Sen. Hunter to Senate Republicans: Support Must Come Soon

Hello Senator Hunter (0.00 / 0)

... and thank you for sharing your thoughts with us here at BFM!

As one who is staring this issue right in the face as we speak, I'm grateful that there is awareness on the part of people in the legislature towards the problems that are out there in the housing market. Not only does it threaten the economy in Michigan, I believe it has the potential to threaten the national economy as well. 

I hope that the Senate does address your legislation- reports now are that the Senate Majority Leader is already talking about a "continuation" budget, and I take that to mean that he does not feel a sense of urgency to fix the problems that are facing this state anytime soon.

Thanks again for being here!

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by: wizardkitten @ Thu Aug 09, 2007 at 11:43:11 AM CDT

We can't ignore this mortgage crisis (0.00 / 0)

I would recommend reading this article from the Financial Times about what the U.S. Senate Dems are proposing as a means of stabilizing the mortgage market.

For anyone facing foreclosure, check out this brochure from Acorn.

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by: BZP @ Thu Aug 09, 2007 at 11:51:14 AM CDT

I don't think people realize... (0.00 / 0)

... the implications this holds for the national economy.

The housing boom was the thing fueling the fire- if it tips over (and it's looking like it is tipping over), we could enter another recession, which would be crushing to us in Michigan at this point.

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by: wizardkitten @ Thu Aug 09, 2007 at 12:43:32 PM CDT

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It's a mess, isn't it? (4.00 / 2)

If you want a good case of the heebiejeebies, read the Housing Bubble Blog. If we survive the end of the home equity economy without a redux of the Great Depression, I'll be surprised.

Most of the folks on said blog are libertarians, so I take what they say with a block of salt.  But like them, I'm leery of a bailout by Fannie and Freddie, because I think the money will go into the wrong pockets--that is, the hedge fund investors who made billions buying bundles of subprime loan debt from lenders who also made billions while the market was hot. As I understand it, the Congressional dems' bailout idea wouldn't help homeowners who default on their loans when the ARM resets and nearly doubles their payments overnight.  No matter who owns the mortgage, if the borrower defaults, they're in danger of foreclosure.

I can think of a lot of ways the problem should have been fixed before it began, starting with tighter regulation of the mortgage markets and greater scrutiny for hedge funds.  But now that the horse is out of the barn, we could start with federal legislation requiring any company still in the mortgage business to offer a fixed-rate mortgage with a fair interest rate to homeowners with these outlandish ARMS.  Since you can't force a corporation or individual to enter into a contract, sweeten the deal with some federal money to offset amounts the debtor is already in arrears, instead of giving it away to hedge fund investors via the Macs.  I'm thinking of something similar to HUD and FHA loan programs.

The next step is for Congress to get busy and get rid of the most onerous provisions of the 2005 bankruptcy act (known as BARFA to those who practice in this area), and make it possible for those who file for Chapter 7 to keep their houses.

And if you're in financial trouble, lay the groundwork to file for bankruptcy now, not when you're 24 hours away from the sheriff sale of your home.

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by: eartha651 @ Thu Aug 09, 2007 at 21:47:43 PM CDT

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This just in (4.00 / 1)

Paul Krugman is very, very worried about what's happening in the markets.  If Krugman is worried, I worry too.  (Caution:  third party link that might not stay up for long.)

We all know what happened in 1929 with the run on banks.  This time it wouldn't be consumers pulling out their cash (we don't  do savings accounts in this country anymore); rather, it would be the investors who back large bank investments in corporations, including bonds and other securities, who would be running.

No wonder Wall Street is chugging Maalox by the gallon this week.

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by: eartha651 @ Fri Aug 10, 2007 at 11:07:37 AM CDT

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Meanwhile MSNBC (0.00 / 0)

... is out there floating the story, "Is Bernanke wrong?", and off we go on that speculation...

Glad I don't work on Wall Street today (or any day, for that matter).

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by: wizardkitten @ Fri Aug 10, 2007 at 11:23:23 AM CDT

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Welcome Sen. Hunter! (4.00 / 1)

Great to see some more of our awesome Sen. Dems on 'The Tubes of the Internets'!

Hope to see you back!

Liberal, Loud and Proud!

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by: Liberal Lucy @ Thu Aug 09, 2007 at 15:30:23 PM CDT

Improving financial literacy is a must (4.00 / 2)

Thank you for mentioning this.  The industry has done a terrible job of educating people about the various mortgage products on the market and the ramifications under various scenarios.  Home buyers should get a printout they can take home and study to show them what their payment will be with interest, taxes and insurance under different rates and terms. Brokers too often push the bottom line - the monthly payment - without revealing how that could change. 

Brokers and bankers are savvy, but with help from people like yourself, the public can learn what to watch for so they make can make the best decision for their situation.

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by: Kathy @ Thu Aug 09, 2007 at 15:56:23 PM CDT

Welcome Senator Hunter! (4.00 / 1)

Thank you for posting on BFM

I read a report in Bargain Network that there is one foreclosure filing for every 879 US households.  (For all you Michigan/Granholm haters, that's US households, not Michigan households) 

This is very unsettling.  While I can't speak much to mortgage policy, I can say that such a high rate of foreclosure just doesn't fit with my vision of America.

Keep up the good work Senator!  The public needs your legislation.

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by: Z @ Fri Aug 10, 2007 at 06:59:31 AM CDT

You're right, but it's even higher (4.00 / 2)

According to this survey Michigan is eighth in filings as a percentage of households in the state:

On a filings per household basis, RealtyTrac reported a national foreclosure rate in May of one foreclosure filing for every 656 U.S. households. The 10 states recording the highest foreclosure rates in May were: Nevada, Colorado, California, Florida, Ohio, Arizona, Georgia, Michigan, Indiana, and Connecticut. Nevada's foreclosure rate in May was the highest in the nation for the fifth consecutive month and almost four times the national average.

The filings as a percentage of households figure is the one everybody should be quoting, not the raw number of filings (where we're fifth), which is meaningless as an economic indicator.

I read a know-nothing comment on the Lansing State Journal blog a few weeks ago blaming Granholm for the economy and talking about moving to Colorado because "my brudda got himself a job there."  So long, rotsa ruck.

In any case, there are way too many foreclosures in the US, and I welcome Senator Hunter's efforts to do something about it.

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by: eartha651 @ Fri Aug 10, 2007 at 07:50:48 AM CDT

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