Dennis has an op-ed in the NY Times today!
WE need a plan that is big enough, bold enough and fair enough to deal with the nation’s foreclosure crisis.
The foreclosure rate in the US last month was one in every 534 homes. This is hard for the homeowner, obviously, but hard on the banks and the local communities. An empty house brings in no revenue and there’s no added economic impact by a family buying items in the local community.
For starters, federal aid should be directed toward those communities with the heaviest concentrations of foreclosures and homeowners at risk. Aid should help cover public safety costs imposed by vacant homes. It should help defray budgetary shortfalls for public schools that lose property tax revenue.
The communities are being hurt, and there are many homeowners who are on the edge of foreclosure.
Second, a federal loan modification program for struggling homeowners should prohibit the replacement loan’s principal balance from exceeding the property’s appraised value. It should convert the terms to a long-term, fixed-rate and fully amortizing loan. It should limit monthly mortgage payments, including taxes and insurance, to an amount based on the homeowner’s ability to repay.
It’s important that the homeowner be able to make payments. The banks may have thought that foreclosures would just open up more homebuying opportunities, and that may have worked. It’s not working now. The country has to make a decision as to whether it’s more important to have someone living in the house or trying to over charge for that house. While it is the owner’s fault for having overbought their house, it was at the same time the bank’s fault for having oversold the house to the homeowner. There should be a happy medium in trying to solve this crisis.
Dennis then writes that if the homeowner is not able to afford refinancing that there should be a federal home loan bank which buys the house and re-rents it to the current owner. This would have the effect of keeping someone in the house insead of boarding it up. The economic impact on the community would be lessend if this was done.
The foreclosure crisis is a calamity for individual homeowners and a worry to financial markets. And what’s worse, if lenders and investors are allowed to profit from their predatory lending without bearing the full costs, they’ll do it again.
This is most important. When something doesn’t work, there’s no reason to believe that it’ll work in the future. The lending institutions have messed up on this. They shouldn’t be allowed to get away with it just to make the same mistake again.
If you support Dennis, his primary for the OH-10 House seat is this Tuesday, March 4. You can visit his campaign site to see what he stands for. If you agree with him, you can donate to his campaign and you can even volunteer for the campaign! If you prefer, you can donate via my ActBlue page for Dennis’ congressional campaign.
Originally posted here: http://rjones2818.blogspot.com…