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Addressing foreclosure crisis
Program will help revive neighborhoods and provide more affordable housing
Thursday, Oct. 2, 2008 | 2:06 a.m.
One of the unfortunate outcomes of the housing slump in the Las Vegas Valley is the effect the record number of foreclosures is having on neighborhoods. Entire city blocks resemble checkerboards of properties for sale or in foreclosure mixed with homes that aren’t on the market.
Sadly, many of the foreclosed homes have yards that have not been kept up. Multiply that by several homes on a block and you have a neighborhood many prospective buyers may want to avoid.
That is why it was refreshing to read a Tuesday story in the Las Vegas Sun in which reporter Brian Eckhouse wrote about a federally funded program that could help revive residential areas while increasing the availability of affordable housing.
Clark County and its municipalities will receive $47.6 million as part of the Housing and Economic Recovery Act of 2008, a bill passed this summer by Congress to help communities with high foreclosure rates. The government agencies can use the money to purchase or rehabilitate properties and then sell them to low- and moderate-income buyers, or can use the money to help those buyers with down payments and closing costs.
The agencies have until Dec. 1 to devise a plan of action and must spend the money within 18 months, so positive results should be seen soon.
It is unrealistic to expect this program will solve all the housing problems associated with the foreclosure crisis, but it certainly is welcome in these tough economic times.
For that reason the county and Las Vegas, Henderson and North Las Vegas should spend the money wisely by ensuring their plans identify the neighborhoods that need help the most. Well-crafted plans that produce results by uplifting neighborhoods and enabling lower-income individuals to purchase homes — without getting trapped by unaffordable mortgage loans — might encourage Congress to put more money into the housing program next year and beyond.
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Barack "Sub-Prime" Obama is number two on getting cash from the crooked Fannie Mae and Freddie Mac organizations. He accomplished that feat in only 3 years of being a US Senator.
For years the Democrats having been pushing the Fannie Mae and Freddie Mac and regular banks to do more and more and more and more sub-prime loans so that minorities can get into house.
Now all Americans are paying a big price for that foolishness.
Here is an article praising Clinton on busting open the sub-prime market for minorities to own homes. It was written in 1999 with this scary prediction: "argues that a higher target would only produce more loan defaults by pressuring banks to accept unsafe borrowers."
http://articles.latimes.com/1999/may/31/...
As of Feb 2008, Democrats were still trying to increase the sub-prime market:
"Democrats sought to expand the role of Fannie Mae and Freddie Mac in affordable housing and the subprime market on Thursday as a proposed increase in the companies' conforming loan limit ignited some protest from Republicans."
Below is part of McCain's speech in 2005 on the Senate floor. Too bad, they did not listen to him.
"For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market."
"I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole."
Jim, considering I've already corrected you on the timeline for when McMaverick actually signed on to S.190, perhaps you can post your source for this speech of his that you have spammed onto every other thread on these boards that claims he signed on in 2005.
I'd sure love to see who is claiming he signed on to this prior to when the Congressional Record indicates he did (May 2006).
Oh and one last thing, "pushing for" and actually making something happen are two different things. I don't really expect you to understand obvious nuances (a contradiction in terms? LOL) .....
You chart shows a higher percentage jump in 2003 which makes sense because that is when interest rates started to jump.
More people became unqualified for normal loans and more qualified for sub-prime.
So you can stick that fact into brain and crank it.
Here is an article praising Clinton on busting open the sub-prime market for minorities to own homes. It was written in 1999 with this scary prediction: "argues that a higher target would only produce more loan defaults by pressuring banks to accept unsafe borrowers."
http://articles.latimes.com/1999/may/31/...
I'll ask this again, because I haven't received any response to it. Why are republicans so focused on derailing Barack Obama?
