Renters vs. Speculators

This article on CNN.com made me think about the nuances of the mortgage crisis a little harder.

I agree that people who bought houses as speculators should not be helped out of those bad investments by the government. Any investment involves risk, and buying a home as a purely money-making investment with a mortgage structured to guarantee that you'll never actually pay it off should count as one of those risks.

When someone buys a home to live in however, it's more than just an investment. The purpose of buying the home isn't merely to use it as an opportunity to increase capital; it's fulfilling one of the basic human needs: shelter. Many people who bought homes to live in via a poorly structured loan would never have been able to qualify for a loan otherwise. They were the vicitims of predatory lending practices, but before that they were the victims of an economy that places home ownership out of people's grasp.

There's another option for people who can't qualify to buy their own home: rent one! And here's where it gets sticky. What happens when an unscrupulous speculator buys a home as an investment, but then rents it out to someone who is not a speculator, but merely someone renting to fulfill the basic human need of shelter for themselves and their family? When the owner is foreclosed upon because they gave up on paying off the mortgage for a home they don't even live in, what options do the renters have, and what rights should they have?

The renters could buy the home from the bank, but many people rent precisely because they don't have the credit history or income necessary to qualify for a loan from the bank to buy a home.

Here's what I propose:
1st step - The bank must allow the renters to remain in the home after foreclosure for the duration of their lease or 6 months, whichever is greater, while paying the rent specified in their lease directly to the bank, as long as the amount of the rent is greater than or equal to the amount the erstwhile owner was supposed to pay the bank as specified in the original mortgage agreement. There is an understanding that after this time period is over, the lease will not be renewed.
2nd step - If the rent specified in the lease is less than the mortgage payment required of the owner, the bank extends the option to the renters to remain in the home for the duration of their lease or 6 months, whichever is higher, but they must pay to the bank the amount that the owner was supposed to have paid as per their mortgage agreement (non-retroactive: just keep up, they don't have to catch up!). There is an understanding that after this time period is over, the lease will not be renewed.
3rd step - If the renters have lived in the house for at least 1 year and have a perfect history of paying their rent, then once the lease (or 6 months) is up, the bank offers the renters the first chance at buying the property. The sale amount is not to exceed the balance of the mortgage, and the regular credit-score/income requirements should be waived. If the equity already in the house is equal to 15% of the current value of the house, no down payment is required. If not, a down-payment which will bring the equity up to 15% of the current value of the house may be required by the bank at the bank's discretion.
4th step - If the renters have lived in the house for less than 1 year and/or have a less than perfect history of rental payments on the house, then they will also have the first chance at buying the property with a loan structured as above, but the bank may apply the regular credit-score/income requirements to the renters.
5th step - If the renters are unwilling or unable to purchase the house under the above structure, the bank is free to offer the house for sale as it would any other foreclosed property.

Throughout this whole process, the speculative/deadbeat owner is cut out: They have been foreclosed upon and have no further connection to the property. Any investment they made in the property is lost, and their credit history reflects their poor investment choices.

So, what do you think? Is this fair? Is it reasonable for the government to require lending institutions to extend these options to renters?

- "None at all."

Options for Florida and Michigan (updated 5/21)

Option 1: Don't seat any delegates. In that case, the total number of delegates needed to win is 2,025. There are currently 86 delegates that will be determined by votes in the remaining states (and Puerto Rico), and 212 superdelegates who have not publicly pledged their vote to either candidate. Obama needs 62 (21%) of these remaining delegates to win the nomination, Clinton needs 247 (83%). (The two percentages don't add up to 100%, because of the 9 delegates awarded to John Edwards before he dropped out of the race).

Option 2: Seat delegates proportional to votes cast and reinstate superdelegates. In that case, the total number of delegates needed to win is 2,208, and the number of unpledged superdelegates goes up to 267. This would give Clinton half of the available pledged delegates from Florida where she received 50% of the popular vote (93 delegates), and Obama 33% of the available pledged delegates from Florida where he received 33% of the popular vote (61 delegates). Clinton would also receive 55% of the available pledged delegates from Michigan (70 delegates), while Obama would receive none, since he received no votes because his name was not on the ballot. Obama would need 185 (52%) of the remaining delegates to win the nomination, Clinton would need 268 (76%). (The two percentages don't add up to 100%, because of the 9 delegates awarded to John Edwards before he dropped out of the race, and because of the Florida and Michigan delegates that represent votes for candidates other than Clinton or Obama).

