Streams

Housing Plan

Thursday, February 19, 2009

Mark Winston Griffith, executive director of the Drum Major Institute, and Jose "Joey" Torres, mayor of Paterson, NJ, look at the Obama administration's new housing recovery plan, and how government programs and local activism are already at work preventing foreclosures.

Guests:

Mark Winston Griffith and Jose "Joey" Torres

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Comments [67]

Anne from DC

Come homeoweners -didn't we all think it was really strange that we lived in homes that WE OURSELVES COULD NOT AFFORD? I am joking - in two quick years my house appreciated so much I could not afford to buy it. This housing bubble was pure make believe and now the correction is happening.

Feb. 20 2009 11:36 AM
Victor from Hudson Valley

I lost 90% of my investment in citibank. Wheres my bailout?

Feb. 19 2009 11:52 AM
Miriam from New York (Westchester County)


My husband and would like to buy our first home, after renting for a very long time and waiting out the housing bubble. However, it seems that despite the hysteria surrounding the falling housing market, prices around the New York area haven't come down much, or at least enough. I expect the decline in prices to continue, as people come to terms with the loss of high paying jobs and re-adjusting mortgage rates. So we're still waiting it out.

Everyone seems to forget that even current prices reflect the housing bubble - which means homes throughout the country should never have been priced as high as they were in the first place. I think banks who own property are not doing everything they can to price their homes fairly - they still want to make as much money on them as they would have during the real estate bubble.

It's time to give those who have been more responsible with their money a chance at owning a home they can really afford. Banks need to sell these homes are fire sale prices, and they need to get past their insatiable greed, which was a major cause of this economic crisis. By lowering prices on the homes they own, banks can build solid assets again, which they (not to mention the rest of the world) need desperately.

It would be great if the government could set up something with banks directly to facilitate this. And forget the middlemen (real estate and mortgage brokers) - they've lived high on the hog for too long, and perpetuated the real estate bubble as well as greed and irresponsibility. Great care should be taken to ascertain that these homes would go to single home buyers, not speculators.

I would love to hear more shows that address these issues and if there are indeed programs being set up between governments and banks, to let us know about them. So far all the efforts seem to be bailing out homeowners who made irresponsible choices rather than helping first time home buyers, who could contribute real stability to the economy.

Feb. 19 2009 11:39 AM
Susan

hjs--
Amen!

Feb. 19 2009 11:27 AM
hjs from 11211

"we need is a new political party not beholden to the powers that be."

well that's not going to happen any time soon
the corporations own the government.

Feb. 19 2009 11:20 AM
Susan

hjs--
The banks are hanging in to be bailed out by their politician buddies they bought and paid for. They would sell or rent at reasonable prices if it became clear that they won't get any more of our money, and that they would be on the hook for all the property taxes and upkeep other homeowners are responsible for. What we need is a new political party not beholden to the powers that be.

Feb. 19 2009 11:16 AM
hjs from 11211

susan
interesting idea
so the banks are going to turn into rental corporations?
i wonder why there are so many abandoned properties. why aren't they renting them?

Feb. 19 2009 11:09 AM
Susan

hjs--
People (generally, poorer people) live in rentals too. We are not talking about whether people should have a place to live, but whether taxpayers shoud subsidize high-end oversized housing as investments for those who can't afford them. I would rather see the money in food banks, rent support, etc. for the truly needy.

Feb. 19 2009 11:00 AM
jl

if obama didn't spend any more $$ on banks/mortages believe me the free market would come alive in a second.

there are millions of people waiting for the government cheese to dry up before they spend their first dime on another property.

have faith don't give in to fear. now is the time to yell at your representatives, no free money to banks at taxpayer expense!

Feb. 19 2009 10:56 AM
hjs from 11211

susan
the stock market is known to always be risky, someone should have told u that. my company did. my company also lets you pick what % bonds/stocks you want.
homes, well, people live in them. why would this be confusing?
don't get me wrong i wish i was smarter. i wish i knew i could have gotten a home with no money down. i was out of the loop on that. my bad.
but now we selfish americans have built millions of homes out in the sprawl. people live in them. if one home is foreclosed ALL the people in the neighborhood will lose money. I think they should all be made into section 8 housing, but that's just me.
this downward spirals needs to be avoided.

