NEW YORK ( TheStreet) -- Top banking executives said this week that it may take years for the country to see a full-fledged housing recovery -- and that a government rescue program may actually be hindering progress.
The housing market recently began another leg down, despite hopeful signs last year after the Obama administration rolled out its "Making Home Affordable" program. Home sales have dropped dramatically since some incentives expired in April. Despite homes being more affordable than ever, demand has been feeble, prices remain soft and there's more than a year of supply on the market.
The latest sign of weakness came Wednesday, when the Mortgage Bankers Association said applications had fallen for the second week in a row. Though mortgage rates remain at historic lows, refinancing requests dropped 11%. Though home prices are still deeply discounted in many regions, applications for new purchases also fell marginally.
At an event this week, Bank of America (BAC - Get Report) CEO Brian Moynihan estimated that it will take the bank another three years to work through its 1.5 million "seriously delinquent" borrowers. Jamie Dimon, who heads rival mortgage lender JPMorgan Chase (JPM - Get Report), said federal initiatives have simply delayed the inevitable for many borrowers."We have been writing off foreclosures that are delayed because of HAMP," said Dimon, referring to the government's Home Affordable Modification Program. While the initiative has "reduced