Option 3: Seat delegates proportional to votes cast, award all "unpledged" votes in Michigan to Obama (who did not appear on the ballot, though Clinton did) and reinstate superdelegates. In that case, the total number of delegates needed to win is 2,208, and the number of unpledged superdelegates goes up to 267. This would give Clinton half of the available pledged delegates from Florida where she received 50% of the popular vote (93 delegates), and Obama 33% of the available pledged delegates from Florida where he received 33% of the popular vote (61 delegates). Clinton would also receive 55% of the available pledged delegates from Michigan (70 delegates), while Obama would receive 40%, representing the 40% of Michigan voters who voted for "unpledged"delegates on a ballot that had Clinton's name but not Obama's (51 delegates). Obama would need 134 (38%) of the remaining delegates to win the nomination, Clinton would need 268 (76%). (The two percentages don't add up to 100%, because of the 9 delegates awarded to John Edwards before he dropped out of the race, and because of the Florida and Michigan delegates that represent votes for candidates other than Clinton or Obama). John Edwards name did not appear on the Michigan ballot either, however, making it problematic to award all of these delegates to Obama, which leads us to the next two options...

Option 4: Seat delegates proportional to votes cast, award half of "unpledged" votes in Michigan to Obama (who did not appear on the ballot, though Clinton did) and reinstate superdelegates. In that case, the total number of delegates needed to win is 2,208, and the number of unpledged superdelegates goes up to 267.This would give Clinton half of the available pledged delegates from Florida where she received 50% of the popular vote (93 delegates), and Obama 33% of the available pledged delegates from Florida where he received 33% of the popular vote (61 delegates). Clinton would also receive 55% of the available pledged delegates from Michigan (70 delegates), while Obama would receive 20%, representing half the 40% of Michigan voters who voted for "unpledged"delegates on a ballot that had Clinton's name but not Obama's or Edwards' (26 delegates). Obama would need 159 (45%) of the remaining delegates to win the nomination, Clinton would need 243 (69%). (The two percentages don't add up to 100%, because of the 9 delegates awarded to John Edwards before he dropped out of the race, and because of the Florida and Michigan delegates that represent votes for candidates other than Clinton or Obama).

Option 5: Seat delegates proportional to votes cast, split the "unpledged" votes in Michigan evenly between the two delegates and reinstate superdelegates. In that case, the total number of delegates needed to win is 2,208, and the number of unpledged superdelegates goes up to 267. This would give Clinton half of the available pledged delegates from Florida where she received 50% of the popular vote (93 delegates), and Obama 33% of the available pledged delegates from Florida where he received 33% of the popular vote (61 delegates). Clinton would also receive 75% of the available pledged delegates from Michigan (70 delegates) representing the 55% of Michigan voters who voted for her, as well as half of the voters who voted for "unpledged" delegates (even though her name was on the ballot! A generous option for Hillary!), while Obama would receive 20%, representing half the 40% of Michigan voters who voted for "unpledged"delegates on a ballot that had Clinton's name but not Obama's or Edwards' (26 delegates). Obama would need 159 (45%) of the remaining delegates to win the nomination, Clinton would need 243(69%). (The two percentages don't add up to 100%, because of the 9 delegates awarded to John Edwards before he dropped out of the race, and because of the Florida and Michigan delegates that represent votes for candidates other than Clinton or Obama).

There's one more option that would definitely be the least fair to Senator Obama, especially since his name didn't even appear on the Michigan ballot...

Option 6: Treat both states as "winner take all" and award all available pledged delegates to Clinton and reinstate superdelegates. In that case, the total number of delegates needed to win is 2,208, and the number of unpledged superdelegates goes up to 267. This would give Clinton all of the available pledged delegates from Florida where she received 50% of the popular vote (185 delegates), and all of the available pledged delegates from Michigan (128 delegates) where she received 55% of the popular vote. Obama would need 246(70%) of the remaining delegates to win the nomination, Clinton would need 118 (33%). (The two percentages don't add up to 100%, because of the 9 delegates awarded to John Edwards before he dropped out of the race).