Feb. 19 2009 10:53 AM
smidely

To the non-knee jerk contrarians commenting in this discussion...

Finally this country is getting some cahones. so this is what it takes. Keep it up!

Feb. 19 2009 10:48 AM
Brian from Hoboken, NJ

I am not opposed to social safety nets, welfare, Medicaid, etc. I pay quite a bit in taxes and accept a progressive tax code. I draw the line at helping people whose homes are underwater. Who cares? My IRA is underwater. It will come back eventually. So will home prices. Live in the home and be happy. As for the predatory lending, those examples are few and far between. Don't sign aything you don't understand or didn't read. Simple as that.

Feb. 19 2009 10:44 AM
The Truth from Atlanta/New York

8 years a trillion dollar debt - NO ONE UP IN ARMS...things that make you go hmmmm.

Feb. 19 2009 10:44 AM
hjs from 11211

the free market is dead, i have faith in that.

Feb. 19 2009 10:43 AM
The Truth from Atlanta/New York

PHOEBE: What is your suggestion for a solution.

Feb. 19 2009 10:42 AM
Diane from Long Island

Response to 42-Doctor7: If my tenant does not renew the lease...I am walking away from the condo. It's just four walls and now that I am a renter and able to pay my bills, on time, in addition to laying out the $575 for the condo. It is no longer affordable due to circumstances beyond my control and so, let the bank have it...maybe they can use it as a retreat for their financial officers.

Good luck to everyone and we are all in this together to some degree, stop bashing each other and embrace the efforts President Obama is making.

Feb. 19 2009 10:40 AM
Susan

hjs--
Small business, one plan only, and grateful for that. But you miss my point--why should real estate be privileged above all other investments? This is a serious question, not a snide remark.

Feb. 19 2009 10:40 AM
Susan

hjs--
Small business, one plan only, and grateful for that. But you miss my point--why should real estate be privileged above all other investments? This is a serious question, not a snide remark.

Feb. 19 2009 10:40 AM
smidely

hjs have faith friend nobody would be on the street -- it's called let the market do it's thing.

Housing prices would drop to the point where people could afford to rent/buy again.

the 3 trillion would instead be spent on helping those people pay for social costs...as I said?!

Feb. 19 2009 10:38 AM
hjs from 11211

susan
ur plan did not let u buy bonds? that sucks

Feb. 19 2009 10:37 AM
Phoebe from NJ

@The Truth: You're right, now is not the time to question. You'll find that most opponents for this handout - and the majority of mortgage holders - made choices a long time ago to live within their means. If others had done so, we wouldn't have gotten here in the first place.

All this does is teach that if you make decisons - of your own free will - that you can not or will not follow through on, your government will force your fellow citizens to pick up the tab.

Feb. 19 2009 10:35 AM
hjs from 11211

Tony
you should have invested in bonds instead of stocks, there's no easy money.

Feb. 19 2009 10:34 AM
mozo from nyc

If you want to blame anyone for this mess, blame the mortgage banks and brokers. The banks created these mortgage products thanks to de-regulation that amount to financial crack. The brokers then peddled the crack. If these products didn't exist we wouldn't have this current situation.

BTW, I was a residential real estate appraiser.

Feb. 19 2009 10:34 AM
hjs from 11211

truth
you can't ask americans not to be selfish it's part of our DNA

Feb. 19 2009 10:33 AM
Phoebe from NJ

@The Truth: You're right, now is not the time to question. You'll find that most opponents - and the majority of mortgage holders - made choices a long time ago to live within their means and if others had done so, we wouldn't have gotten here in the first place. All this does is teach that if you make decisons, of your own free will, that you cannot follow through on, your government will force your fellow citizens to pick up the tab.

Feb. 19 2009 10:33 AM
doctor7 from New York, NY

Regardless of my ability to pay, I would willingly walk away from a home worth $500K if I owe $1 million on it. I can buy the replacement on the cheap in cash so I don't need the credit. This is only a "crisis" because people forgot the law of gravity...and don't give me that "this is my house" BS, ever heard of renting? I spent my entire youth in rental housing. This "package" is a political move. It creates a few short term jobs, teaches nothing, and only delays the inevitable = massive correction of a bubble.

