Housing Bill

Thursday, July 24, 2008

Adam Davidson, NPR correspondent for International Business and Economics, talks about the housing assistance bill just approved by the House and expected to be enacted next week. Then Sarah Gerecke, chief executive officer of Neighborhood Housing Services of New York City, talks about the local impact of the legislation.


Adam Davidson and Sarah Gerecke

Comments [66]

Tonya from New York City

I would like to see relief for homeowners who fell prey to predatory lending. I would also like to hear more about Neighborhood Housing Services and their services.

Jul. 24 2008 03:00 PM
hjs from 11211

taxes will go up to pay for more police when abandon homes become crack houses or the whole neighborhood is written off.

Jul. 24 2008 02:54 PM
Tony from Brooklyn

That loud hissing sound you hear is the air coming out of the housing bubble. The mortgage crisis was preceded by the deflation of the housing bubble. Equity declined to the point where a. people couldn't take increasing equity out of their home in the refinancing Ponzi scheme the mortgage banks were running; or b. homes were worth less than was owed to the bank for that home and people walked away. So, you may have missed it, but housing prices have come down a great deal.
The purpose of gov't. intervention with regard to the mortgage crisis isn't to stop foreclosures. It's to stop banks from failing. Bear Stearns, WaMu, Wachovia, as well as Fannie and Freddie are all in the toilet or worse. Failing banks isn't good for the overall economy. Surely you'll grant me that point. We're going to pay for this thing sooner or later. The government's position(and mine to a certain degree) is it's better to get in the way of this freight train before it starts rolling down hill because it's cheaper to do it now than to clean up the mess further down the tracks.
To your point of high taxes: Tax rates don't translate directly to revenue. Your high taxes will go UP if you have a lesser tax base to provide the same services. Also tax rates are but one variable in the quality of services a town provides. The funds still have to be managed.

Jul. 24 2008 12:56 PM
Jon P. from Hewitt, NJ


So how are housing prices going to come down from their way over artificially priced value that they are at now? Because if the house prices don’t go down, how are responsible people with stable incomes ever able to afford to buy a house? Won’t the economy and the housing market be better off in the long run if the majority of houses are owned by these types of people. Otherwise, how can it help the economy and the nation if house prices just keep going up. Come on, you know that everything that goes up, must eventually come down.

Plus I can show you plenty of towns that have extremely high property taxes yet the quality of public services, schools and infrastructure keeps getting worse and worse year after year as house prices just keep going up….

Jul. 24 2008 12:35 PM
Tony from Brooklyn

This message board should be exhibit A in the case that Americans are not clever enough to understand the complex economic and political issues that exist in the world. If people could get past the childish issues of "fairness," they just might see.
Consider: Foreclosure brings empty homes. Empty homes bring lower property values. Lower property values bring less local taxes. Less taxes=poorly funded schools, especially when the schools are competing with the extra law enforcement that's required to fight the crime that comes to neighborhoods with vacant homes. Poorly funded schools=students who can't compete in the global marketplace and/or the likes of Greg(7) who thinks the GOP is conservative in their spending!!! Where has this guy been the last 7 years?
Contrary to popular opinion, you didn't learn everything you needed to know in kindergarten. The more foreclosures in the market, the more we all suffer as the rest of the dominos fall. THINK beyond the knee jerk response to cling to what's "fair," and it's readily apparent that gov't intervention is the right thing to do...for all of us.

Jul. 24 2008 12:03 PM
Jon P. from Hewitt, NJ


My rent won’t go up. Even though Hackensack is not exactly a rich town, its right next to NYC. You know what that means? An over inflated house market that’s not affected by the national down turn. But I would be happy to see my rent go up if house prices around me went down. Then I could realistically buy (unlike the delusional people making 40 grand a year thinking they can afford a half a million dollar house with no money down…) an affordable house and not throw away money towards rent like I am currently doing.

Jul. 24 2008 11:46 AM
hjs from 11211

jon p

of course this is for the banks but it will also help stabilize the housing market. do u want your rent to go up?

Jul. 24 2008 11:33 AM
Jon P. from Hewitt, NJ

Think about it, has any government bailout programs in recent times actually helped the common man? Or have they just helped the corporate word? Don’t believe the hype….

