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."
Showing posts with label justice. Show all posts
Showing posts with label justice. Show all posts
Thursday, May 29, 2008
Thursday, April 03, 2008
Sorry, Florida and Michigan... kind of...
Apparently, the voters of Michigan and Florida are being "disenfranchised" by the way the DNC policies have erased their delegates. People are understandably upset about that. But who should they be upset at?
State party officials were apparently well aware that they were breaking the national party rules when they scheduled their primaries so early. As far as I know, there has been no dispute on this point.
It also seems that the fact that their delegates would not be seated at the convention was also not suddenly sprung on them in the last month or so.
So, the state party officials who made this decision with full knowledge that they were violating a rule that they had agreed upon ought to be held responsible. What's funny is that these are the guys who are loudly blaming Howard Dean and Barack Obama (and others) for unjustly disenfranchising Florida and Michigan voters.
Florida and Michigan voters should be mad, but not at Dean, and not at Obama. They should be mad at their state party officials who agreed to something and then decided not to go along with it in order to increase the strength of their voice (or so they thought) in choosing the Democratic nominee.
What's ironic is that the decision was made to put them at the head of the pack, theoretically to have a more decisive voice in the nomination. With the 2 front-runners neck-and-neck, however, it now seems that the last states to vote will hold more power.
So now they are demanding to be given the last voice, too! It's just politics as usual, but it's still frustrating to hear the voices that caused all the problem loudly proclaiming everyone else to be at fault, and themselves to be the biggest victims.
The funniest thing is how both Clinton and Obama seem to have randomly fallen ideologically aligned with the position which (coincidentally) supports their own nomination. What are the chances? I love hearing them talk as if they're advocating for the poor disenfranchised voters, or for the other state parties who followed the rules and will be less likely to if poor precedent is set... when of course they're advocating for themselves!
Although I guess that same remarkable coincidence is at work in this very post, as I (an Obama supporter) advocate a stance that seems to work in Obama's favor.
That's politics for you.
- "And your gonna become voters! And your gonna vote like your friends do!"
State party officials were apparently well aware that they were breaking the national party rules when they scheduled their primaries so early. As far as I know, there has been no dispute on this point.
It also seems that the fact that their delegates would not be seated at the convention was also not suddenly sprung on them in the last month or so.
So, the state party officials who made this decision with full knowledge that they were violating a rule that they had agreed upon ought to be held responsible. What's funny is that these are the guys who are loudly blaming Howard Dean and Barack Obama (and others) for unjustly disenfranchising Florida and Michigan voters.
Florida and Michigan voters should be mad, but not at Dean, and not at Obama. They should be mad at their state party officials who agreed to something and then decided not to go along with it in order to increase the strength of their voice (or so they thought) in choosing the Democratic nominee.
What's ironic is that the decision was made to put them at the head of the pack, theoretically to have a more decisive voice in the nomination. With the 2 front-runners neck-and-neck, however, it now seems that the last states to vote will hold more power.
So now they are demanding to be given the last voice, too! It's just politics as usual, but it's still frustrating to hear the voices that caused all the problem loudly proclaiming everyone else to be at fault, and themselves to be the biggest victims.
The funniest thing is how both Clinton and Obama seem to have randomly fallen ideologically aligned with the position which (coincidentally) supports their own nomination. What are the chances? I love hearing them talk as if they're advocating for the poor disenfranchised voters, or for the other state parties who followed the rules and will be less likely to if poor precedent is set... when of course they're advocating for themselves!
Although I guess that same remarkable coincidence is at work in this very post, as I (an Obama supporter) advocate a stance that seems to work in Obama's favor.
That's politics for you.
- "And your gonna become voters! And your gonna vote like your friends do!"
Thursday, January 31, 2008
"They broke the law. They're criminals."
An interesting comment that comes up often when debating the issues surrounding undocumented aliens (or "illegal immigrants," if you prefer) is something to the effect of "they broke the law" or "these criminals." A lot of the time it's used in defense of plans that require them to "wait in line" for citizenship or legal residency behind their countrymen (or women) who "played by the rules" or "did it the right way."
I'm disappointed that this comment is usually left unchallenged. Here's what I would say if that came up in a debate I was having:
"Interesting that you seem to put so much weight on them having broken the law. Let me ask you: have you ever driven faster than the posted speed limit? Have you ever crossed the street in the middle of the block or against the red? Have you ever failed to come to a complete stop at a stop sign? You broke the law. You are a criminal. Do I have the right to demand that you be deported from this country? If you get caught, sure, there needs to be a penalty, but a penalty that is proportional to the damage or danger your behavior posed to the public. The mere fact that a law was broken is not sufficient reason to defend deportation.