Feb. 19 2009 10:32 AM
Susan

hjs--
No, I did not play "Wall Street roulette"; defined retirement plans, in case you hadn't noticed, have been replaced by 401k and IRA plans, so if one ever hoped to retire (now a vanishing possibility for more and more of us), you had no choice but to enroll in these supposedly safe investments.

Feb. 19 2009 10:32 AM
Joe Corrao from Brooklyn

Historic?...not the 1st time we've done the absolute wrong thing....

Feb. 19 2009 10:32 AM
GL from NJ

I'm so sick of bailouts at this point. Let the bondholders of the crummy mortgages figure out what the foreclosed properties are worth and liquidate the properties already. Stop trying to prop up marginal borrowers.

Feb. 19 2009 10:31 AM
smidely

listening to the patterson mayor respond to the question from the wanna be 1st time buyer asking how it will possibly help her and other responsible players was downright scary. Explaining that the entertainment business relies on housing prices? that patterson has a committee to approve home buyers? What a lesson in limiting the role of government to REGULATION -- not the kooky commy business of incentives, committees and the "HOLISTIC APPROACH"...

Feb. 19 2009 10:28 AM
Sophie from Poughkeepsie, NY

Well, unless they mandate companies like Countrywide to work with homeowners it won't make a difference. I know, Countrywide services our mortgage, has our property mixed up with a Florida property and has put us in foreclosure
and refuses to work with us. They are a nightmare as well as corrupt.

Feb. 19 2009 10:27 AM
The Truth from Atlanta/New York

Mayor Torres, what is your proposal for a solution?

Feb. 19 2009 10:27 AM
Susan from Kingston, New York

I am not underwater and I am still able to meet my mortgage payments. I have a job, however, the value of my investments have plummeted. But if this spiral does not stop I will be underwater. I night lose my job. Then where we will be? All of us. We must do something!

Feb. 19 2009 10:27 AM
mozo from nyc

If you want to blame anyone, blame the lenders for creating what has amounted to "financial crack". If these products didn't exist you wouldn't have these bad mortgages.

Feb. 19 2009 10:27 AM
Pavel Gurvich from Norwalk, CT

I'm retired living in my home. I'm paying my mortgage from money I'm getting from my IRA and Social Security. I'm not at foreclosure threat for a while. However I would like to refinance my mortgage for lower interest rate.

When I talk with brokers and/or banks they say that refinanceing will cost me $5000 - 6000.

I do not want to spend this amount of money because I may need to sell my house as soon as prices recover and then refinancing will not make sense.

My question is whether the bill will help me with cost of refinancing?

Thank you, Pavel.

Feb. 19 2009 10:27 AM
Wendy from Brooklyn

I don't understand the last callers point. He said he is making, and is able to make, his mortgage payments. Why would someone get help just because the value of their property declines below the mortgage? Property values are subject to the free market like anything else. If demand goes down, so does the price. You know that when you buy. You buy because you want a home and find something you can afford. It sounds like that's what the caller did - so the price he paid is what it's worth to him. The government shouldn't be guaranteeing that prices. Let's not forget that anyone that pays off their mortgage over time is already paying, because of interest, way beyond what the property was worth.

Feb. 19 2009 10:26 AM
Joe Corrao from Brooklyn

If you let the free market establish prices house will still get sold....

Feb. 19 2009 10:25 AM
The Truth from Atlanta/New York

Also @ PHOEBE and the rest...NOW is NOT the time to question all of this, that is what the Bush administration and all of you arm chair economists should have been monitoring so that we would never have gotten here in the FIRST PLACE!

Funny everyone's eyes and ears are open and critical now of the solution.

Feb. 19 2009 10:25 AM
Tony from San Jose, CA

Bail out my 401k, it fell through no fault of my own...

Feb. 19 2009 10:25 AM
Scott from Cambridge, MA

Social solidarity people! Most of the people who have been foreclosed were victims of predatory lending. That's why places in New York with the highest rates are in minority communities in the Bronx and Queens. We're in this together, and when we start realizing that we can begin to pass historic legislation like single payer universal health care.

Feb. 19 2009 10:24 AM
hjs from 11211

susan
if by invested you mean you played wall st roulette, I would say you had no business putting your money where it did not belong

Feb. 19 2009 10:24 AM
Hugh from Crown Heights

How many people now hoping for government/societal help in paying for a home bitterly resent and oppose help for people who can't pay for food or clothing or rent?