Notice that currently, Clinton needs over 80% of the remaining delegates to gain the nomination, while Obama only needs 21%. Almost any option that involves apportioning Florida and Michigan delegates in some sort of fair way reduces Clinton's needed delegates to 69% or 76%... not a huge change. The only way that she gains an advantage is if she gets ALL of the delegates from Florida and Michigan, which seems unfair since Obama received a third of the votes in Florida, and 40% of the voters in Michigan turned out and voted for "unpledged," which HAS to be interpreted as a vote that would have been cast for Obama or Edwards if they had been on the ballot. It's not too much of a stretch, either, to imagine that some of those who voted for Hillary might have voted for Edwards or Obama if they had been on the ballot.

I say award delegates proportional to the votes they received (option 2). That's not the fairest option (I think that option 4 would be closer to the real numbers), but it should take away any whining ammunition that Hillary might take into the convention if Obama gets to 2,025 delegates but not 2,208.

What do you think?

- "There's no crying in baseball!"

The voice behind the mouth

Hello, loyal readers,

I recorded another short "Perspective" for our local NPR station (KQED) and it will air Wednesday, May 7th. It's another installment in my ongoing, multi-part, multi-media rant on standardized testing. I think it airs at 7:37 am and again at 8:37 am... but I'm not sure. If you aren't able to tune in, you can listen to their archive of past Perspectives here, as well as my two previous contributions to the program here and here.

-"I'll make you famous."

I love you, Jonathan Kozol!

I've started to read Jonathan Kozol's latest: Shame of the Nation. I love it. Basically, Kozol is tracing the backward slide of American public education into segregation and inequity to a degree we haven't seen since the 1950's. Poor kids (especially black and latino kids) are being sequestered educationally and denied access to facilities, teachers, opportunities and especially money. Sounds like the good old days, doesn't it? I love the way he cuts through the political double-talk that we hear so often that claims that "throwing money at the problem" won't work for the education of poor, urban, minority students. If the rich really believe that, muses Kozol, how do they justify the insane amounts of money they gladly fork over for their own kids education? Their behavior certainly does seem to suggest that at some level they believe that a better education costs more money... or they're big suckers, easily parted from the money, an option which the fact of their wealth would seem to invalidate.

Anyway, reading this book is great... but there's a problem. So far it's just making me angry and frustrated, and I think that's valid. It should. But what good does that do anyone? Complaining loudly about how messed up things are has become something of a national pastime in post-modernist America, and being outraged at injustice has become an acceptable substitute for actually working for justice.

Not to say that it's our responsibility to fix the problems of the world, but here's a little game I like to play in my own mind: I call it "what if everyone made the same choices as I do?" I know that my owning a hybrid rather than a Hummer will not by itself save the world from global warming, or that whether I throw my soda can in the garbage or the recycling will determine whether or not my descendants will have to live in caves underground. But it is helpful to assume that on each issue, the world is full of two kinds of people: those who are making the problem worse and those who are making it better. At that point, I have to decide which group I want to belong to.

Making these choices more about the identity I want to reinforce for myself and the kind of person I want to continue becoming rather than about changing the world is very freeing. It's not my responsibility to change the world, but I can choose to be a part of the group that takes individual responsibility to the whole seriously.

So, back to the issue at hand: how should I respond to Kozol's damning indictment of American education? Here's some ideas I've been thinking of... please reply with more if you come up with any... and let me know how you're doing on following through!

• Vote for political candidates that favor more equity in public education (well, assuming the choice is given, check!)
• Write op-ed pieces, letters to the editor, my elected representatives at local, state, and national levels, and express my disappointment with the injustice going on and my hopes for their moral integrity as one of their constituents (check!)
• Try to let everyone I know in on what's "really" going on with public education, and deciphering the statistics and political jargon for what it really is: a concerted effort to make sure that any available resources are shifted toward those who already have more than they need at the expesne of those who really need it (If you're reading this... check!)

Now, the really tricky ones... the ones that trip up those avowed liberals in Hollywood or the left-wing politicians who talk the talk but send their own kids to the same elite schools as the rest of the rich people:

• Resist the pressure of society to seek out places to live with "good-schools" and assuming that my responsibility to my own children mandates sheltering them from "those people" and making sure that none of the "problems" of growing up as an urban minority have anything to do with me or my family.
• Work in an inner-city, minority school and teach those kids with everything I've got.
• Send my own kid to a public, urban school with a diverse population instead of the elitist schools that my race and socio-economic status hold out to me, and then invest heavily in that school community as a parent volunteer and advocate .

So that's the kind of response I want to have to a book like this. Please keep me accountable when you see my making choices that betray my convictions.

- "Have you met them? The poor?"