It’s Time for the Candidates to Get Specific on the Homeownership Crisis

Now that the presidential tickets are set, it’s time for the candidates to get specific about problems and solutions critical to our economic recovery and future prosperity. Along with job creation, they should start with Home Opportunity—the cluster of housing, homeownership, and fair lending issues that are so central to the American promise of opportunity for all.

America continues to face a Home Opportunity crisis, with 2 million foreclosure filings this year, and millions more families at risk. That’s millions of senior citizens losing their economic security, children and families uprooted, neighborhoods blighted with vacant properties, and a continued drag on our economy.

What’s more, unequal opportunity and the discriminatory targeting of communities of color by unscrupulous brokers and lenders means that minority families continue to be especially hard hit. Major discrimination settlements by the Justice Department against Countrywide, Wells Fargo, and other major lenders reveal that, despite the progress we’ve made as a nation, Americans of color have been especially unlikely to get a fair deal from the banks. That translates to a historic loss of community assets and wealth that hurts us all.

Unlike employment, however, Home Opportunity has received inadequate attention in the general election campaign, despite its undisputed political, as well as economic, importance. For swing states like Florida (with 25,534 new foreclosure filings in July alone) and Nevada (with 26,498 filings), these questions are especially pressing. Amazingly though, neither campaign’s homepage includes housing, homeownership or foreclosures among the featured issues.

Early in his campaign, Mitt Romney famously told the Las Vegas Review Journal, “Don’t try to stop the foreclosure process. Let it run its course and hit the bottom.” Months later, he appeared to shift position, saying in Florida: “The idea that somehow this is going to cure itself by itself is probably not real. There’s going to have to be a much more concerted effort to work with the lending institutions and help them take action, which is in their best interest and the best interest of the homeowners.”

Romney also said in a Republican debate that government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac—the historic guarantors of the 30-year fixed mortgage for generations of middle class Americans—“were a big part of why we have the housing crisis in the nation that we have.” In neither case, however, have specific solutions followed. Romney has, by contrast, called for eliminating the Consumer Financial Protection Bureau and the Dodd-Frank legislation that created it.

As incumbent, President Obama has implemented multiple measures, including the Bureau, the Making Home Affordable program, housing counseling, and joining 49 state attorneys general in a national mortgage settlement with five major banks. (Intriguingly, Republican VP candidate Paul Ryan’s constituent services site refers Wisconsans with homeownership woes to the latter three programs for assistance).

Yet, most analysts agree that Making Home Affordable has fallen short of Administration goals, and that the national mortgage settlement, while helpful, does not reach the majority of homeowners who could benefit from its terms. Many argue, in particular, that the President can do more to extend principal reduction—shrinking the principal owed on mortgages to reflect homes’ fair market value—to mortgages backed by Fannie and Freddie. And while the Administration outlined three options for the future of those enterprises over a year ago, the President’s preferred agenda for them remains unclear.

The Obama Justice Department has been aggressive in settling discrimination suits against major lenders, but Candidate Obama has not discussed the role of discrimination in creating the housing crisis, nor the role of future equal opportunity efforts in solving it.

In short, the candidates, as candidates, have yet to articulate to the American people their respective visions for the future of Home Opportunity. How will each address the lender misconduct and inadequate rules that led to the current crisis? How will each ensure that families with the resources to be successful homeowners are not thwarted by future misconduct, arbitrary restrictions, or a lack of sound information? How will each help rejuvenate neighborhoods devastated by predatory lending and mass foreclosures? And how will each ensure that people of all races, ethnicities, and communities have an equal opportunity to pursue the American Dream?

With the tickets now set, it’s the candidates’ responsibility to get specific on these questions, so critical to the nation’s choice of the next president. As voters, it’s our responsibility to demand that they do.

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What Happened to the Chamber I Once Knew?

I remember a time when the Chamber of Commerce worked to bring new businesses and good jobs to American communities. These days, however, the national organization seems more interested in blocking ingenuity than fostering it.

The National Chamber of Commerce recently kicked off an ad campaign tied to 21 Congressional races. Many of the ads address health care reform, but several focus on energy. The ads assail candidates who support renewable power, cars that go father on less gasoline, and other clean energy solutions. And they applaud candidates who favor the same fossil fuels that have dirtied our air for centuries.

Just to be clear: Every single one of the attack ads targets Democrats, and all the positive ads back Republicans.

Positioning America as the leader of the 21st century clean energy market should be a shared national goal, but the Chamber of Commerce has revealed once again it views clean energy as a partisan lightening rod.