Jul. 24 2008 11:26 AM
Jon P. from Hewitt, NJ


Not happy with paying for any wars… That’s a whole other show…. House values that go down due to foreclosed houses around them will not devalue forever. All houses are way over valued right now. More affordable houses will lead to more stable home owners and Real-estate prices will go up, not overnight but they will go up. This bail out wont make house values go up any faster and will just ad to our debt and devalue the dollar even more.

Jul. 24 2008 11:23 AM
hjs from 11211

martha rosler,
agreed so called liberals say "let them eat cakes." eye opening.

truly we are a state of greed.

Jul. 24 2008 11:19 AM
hjs from 11211

does the stock market agree

a) The economic crisis is being totally overblown in the media.

glad you write to them more should

Jul. 24 2008 11:16 AM
feboe from never never land

f) there's no global warming
g) we can control the Arabs
h) america the greatest ever
i) i like my head in the sand

Jul. 24 2008 11:13 AM
Jon P. from Hewitt, NJ

Martha Rosler,

Should I feel sorry about people who lied about their income (there’s no excuse for that, no matter what the mortgage broker told you)? Should I feel sorry about people who no matter how smart or ignorant obviously bought way more house then they can afford? Should I feel sorry for greedy people trying to make a quick buck by flipping homes? Should I feel sorry for people that took out second loans to pay their credit card debt? How ignorant do you have to be when your borrowing several hundred thousand dollars in your name and you don’t hire an independent lawyer? I’m tired of paying for foolish people’s decision. You just cant cry ignorant on this one.

Jul. 24 2008 11:13 AM
hjs from 11211

jon p.
just how many empty apartments do u think are there out there??
forget you, there are "responsible' homeowners who will lose value as their neighbor's homes are discounted. is that "fair?"

wishing to add to the falling wealth as a nation not very patriotic.

by the way you people seem ok with paying for endless wars. what's with that?

Jul. 24 2008 11:10 AM
Phoebe from NJ

a) The economic crisis is being totally overblown in the media. There is no recession to date, although you'd believe it was ongoing for the past 2 years. Granted, times are tough but the underlying reason for many of the current issues are related to the dollars weakness, and export of jobs.

b) The number of people affected by the "mortgage crisis" is actually very small in comparison with the country as a whole (5% or so) many of whom are not eligible for a bail out. It could be very strongly argued that most - but not all - put themselves onto the streets by entering into an agreement.

c) You use hyperbole; they would not be "on the streets" per se, they just would not own a house which they should probably have never bought.

d) See other comments on student loans, credit card bills etc. etc. Should they be bailed out to? By who? Shall I garnish your wages an extra $50/week to pay for your neighbor's flat-screen TV?

e) I write my Congressman about many things; some he agrees with, some he doesn't...

Jul. 24 2008 11:01 AM
Jon P. from Hewitt, NJ


Yes, I’m all for putting a million folks out on the street. Then they can rent like I do. Then my tax dollars won’t be paying for their stupid mistakes…. They wrecked their own credit, not me….

Jul. 24 2008 11:00 AM
martha rosler from brooklyn

I am pretty appalled by people's haste to condemn everyone who was duped or oversold on Bush's 'ownership society' pipedream. Especially poor people don't know about hiring lawyers because the mortgage brokers and banks seem like upstanding , responsible institutions.I have faithfully paid my mortgage for over 20 years, pay off all my credit cards every month, but I can see beyond my own nose. People did not expect to be lied to & cheated and deserve to be bailed out. Bailing out Fannie and Freddie is a different issue, because everyone, right & left, understands their failure would likely precipitate a worldwide depression.

Jul. 24 2008 10:59 AM
Steve (the other one) from Manhattan

@Nikki - funny, that's exactly what I owe. Can't wait for when they have to bail out Sallie Mae. Let me guess - law school?

Jul. 24 2008 10:54 AM
hjs from 11211

ok. so did u write to rep in congress?
explaining now is the best time to put millions of people on the street.

Jul. 24 2008 10:53 AM
Phoebe from NJ

hjs: I'd argue it is by far the best time to learn a lesson. Same for high gas prices. Time to bring on real change, not bail outs to encourage ongoing poor habits.

Jul. 24 2008 10:48 AM
hjs from 11211

more poor planning when will we learn.

Jul. 24 2008 10:47 AM
Nancy Cadet from fort greene bklyn

Can we mention the following:

cost of Iraq war/occupation hourly, weekly, monthly?

rise of national debt under GWB?

