Tag: Home Owners

What Of Main Street?

Bailing out Wall Street without fixing Main Street is like fixing the cracks in the wall while your foundation is crumbling. The measures listed above, as well as more basic changes, are necessary. But with more than 100,000 families losing their homes each month, I would like to focus on one critical part of the foundation — stopping foreclosures and keeping families in their homes.

The root of the crisis is that working families have been squeezed from all sides, especially since the recession of 2001. Household income has been falling behind the increasing cost of necessities. The squeeze has been aggravated by the decline of medical coverage and retirement plans, shifting these costs, along with soaring costs for education, food and energy, onto over-strained family budgets.

Many have dealt with this strain by going into debt. They were pushed deeper by the mortgage brokers, real estate agents, appraisers, and credit card vendors, who piled on fees, charges, and hidden interest rates, often based on wildly inflated housing prices. Even when this debt was not the result of outright fraud and conspiracy by the financial and real estate industries, it was in violation of any reasonable banking standards. Financial institutions, staffed by MBAs, PhDs and other highly-trained experts, made loans that no first-year economics student should have approved.
The immediate cause of the financial crisis on Wall Street is this mountain of debt smothering people on Main Street. In simplified form, here is what happens.
● Hard-pressed families fall behind on their mortgage and credit card payments.
● When homeowners can’t make payments, the banks foreclose, but the home frequently stands empty and the bank is unable to recover much of the outstanding loan..
● The bank, with less money coming in, has trouble paying other banks and investors that it borrowed money from.
● Those other banks and investors have trouble paying banks and investors they borrowed from.
● Banks, investors, and ordinary businesses are afraid to lend money to other banks, investors and ordinary businesses.

Families owe more on their mortgages and their credit cards than they can ever pay back. And their effort to save their homes and meet creditors’ demands is undermining their families, their neighborhoods and the local economy, as family members work multiple jobs and cut back on health care, local purchases, local taxes, utilities, and home maintenance.

The bailout package just approved by Congress doesn’t address this problem at all. Homeowners and consumers still have the same debt, still face the same monthly payments. The only change is that the U.S. government has become a collection agent for the banks and investors.

New Trend To Bar Voters

Democrats and Republicans battled in the media and the courts Tuesday over hotly disputed claims that the GOP could use lists of foreclosed homes to bar voters from the polls in November.

The fight — started by an online publication that reported Macomb County’s GOP chief had discussed such a plan — is just the latest in a decadeslong battle between Democrats, who accuse Republicans of trying to suppress Democratic votes, and Republicans, who accuse their opponents of vote fraud.

The issue arose last week, when the online Michigan Messenger quoted James Carabelli, the Macomb County GOP chairman, as saying, “We will have a list of foreclosed homes and will make sure people aren’t voting from those addresses.” Carabelli denies making the statement, and says the county party has never had such a plan.

State officials, and Democrats, said it’s not clear any such plan could legally challenge voters’ right to cast a ballot. Even if voters have been foreclosed, state law allows a grace period of 30 days after moving to vote in their old jurisdiction, or 60 days if they move within the same city or township.

In their lawsuit, the Obama campaign and the DNC sought to tie the allegation to Republican practices dating to the 1980s. Bauer compared the idea to the practice of “caging,” the subject of legal battles as recently as 2004, when Republicans challenged 35,000 Ohio voter registrations after voters at registered addresses failed to return postcards mailed by the GOP.

Senate Approves Housing Bill

The US Senate has approved a rescue bill designed to prop up America’s battered housing market.

The new law creates a $300bn (£150bn) rescue fund to help thousands of homeowners get cheaper loans.

It may also be used to bail out the struggling mortgage giants Freddie Mac and Fannie Mae, which own or guarantee around half the nation’s mortgage debt.

The bill has been approved in a very short time. President George Bush is expected to sign it into law next week.

Washington says the bill will help hundreds of thousands of Americans trapped by mortgages they can no longer afford.

They will be offered the chance to refinance with state-backed, fixed rate loans.

This is some relief for bewildered home owners, but in the same bill millions of taxpayer dollars will be used to bail out the corporations that lead the speculation in the housing markets.  I guess I would have to support the bill only because it will give the average home owner a chance to refinance at a lower rate.  Damned if I do and damned if I don’t.