For the sake of politics—or the fossil fuel sector—they are rejecting the enormous economic opportunity presented by clean energy. The U.S market invested $55.9 billion in clean energy technologies last year according to Bloomberg New Energy Finance. You would think that kind of growth in the midst of a recession would earn some respect within the chamber.

Instead, chamber leaders ignore it and discount the jobs that come with this investment. It’s as if they were saying that the more than 100,000 Americans working in the solar industry or the more than 80,000 in the wind industry don’t embody the values of entrepreneurialism, prosperity, and growth that the Chamber of Commerce used to represent.

This may come as no surprise to those who know the chamber for refusing to accept climate science, but I knew the chamber in a different light.

My father was active in the Chamber of Commerce in the small, conservative town where I grew up. Like local chambers everywhere, it was dedicated to making our community grow and prosper. It wasn’t interested in blocking national energy policy or pretending to know more about science than scientists. It simply worked to support existing businesses in the area and attract new ones.

In those days, the chamber helped make the American Dream happen for people. Now its representatives in Washington act like a shadow group dedicated to obstructing innovation and progress. This makes them blind to real advances happening in communities across the country. More than 150,000 Americans, for instance, have jobs manufacturing clean cars. They work for 300 different companies at facilities in 43 different states.  Most of them are building cars and using technologies that weren’t even available 10 years ago.

That’s the kind of opportunity my dad would have welcomed in our town. But these days, the national Chamber of Commerce wants to undermine it and any policies that would encourage it.

It seems committed to turning clean energy into the third rail of politics for this cycle. It has promised to be more involved in this election cycle than they were in 2010, when it spent more than $33 million on federal races.

Money like that gives the chamber real power, but I believe the American Dream is more powerful. I think most voters will see that real jobs, real growth, and real innovation will do more for their communities than the chamber’s obstruction.

 

 

 

The Occupy Movement Focuses on Foreclosures

As the Occupy movement enters its third month, it is moving into a new phase. Colder weather in the north, combined with aggressive push back from city officials around the country, is requiring the movement to adopt new, innovative approaches that include, but transcend, public presence as protest.

Pundits are wondering aloud whether Occupy is through. But this young movement is just getting started. An exciting piece of evidence to that effect is a new focus on foreclosures.

Alongside its call for job creation, corporate accountability, and relief from crushing student loan debt is a growing demand that Wall Street and Washington make right the disaster that their greed and neglect respectively caused. The movement has deemed December 6th a National Day of Action to Stop and Reverse Foreclosures.

The new “OccupyOurHomes.org” website describes the stakes and the problem well:

“Everyone deserves to have a roof over their head and a place to call home. Millions of Americans have worked hard for years for the opportunity to own their home; for others, it remains a distant goal. For all of us, having a decent place to live for ourselves and our families is the most fundamental part of the American dream, a source of security and pride.

 In 2008, we discovered bankers and speculators had been gambling with our most valuable asset, our homes—betting against us and destroying trillions of dollars of our wealth. Now, because of the foreclosure crisis Wall Street banks created with their lies and greed, millions of Americans have lost their homes, and one in four homeowners are currently underwater on their mortgage.”

These Americans are joining many others, particularly in communities of color, who were victimized by predatory lending and lax enforcement for decades. A new report by the Center for Responsible Lending, for example, shows that African Americans and Latinos were consistently more likely than whites to receive high-risk loans. While an unacceptable 12 percent of White Americans have lost their homes to foreclosure or are delinquent, a staggering one-quarter of Latinos and African-American borrowers are in the same position.

Fortunately, there are a range of solutions that can save homes, restore communities, and rebuild the American Dream of fair and sustainable homeownership. They range from mandatory mediation of foreclosure proceedings, to pre- and post-purchase counseling, to principal reduction and bankruptcy reform. Also important are approaches like own-to-rent programs, community land trusts, and improved fair housing enforcement. And when Congress again takes up the future of Fannie Mae and Freddie Mac, it will be crucial to maintain a government role that keeps homeownership accessible and sustainable for working Americans.

The Occupy movement and its allies have been criticized, unfairly in my view, for failing to articulate solutions. As their attention turns to addressing foreclosures, it is clear what they are working for.

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Genuine Investment in Jobs .. and Infrastructure

The U.S. unemployment rate remains dangerously high, and in some communities, rivals the rates of the Great Depression. Clearly, there is a jobs crisis in this country.  While the temptation for those who are employed might be to be thankful and exhort one another “not to rock the boat,” there is a plethora of reasons why that would be a Very Bad Idea. Ok, the thankful part is probably a good idea.