Can you invite a speake who knows what he/she talking about instead of the conventional washington 'wisdom' of Adam Davidson, ie. Duncan Black aka Atrios or Paul Krugman, both economists?

Fat chance, eh?

Jul. 24 2008 10:46 AM
RC from queens

If people can't be responsible and are unable to take care of themselves. Do they therefore deserve the same rights that those who are responsible? Perhaps we should have a tiered citizenship?

Jul. 24 2008 10:46 AM

I am a first time home buyer with stellar credit who waited until the prices came down to where I could actually afford the house. Now I am finding out that I would have to pay more every month even if the price has come down by 10% because interest rates have gone up. This bill is only going ensure the interest rate keeps on going up and make it even more unaffordable for people like me.

Jul. 24 2008 10:46 AM
Valerie from Inwood

(1) Why not convert the balloons to long-term fixed rate, like 45 or 60 years?

Jul. 24 2008 10:45 AM
chandrakant r shah from regopark, ny

this is they use tax payers money and help the people who gambled..indirectly we are promoting gambling

Jul. 24 2008 10:45 AM
robert from New York

Having listened to your guests, I am sympathetic to those who were "duped" by overly complex mortgage requirements. But really, shouldn't one hire a lawyer to go through all that when one buys a house?

I rent, and receive no tax breaks for that. If I can't make my rent, too bad. Why in the world should we bail out those who can't meet their mortgage payments? If the houses go back on the market, then the price of houses will fall, and more people will be able to buy.

If we are going to bail out people with taxpayers' money -- our money -- should we not own some portion of these properties?

It's fine to say: we do this for the good of the economy. But I own no property, I can't _afford_ to own any property at the moment, and it seems grossly unfair to use my tax dollars to help other people hang onto properties they couldn't afford.

Jul. 24 2008 10:44 AM
Jon P. from Hewitt, NJ

Foreclosures are nothing new. People have been making stupid mistakes for decades and houses have been foreclosed for decades. 95% of people pay their mortgages on time. Why should we bail out the 5% for being stupid or greedy? If you’re taking out a 100,000 to a half a million dollar loan, there’s no excuse for not going out and spending a couple of hundred bucks on an independent lawyer to look over your contract…. I realize that people’s houses that are not foreclosed are being affected by foreclosed houses around them. But when food prices go down, it’s good for the economy. When fuel prices go down, it’s good for the economy. So why is it not good when house prices go down? You’ll get more stable new home owners and in the long run, everyone’s house value will go up again. Rushing to save the ignorant, greedy and dishonest doesn’t help anyone except the ignorant, greedy and dishonest….

Jul. 24 2008 10:44 AM
hjs from 11211

this is a national crisis. not time to teach lessons

Jul. 24 2008 10:44 AM
jade from ny

Why should *I* pay for people who were too lazy to shop around for the best mortgage, or to obtain independant advice?

I was responsible and didn't "buy:" a home and I'm stuck in poorly maintained rental housing.

Jul. 24 2008 10:43 AM
John from Manhattan

I assume that the old consumer protection law which created the "APR" - truth in Lending never applied to mortgages?

Jul. 24 2008 10:42 AM
Andy from NYC

While the concept of a bailout is deplorable-rewarding bad behavior, in essence-
the overall cost to the economy far outweighs the moral correctness of letting people fail. This economy will not recover until housing prices stabilize and the perception that one's house value is in free fall is countered.

Jul. 24 2008 10:42 AM
Jonathon from NYC

Socialism for the rich, capitalism for the poor.

Rich make money being greedy, lose a little, and govt makes them whole. Poor lose a lot by making stupid decisions and govt tosses them some change. Middle class stays the course and foots the bill as always.

Jul. 24 2008 10:42 AM
Phoebe from NJ

@26, Hugh: That would be heading toward fascism, which if you take into account the Executive and Congress' abuses of the Constitution may not be too far away...

Jul. 24 2008 10:42 AM
michelle from brooklyn

does this mean the taxpayers will have to bail out credit cards too? that's the next ticking time bomb.
it's just not fair that the taxpayers have to flip the bill for other's people stupidity and lack of responsibility.

Jul. 24 2008 10:41 AM
hjs from 11211

silly. grow up? or become a drone?

