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Geithner to Obama: It's too much, Mr. President. (White House Flickr Pool)

This isn’t specific to D.C.’s housing situation, but Zach Goldfarb‘s blockbuster story in today’s Post about how President Barack Obama missed opportunity after opportunity to help the nation’s homeowners is an important read for anyone interested in the subject. Unlike a lot of pieces about White House deliberations at the highest levels, this one has players like Peter Orszag on the record about how the administration’s hesitation to force banks to stop foreclosures resulted in failed efforts to relieve homeowners of the underwater mortgages that continue to act as the economy’s biggest ball and chain.

One dynamic that emerges: Housing and Urban Development secretary Shaun Donovan pushed for stronger action, recommending that the U.S. pay banks to reduce homeowner debt and require banks that received bailouts to take part in a mortgage modification program. But other advisors advocated for voluntary participation, and that view won out. Treasury Secretary Tim Geithner also argued that direct aid to homeowners would be more expensive and risk more moral hazard than spending money on construction projects and keeping public servants employed. So when Donovan made the case for more aggressive action on housing, Geithner pushed back.

It looks like the main takeaway is this: Obama knew that swift, decisive action was necessary, and announced programs that sounded like they had the right idea. But when it came to building in the mechanisms that would allow them to actually work, he was always convinced that the banks wouldn’t go for it, or homeowners would abuse it, or Congress wouldn’t fund it—-which, after a while, proved to be true. And now, he’s surprised and frustrated that those programs have had an almost negligible effect.

In the Washington area, there’s a strong effort to counsel homeowners on their options, and the D.C. Council has made it harder for banks to foreclose on homeowners. Regionally, mortgage delinquencies are on the decline. But would they have gone faster if the administration had acted more decisively? Probably, yeah.