Helps For Homeowners

A Letter to The Washington Post

More than a year ago, some of the world’s top economists advised President Obama to introduce a much bigger plan to forgive part of the mortgage debt owed by millions of underwater U.S. homeowners [“Why has the U.S. recovery sputtered?” front page, Nov. 23]. But The Post’s editorial board asserted [“Housing relief,” Nov. 24] that providing a greater number of such loan modifications could have been viewed as rewarding “borrowers who took on more debt than they could handle.” What The Post did not note is that millions of borrowers were lured into getting high-risk, costly loans that were often predatory and loaded with hidden fees.

It is not too late to rescue thousands of troubled but responsible homeowners, especially at a time of historically low interest rates and rock-bottom home prices. It is also an opportune time to promote the making of safe, sound and affordable loans to creditworthy borrowers, many of whom would be first-time home buyers whose purchases stand to uplift the housing sector and accelerate the recovery of the nation’s economy. 

There's No Silver Lining in TARP's Failure On Housing Relief

A Letter to The Washington Post

The Post was right in claiming that the Troubled Assets Relief Program produced more benefit for the U.S. economy than even its strongest supporters expected ["The tale of TARP," editorial, Oct. 3]. It also correctly pointed out that TARP has clearly failed in its attempt to channel mortgage relief funds to troubled homeowners

The Post, however, went on to suggest that there is a silver lining in government's failure to prevent a greater number of people from losing their homes. Because so few people qualified for relief, The Post incredibly found comfort in knowing that the government hardly spent any of the $41 billion set aside for this important task.  This completely missed the point. Had the government put in place streamlined loan modifications that included loan balance reductions from the very beginning, hundreds of thousands of homes and jobs could have been saved.

There continues to emerge evidence that the housing bubble was driven substantially by the making of defective loans that were also managed poorly over time. At a time of historically low interest rates and hopeful signs of a housing recovery, it is still not too late to rescue troubled homeowners and prevent the deterioration of thousands of American communities.

Misplaced Blame For Bad Loans

A Letter to The Washington Post

Once again, a financial expert blames the government for seeking to expand homeownership by encouraging "lending to borrowers who would not otherwise qualify for traditional mortgages." In his Feb. 12 op-ed, "Why pick on banks?" Stephen A. Schwarzman, chief executive of the Blackstone Group, did not substantiate this accusation. What several lenders actually did was make millions of inappropriate subprime loans that often did not require income documentation, lacked transparency and contained hidden fees and costs. In fact, the Wall Street Journal has reported that more than 60 percent of borrowers who received subprime loans in recent years could have qualified for less expensive conventional loans.

Ironically, Mr. Schwarzman acknowledged that banks not only made subprime loans but also lowered lending standards for various other commercial, residential and consumer loans. In addition, he noted that banks widely underwrote and sold securitized pools of subprime loans that were given AAA ratings without performing minimum due diligence. Was all of this, too, the result of governmental pressure? Are we now to applaud banks for "becoming conservative" about loans to small businesses and thereby not heeding government initiatives intended to fuel economic growth and job creation?

Partners in 'Entitlement'

A Letter to The Washington Post

Letter writer John Schneider appears convinced that the majority of homeowners who are in danger of losing their homes got in over their heads by taking on mortgages they "knew they couldn't afford" and now want someone to bail them out.

In fact, the Wall Street Journal has reported, more than 60 percent of borrowers who received subprime loans could have qualified for less-expensive conventional loans.

I applaud the millions of consumers who are fortunate and savvy enough to make superb decisions when making major purchases such as a home. But the public needs to know that many greedy brokers and lenders lured responsible borrowers into inappropriate mortgage loans that lacked clarity and contained hidden fees and costs. Until this is understood, the standardized loan modification plans for troubled borrowers that are vitally needed to get the housing sector and the economy moving again will not be implemented.

Predators behind the Housing Slump

A Letter to The Washington Post

The Post asserted that the housing slump is due primarily to lax lending standards that prevailed until recently ["Down Arrows," editorial, Jan. 23].

Highly unregulated and predatory loan practices may be more to blame than the sheer loosening of lending standards.

Indeed, many "subprime" loans were inappropriately extended to borrowers, including immigrants and minorities, who had income and credit scores that qualified them for prime loans. Fannie Mae and Freddie Mac surveys have shown, for example, that as many as one-third to one-half of Hispanic borrowers who got subprime loans qualified for prime loans.

What is needed is innovative underwriting that enables lenders to accurately assess the creditworthiness and financial capacity of all borrowers. Such systems take into account multiple wage earners and documented income from more than one job, and they add weight to on-time payments of rent, phone bills, utilities and other "alternative" credit indicators.

The Voice of the Mexican Americans

A Letter to The Washington Post

Not in Biafra, though there we are concerned as compassionate human beings, not in Southeast Asia, though there we are fighting alongside fellow Americans, but rather deep in the heart of Texas, deep in the Southwest, there are approximately five million of us, Mexican Americans, receiving a poor education and consequently often enough low incomes and limited employment opportunities.

We have met with discrimination and apathy.  Our present political and economic situation attests well to that fact.  Certainly, great strides have been made and these have occurred in large measure through the efforts of many concerned Americans.  Nevertheless, political obstacles remain: the powers that be, largely in the Southwest, are still as dormant as we were often regarded to have been about our own economic efforts.

It is thus reassuring to hear protests in the wind, that progress has been made, things are being done, and that these heartening voices come from those seeking change and most auspiciously from those causing change.

We are trying to solve the economic problems besetting our particular minority -- a minority that has fought nobly for the Nation.  Ours is merely the pursuit of a goal which the Nation's government and people have persuaded us to take: we all want to be good Americans.

Our new frontier, the economic frontier of Mexican Americans, represents all the aspirations and ambitions of American citizens who want to take part in the economic growth and progress of the Nation.  It is not so much a quest for materialistic wealth as it is for economic justice; it is not the clamor of one people that seeks to destroy or take away the economic wealth and benefits of others -- it is, indeed, merely the desire of Mexican Americans to have the opportunity to work for the economic and social progress of the Nation and of all Americans.

Mr. Nixon, Mr. Wallace, there is a Mexican American.  Mr. Humphrey already recognizes more clearly our plight and our existence.  As the days go by, nevertheless, we shall have more to say; as Americans we can do no less and we can do much more.  And we will.