Could 30 million Americans, completely unnerved and destabilized from the ravages of their home mortgage foreclosures, benefit from a decades old and time proven theory of recovery - compulsory integration? Is there anyone who can argue successfully that our country is in troubled economic times and that the present day recovery system is working? Certainly not says the Rev. Patrick H. O’Connor of the First Presbyterian Church in Jamaica. Likewise Jim Dwyer’s Sunday New York Times article, which reinvents the sub-prime mortgage chaos into the food chain in his “When Pizza Becomes Predatory” front page headlines and announces the pastor’s news and analysis of a slice of pizza. “You have a $2.50 slice of pizza bought with a debit card, and if the person is over the limit, the card is not rejected. Instead, you have a $35 fee. So the slice of pizza is $37.50”.
The cancellation of the purchase may not have proven of immediate benefit to the pizza parlor nor the consumer, but in the weeks to come, little would have resulted if the purchase had been declined. Except of course, to state the obvious, our friend would not have ended up having to see a bill for $37.50 for a slice of pizza.
Magnified millions of times over, the declination of each request for modification also leads to long standing and potentially permanent chaos in our struggle for a return to stable neighborhoods, job optimism and highly respected middle class values of credit scores and financial responsibility. It is a given that so many families have taken on mortgage loans which far exceed their ability to repay or no longer bear any relationship to the value of their homes. Our return to real estate homeownership is not going to be geared towards statistics of whether our local quarterly reports indicate a decrease in homes foreclosed from last year’s figures.
The stated facts are that the volume of foreclosure activity and bank-seized properties does not benefit from subtle increases or decreases in statistical timelines. Foreclosures in our communities litter the weekly and local community newspapers, no longer advertising simple sub-prime defaults. This year we are set to watch out for the defaults for all of our friends who have lost jobs and income. This collapse is most certain to occur, and we witness the margins dip on their spread between rainy day accounts and bill paying. The refusal of our Federal Government to intercede in mandatory regulation will turn back the recovery process for decades to come.
Every several months, newly touted solutions grab the attention of the real estate community. The Home Affordable Foreclosure Alternatives (HAFA) have received much attention in the past several weeks, serving those whose goal is to achieve a short sale. The Treasury Department, in partnership with the major servicers, specify a thirty day window after which we are told whether a short sale may be approved. What follows are lines and lines of procedures, caps on real estate commissions and time limits to re-sell and avenues to obtain broker price opinions. The losers in this process will far outnumber those who prosper.
During the past several years, TARP,HAMP,HAFA and scores of freshly minted initialed entities entered our daily conversations. Quietly, we have asked for recognition in our negotiations with lenders and foreclosure conferences in court, to establish well defined reviews of our financial statements and accountable methods for assignments with bank representatives who can discuss our loan modification requests from the “international” and far flung offices of our lenders and servicers.
Continually, we often find deaf ears or untraceable extensions as we seek to communicate with bank representatives. This has also unfairly resulted in our lenders shouldering an intolerable burden of unpaid debt, with the new law in the state of New York. This law requires that the lenders now must maintain the properties which they have seized in foreclosure actions. Our lenders backlash against this law and the unfair consequences which may continue to restrict future lending has also missed the mark.
The argument to punish the lender is as unfair as it is to destroy our neighbors and friends. This spiraling trend of inefficient and costly failures in the loan modification programs also leads to taxable issues for discussion and balance sheet reviews. When our home loans reach default stage and arrears mount and short sale approaches are looked at by buyers and lenders and sellers, the Internal Revenue Service also looks at this cancellation of debt issues.
The insanity of failed loan modifications and denial of responsible requests to restructure our monthly debts is a recurring invitation to participate in the destabilization of America. The humbling realization after working with hundreds of families is that we have the process to recover and we have the alternatives available to prevent forced seizures of our homes.
Poor results and statistical failures have resulted from the lack of compulsory integration of the HAMP solutions into our requests for responsible loan modifications and foreclosure defenses. Our courts are now witnessing challenges by homeowners to enforce the present HAMP regulations. HAMP must become an obsession and dominate the discussions.
We are short changing both our lenders and our homeowners by permitting anything less than rigid adherence to those stated goals of recovery. HAMP is not a bargain nor is it a bailout. It can be an effective method for mandated and compulsory integration. We have seen the challenges and downfalls in our history for turning our backs to social injustice.
Years and years of waste and family destruction can be avoided by re-integrating the past successes of mandatory integration of these vital economic recovery programs. Failure is not an option and cannot be tolerated. When you are faced with mortgage arrears or the service of a summons and complaint, we must be certain that exercising the right to recover and save your home, be heard in the offices of our lenders and throughout the courts of our State.
The attorneys who serve the lenders in their quest to foreclose, must refrain from any conversation or discussion with the very homeowners they sue, unless it is to direct these families to private counsel, not for profit agencies or Bar Associations. These are dangerous lawsuits and any attempt to diminish the severity of the foreclosure action by either the actions of the lender or their attorneys must be viewed with harsh consequences. We cannot measure the cost of failure, for it will linger for generations: a child evicted from his room, a senior now out on the streets, uncles and aunts now living in new states or unknown shelters. We hear about divorces, separations – “Addressee Unknown” when we receive Christmas cards back from friends no longer living in their homes.
Our recent history recognizes us as a strong people, solving this madness. We too can use the strength of our Nation to cure our present day economic ills. We are not a nation of invertebrates. We are a people of backbone and when pressed we will rise, conquer and with the ability to listen to all sides, frame mandated and compulsory procedures to solve the foreclosure crisis.
