Wells Fargo doesn't believe government initiatives will help the housing market

Wells Fargo Securities predicts that President Barack Obama's latest plan to help more homeowners gain access to mortgage refinancing will assist some borrowers but won't make a large impact on the housing market overall. The Wells Fargo report suggests that the new plan will not prompt a housing recovery, but the necessary clearing out of foreclosed properties from the market will help housing rebound.

Anika Kahn, economist at Wells Fargo, told the Orlando Sun-Sentinel that the changes to the Home Affordable Refinance Program implemented by the Obama Administration still maintain strict criteria for homeowners to meet in order to refinance, leaving many borrowers unable to participate. In addition, the program does not help promote home sales or stabilize home prices.

Further, MSNBC reported that Federal Reserve chairman Ben Bernanke recently hosted a two-day meeting with central bank policymakers to discuss new plans to help the housing market. But the central bank is known for doing very little to directly affect the housing market, and the meeting could have meager results.

The news source reported, however, that in the past few weeks, the Federal Reserve has indicated it will try to revive the market by buying more mortgage-backed bonds to push rates lower and increase available cash for lending. This would be the second round of bonds to be bought by the Federal Reserve since the crash of the housing market.

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