Jul. 24 2008 10:41 AM
Phoebe from NJ

hjs: The way to get out of the hole is to cut back, save a portion of your wages, and make informed decisions. Not "I want, I want" which permeates all classes. Then, when there is difficulty, have a support system to prevent people falling into the hole. A health service and regulation would be 2 good starts to this, but not adding $$$ to the deficit which drags the dollar further and will fuel inflation... making the issues worse. A sea-change in mentality is the only true way to get America back.

Jul. 24 2008 10:40 AM
Tony from Brooklyn

Deregulation is the cause of the housing crisis. The government abdicated their implied role in overseeing this industry and the chickens have come home to roost. The mortgage industry was preying on our most vulnerable. There's evidence of marketing plans put in place by these companies to specifically target the undeducated, the elderly, and the desperate. Then on top of that the fees that accrue on top of the interest and principal are often fraudulent as well. State governments should prosecute this fraud to the full extent of the law(before they go out of business) to recover the funds to help pay for the crime, urban and suburban decay that is sure to come in the aftermath of this crisis.

Jul. 24 2008 10:40 AM
Steve (the other one) from Manhattan

I have a sinking feeling that this bill's ultimate goal is to bail out (yet again) big banks and Wall Street. I don't want to see people who were cheated put out of their homes, but how many times will big business's losses be socialized? Their profits sure aren't ...

Jul. 24 2008 10:40 AM
Chris K from New York

Your guest suggests that government intervention suggesting that certain companies/institutions are too large to fail always leads to unintended consequences and enables these companies to make much riskier and potentially worse decisions in the long run. Although this is correct, he implies that the only solution is no government interference. This is only true if you accept his implied premise is that these companies are still free to make whatever risky decisions they want. If government is willing to determine that certain companies cannot fail and are offered protection then government also needs to place reasonable regulations on them to limit their ability to execute on overly risky business plans.

Jul. 24 2008 10:39 AM
Hugh from Crown Heights

Doesn't this turn "capitalism" on its head? Isn't socialism for the massive corporations while small businesses and regular individuals are hung out to dry?

And will certain _individuals_ be deemed to big to fail? Is Bill Gates too big to be allowed to fail?

Jul. 24 2008 10:39 AM
bill from Brooklyn


You are a renter. You are living in someone else's home. You like a kid living in his parents basement. Grow up.

Jul. 24 2008 10:37 AM
Stephen from Lower Manhattan

The larger problem is that we have had a protracted period of unprecedented spending on housing. At a time when our nation needs to invest in infrastructure, technology, education and other areas to assure future economic growth, the government is going to throw good money after bad.

This bill is a tonic to lazy minds, the irresponsible and short-term thinkers.

Jul. 24 2008 10:37 AM

does the bill include any new regulations, reseve requirments, accountability provisions, etc, for fanny and fredy in exchange for the garrantees?

Jul. 24 2008 10:36 AM
hjs from 11211

people it's not going to be easy to get our nation out of the hole. this might be a first step.

Jul. 24 2008 10:36 AM
Nikki from "broke-lyn"

housing assistance? sure! student loan assistance? hell no! - - - i am a student with $160,000 student loan debt from Sallie Mae, which by the way just stopped offering consolidation options in May of this year....i should have just bought a home with that money, at least i'd have better repayment options now. can we get an assistance bill for students in debt over their heads because they chose to educate themselves only to be interns and barely making ends meet

Jul. 24 2008 10:34 AM

why do I get the feeling that this guy is a reporter without much background in econ.? Fannie and Freddie ARE TOO BIG TO FAIL!! would Davidson rather that we have another great depression? NOBODY, left or right, advocated letting them go under.

give me a break!

Jul. 24 2008 10:33 AM
hjs from 11211

keep in mind if people lose their homes wealth (equity) goes to chinese and other foreign lenders

Jul. 24 2008 10:33 AM
Liz from brooklyn

It is truly obscene that yet again our government is bailing out stupids fat cats.

Jul. 24 2008 10:32 AM
Stephanie Heacox from Brooklyn

The key problem here is that mortgage holders, many of whom should never have gotten these mortgages, cannot meet their current payments. Why doesn't the bill create lower payments by offering *40 year* mortgages to these folks, lowering their payments without trying to give them interest rates they don't deserve and taxpayers can't afford...

Jul. 24 2008 10:32 AM
John Hamilton from Yonkers NY

I actually already resented the mortgage tax credit. But if no action is taken worldwide global consequences could be huge. We need to try something to head off global crisis and at the same time create some consequences for those who made mistakes.