1. People don't vote against candidates; they vote for them.
2. Why aren't you supporting your own candidate instead of attempting character assassinations on Obama?
Lastly, can we PLEASE move on from the blame game to actually figuring out how to solve the financial crisis? You are a political hack if you don't believe to some degree BOTH parties are responsible for our current situation. At this point it's pointless to figure out the percentages. Let's move on, work on the problem at hand, and let future historians and congresses figure out those other questions. Besides I'm sure we don't have all the information right now.
Duh duh duh....the subprime mortgage crisis was a direct result of so called "affordable housing programs" pushed by the federal government.
By the way Gordon...
1) President Bush doesn't control subprime mortgages...as much as I dislike him he didn't cause the crash.
2) Republicans tried to increase regulation of FM and FM seeing troubles back in 2002. (Free marketers saw potential problems as far back as 1999).
3) The so called credit crisis isn't a traditional credit crisis. Lending hasn't seized up despite what politicians and the media keep talking about.
Gordon,
Subprime mortgages exploded in 2003 because the fed cut the rate to a historically low level.
The explosion of easy money fanned outward through the banks and down to wannabe home owners.
So your answer to "what caused the explosion in subprime mortgages" is Greenspan Put.
I should also note that the "affordable housing" programs and the easy money thanks to the fed created an explosion in demand for housing.
That means rising home prices. The reason defaults on loans after 2002 are higher than before is because of a run up in home prices.
In 2002 a 1400 sqft brand new home would have cost about $140,000. In 2007 that same home (brand new) would be $240,000.
Which payment is easier to make?
Avoiding the blame game I would like to ask why the homes can't be maintained by the city and a lien be put on the home so that when it sells the city can recover their output of money? Why does it always have to be about some fancy-schmancy 'Act' that affords millions that are never recovered? Simply put the city or HOA (if there is one involved) should hire someone, pay them and put a lien on the house to recover their money. The house will sell eventually so if the bank owns it now they should either pay for the upkeep themselves or somewhere down the road someone, bank, new owner, perhaps even the realtors taking a lesser commission - in any case someone besides taxpayers should pay for this. I could care less whose fault it is at this point in time because that doesn't solve the problem. Let's spend more time/energy looking for solutions instead of trying to prove a point about who is to blame.
So Gordon your point is...regulation failed but we need more of it?
They admit they didnt see a problem but if they did the probably should have done something. Also, that doesn't address the points that the Federal Reserve and CRA 77 didnt help create the problem in the first place. "Preditory" lending was a result of government policies not a result of inadequate regulation.
Deregulation didn't cause the crisis: http://npri.org/blog/deregulation-didnt-... (neither did Republicans it was Rep and Dems bad policies they created).
...and the bailout is a scam: http://npri.org/blog/credit-crisis-hits-...
Azsk8fan,
Putting a lien on the home so the government can keep up the property won't arrest falling prices, nor will it help home sales.
If the government bought homes it would but a huge financial burden on the state (or city).
This may arrest falling home prices but it does not mean that homes will be sold and taken off the government books.
The government may get stuck with thousands of properties to maintain costing even more money.
The best thing to do is to let home prices fall and let supply and demand kick keep working their thing.
What deregulation? Name 3 things. You all have 1 thing to blame and ironically Bush is the biggest regulator since Nixon!
I can name more regulations that failed than any deregulation that can be linked to the crisis.
I love Robert Greenwald movies, they are so bad they're great. He's really good at taking quotes out of context or only telling half the story.
The DVD on Wal-Mart is an excellent example.
He blamed Wal-Mart for getting a $1 million subsidy that put a local store out of business.
THE GOVERNMENT GAVE THE SUBSIDY! It was the government's fault...
Ironically the store owner said that if he had gotten the subsidy or if Wal-Mart didnt he could have stayed in business and competed with Wal-Mart.
Greenwald, like many anti-capitalist hard core socialists don't think hard enough to understand what is going on...let alone understanding what someone says.
KD, I realize what you're saying but I thought this article started out being about the homes not being kept up on the outside and causing neighborhoods to fall into disrepair - and then this 'Act' this provides millions to fix up the yards and what-not. I was only looking for possible solutions to pay for the upkeep - something besides an 'Act' with money being provided at the taxpayer expense.
