Huff & Puff & Blow the Housing Market Down...

Via Ace, the Obama "no proof of income" mortgage re-finance program is a major bust:

More than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out...A major reason so many have fallen out of the program is the Obama administration initially pressured banks to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.

Well, DUH!

Meanwhile, AP has this today: Pre-existing home sales dropped 2.2% in May.

Sales of previously occupied homes dipped 2.2 percent in May, signaling that a boost from home-buying tax credits is fading sooner than expected...

The tax credits were expected to lift sales in May and June...

The report is "a worrisome sign for what will occur in July and thereafter when the effect of the tax credit is behind us," said Joshua Shapiro, chief U.S. economist at MFR Inc., an economic consulting firm in New York...

The report "suggests that even government stimulus in the form of a tax credit isn't enough," to support the U.S. housing market, wrote Guy LeBas, an analyst with Janney Montgomery Scott.

Ouch!

6/23 UPDATE: More bad news. New home sales down 33% since end of tax credit. Lowest on record.

Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits... The bleak report from the Commerce Department on Wednesday is the latest sign of a precarious housing market that is struggling to recover and could weaken the broader economic recovery. It follows a disappointing report issued earlier in the week showing sales of previously occupied homes had dipped in May.

6/24 UPDATE: Mortgage rates are now at the lowest level in recorded history.

Mortgage company Freddie Mac said Thursday that the average rate for 30-year fixed loans sank to 4.69 percent, from 4.75 percent last week.

That's the lowest since Freddie Mac began tracking rates in 1971. The previous record of 4.71 percent was set in December. Rates for 15-year and five-year mortgages also hit lows.

Mortgage rates have fallen over the past two months. Investors wary of the European debt crisis and the turbulent stock market have shifted money into the safety of Treasury bonds, driving down yields. Mortgage rates tend to track the yields on long-term Treasury debt.