Write Down Mortgages, Says Progressive Caucus

Progressive champions and Congressmen Raul Grijalva and Keith Ellison joined activists around the nation to ask the Federal Housing Finance Agency to assistant struggling homeowners by writing down mortgage principals.

The agency, run by acting Director Edward DeMarco, oversees Fannie Mae and Freddie Mac. Together the two own or guarantee more than half of the mortgages in the country.

“Twelve million Americans owe more money than their home is worth,” Grijalva and Ellison said. “The American people have been duped, lied to, and kicked out of their homes, and now it’s time for Mr. DeMarco to stand up and do right by them.”

By writing down the mortgages, the two co-chairs of the Congressional Progressive Caucus believe homeowners would have a better chance of staying put. Millions of American families have found themselves without a roof over their heads after banks failed to work with them.

“Underwater homeowners need justice,” Grijalva and Ellison said. “Write downs are about keeping families in their homes and saving taxpayers money by preventing foreclosures. Simple, straightforward principal reductions are a good way to prevent the foreclosure crisis anchor from dragging down the U.S. recovery.”

Home values plummeted along with the economy and families are currently paying more for their homes than they are worth. Keeping these families in their homes makes good moral and economic sense. Adding a foreclosure to their credit history places an incredibly burden on future purchases and it throws them into disarray.

Related Stories:

$26 Billion Foreclosure Settlement: Good News?

Cash-Starved States Look To Foreclosure Settlements For Relief

Five Major Banks Being Sued For Illegal Foreclosure Practices In Massachusetts

Photo by Nick Bastian


Ulli W.
Ulli w6 years ago

last comments end found cut off:
http://www.youtube.com/watch?v=JXt1cayx0hs →3:30 hrs History of Money (full)

Ulli W.
Ulli w6 years ago

One point seems to miss in all these comments - that is, how "our" monetarily based economy functions – with due respect to the role of interest-money in it.
→firstly, interest money has never been issued (as opposed to principal).
→even if you make a real clever investment with your loan that results in substantial increase of value, it does not (yet) increase the amount of money you have. Only after trading it you may realise principal interest profit and repay your debt. (where comes the cash from, that the buyer pays you?)
→Otherwise you need to put up another debt (interest inclusive) to at least pay the interest.
→ in the big picture it's obvious that the lender(s) is/are not overly keen to see all debt re-payed, because it would diminish the inflow of interest-cash …
→not "the economy" nor the housing market or the Dollar or the Euro crashes …
These are the void bubbles of bundled interest obligations that were traded with phony promises of profit – for real money – or paid for by debt again.
Now the lenders are better able to exchange fancily printed paper(currency bills) into "real values" e.g. houses under foreclosure.

This had to be kept reasonably short. More detail can be found on youtube or google

"money as debt" → http://www.youtube.com/watch?v=Dc3sKwwAaCU
"brain cant think exponentially"→ http://www.youtube.com/watch?v=F-QA2rkpBSY
are reasonable starters

Lynn C.
Lynn C6 years ago

@Kevin W. I understand why you feel the way you do, but the reality is you will share the cost in one way or another, the most important one being that those who lose their homes will inevitably bring the cost to the tax payer in another, much more expensive way. The erosion of these people's ability to continue to keep their jobs, educate their children, and contribute to the tax base would be more productive in the long run, and benefit all of us.

Kevin W.
Kevin W6 years ago

Buying a home is a huge responsibility and also an investment. An investment that we all hope will yield a good return. But any investment expected to yield a profit comes with risk. Folks who bought when prices were artificially high assumed that risk and many are paying or have paid a price. I have a great deal of sympathy for people in that situation but I don't think the feds should be bailing them out. Why? I don't think I should share in their loss because if the housing market were still rolling along and home values appreciating, these same folks would not be offering to let me share in their gains. We are not a socialist country ( despite GOP rants to the contrary ) and if someone wants me to share in their investment loss then they need to ask me ( the taxpayer ) before they make that investment, not spring it on me after their investment goes south.

