Bankrupting the Common People

It Is Time for a Moratorium on Foreclosures

September 14, 2010

OpEdNews - Of all the measures recommended to ameliorate the ravages of this recession, and the one that resonates and comes across as most urgent and doable, is for this president and this Congress is to implement an immediate moratorium on foreclosures by banks, thereby keeping people in their homes.

It would likely forestall bankruptcy proceedings for millions of these people and give them a lifeline and more time to find other employment, the probable cause of their current distress.

It would also have the effect of stabilizing home prices as foreclosures have contributed greatly in depressing real estate prices of other existing homes in neighborhoods where foreclosures have mostly occurred.

The sub prime mortgage market that began crashing in late 2007, and overwhelmingly in the fall of 2008, has played out. Sadly, most of the people who got ensnared when that bubble burst shouldn't have qualified and should have been rejected for the home loans they received, as they became the unwitting foils of unscrupulous mortgage lenders in their zeal to secure higher profits at any cost.

Yes, people were often taken advantage of, conned and manipulated by the likes of the most notorious and unsavory lenders; i.e., Washington Mutual (WAMU) and Countrywide Mortgage, both of which subsequently went under.

Yet these people must bear some responsibility for their plight (and it's probably too late to help these people, as many have walked away from their homes and many [presumably] are already in bankruptcy). There are going to be casualties in any economic downturn much less the great recession we find ourselves mired in.

But when a recession becomes so perverse and effects people who have previously been responsible home owners — paid their mortgages on time (most for many years before falling victim to circumstances that was none of their doing) and they suffer long term unemployment, substantial loss of income, and their savings become depleted and with the specter of foreclosure and the loss of their home imminent — then it is time for emergency measures to be implemented, and thus the aforementioned foreclosure moratorium.

To be sure, the banks would scream and resist the implementation of a mortgage moratorium, and Republicans (as is their want) would undoubtedly attempt to obstruct and denounce the measure as "Socialism" and "UN American." But who cares what they think. Such a measure would be unimaginable of being implemented if Republicans were in the majority of Congress (something that may be a likely occurrence after the November mid term elections).

A mortgage moratorium would also blunt the charge against Obama that he has only sided with the banks and Wall Street in this recession, keeping them afloat with massive bailouts while neglecting the people on "Main Street."

To this observer, the American people would support such a moratorium, as many are anxious themselves with the thought of what would happen to them if they became unemployed and lost their homes in foreclosure.

Home ownership has been the centerpiece of the "American Dream," which has become tattered, in many respects, too numerous to mention in this short piece.

But the continuing spectacle of millions losing their homes for no fault of their own is itself UN American.