Jul. 24 2008 10:32 AM
Susan from Kingston, New York

While I understand the need to do this in terms of saving neighborhoods, this bill is an outrage! I pay my mortgage bill on time. My question is why should I?

The underlying message in this bill is "break the rules and you will be rewarded." The only people that make out are the hedge fund managers, mortgage lenders and the banks!

Jul. 24 2008 10:32 AM
Tim B from Manhasset

1. Is this bill addressing a "Housing Crisis", or is that a misnomer? Instead, might a more accurate name be the "Mortgage Lending Crime Spree"?

2. re: UNINTENDED CONSEQUENCES. Where have those folks who perpetuated dishonest and unethical lending practices gone? Surely they'll find some way to play the system that this bill creates for their gain, and once again at the expense of those who can afford it least.

Jul. 24 2008 10:31 AM
Phoebe from NJ

Wonder why I bother to pay my bills? Banks made dumb decisons to lend to people who could not pay. People made dumb decisions to buy more than they could afford (nice gas-guzzling SUV in the driveway, too)... And the rest of us bail them out? This should be a great time for the banks and public to learn a lesson the good old-fashioned way, but the pandering Congress and lame-duck President (who leads in expenditure we can't afford) just write another check from my children's future...

Jul. 24 2008 10:30 AM
Curt from River Vale, NJ

The same people that are in default on home loans I suspect are the same ones that years ago were the people who couldn't manage their credit cards. The banks are completely culpable as well... they got greedy. I do not feel compelled to help these irresponsible people when I strive to pay all my bills on time and keep a good credit rating. Let 'em sink!

Jul. 24 2008 10:30 AM
Paul from Manhattan

How will this affect market conditions for aspiring first-time home buyers with good to very good credit?

Jul. 24 2008 10:30 AM
Linda from Riverdale

I didn't buy a house because I did my research & knew it wasn't financially wise at the time. So I'm extremely angry that I am now bailing out the others who were irresponsible!

Jul. 24 2008 10:29 AM
But why?

Have one Brooklyn Bridge for Sale. Sale backed by the US Government. :)

Jul. 24 2008 10:29 AM
Tony Davis from Brooklyn, New York

"Behind closed doors"

Brian, the doors are not closed. The public may attend conference committees - just as lobbysts do.

Now that I think of it, why does the press not attend these crucial meetings and report to us??

Jul. 24 2008 10:29 AM
Greg from Manhattan

No. I don't think they should bail anyone out. Granted, I know that there was trickery involved in a lot of these lending practices, but it's people's responsibility to read the fine print. The banks should definitely not be helped at all, as they started this whole mess. I am not registered in any way, but the one thing I like about the Republicans, is that they are very conservative in their spending, but now Bush all of a sudden wants to spend all this money to bail people out. Does he want to pay my credit card debt, or my student loans as well?

Jul. 24 2008 10:27 AM

Are we a socialist society? Although, I would like us to be (like Europe). We're NOT! This sends a terrible message to other financial institutions along with irresponsible borrowers that "We the People" will bail you out.

Ridiculous! Let "them" take some responsibility for their own irrational actions.

Jul. 24 2008 10:27 AM
Jonathan from Manhattan, just barely.

When skyrocketing rents were driving my fellow middle-class Manhattanites out of this city by the thousands, I didn't see anyone offering to help prevent them from losing their homes.

This outrageous bill rewards speculators and people who made boneheaded decisions, at the expense of those who behaved prudently.

The word is shameful.

Jul. 24 2008 10:27 AM

So much for making responsible decisions. I think I should go and over-spend, and when the bank comes, I'll tell them that its not my fault. Meanwhile, why do I pay taxes, to run the subway? To provide services? No, to bail out Mr and Ms Spend-it-all. *Yay*

Jul. 24 2008 10:27 AM
Hugh from Crown Heights

I just wish I had got on the gravy train, taken on one of those unaffordable mortgages. Now I'd own a place, paid for by Uncle Sam and regular folks. As it is, I'll be hosed for rent until I'm six feet under.

Jul. 24 2008 10:23 AM
Tony from San Jose, CA

I am glad I have my savings in euros.

Jul. 24 2008 10:22 AM
hjs from 11211

lame duck bush signs

Jul. 24 2008 10:13 AM

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