For Charlotte, the most important day of Barack Obama's young presidency may be Wednesday, when Obama announces his administration's foreclosure rescue plan.
It's an issue especially important to us, not only because the nation's credit catastrophe is at the heart of today's banking crisis - costing this city one bank and thousands of jobs - but because Charlotte is struggling more than most with home defaults and the damage they inflict.
What will Obama's propose? Advisers and officials are suggesting that the plan likely will come with a lot of gadgets, including giving judges the ability to adjust some mortgage terms in bankruptcy proceedings, plus the government possibly purchasing troubled loans held by lenders and investors.
The idea to watch is one that Obama economic honcho Larry Summers hinted at late last week - directly lowering payments on troubled and potentially problematic mortgages, perhaps by making matching payments with lenders to cover some monthly costs.
It's an approach that could especially benefit former boomtowns like Charlotte, where foreclosures struck not because of a burst housing bubble or job losses, but because homebuyers were offered and accepted mortgage terms they could not afford. The result: a swath of troubled starter-home neighborhoods threatens to squeeze the city from its perimeter.
Already, we've seen that the damage from foreclosures extends beyond the streets riddled with defaulted homes. Adjoining neighborhoods have suffered hits to property values. Area businesses were weakened even before the downturn's grip tightened.
Now, those struggles are exacerbated with the recession, eroding consumer confidence and threatening all of the city. Even stable neighborhoods have seen the market wither as homeowners wishing to move in - and move up - are unable to sell their homes in increasingly struggling areas. We may have been one of the last cities to fall into the downturn, as our mayor likes to say, but we won't be one of the first to emerge from it without a foreclosure fix.
Now, those struggles are exacerbated with the recession, eroding consumer confidence and threatening all of the city. Even stable neighborhoods have seen the market wither as homeowners wishing to move in - and move up - are unable to sell their homes in increasingly struggling areas. We may have been one of the last cities to fall into the downturn, as our mayor likes to say, but we won't be one of the first to emerge from it without a foreclosure fix.
For Obama's plan to work, experts say, it will need to do what other programs thus far haven't - offer a more standardized approach that's accessible to consumers and streamlined for mortgage servicers, who want an easier, quicker method to identify troubled loans and set new terms.
Those details will come Wednesday. Are you optimistic they'll help? Or do you think this will lead to more wasted money?
Those details will come Wednesday. Are you optimistic they'll help? Or do you think this will lead to more wasted money?
Should you feel obligated to spend more and save less to help the economy? Cornell economist Robert H. Frank says no.
A compelling (and lengthy) read from the Los Angeles Times: Depression survivors remember hope.
A downturn upside: The recession is a fine multi-purpose excuse, writes the New York Times' Alex Williams.
Posts
2 comments:
For Obama's plan to work, experts say, it will need to do what other programs thus far haven't - offer a more standardized approach that's accessible to consumers and streamlined for mortgage servicers, who want an easier, quicker method to identify troubled loans and set new terms.
We should first pull the original contract and application. If the loan was funded by adequate credit, at least a 10 percent down payment and the income was sufficient then we should look at changes since that time.
If it started out as a train/house wreck just waiting for a time to happen with no income/equity or past history of paying bills on time, then we should take the losses now.
It is sad to put people out of their houses.
But it even sadder to put people out of their houses mainly because of all the devaluations/foreclosures in their neighborhood because of those who could not afford them in the first place.
The timing of foreclosing during a time of protection for those next door neighbors is best and we need to do it today! Those are the people who need the help the most.
Most people would agree we supplied to a artificially created demand.
You can blame as many people as you want but it all comes back to the person who bought the house in the first place. Until we make them the responsible party then we will hear that our government is the answer to all our problems while they continue to be the source of our problems.
It's absurd to me that we are looking at helping certain groups of borrowers that will continue to be problematic borrowers. Look through those neighborhoods that are failing and you will also find families with two SUV's in the driveway living paycheck to paycheck. For myself and my family who have been fiscally responsible, making sure my mortgage came with a fixed rate and owning older cars, we will be the ones to face the tax burdens to bail out those irresponsible borrowers. It's just another form of welfare.
I say let those who borrowed too much go into foreclosure. Let my flawless credit rating be my ticket so that I may be able to buy up those foreclosures and rent those properties back to the original buyers. I agree that the builders and lending institutions took advantage of peoples' desire to have a piece of the American dream, but the borrowers own more of the burden for filling out the credit application to begin with. Quit making them the victims.
Post a Comment