On the other hand, the boat needs to be rocked. At least a little.  On both sides of the partisan divide, talking heads are beginning to posture. “I stand for job creation.” says one. “No – I stand against all job-killing legislation.” boasts another. “I’m pivoting to focus on jobs.” “I will work tirelessly to focus on what the American people need – jobs.”  If we could create jobs out of hot air, the unemployment rate would be 0.0 percent.

People want and need jobs. Good jobs - that offer a living wage, necessary benefits, and the ability to conceive of a future beyond where you are today. An essential element of the American Dream is a belief in the ability that hard work should be rewarded. But what happens when large groups of our fellow Americans are encountering some of the longest-term and most intractable unemployment seen in decades?  It’s not a problem only for the unemployed, although the point can be made that even if the effects were only felt by the unemployed, it would still be a problem that each of us would be responsible for. However, even in an argument based entirely on self-interest, the current unemployment rates cannot stand.

First, people out of work, unable to find work, and losing hope of finding work, are not spending money. People out of work are losing their homes. People depleting their savings are unable to plan for their children’s education.  Thus, your neighbor’s unemployment may: 1) lower consumer confidence; 2) lower the value of real estate in your neighborhood; and 3) decrease the number of students attending college and/or raise the number of students competing for increasingly limited financial aid.  These are relatively simple examples.  There are more nuanced arguments to be made – for example, herehere, or here.

The solution seems simple. Invest in jobs. After all, it’s become a widely accepted truism that our infrastructure is crumbling. Pay our unemployed to rebuild our crumbling infrastructure.  In the words of Aziz Ansari, “Jay-Z has vodka he makes. Jay-Z signs the tab, money goes back into his own pocket!” We need planners, construction workers, architects, clerical workers, lawyers, accountants, and numerous other job titles. They need work. Again, there are more nuanced arguments to be made – for example, herehere, or here.  It may be complicated to figure out how to actually implement and maximize our investment in our future. But it’s not just necessary. It’s imperative.

Progressives Taking Charge

The President has shown a talent for slowly but surely moving public opinion in the right direction on crucial policy points, then inexplicably giving those points away to his political opponents for little or nothing in return. According to last month’s Gallup poll, for example, only 20% of Americans want Congress to reduce the deficit solely through spending cuts, while the overwhelming majority favor some mix of taxes and cuts, and an additional 7% support tax cuts alone. This was President Obama’s stated position, the one thing he said he would stand by, yet the deal he ultimately signed off on included zero revenue increases.

The President long ago convinced Americans that the Bush-era tax cuts should be allowed to expire, either for those making more than $250,000 per year, or for all taxpayers. Yet the President caved on this proposition during the lame duck session of Congress, and again in the debt ceiling debate.

So now we’re waiting on a deficit “Super Commission” likely to be packed with conservative hardliners, and a process in which the President promises, once again, that increased taxes for the wealthiest among us must be part of the mix. But the stakes are high. And the default outcome—in the likely event that the commission cannot agree—is across the board cuts that would devastate Americans hardest hit by the recession and bury the prospects for job creation and recovery.

We can hope that the third time will be the charm. We can wring our hands and expect to be sold down the river. Or we can take action to make sure it’s a real fight, with or without the President’s resolve. That course, the right course, will require innovative ideas, aggressive organizing, and a powerful narrative that has been lacking from the debate so far.

Fortunately, progressives have already launched several efforts that are crucial to winning the fight. The Congressional Progressive Caucus (many of whose members opposed the debt deal) led a jobs tour around the country, proposed a Progressive Budget, and is calling for job creation as a top priority, including in budget negotiations. The Congressional Black Caucus has its own jobs initiative and has vowed to push back against harsh, cuts-only approaches.

From the Rebuilding the American Dream movement, to the Home for Good Campaign, and beyond, activists are taking to the streets, to Facebook, and to the halls of power in their call for an opportunity society, including an opportunity budget.

Just as crucial will be telling our story, a story that inspires the base, persuades the undecided, and marginalizes our opposition. It must be a story rooted in shared values of opportunity, and economic security, and the idea that we’re all in it together. It must identify corporate misconduct, inadequate regulation, and wrongheaded economics as the forces that got us into this crisis. But it must focus overwhelmingly on positive, pragmatic solutions that enable Americans to get back to work and rebuild their dreams, as well as their assets. Hardly a fringe message, research and experience show this fits well with what everyday Americans already believe.

Armed with ideas, organizing, and a compelling American narrative, we can win not only the budget and deficit fights, but the fight to restore our economy and expand opportunity into the future. It would be nice to have the President in the lead in this fight, but we may have to pull him along behind us.

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