We've had three decades of vilifying, even criminalizing, welfare and social aid of various kinds. Any person who opposes those kinds of social assistance is already committed to opposing any government assistance now.

Feb. 19 2009 10:23 AM
The Truth from Atlanta/New York

PHOEBE.. of course I have a problem with that and if you listened to/or read the entire speech re: qualifications, you would know that President Obama, specifically said who would be excluded from the assistance.

Feb. 19 2009 10:22 AM
Joe Corrao from Brooklyn

Yay Susan!

Feb. 19 2009 10:21 AM
Scott from Cambridge, MA

In the new issue of The Atlantic, Richard Florida makes a cogent argument that for us to survive this depression we need to move the emphasis away from owning a home to renting. Once you purchase a home, you become sedentary and cannot move around the country to take jobs in new industries. Innovation will rescue us from this depression, but home ownership has a negative impact on innovation. What Obama should do is ease people out of their homes and allow them to rent it for cheap before finding new residence.

Feb. 19 2009 10:21 AM
Hugh from Crown Heights

The sad fact is that people overpay for things all the time. It is not the job of the government to guarantee the value of people's homes. And if indeed the government sought to establish a floor for home prices, it would almost certainly have disastrous consequences.

Feb. 19 2009 10:20 AM
Joe Corrao from Brooklyn

Anyone that bought a house that now is 'worth' less than what you paid...enjoy it, it is your home, live there, maybe in the future the price will go up and you will make some money...but at worst you have a house to live in.

Feb. 19 2009 10:20 AM
Norman from NYC

Congresswoman Marcy Kaptur of Ohio suggsted that when they come to an eviction hearing, they say:

"Judge, I did not take out a mortgage with the plaintiff. I demand to see the original signed documentation or other proof. If the plaintiff can not produce that documentation I ask the court for a summary judgment that the plaintiff has no interest in this property. I also ask this court to require the plaintiff to produce a signed a quit claim deed for this property."

Most of the financial entities who own these traded loans will not be able to answer that for a long time.

Could you ask your guests, Is that true?

Feb. 19 2009 10:20 AM
Diane from Long Island

I had to actually move out of my condo and rent it at a loss to the tune of $575 a month. Is there anything I can do to lower my monthly payments like reduce my interest or extend my terms to a 40 year so I can move back to my home? I purchased the home for $292K and put at least $50K into it, the value right now is less than what I owe on the mortgage.

Feb. 19 2009 10:20 AM
Tony from San Jose, CA

Well, I'd rather house values fall even more, since I want to buy one. Rewarding irresponsible behavior.

http://www.economist.com/finance/displaystory.cfm?story_id=13110718

You people need to lose your home, you need to live on the street and beg for food. You made a mistake, you pay for it. I am not your comrade.

Feb. 19 2009 10:19 AM
The Truth from Atlanta/New York

If you stop looking at this selfishly, you will see, if the housing market doesn't get stable, if we let the ship sink, we ALL go down with it people!!!

Feb. 19 2009 10:19 AM
Jim from Brooklyn, NY

I could have bought a home years ago but I felt that as I was in the process of starting a business, I might have had trouble paying the monthly payments (mortgage, taxes, fees, etc). Apparently, I would have been better off just buying anything, waiting until I could not afford to pay anymore and then just getting free money to take care of it.

I resent the fact that I made the fiscally responsible choice to continue renting at a level I could afford, and yet now my tax dollars are being used to bail out the idiots who didn't.

This is an unfair use of my tax money, no different from the financial bailout of the banks.

Feb. 19 2009 10:19 AM
Jill from UWS

What about those of us who knew that housing prices were soaring at an unrealistic and unsustainable rate and DID NOT buy? Now we are paying to keep other people in their homes and prop up the prices that have kept us out. I understand some people need help because the really were victims, but here in NYC it is hard to fathom. I have NEVER paid ONLY 31% of my income on housing and I've always been in shared RENTALS. I don't understand working class folks with $3000+ a month mortgage payments for houses in Queens--for that they could get a luxury rental here in Manhattan. It doesn't make logical sense.

