House Democrats are unhappy with president Obama, and they are not holding back about saying so. “The administration has been AWOL on this issue [mortgage relief],” complained Dennis Cardoza (D-CA) after the house was unable to learn any details about Obama’s housing relief plan mentioned in his jobs address[1]. “I’ve never seen anything this irresponsible,” Cardoza added. Cardoza and others had requested a meeting with Edward DeMarco, acting director of the FHFA, to learn specifics about the plan but were denied both access to DeMarco and concrete answers, complained Elijah Cummings (D-MD). Cardoza added that the FHFA knows nothing about the president’s “very significant housing initiative” anyway and raised the possibility that the administration is “stonewalling.”
The group of representatives did receive a response from the FHFA, albeit an inadequate one, according to the irate representatives. “They send us some career employees… [that] were not able to answer the questions,” complained Cummings[2]. Both on and off Capitol Hill the housing market is creating serious controversy and concern as it fails to respond to even the most optimistic “stimulus” and investors appear to be moving out of the market as well.
Do you think that the federal government can “fix” this crisis? Should the FHFA have a role in the solution?
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[1] http://thehill.com/homenews/house/181961-dems-rip-white-house-for-going-awol-on-mortgage-crisis-
[2] http://www.theyeshivaworld.com/news/General+News/103525/Dems-Slam-President-Obama-For-Going-%27AWOL%27-On-Mortgage-Crisis.html
The Federal Government most definitely CAN fix this. Here’s how. Declare a nationwide moratorium on foreclosures, period. Remember, the banks broke the law, it’s called perjury; robo-signing, signing false statements under penalty of punishment, is perjury. This would be an appropriate penalty for the robo-signing scandal. Next, review every delinquent mortgage and modify everyone of them wherever possible. do not let the banks, with their unrealistic underwriting standards, make the decision as to what is and is not possible, hire independent third parties and give the benefit of the out to homeowners, period. If it is just not feasible in any way shape or form for the owner to stay in their home, short sell it. And, once again, take this out of the hands of the banks and investors. No one ever heard of a ‘never fail’ investment, so if they lose money, too bad, that’s the nature of investing. Period. And END the government bail out program! Period! Victims of Hurricane Irene are not getting as much financial assistance as these law breaking banks. It’s a disgrace and it has to end.
Unfortunately, and though economic policy, legislation, and regulation in recent years reads like an excerpt from Bizarro World Times, we must expect the tumult to be sustained, if not accellerated. Washington elites in general don’t really WANT to fix this or any other substantive problems, for problems that surface provide them the opportunity to enact changes that enrich their political allies. The men behind the curtain are incomprehensibly incompentent, insane, or evil…or mix up a cocktail of those three in whatever proportions suit you. We remained burdened with a political ruling class dominated by political animals whose driving force has been and remains the accumulation and wielding of power, and the attendant accumulation of wealth for themselves and their cronies. Some, those I allude to as evil, actually believe in what they’re doing, and if you look you can see and hear their recorded public rants in which they advocate the pursuit of socialism in America, and in fact a restructuring of the world, aligned with their socialist / communist wet dreams. Others simply want to get rich and build their own careers, and while perhaps cognizant that their actions are damaging to the country, are under the mistaken impression that America’s inherent strength and resilience will always enable her to recover from whatever combination of mad schemes they impose upon her in their insatiable quest for wealth, power, and control. But at this point they’ve damn near killed the Golden Goose, and may well in fact prove successful in doing so. It happened to Rome and every other “empire” throughout history, and America certainly is not invulnerable to the rot that springs from straying from responsible core principles. The sad part is that if you read the writings of the Founding Fathers, they clearly foresaw the potential of America’s decline and dissolution, and specifically, repeatedly warned us against allowing it to materialize. Their love of liberty, disdain for corruption, and understanding of human weakness were stunning. But then few these days read their writings or seriously consider their profound thoughts. The bulk of the political elites are surely oblivious to them, and will NOT pull this nation back from the brink. It will be up to the citizenry, through peaceful politial activism, to save the day. It remains to be seen whether an awakening of the general populace expands quickly enough to facilitate the necessary changes in time, replacing careerist politicians from Bizarro World with citizen patriot legislators.
Richard & Suzanne are actually both right. . .
1) Go back to Normal Underwriting Standards that served our country well for decades. Documented income, reasonably good credit, reasonable LTV. UW Standards should not be too tight, nor too loose, but reasonable enough that people shouldn’t feel like they have been thru Hell just to get approved.
2) Take all existing loans and if they can be refinanced, allow them to do so to take advantage of the lower rates. Those that are underwater, recognize that both borrower and lender have a problem and modify them immediately! If borrower is unable to make the new lower payments then expedite a short sale.
Instead we continue the ridiculous process of micromanaging the select few who get to refi or modify and shut everyone else out that needs relief. This drags out the forecloure process in neighborhoods all across the country. As values fall further more and more homes are upside down and placed at risk.
With 6.5 Million home loans in some stage of delinquency, we are deluding ourselves if we believe that there is no shadow inventory and that prices are not going lower.
There cannot be a recovery in the US Economy until Real Estate recovers! The sooner we reduce and eliminate the number of foreclosures, the sooner we place a floor under real estate values and a recovery can begin. Then Lenders can feel comfortable about the new loans they place on the books without the fear that they will be underwater next year. Homeowners can take the savings realized and begin to make other purchases spurring some level of economic activity. Companies can begin to hire because they believe that a recovery is in place and there will be a need to expand. Now that we FINALLY have the new jobs being created, the recovery can pick up steam, and we can ultimately return to some sense of normalcy.