⭐🔥 Click here to check Latest Celeb News & Celebrity Gossip in 2022! 🔥⭐
The Washington Independent
The Washington Independent

More Calls for Direct Action on Foreclosures

In the latest issue of The New Yorker, James Surowiecki  weighs in on something TWI wrote about recently: The need for a new -- and bolder -- foreclosure

Rian Mcconnell
Last updated: Jul 31, 2020 | Aug 03, 2009

In the latest issue of The New Yorker, James Surowiecki  weighs in on something TWI wrote about recently: The need for a new — and bolder — foreclosure strategy. Foreclosures continue to outpace loan modifications, even as the Obama administration presses the lending industry to do more. And in some communities, it’s not just the new foreclosures causing problems; it’s all the vacant and abandoned bank-owned properties.

As we noted, the time is ripe to try new tactics to combat foreclosures, including encouraging ways to rent foreclosed homes back to former owners. Fixing tax laws that are slowing down some loan modifications might help. Even direct loans to homeowners could be a strategy.

Surowiecki agreed:

If we really want to keep people in their homes, then, nudges and renegotiations probably aren’t going to do it. We need more direct action. One option, which the banking lobby killed earlier this year, would be to allow “cramdowns”: let bankruptcy judges reduce the principal on homeowners’ mortgages. Another, even more direct option is simply to give aid to homeowners: one proposal would have the government make low-interest loans, or even grants, to people who have suffered a steep decline in income and have negative equity in their homes. That would target the aid at the people who need it most: as another Boston Fed paper shows, defaults are most likely to happen not just because interest payments are set too high but because of income shocks (usually after the loss of a job) and plummeting house prices.

Surowiecki pointed out, as we did, that forceful actions to help homeowners might not be popular; no one wants to pay off their neighbor’s mortgage. But as foreclosures continue, the spillover effects on surrounding neighborhoods will become more severe, which may change that attitude.

But in the end, Sur0wiecki says, the Obama administration will have to come to a conclusion it hasn’t reached yet: Fixing the roots of the crisis is going to be costly. The government seems to be in denial on this. The current view is that “we’ll just keep muddling through with the current approach, which offers us the sense that we can get quite a lot without spending much,” Surowiecki said.

Maybe it’ll work. But the housing bubble was very expensive. It’ll be surprising if we can deal with its consequences on the cheap.

More reasons why it’s time for the government and the lending industry to quit trying to just muddle through the crisis and really rethink foreclosure strategies.

Rian Mcconnell | Rian is a Villanova University graduate who was born in DuBois, Pennsylvania. He graduated from Thomas Jefferson University in Philadelphia with a medical degree. His residency was at Thomas Jefferson and its associated Wills Eye Hospital, and he finished his education with fellowships in cataract and corneal surgery at the University of Connecticut. He has a vast experience in ophthalmic surgery, with a focus on cataract surgery, corneal transplantation, and laser refractive procedures. He serves on the board of Vision Health International, an agency that provides eye care and surgery to indigent patients in Central and South America, in addition to his surgical practice.


MA-Sen: 150 Conservative Bloggers Fan Out, Looking for Scandals

BOSTON -- The mysterious Election Journal blog, which first released the infamous 2008 video of two bumbling New Black Panther Party members waving nightsticks

MA-Sen: 66 to 19

BOSTON -- That, via Alex Isenstadt and Josh Kraushaar, is the number that defined the Massachusetts Senate race more than anything else. From the primary

MA-Sen: A Text Message From Scott Brown

BOSTON -- Having signed up for Scott Brown’s text message service for election day, I just got this text: Are you about to have lunch? It’s a great time to

MA-Sen: Loyal Democrats Grouse About Coakley

BOSTON -- A little while after noon, a steady crowd of Democratic voters streamed into the Cathedral High School Gymnasium to cast votes for their party’s

MA-Sen: Brown Wins

BOSTON -- At 9:20, the first rumors of Scott Brown’s victory in the Massachusetts Senate race started to work around the room. A moment later, Doug Flutie

MA-Sen Photos: ‘Paint the Town Red! Croakley’s Dead!’

Below are some photos of yesterday’s People’s Rally in Worcester, the rally that Brown held to counter-program the Obama rally in Boston. The crush of

MA-Sen: Out-of-Staters for Brown

BOSTON -- A surprising discovery at yesterday’s People’s Rally in Worcester was just how many people had traveled into the state to assist, in whatever way,

Menendez, Lautenberg to Continue BP-Lockerbie Investigation

Sens. Robert Menendez and Frank Lautenberg, both New Jersey Democrats, will continue to seek details about BP’s alleged involvement in the release last year of

Net Investors Bullish on Palin’s Prospects for Staying on Ticket

Just for fun, the Internet prediction Website Intrade has opened a contract on whether Alaska Gov. Sarah Palin will be withdrawn as McCain’s running mate.

No Experience Necessary

Gov. Sarah Palin’s a middle-class hockey mom, but does that really qualify her to be vice president?

© Copyright 2022 The Washington Independent All Rights Reserved

Terms & Privacy | twi.news@washingtonindependent.com

⭐🔥 Click here to check Latest Celeb News & Celebrity Gossip in 2022! 🔥⭐