February 14 – In the past several weeks, spurred on by election rhetoric on both sides of the aisle and amped to new levels during the President’s State of the Union Message, the rush to fix the housing crisis in Washington is hitting levels that have not been seen since . . . well, since the last time Americans went to the polls.

With more voices and voter polls showing that the U.S. populace is placing an extremely high value on the importance of housing as an investment as well as a place to live, those already in public office – and those wanting to get there – are advocating a variety of new initiatives to jump start this segment of the economy while still trying to pass the blame for the slump that is now in its fifth year.

The Obama administration recently unveiled a $5 billion to $10 billion program to support homeowners who owe more on their mortgages than their property is worth to refinance at today’s historic low rates – figuring to help about 3.5 million homeowners. The caveat here is that the borrower cannot have missed more than one payment in the previous six months and must have a minimum FICO score of 580, a very liberal score. This is an extension of the administration’s program instituted last fall targeted at 11 million homeowners whose mortgages are owned by Fannie Mae, Freddie Mac or backed by the Federal Housing Administration. This program is being extended to loans owned by private banks and investors.

As good as this sounds, the reality is that for the few dollars saved by the homeowner by refinancing at a lower rate, there are costs and risks involved all the way around. For starters, the property is still under water and the owner will still be unable to sell or pull any equity from the property – probably for years into the future.

And will the banks be any more willing to lend than they have been? This new program sets out guidelines with streamlined documentation, but many point to that as being one of the culprits of the mortgage crisis to start with. And if a person is struggling with a mortgage and has no way to get out from under it via selling the property because there is no equity, how much will a refinance help anyway? Even at the largest loan amount allowed under the program in the highest cost areas of the country, reducing the loan rate from five to four percent will still result in a payment greater than $3,000 per month, saving only a few hundred dollars. Take the number of people who could qualify for the refinance and then subtract how many will see significant help by doing so; suddenly the multi-billion dollar price tag doesn’t look so appealing and most likely will not spur housing significantly. To pay for this program a fee to banks is being proposed, which would ultimately trickle down to consumers and borrowers in the form of higher costs.

Both Republican congressional representatives and presidential candidates have attacked the plan, but have offered no counter proposal and some are of the opinion that the market should just settle on its own and foreclosures should run their course.

On the foreclosure front, it appears that 2012 will see another influx of fire sales that will further depress home prices. Realty-Trac, an Irvine-based data firm, reports that 1.9 million homes were served with default notices last year.

Then there is the blame game. The second of the administration’s two initiatives wants investigations of the financial firms that were involved in the mortgage crises and plans on “bringing them to justice.”

Just how this is going to help struggling homeowners is yet to be explained. Plus the fact remains that these so-called investigations have been going on since the Bush presidency – even many attorneys and officials in Washington scoff at the notion that anything significant will ever come of these. One Securities and Exchange Commission official even commented that the information on what happened is out there but no one is acting on it to bring criminal charges. This would appear to be nothing more than window dressing and a huge waste of resources.

Although the electorate is stirring up conversation in Washington and along the campaign trail to gain support for the housing industry, it would appear that with the divergence of opinions and the lack of any solid, useful proposals to turn things around, the search for real help for homeowners will continue.

Terry Ross, the broker-owner of TR Properties, will answer any questions about today’s real estate market. E-mail questions to Realty Views at terryross1@cs.com or call 562/498-1049.