Obama’s Wrong Note on Foreclosures

As Election Day nears, President Obama is regaining his populist mojo. His State of the Union speech was mostly pitch perfect, evoking core American themes of opportunity and optimism, and calling for “an economy where everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same set of rules.”

But the President has repeatedly hit a wrong note in talking about the foreclosure crisis. Not only is his story inaccurate, but he is promoting a harmful narrative that will make it harder to fix the problem.

The President said in his State of the Union address that “we’ve all paid the price for lenders who sold mortgages to people who couldn’t afford them and buyers who knew they couldn’t afford them.” He repeated that theme a week later at a speech in Falls Church, VA, contending that people who did the “right and the responsible thing” were hurt by “lenders who sold loans to people who they knew couldn’t afford the mortgages; and buyers who bought homes they knew they couldn’t afford; and banks that packaged those mortgages up and traded them to reap phantom profits, knowing that they were building a house of cards.”

According to the President’s narrative, then, large numbers of Americans who are struggling beneath unsustainable mortgages willfully chose that fate and deserve roughly equal blame as do the lending and financial giants who cooked up the subprime scheme, targeted vulnerable communities, engaged in deceptive and discriminatory practices, chopped up and distributed faulty loans, and forced fraudulent foreclosures. A different class of “innocent, hard-working” people are the only ones paying the price in this narrative.

Let’s be clear. The foreclosure crisis was caused by reckless misconduct by the lending and financial industries, inadequate rules and enforcement, and staggering long-term unemployment. America’s long history of overwhelmingly successful homeownership went to pot because regulators looked the other way and unscrupulous corporations took advantage, not because working Americans suddenly became wildly irresponsible. Indeed, conscientious lenders like Self-Help Credit Union in North Carolina successfully made loans to the same group of working Americans over the same period with negligible default rates.

Am I saying that no American homeowner ever applied for a mortgage without a realistic plan to repay it? Of course not. A key purpose of proper underwriting standards and regulations is to help lenders and buyers determine what’s mutually sustainable. But to divide American homeowners into “responsible” ones who’ve managed to stay current on their payments and supposedly “irresponsible” ones who’ve fallen behind is inaccurate and harmful.

After confessing that he and the First Lady—two Harvard-trained lawyers—had trouble deciphering their own first mortgage, the President has nonetheless failed to convey how many Americans were victimized by deceptive and predatory practices; how many families sacrificed all to pay the mortgage after one or both parents lost a job; and how many people facing foreclosure today would be successful homeowners if fair rules and vigilant regulators had been in place. He also leaves out how much each of us benefits when we help our neighbors avoid foreclosure, even if we’ve personally managed to stay current on our own mortgages.

The President’s flawed story erodes the public will to aid struggling homeowners and bolsters those who say that the foreclosure crisis should be allowed to “run its course”—why rally to help people you’ve told us are irresponsible? Yet, without a more ambitious policy agenda than we have now, we’ll see millions more Americans lose their economic security, families uprooted from schools and communities, senior citizens thrown into uncertainty or destitution, and the economy in continued chaos.

The President’s current story is also deepening the feelings of shame that keep too many Americans from seeking the advice that could help them save their homes or, at least, make a successful transition. Housing counselors say the stigma attached to foreclosure keeps many people in the shadows instead of accessing the services that exist. It doesn’t help when the Commander in Chief labels them irresponsible.

It’s time for a new, accurate story about homeownership, opportunity, and the American Dream. It’s a story that places blame where it belongs while recognizing that we each have economic and moral responsibilities. It’s a story about the solutions to the crisis that exist, including many that the Administration can take without any action from Congress. And it’s a story about why, in this crisis as in so many others, we are all in it together. As communicator-in-chief, the President should take the lead in telling that story.

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December 6: National Day of Action

Access to an affordable home under fair and sustainable terms is crucial to our economic security and central to the American Dream. But misconduct by banks and lenders, inadequate rules and enforcement, and record unemployment rates are robbing millions of Americans of their homes and security while ravaging whole communities and holding back our national recovery.

Clear solutions exist that can prevent foreclosures and restore communities today while repairing the American Dream into the future. As the Occupy movement focuses on home opportunity, with a National Day of Action to address the foreclosure crisis on December 6, The Opportunity Agenda has launched "Thirteen Things America Can Do to Stop Foreclosures and Fulfill the American Dream," a summary of effective solutions that can save homes, restore neighborhoods, and fulfill the American Dream. This document states in plain language who must do what to ensure home opportunity for all Americans. Click here to learn more.

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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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An Uneven Journey

Earlier this year, I visited my father, who lives in the Bay Area. As we drove from the Oakland airport, the conversation quickly turned to the Obama presidency. Born in 1923, my dad survived the Great Depression, fought in World War II, endured vicious Jim Crow segregation and violence, participated in the Civil Rights Movement, and, this year, witnessed the inauguration of an African-American president of the United States.

On our drive, he reminisced about how, at age 8, he had gone with his 2nd grade class to see the cavalcade of then-president Herbert Hoover as it drove through downtown Detroit. A year later, the country would throw Hoover out of office for his gross mishandling of the economy, choosing Franklin Delano Roosevelt and his message of change. Before my dad's teen years were through, he would join the Marines and defend a segregated nation from within a segregated military. Traveling to and from southern military bases, he would experience racial humiliation, threats, and violence from white fellow Americans, often while wearing his Marine uniform.