Feb. 19 2009 10:18 AM
Joe Corrao from Brooklyn

market was great property values were high?...it was all an illusion Mr Mayor

Feb. 19 2009 10:18 AM
hjs from 11211

smidely
yes and we would need more money for law enforcement if all those people were put out on the street as u would like to see.
great vision for our nation

Feb. 19 2009 10:17 AM
Phoebe from NJ

@ The Truth: So you have no problem in paying (through taxation) a subsidy for those who lied on applications, didn't read documents they freely entered into, cashed out equiry for cars/vacations etc. while you were paying your way? It disgusts me.

Feb. 19 2009 10:16 AM
Joe Corrao from Brooklyn

Its about the Fiat money that will go towards the bailout...not a good thing

Feb. 19 2009 10:16 AM
Mark from Inwood, NYC

I have a question about the plan. My father lost his job in NJ and my parents had to move to CA for a new job. Now they're having a tough time selling their old home in NJ. They're not necessarily in danger of foreclosure, but they are significantly strained as they have to still pay the mortgage in NJ. Would the plan possibly help someone like them out? My guess is probably not, but I figured I'd ask anyway.

Feb. 19 2009 10:16 AM
FranciL from NYC

Will homeowners who are unemployed be able to refinance?

Feb. 19 2009 10:16 AM
Hugh from Crown Heights

Is this a plan to help those who have fallen behind on payments and are facing foreclosure through no fault of their own, or does it go beyond that to try to buoy up values of homes which are now worth less than their mortgage value?

If the second, then surely this plan amounts to an attempt to re-inflate the bubble. This is the general criticism of all the government efforts since September by people like Nouriel Roubini, Naomi Klein, Michael Hudson and others.

Feb. 19 2009 10:13 AM
The Truth from Atlanta/New York

OK you did the right thing in buying your home, "a feather in your cap" but for those people who did not or were duped into not doing the right thing their is relief.

Not sure what the problem is and where all the anger is coming from. You don't get rewarded for doing the right thing.

What exactly do people want? I am not eligible for any modification or assitance and I am not bitter.

Feb. 19 2009 10:13 AM
Susan

Can anyone explain how someone who put no money down, lied on the mortgage application, then failed to pay the mortgage is a home OWNER? By any definition, this is a squatter. I am a 62 year old widow who, as instructed, invested in my retirement account rather than speculating on real estate. I have lost far more value than these "homeowners." Are we going to be bailed out? Why is real estate privileged above all other investments? What about renters, who on average are poorer than owners, but who can be evicted if they don't pay their rent?

Feb. 19 2009 10:12 AM
Joe Corrao from Brooklyn

used to be you were rewarded (not by the government but by the rules of the real world) for intelligent behaviour. Now we reward idiocracy...we will do nothing more than water down humanity even more. We create money out of thin air, only outcome is the devaulation of ALL money (and your savings)...I ope you enjoyed the "dream" of America cause it is gone.

Feb. 19 2009 10:10 AM
Phoebe from NJ

I'll second #2's comments. This is a handover of incentives to banks, to subsidize the loans of people who couldn't afford their purchase, or cashed out for short-term needs (car, vacation etc.). This is a disgusting robbery of the 90%+ of people who pay obligations they entered into of their free will on time, and are now subsidizing loans for others and propping up banks. Again.

Feb. 19 2009 10:09 AM
marcus

we are all in this economy together. fomenting some kind of resentment toward those who are being helped out is not helpful.

the economic situation only highlights the fact that yes virginia, we do need government and guess what? we always have.

Feb. 19 2009 10:09 AM
smidely

"Obama brought a Howitzer to a forest fire."

-- well that Clinton official certainly said it all

Money would be better spent letting the free market play out, bad banks fail, home prices normalize -- then use the 3 trillion or whatever it turns out to be on health care, entrepreneur incubators, law enforcement and other services that differentiate 1st world from 3rd. Call it a "fire hose."

Feb. 19 2009 10:03 AM
smidely

How many tens of billions do consumers spend each year on unfair (over 15 or even 25% interest, or unexplained yet legal) bank charges that would otherwise be spent on homes, goods, services, savings?

The banks are collecting America's extra "spending" money...then their taxes are forgiven by GUilanni/Bloomberg and all the even more inept copycats racing to their respective bottoms...and finally bailed out by us poor shlubs.

Now Obama appears to be agreeing to pay more tax payer dollars on propping the above system rather than fixing it.

So -- Where's the CHANGE WE COULD BELIEVE IN -- STUCK IN THE BUS SEATS?

Feb. 19 2009 09:41 AM

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