• News
  • Celebrities
  • Finance
  • Crypto
  • Travel
  • Entertainment
  • Health
  • Others

Democrats Demand More Relief for Troubled Housing Market


(Jeff Turner, Flickr)

One year after the Obama administration launched its $75 billion anti-foreclosure program, the housing market remains volatile, loan modifications have been scant, foreclosures are still sky-high — and more and more lawmakers are wondering why the White House hasn’t been more aggressive in tackling the crisis.

Administration efforts to stabilize the troubled housing market have prioritized lenders above struggling homeowners, a number of House Democrats charged Thursday, leading to thousands of foreclosures that might otherwise have been prevented — and threatening thousands more in the months to come.

[Congress1]Although the Obama White House has offered billions of dollars to banks that successfully alter loans to make them more affordable, only 116,00 of those modifications have been made permanent, the Treasury Department reported last week. Meanwhile, nearly 3 million homes went into foreclosure in 2009 alone. The reason for the discrepancy, some Democrats contend, is clear: The decision to modify loans, under Obama’s programs, has been left in the hands of the same mortgage servicing companies that often stand to profit more from foreclosures. That conflict of interest, critics say, all but ensures that the administration’s voluntary modification program will fail.

“The industry that received a trillion dollar bailout,” Rep. Dennis Kucinich (D-Ohio), head of the Oversight Committee’s Domestic Policy subpanel, charged Thursday, “has been unwilling to absorb the losses, to write down bad debts, and their recalcitrance is holding up the resolution of the foreclosure crisis.”

He’s right about at least one thing: Despite the fact that the free-falling housing market was at the root of the global economic collapse, Washington policymakers have dedicated more attention — not to mention dollars — to the bankers of Wall Street than the homeowners of Main Street. The results are tangible. More than 2.8 million homes went into foreclosure last year — a jump of 21 percent from 2008 and 120 percent from 2007, according to RealtyTrac, an online foreclosure database. And it isn’t over. In January, another 315,000 homes went into foreclosure, RealtyTrac reported — up 15 percent from the year before.

Phyllis Caldwell, who heads the Treasury’s Home Affordable Modification Program, defended the administration’s efforts Thursday, telling lawmakers that, aside from the 116,000 permanent loan mods under HAMP, nearly 1 million more homeowners are in trial modifications. The administration, she argued, is making “significant progress” toward its goal of reaching out to 3-4 million struggling homeowners by 2012.

“There are clear signs that our efforts are having a substantial impact,” Caldwell said.

Others aren’t so sure. Rep. Elijah Cummings (D-Md.) went after the HAMP for a lack of oversight he said has led to foreclosures even among those receiving trial modifications. Rep. Marcy Kaptur (D-Ohio) accused the Treasury of taking on a task better suited for housing-specific agencies like HUD. And Kucinich blasted the administration for allowing the lenders to decide if homeowners should receive help.

“You’re going to have to do better,” he told Caldwell.

And that was just the Democrats. The Republicans had their own laundry list of complaints surrounding the HAMP, most of which boiled down to their feeling that the federal government has no business dabbling in the affairs of free-market lenders to begin with. “I just question the idea that the big federal government can do these things,” said Rep. Jim Jordan (Ohio), senior Republican on the subpanel.

The disastrous effects of the housing collapse can’t easily be overstated. The banks, heavily invested in mortgage-backed securities, first required bailing out, and more recently have been reluctant to lend due to the continuing volatility of the housing market. Meanwhile, it’s estimated that consumers lost more than $7 trillion in equity when the housing bubble burst — equity that many had leveraged to buy things they really couldn’t afford. The combination has exacerbated the recovery of an economy utterly dependent on consumer spending and the easy flow of credit.

Indeed, William Dennis, senior fellow at the NFIB Research Foundation, a small-business advocacy group, said this week that the collapse of the real estate market is a central reason that companies aren’t hiring. “You’re not going to address the small business problem until you address real estate,” Dennis said.

Ron Blackwell, chief economist for the AFL-CIO, agreed. His group has endorsed a moratorium on all foreclosures — a move that would force the banks to renegotiate mortgage contracts. That proposal was seen as anathema to the banking industry, however, which has retained tremendous influence over lawmakers despite its role in the economic turmoil.

“The government has been very, very tender in its care of banks,” Blackwell said this week.

Congress has also offered new fixes for the foreclosure crisis in recent months. The sweeping financial reform bill passed by the House in December includes $3 billion to help unemployed homeowners meet their mortgage obligations. The idea is that, while unemployment benefits can put food on the table, those checks often aren’t enough to cover the mortgage as well.

The Senate is expected to unveil its version of financial reform shortly, although it could be months before members of the upper-chamber vote on the bill — if they do at all.

Meantime, many Democrats are hoping the Obama administration will step in on its own with mandatory programs to knock down principal balances to keep folks in their homes.

“The administration that inherited the crisis will be judged for how they respond,” Kucinich said. “That judgment can be as harsh as if they had created the crisis themselves.”

Discussion & Comments (0)

    Recent Articles

    • Things You Should Know about North America

      Things You Should Know about North America

      Get to know more about North America.

    • Eurovision 2010 Paula Seling Unpredictable Contest

      Eurovision 2010 Paula Seling Unpredictable Contest

      Paula Seling's experience on the Eurovision stage led her to declare that "Eurovision is an unpredictable contest". Which may explain the success of the young Lena from Germany, about whom the predictions before the event did not offer much chances for victory.

    • VIPRow.me - The Best Sports Streaming Website Today

      VIPRow.me - The Best Sports Streaming Website Today

      Have you ever contemplated creating a user-friendly site dedicated to sports-related free live streaming channels?

    • Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      Learn How To Download, Install, And Use The Xnxubd 2022 Frame App

      XNXUBD 2022 Nvidia users are able to watch thousands of videos and other contents online. XNXUBD 2022 Nvidia New is a piece of software that enables people to watch videos online without having to pay for memberships. On a graphics card, the XNXubd also provides some of the best gaming and virtual reality experiences.

    • Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      Xvideostudio Video Editor Apk Free Download For Pc Full Version In 2022

      A new edition of the Video Editor Apk for xVideostudio.Video Studio has all the latest features, including support for multiple video download formats in HD, FHD, and even 4K resolutions.

    • 9 Best Lotion For Masturbation - Popular Choice For 2022

      9 Best Lotion For Masturbation - Popular Choice For 2022

      Masturbation is a common activity for men and women. It's a natural and risk-free way to explore your body, experience pleasure, and release sexual tension.

    • Reasons Why You Need To Stop Watching Movies From Sflix

      Reasons Why You Need To Stop Watching Movies From Sflix

      Without having to sign up or pay anything, you can watch movies online for free with SFlix. It has more than 10,000 movies and television shows.

    • Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Mom And Dad's Family History & Wife, Explained

      Coi Leray Collins (born May 11, 1997) is a rapper from the United States. Leray started publishing songs to SoundCloud in 2014, and in 2018 she released her breakthrough track "Huddy" as well as her first mixtape, Everythingcoz.

    • Listen And Download Music On MyFreeMP3 For Free

      Listen And Download Music On MyFreeMP3 For Free

      Are you in a bind and looking for a place to obtain free mp3 songs? Never again will you need to bother, since this article has everything necessary to obtain your solution. Download free music from MyfreeMP3.com, one of the world's most popular websites.