Just writing down all of California's underwater mortgages to market
value would pump more than $20 billion into the state, create more than
300,000 jobs, save Golden Staters an average $810 a month on mortgage
payments and "fix the housing crisis once and for all," according to a new
grass-roots study.
Picking up, in some ways, where ACORN left off, the two demonstrative
community coalition-based groups recognize housing has long been an economic
cornerstone.
Along with the cost of a roof overhead, household operations, insurance,
fuels and utilities, water, sewage and trash services, furnishings, tapped
equity expenditures, and more, housing accounts for about 40 percent of the
Consumer Price Index, an index of consumer expenditures, according to the
U.S.
Bureau of Labor Statistics.
The unemployed consumer can't get a job in a bleak economy.
A weak economy won't get stronger without a viable housing component.
Housing remains soft when even employed home owners struggle to keep a
roof over their heads.
Repeat.
Thanks to taxpayers, big business, including mogul mortgage lenders, got
their bailout from the Feds.
It's time to give some power back to the people.
"One in five Americans owe more on their mortgage than their home is
actually worth. Collectively, underwater homeowners will have to pay down $709 billion
in principal before they can start building equity in their homes. Every
effort to reboot the housing market to date has failed because it has not
done the most essential thing: reduce the massive debt load carried by
underwater homeowners," the report says.
The Feds can't do it, because they emptied the nation's coffers, bailing
out banks and, even under the Obama Administration, remain nearly as inept and as laced with the same
special interests as they were before the Greatest Recession since the Great
Depression.
Banks, with their hiked-up credit card and debit card fees, with their
tight-fisted lending requirements, and their continued lack of transparency,
have squeezed more than enough to afford a bailout for struggling
homeowners.
The Win-Win report says the nation's top six banks paid out more than
twice the cost of the plan ($71 billion per year) in bonuses and compensation alone ($146
billion in 2010). Currently, with the nation still in the throes of
recovery, the nation's banks enjoy a historic nest egg of cash reserves
amounting $1.64 trillion.
"Six billion dollars per month that is currently going to mortgage
payments would instead go toward buying groceries, school supplies, and
other household necessities. As consumer demand picked up, businesses would
start hiring again," the report says.
Grassroots organizations across the country are calling on state
attorneys general, who are investigating the banks for foreclosure fraud, to
stand firm for a settlement agreement that includes large-scale principle
reduction for underwater borrowers; and does not to release the banks from
claims beyond the robo-signing scandal.
This would provide real restitution for homeowners and allow states to
sue the banks for wrongdoing connected to the origination of toxic mortgages
and the steps leading up to foreclosure.
"Homeowners across the state and country nation are struggling to keep up
with their underwater mortgages. We could create a second stimulus with a
cost to taxpayers by writing down the principals and interest rates on all
underwater mortgages to market value," said Peggy Mears of ACCE.
The people still want their slice of the American Dream and they expect
the legislators for which they voted to give it up, according to a National Association of Homebuilders' survey.
Nearly three out of four voters -- 73 percent of
both owners and renters -- believe Uncle Sam ought to provide tax benefits
to promote homeownership.
The sentiment cuts across party lines with 79 percent of Democrats, 71
percent of Republicans and 68 percent of Independents supporting tax perks
that come with homeownership.
Even when told that getting rid of the mortgage interest deduction would
help ease the federal budget deficit, 65 percent of voters opposed any
proposal to abolish the tax provision, with 69 percent of Republicans, 69
percent of Independents and 59 percent of Democrats opposing eliminating the
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