Tuesday, June 02, 2009

Foreclosure Problem Is Getting Worse-- Thank The U.S. Senate, Owned And Operated By The Banksters


I wake up every morning before sunrise. I have a routine and part of it is an early morning hike in the hills above my house. If you've read Eric Boehlert's new book, Bloggers On The Bus you've already experienced a beginners version of the hike and met a couple of my canine pals, Sergeant and Murphy (who I feed dried duck breast everyday). I've lived in this neighborhood ever since I moved to L.A. a couple decades ago. Madonna moved into the neighborhood at one point but her place wasn't near my route and I'm sure there were big walls around it anyway. I was more excited when one of the artists from my label who I actually worked with moved down the street. And his house got into Architectural Digest! And then, right next door to my house, a woman from the Ethiopian royal family moved in. (Once she asked if she could buy my house to use as a guest house.)

Anyway, Madonna moved away and the artist with the A.D. showplace and the Ethiopians have been foreclosed on. I've passed the architectural showplace every day for two years. It's awesome, but too... unique, for a market like this. It's been empty for all that time. Well, not exactly empty. It looks like some squatters have broken in the back door and moved in. I called the real estate agent listed on the sign in the front but he's too busy-- maybe with a second job?-- to pay any attention. I'm starting to worry about neighborhood blight.

Yesterday Jesse Jackson, in Lansing, called for a nationwide moratorium on foreclosures. It;'s certainly something Congress hsould have done in January.
“This whole crisis was triggered by the lending crisis. The stimulus was supposedly to stop the housing hemorrhaging. Somehow the stimulus shifted from housing to banks. But there are at least four gushers of blood: There’s jobs, there’s housing, health care and student loans. And right now there is no relationship between the stimulus coming in and the numbers going out. But stimulating banks and closing plants. those workers will then compound the housing crisis and the health crisis. They’ll be going from working to unemployment compensation.”

State Sen. Hansen Clarke, a Detroit Democrat, introduced legislation earlier this year which would create an optional two-year, judicially reviewed moratorium on foreclosures. And while some local politicians, including Lansing Mayor Virgil Bernero have called for the bill to be passed, such a legislative timeout on foreclosure is frozen in the Senate Banking Committee.

The Party of No, of course, opposes it and will block it from being considered in the state Senate.

This morning's NY Times published an editorial that points up how drastically the foreclosure problem is accelerating. Obama, under pressure from Republicans and conservative Democrats who are just as bad, hasn't gone nearly far enough to make much of a dent-- or even slow the process. His plan offers subsidies to banksters for offering mortgage modifications-- too little too late and, regarding the banksters, too short-sighted, greedy and disinterested in the preservation of neighborhoods (or society in general).
One of the biggest problems is that the plan focuses almost entirely on lowering monthly payments. But overly onerous payments are only part of the problem. For 15.4 million “underwater” borrowers-- those who owe more on their mortgages than their homes are worth-- a lack of home equity puts them at risk of default, even if their monthly payments have been reduced. They have no cushion to fall back on in the event of a setback, like job loss or illness.

When Congress tried addressing the problem in a serious fashion the banksters move dinto action and managed to kill the legislation on the chmber they own (the Senate). In early March the House passed The Helping Families Save Their Homes Act 234-191, only 7 Republicans joining all but 24 mostly conservative Democrats to get tough with the banks. And then the Senate watered it down into a nearly meaningless and useless piece of crap. It was sabotaged by a coalition of anti-family Republicans and the usual corrupt Democrats who vote with them. As the Times pointed out today, the problem isn't going away by itself or through pathetic half measures. It's getting worse.
With joblessness rising, lower monthly payments could quickly become unaffordable for many Americans. In a recent report, researchers at the Federal Reserve Bank of Boston argued that unemployment is driving foreclosures and to make a difference, anti-foreclosure policy should focus on helping unemployed homeowners. The report suggests a temporary program of loans or grants to help them pay their mortgages while they look for another job.

The government will also have to make far more aggressive efforts to create jobs. The federal stimulus plan will preserve and generate a few million jobs, but that will barely make a dent-- in the overall economic crisis or the foreclosure disaster. Since the recession began in December 2007, nearly six million jobs have been lost, and millions more are bound to go missing before this downturn is over.

President Obama needs to put more effort and political capital into promoting the middle-class agenda that he outlined during the campaign, including a push for new jobs in new industries, expanded union membership and a fairer distribution of profits among shareholders, executives and employees.

There will be no recovery until there is a halt in the relentless rise in foreclosures. Foreclosures threaten millions of families with financial ruin. By driving prices down, they sap the wealth of all homeowners. They exacerbate bank losses, putting pressure on the still fragile financial system. Lower monthly payments are a balm, but they are no substitute for home equity. And until more Americans can find a good job and a steady paycheck, the number of foreclosures will continue to rise.

This is the kind of thinking-- the 24/7 bullshit Fox spews out-- that will continue to sink America:

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