"That's all assuming that the law is just. I don't think it is. In the 1850's, it was illegal for a slave to cross the "border" between a slave state and a free state without permission. That slave couldn't claim to be free just because they'd made it to a place where slavery was illegal. The fugitive slave law said that that person would be returned to a state of slavery if they were caught pursuing a better life north of the border. Anyone who helped them escape knowingly was also considered a criminal, even though slavery was illegal in their state.
"Does this law sound familiar? We're trying to pass those laws now! Would you label a fugitive slave a "criminal" and do everything in your power to return them to slavery? Would you insist that they "wait in line" behind the other slaves who were "doing it the right way" and "following the rules" by pursuing the option that some masters held out to their slaves of allowing them to "buy" their own freedom by taking on extra work over the course of decades... only to leave their families and children behind because they were still property? Would you lambast those citizens of the free states who hired former slaves and provided housing for them as "part of the problem"? I hope that in this day and age, the answer to these rhetorical questions is obvious.
"Do you understand that the desperation that drives people to leave behind family and community and risk their lives to travel hundreds and thousands of miles and be treated like a fugitive is the same kind of desperation that drove slaves to flee to the freedom of the north? Do you understand that it is not the lowlife criminals of these poverty-stricken nations that try to make it to the USA, but the most motivated, disciplined, hard-working and inspired citizens?"
I doubt I'd actually be able to make that argument without being shouted down, but it's what I'd want to say. If a law is immoral, then persons of conscience have a moral obligation to fight against it and defy it. The laws that try to drive hard-working immigrants from our nation by treating them worse than we treat our pets and livestock are immoral, and I applaud those immigrants who put their lives on the line and endure the brand of "criminal" to work for a better life for their family. We need more citizens with this relentless drive to wrest a living from their own sweat, blood and tears.
- "A lousy hundred bucks? Is that all my blood and sweat is worth?"
I'm disappointed that this comment is usually left unchallenged. Here's what I would say if that came up in a debate I was having:
"Interesting that you seem to put so much weight on them having broken the law. Let me ask you: have you ever driven faster than the posted speed limit? Have you ever crossed the street in the middle of the block or against the red? Have you ever failed to come to a complete stop at a stop sign? You broke the law. You are a criminal. Do I have the right to demand that you be deported from this country? If you get caught, sure, there needs to be a penalty, but a penalty that is proportional to the damage or danger your behavior posed to the public. The mere fact that a law was broken is not sufficient reason to defend deportation.
"That's all assuming that the law is just. I don't think it is. In the 1850's, it was illegal for a slave to cross the "border" between a slave state and a free state without permission. That slave couldn't claim to be free just because they'd made it to a place where slavery was illegal. The fugitive slave law said that that person would be returned to a state of slavery if they were caught pursuing a better life north of the border. Anyone who helped them escape knowingly was also considered a criminal, even though slavery was illegal in their state.
"Does this law sound familiar? We're trying to pass those laws now! Would you label a fugitive slave a "criminal" and do everything in your power to return them to slavery? Would you insist that they "wait in line" behind the other slaves who were "doing it the right way" and "following the rules" by pursuing the option that some masters held out to their slaves of allowing them to "buy" their own freedom by taking on extra work over the course of decades... only to leave their families and children behind because they were still property? Would you lambast those citizens of the free states who hired former slaves and provided housing for them as "part of the problem"? I hope that in this day and age, the answer to these rhetorical questions is obvious.
"Do you understand that the desperation that drives people to leave behind family and community and risk their lives to travel hundreds and thousands of miles and be treated like a fugitive is the same kind of desperation that drove slaves to flee to the freedom of the north? Do you understand that it is not the lowlife criminals of these poverty-stricken nations that try to make it to the USA, but the most motivated, disciplined, hard-working and inspired citizens?"
I doubt I'd actually be able to make that argument without being shouted down, but it's what I'd want to say. If a law is immoral, then persons of conscience have a moral obligation to fight against it and defy it. The laws that try to drive hard-working immigrants from our nation by treating them worse than we treat our pets and livestock are immoral, and I applaud those immigrants who put their lives on the line and endure the brand of "criminal" to work for a better life for their family. We need more citizens with this relentless drive to wrest a living from their own sweat, blood and tears.
- "A lousy hundred bucks? Is that all my blood and sweat is worth?"
Subscribe to:
Posts (Atom)