Gordon,
No...you didnt. You've only showed that regulation that existed didn't work. Any facts that say they didnt enforce really means they didnt know what was going on. The regulators had no clue. Regulation failed.
And how can you discount the moral hazard of bailout, the federal reserve rate cuts, and the CRA?
All of those are regulations which encouraged high risk taking and helped created a massive housing bubble?
Why don't you explain that here.
And Azk8fan,
That would be a great plan if you wanted a "Full Employment for Gardeners Act" all it does is slow growth in other sectors by taking money away that will be used in higher valued persuits. Slower economic growth means slower recovery and a slower ability to start repurchasing homes.
Basically this plan will give us a few nice lawns that will just sit empty even longer.
An easy to read article on moral hazards and the danger of a bailout: http://www.reason.com/news/show/129202.h...
Tried to find the original video but You Tube pulled it (naturally!)
Here is another version which does a good job explaining what happend: http://video.google.com/videosearch?q=Bu...
About half-way through it, it points a lot of fingers at Obama which is unfair. It has been governments fault for 40 years Obama has only been in gov for 3 and suing banks for 10.
Reid caused a panic and run on insurance stocks.
What idiots we have in DC!!!!!!!
BOO for spam. Be ashamed nance. Also that has no bearing on the thread.
referret...I sorry that I offend you...the God of threads....LOL
Reid speaking on the bailout bill...created a panic and run on insurance stocks.
What an Idiot!!!!!
Gordon...you still pointed to one deregulation. 1!
I'm not pointing fingers at Dems or Republicans I'm pointing it at the government.
Government GSE, the Federal Reserve, the SEC, the bailouts, the CRA of 77 amended in 89 and 95....all regulations and regulators.
You've got one deregulation. 1!
And to say that Republicans wanted no oversight is an overstatement. The pushed for regulation of FM and FM in 03 and 05 to be blocked by Dems.
If we had of done serious deregulation. Elimination of the Federal Reserve, the GSE's and outlawed bailouts, this problem wouldnt be a 4th of the size it is now.
We need more deregulation not more regulation.
Gordon,
The Community Reinvestment Act of 1977 was passed to force lending institutions into granting subprime loans. IE High Risk loans.
Over the last 40 years the results have been this.
A stead rise in the price of homes, above and beyond the rise in inflation.
As home prices moved faster than personal income growth, the government pushed to increase home ownership in 89 and 95. IE pushing more subprime mortgages.
Companies were penalized if they did not take a certain amount of subprimes by the way.
Adding fuel to the fire was the Mexican Peso crisis in 95, Asian Financial Crisis in 97, Russian Rubble crisis in 98, Dot Com bubble burst in 2000, and the post 9/11 recession.
With the bulk (if not all) was the Federal Reserves response to cut interest rates. The government also bailed out creditors to Mexico.
This added more money to the money supply. More money chasing the same amount of products means inflation.
More money and easy credit in 2003 (economic recovery time for America) combined with increased requirements on subprime mortgages fueld demand for housing.
Prices skyrocketed in 2004.
The rest is history.
The reason it took so long for the effects of the CRA to take effect is because government manipulation of economic information sometimes takes a long time. Requiring high risk and giving easy acess to loans was like crack coccane. Over time the addict (the American homeowners and the mortgage industry) needed more and more and more and more. Until the economy couldnt take it anymore.
The system crashed after 30 years. It look slightly less time to prove JM Keynes was wrong.
Look...there goes the Dems hiding from their corruption of the sub-prime market.....Who me???...they say
They screwed over America.....
Gordon,
Also if crackhead squatters are living in them we should charge rent. (just kidding)
I agree with your points.
jfnance32,
I find it funny that you pointed out a lot of when where and how a lot of this debacle occured, and yet still, a liberal sneaks into the room here, mouths off, and then sneaks out just as you stated they do, again, kudos, you are astute and a fine gentleman. (tip of the hat)