Big Banks Get Bailed Out, But Responsible Homeowners Need a Break Too
Earlier today, I received an email from the White House asking I help promote for a bill to assist responsible homeowners who are underwater on their mortgage. The bill is especially relevant and important to me because I am one of those homeowners. Six years ago, I bought a house in my hometown of Kannapolis, North Carolina. I was told when I bought the house that it was an excellent investment because the local economy would be boosted by the development of the North Carolina Research Campus just a mile and a half away. I signed the papers two years before the banking crisis. While many other homeowners have been allowed to refinance their homes at rates lower that what they originally agreed to, I have been stuck in a house whose value is only 60% of the loan I signed on for. Should I be held accountable for the irresponsibility of the banks who made errors but got bailed out?
While my situation is important to me, today I received news that my next door neighbor has been forced to foreclose on his house and to move out within three weeks. Although he has not made a house payment since November 2009, prior to that he had responsibly paid his mortgage every month for 24 years. He was fortunate to survive for a year after the recession hit and he lost his job. However, he realized he could not continue to make house payments and provide the adequate resources necessary for his family's survival. While Tea Party Congressmen like John Fleming (R-LA) are complaining about the struggles he has with the $400,000 he has left over each year, my next door neighbor is enduring a real struggle that is also shared by many other typically responsible hard-working American families. Unless something can be worked out in the next three weeks, I will sadly lose a really good neighbor whose generosity was evident today when he donated some wooden boards from his now part-time job as a carpenter so that I could repair the rotting stairs to my deck.
The ungratefulness of the banks is inevitable in this story. If the financial institutions got bailed out when they were irresponsible, should the rest of America have to suffer along with them without any lifeline extended? While I can understand that the banks would not be able to forgive me since I have only had my house for six years and have not yet paid payments that equal the amount loaned, surely my next door neighbor in the 24 years that he made payments on his house has paid well above and beyond the loan he agreed upon.
If Congress does not soon act in response to President Obama's admonition to pass a new law allowing for the refinancing of homes at lower rates and the extension of mortgage forgiveness to those who borrowed from financial institutions other than Fannie Mae or Freddie Mac, we may see the return of shanty towns of the homeless that existed in the days of the Great Depression. Then those towns were called "Hoovervilles," since the public blamed President Herbert Hoover for the economic crisis. Today, it would only be appropriate to call those towns "Bankervilles."