CARL BLOICE
BLACKCOMMENTATOR.COM
“The Foreclosure Crisis: A Nation in Denial,” is the
title of a commentary by Bruce Judson on Huffington
Post January 9. “As we start the New Year, the
executive branch and Congress continue to pretend the
gravest risk to our economy and social stability does
not exist: the ongoing foreclosure crisis,” wrote
Judson, entrepreneur-in-residence at the Yale
Entrepreneurial Institute and author of It Could Happen
Here: America on the Brink. “The financial crisis began
with the housing crisis and it will not end until we
resolve housing. Government policymakers who seemingly
ignore this basic fact are leading the nation to
another potential catastrophe.”
In 2007, only a few observers were warning of the
devastating effect all this was having, especially on
African American and Latino communities from one end of
the country to the other.
“Today, an estimated 29 percent of all homes with
mortgages are underwater. In addition, at least one
respected analyst estimates that a total of 14 million
homes will be foreclosed on from 2007 to the end of the
crisis,” Judson wrote. “This represents a hard-to-
imagine one in every four mortgages. With foreclosures
increasing, there is now such a looming imbalance of
supply and demand that, as the Fed notes, further
decreases in home prices are likely. Some believe home
price reductions of another 20 percent are likely. This
would, in all likelihood, have disastrous consequences
on at least three fronts – and ripple effects that are
impossible to predict.”
Judson wrote, “What is shocking is the almost total
lack of attention the administration has paid to
suffering homeowners. It’s hard for me (and apparently
Chairman Bernanke) to understand how the administration
can possibly hope to revitalize the economy without
seriously addressing the overhang of consumer housing
debt. Moreover, the failure to address the risk this
poses for a broader economic catastrophe borders on the
inexcusable.”
“If President Obama is serious about saving the middle
class and reducing income inequality, the
administration needs to be far more aggressive in
developing policies to keep homeowners as homeowners.
As I have written before, this was one of FDR’s central
goals in the New Deal. Detailed proposals for
addressing this extraordinary risk do exist. However,
they will require a determined effort. There are
solutions, but they are not simple.”
“What is most important right now is that we recognize
we are in a lifeboat that will not reach land,” wrote
Judson. “We need to focus on implementing a meaningful
solution to the problem. A clock is ticking and
Washington needs to acknowledge that a witching hour is
approaching.”
Three years ago, with much fanfare, the Obama
Administration launched the Home Affordable
Modification Program with a target of assisting over 3
million distressed homeowners. As of the end of the
year, it is said to have aided somewhere in the
vicinity of 750,000. One problem is that it’s voluntary
and the bankers aren’t in a voluntary mood.
Excerpt from http://www.blackcommentator.com/455/455_lm_foreclosure.php