Nancy L.
Nancy L6 years ago

Thanks for posting.

Mary B.
Mary B6 years ago

I don't think a business model based on 'let the buyer beware' is very smart.People have enough to deal with just raising a family, working, ect, and I think we have a right to expect all businesses, but especially banks who hold control of such long term consequences must be totally honest and easy to understand.If they are not doing this voluntarily, then they must be regulated and monitored. Do not ever accept responsibility for the irresponsible and deceptive practices of banks unless you are rich enough to buy them out and fix the mess they made.It doesn't matter if what they did was legal. If they do not explain in ordinary terms what will happen if you agree to their terms, they are manipulateing you and are responsible for the hardship their misleading sales talk causes.Only when you really understand what you're signing up for can you shop around and make informed choices. Then if the economy crumbles around you can you say 'I'm still responsable for paying this back'.Even then, any decent banking business should be glad to grant some leeway.Nobody wins when houses sit empty and familys are made homeless.

Catherine D.
Catherine D6 years ago

Now they have a hoard of money that they can never possibly use up in 10 lifetimes.
And millions of buildings falling down from neglect.
Municipalities all over the country are stuck with demo costs.

The Banksters, aided and abetted by the US government, robbed the Homeowners.

This is a textbook example of Fascism; the unholy alliance between corporations and government.

Catherine D.
Catherine D6 years ago

Variable interest rate loans should only be permitted if the interest rate decreases.
Anything else is usury.

When a home is purchased with a loan, the loan holder pays back in excess of 3 times the original loan amount over the typical 30 year term of the loan.

That means a 100K loan costs 300K; a 200K profit for the Banksters.
Millions of properties are caught up in this Ponzi scheme.
Billions of dollars profit for the Banksters.

Hundreds of thousands of properties have been foreclosed.
Millions of people have been put out on the street.

Those properties have been left to rot. The greedy Banksters refuse to sell the ruined properties that they stole. They demand more money than they are worth in their ruined condition. They seek to provoke bidding wars, where no one is bidding.

Like the vicious, petulant children that they are, they refuse to admit their errors and return the stolen property to the rightful owners, or adjust the loans to a level that the loan holders are able to pay and stay in their homes.

The Banksters have been paid all the money they are due. Even with the market tanked, they still have huge profits in their bank accounts. They also received Taxpayer bailouts.
They are rich beyond belief. With stolen money.

People were stupid to accept variable interest rate loans.
The Banksters were greedy and manipulative to offer such loans to the public.

Now they have a hoard of money that they can never possibly use up in 10 lifet

Marilyn L.
Marilyn L6 years ago

I don't think they should write them down. I think everyone who owns a home, no matter your financial situation, or your lenders should be given a refinance rate of 2 to 4% depending on your income. Everyone who owns a home has a home that is worth less than it was in 2006, doesn't matter if you're flipped or not the reality is you took a hit on your homes worth because others were greedy and acted in a criminal fashion. The lowering of the rate at least allows people to recoup and save some money until the market turns around.

Howard C.
.6 years ago

I do not live in the US, I live in England, but I really understand this issue, it is a problem that many people in the UK have been through. In our case we saw the price of our properties rising really rapidly, it seemed that they always would, the banks were very willing to loan us more and more money and why not, house prices kept going up, we were getting rich!! Then the bubble burst, suddenly we were left with mortgages far higher than the value of our homes, things got worse, lots of us started to lose our jobs and the whole thing came crashing down. It is difficult to say who was to blame. Was it the banks? Well, no one forced anyone to take out ever increasing mortgages and lots of credit cards, that is true, the banks were innocent of that one. Then the banks started to run in to trouble. No one forced them to make the really poor investments that caused them all their troubles. But this time it was different, governments across the world (the very same governments that had turned their backs of individuals who had borrowed so much from the banks and lost their homes as a result) started pumping billions (I think it was trillions) of Pounds/Dollars/Euros in to the banks. There is a saying - what's sauce for the goose is also sauce for the gander, or to put it another way, if there was money available (it was used to bail out the banks) why were so many people left to suffer?