As we marveled at the progress we've made as a country, we drove by block after block of boarded up houses in some of Oakland's African-American neighborhoods, many with foreclosure signs visible. Many homes in the same neighborhoods still sported lawn signs reading "Change" and "Hope."

As the Obama presidency sinks in, many are interpreting it in absolute terms: arguing either that it shows that racial bias and discrimination are no longer factors in American life, or that the election means little for race relations, reflecting merely a unique confluence of events--a historically unpopular incumbent, a historically bad economy, a gifted politician raised by white folks who ran a flawless 21st century campaign against a pair of tone-deaf 20th century opponents. News media coverage mostly echoed that polarized, simplistic discourse, with an emphasis on the "post-racial America" narrative.

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Obama is DECEIVING us on HEALTH CARE - Beware Hidden Risks!

Some people have wondered why many working people, especially Catholics have stood by Hillary Clinton.

They accuse them of racism or simply of being 'out of touch' with their 'movement'

I think it is much less complicated. They are terrified of an increasingly terrifying aspect of our free market economy, incredibly high health care costs, costs which can destroy a family's hopes and dreams for a better future forever and leave them homeless and starving. The most common cause of bankruptcy and homelessness.

Obama is trying to work with the insurance companies. His healthcare guy, Jim Cooper, is a big benificiary of insurance company money. He helped kill universal healthcare in 1994. Its also come out in the past weeks that, embarassed, he is LYING to us on health care. Obama's healthcare plan would NOT SOLVE THE HUGE PROBLEMS THAT A GREAT MANY OF US WHO HAVE ANY KIND OF HEALTH ISSUE FACE WHEN IT COMES TO AFFORDABILITY. It does not even attempt to. Instead, he focuses on healthy people and getting them on paper as being insured BY CUTTING BENEFITS.

Many so called 'elites' may think they are immune from job loss. However, its NOT TRUE. Working people have no ILLUSIONS. They also realize how one health incident can ruin someone's life. A few weeks ago I wrote about that young woman who died because she could not pay off an older clinic bill.

According to the Kaiser Family Foundation, the cost of an average 'difficult' pregnancy, uninsured is
. A hospital faced with an indigent patient and a bill that large, may write, say half of it off. But a person will still have their wages garnished for the rest of their life. If they own a home with their family, or any other large convertible assets, it WILL be taken. And, with bad credit, they will not be able to rent.

This is why
many people are voting for Hillary Clinton.

Working people, like many others, are disturbed by Obama's stance on healthcare relative to Ms. Clinton's. They realize that Obama isn't really solving the problems, just nibbling around the edges.

Ms. Clinton's healthcare plan would make a huge difference for that 20% of Americans who are currently
outside of a group plan. Obama uses deceptive language like "nobody can be turned away" and "no pre-existing condition can be excluded" to pretend he is, but his own economic advisor has admitted that it would be 'too expensive' to SUBSIDIZE the sicker 20% of the American people. (That is MUCH more than the 15 million Hillary claims - much more) - It would be too expensive, is what Goolsbee claimed (for both candidates, but Clinto has showed that SHE can overcome it, with a mandate.). Clinton HAS done the numbers and says it can be done while still covering everybody AND
capping out of pocket expenses at 5-10%
of a family's income. The way it can be done is by exercizing CLOUT. The clout that a government negotiation team would have IF THEY HAD A BUNDLE OF BOTH HEALTHY AND ILL TO BARGAIN WITH. If you just have ill, there is no bargaining power. You are at a disadvantage BECAUSE TREATING ILL PEOPLE IN THE UNITED STATES DOES COST A LOT OF MONEY. That is also why McCain's plan is doomed to fail. There is room for savings BUT NOT ENOUGH AS TO MAKE THESE DISEASES AFFORDABLE FOR MOST AMERICANS WHO HAVE THEM AT CURRENT WAGE LEVELS. Wages would have to go up dramatically, which is not going to happen in the current world economy. Wages will continue to go down, and we need to make it so people CAN STILL SURVIVE.

Hillary will give Americans the peace of mind that comes with having good healthcare coverage, a peace of mind that most other citizens of developed nations TAKE FOR GRANTED.

That is what is so new and LIFE CHANGING about Hillary Clinton's proposal. For many people, it would be the first time they had been able to get affordable health care. Our experience during World War II shows that when a large number of people gain health care, healthy lifespans and productivity increase. Dramatically. Studies have shown that some people are making important life decisions based on healthcare issues. Clinton's proposals would free millions. That would revitalize the economy. Perhaps that is what scares some. Wages might need to increase because people's insurance would no longer be so dependent on where they worked. People could start small businesses and business could stop laying off their older employees to lower their healthcare bills.

Under Obama, rationing would continue, even worsten. To get cheaper insurance, people assume more risk. Insurance companies pay less. They save the difference in their medical savings accounts so they are not broadsided. But many people don't have that money. Sick people often cant afford the cost. Insurance companies could ask 'a fair price' which for some people might be very high, as its based on the cost of their care, as well as the risk, Under Clinton, its based on income, the very poor and the unemployed would pay nothing or next to nothing. A major - actually, the largest - larger than simple unemployment - driver of the breakup of homes and families would be averted.

Thats much less than most poor families and individuals are paying now. The mandate makes it possible - its been explored in countless other countries and thats just the way it is. However, most low and medium income people would pay FAR LESS than they do now, and people without insurance - not just insurance, WORKING COVERAGE WITHOUT GAPS would not exist.

is clearly against
real universal coverage.

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