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Government action will help

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Posted: Friday, March 20, 2009 10:00 pm

Due to past government interference in lending conditions and the current state of the economy, specifically the housing markets, government action is necessary to correct the mistakes of the past.

I would like to contrast two proposals for addressing the foreclosure crisis: the recent proposal from the Obama administration, and H.R. 230 as introduced by Congressman Dennis Cardoza.

Unlike the Obama plan, the Cardoza legislation would allow the refinance of owner-occupied homes even if they are upside-down by more than 5 percent. It's estimated that one in five homeowners in Central California are upside-down by more than 5 percent.

The Cardoza legislation would reduce the interest rates of homeowners to a flat 4.0 percent for a term of 30 to 40 years. The Obama plan would only reduce interest rates to their current levels. And H.R. 230 is not restricted to only those homeowners who are currently behind or at risk of falling behind on their mortgage, any homeowner may qualify for the Cardoza plan.

While the Obama plan is a small step down a very narrow path, H.R. 230 by Congressman Cardoza has significant and widespread benefits. By casting a wide net, the Cardoza plan has two positive and immediate impacts.

First, those who are behind on their mortgage payments will have their payments reduced and increase the likelihood that they will be able to keep their homes. Second, those who are not now, and likely would not be, in danger of losing their home will still see a reduction in their mortgage payments, thereby giving them more money available for immediate purchases in our depressed economy.

As the CEO of the Building Industry Association of the Delta, I strongly encourage the support of H.R. 230.

John Beckman


Building Industry Association of the Delta

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Welcome to the discussion.


  • posted at 4:30 pm on Mon, Mar 23, 2009.


    dogbark...I don't know where they are coming up with the prices for REO homes but to me it looks like they are grabbing them out of thin air. For those that are in a position to buy a house right now...wow...lucky them! But there is a certain house in Lodi (PRIME REAL ESTATE!) that I've admired for years. It appraised AND sold for just over half a million dollars about a year and a half ago. It is now priced (as a foreclosure) for right around $160k. I envy the lucky folks who end up with THAT deal.BUT, I do not envy the families who own homes in the vicinity, who's homes should be valued in the $300k range but whose values will drop down to $200k or less. There are also foreclosure homes going for $60k, $70k, and $80k all over town, with neighboring homeowners struggling to pay for their $200k or $300k mortgages.The mass foreclosures need to be stopped or at least slowed dramatically or we'll all be drowning! Rents will soon be going up too, as a result... (or have they already started?)

  • posted at 5:12 pm on Sun, Mar 22, 2009.


    OK, as an example: a bank forecloses on a house, and has an appraisal. What's the net effect besides throwing a family out on the street? The banks booked assets just dropped by the difference of the properties' original value and the new appraised vvalue. The other houses around that house also take a hit in comparative value when the bank fire-sales the house.This has to stop. If the banks won't moratorium the debt, then maybe it's time for a 90 day cooling off period imposed by the government. Also we should not go along with the govt selling off the 'toxic loans' to the private sector. That will be more of the lowball selling of those properties affecting the rest of us and our property values. Bit the bullet, use lease to own contracts and wait for the equity to return, the govt will recover far more money that way.

  • posted at 5:47 am on Sun, Mar 22, 2009.


    By the way, Acampo-Mom, there are many places and landlords who will rent to people who have been hurt because of these economic hardships. If one's credit history isn't marred by irresponsible behavior, most understand that and will be open to renting to them. But for those who use the economy as an excuse to simply not pay their bills (when they are able to), then no, they shouldn't be given much latitude.We are responsible for ourselves. How we behave during good and bad times directly reflects on our personal integrity. If I were offering a home for rent I would not hesitate to hand it over to anyone who (through no fault of their own) was forced to abandon their home and opt for bankruptcy. But I'd slam the door in the face of those who are taking unfair advantage of the situation.Also, I also didn't say that you considered me cold-hearted; I merely meant to suggest that some might find me that way through my comments in that one post.

  • posted at 5:37 am on Sun, Mar 22, 2009.


    Acampo-Mom - there must be a communication disconnect here. Sure, if someone comes to you to refinance your home for less or if you can find a better deal so you can keep it, that's great. I'd say jump on it!But to force lenders to lower rates, forgive arrearages or in any other way dictate to them how they should conduct their business is not good. The government has clearly overstepped in this banking debacle. Even today we're seeing suggestions coming from the White House that would force their idea of executive compensation limits on private companies. This is very, very dangerous territory. As I asked before, where will this all end? At what point will the government stop in its interference in the free market? Just what will it take for all of us to realize that our nation is turning drastically toward socialism? The problem is that Obama, et al. are using fear as their best weapon to force these things through.The outrage we feel now shouldn't be directed at AIG - it should be aimed squarely at the White House and Capitol Hill.

  • posted at 4:17 am on Sun, Mar 22, 2009.


    LodiSafeway...I only disagreed with one small portion of your comment. I didn't say, "Gosh you're cold hearted" or "Gee, give everyone a hand out!"And you're right, we shouldn't all be on the hook to be responsible for our neighbors. I'm on the hook for being responsible for me and my family, though, and if someone were to come to me and say "Would you like to refinance your current loan at 4%?" I'd say "HELL YES." And if someone were to come to me and say, "We are going to let your neighbors refi their current mortgage at 4%, preventing the foreclosure of their property, and in turn preventing the value of your own home from plummeting even further." You know what I'd say? "Thank God!"When you say: "The solution is simple: those who cannot afford their homes should either find a way to buy one within their means or go out there like millions of other Americans and rent." You are just...wrong. They can't sell their homes and who's gonna rent or give a mortgage to someone with a foreclosure on their record???

  • posted at 6:30 pm on Sat, Mar 21, 2009.


    Check BoAhttp://www.bankofamericaboycott.com/

  • posted at 6:29 pm on Sat, Mar 21, 2009.


    danielh wrote on Mar 21, 2009 9:44 AM:" John Beckman: Nope. Sorry. Government rules and regulations got us into this mess.If you put more of the problem, the problem gets bigger.Washington, D.C. is so corrupt that it can't be fixed. we need another government, if only the Joint Chief's of Staff would support a new government. "Feds refused to disqualify the Matricula Consular ID card as a secured card, meaning illegal aliens could get bank accounts using it. Then the regulations were lowered so they could go out and get $400,000.00 loans. Now they are foreclosing, and believe me, more will foreclose throughtout the year. Federal law enforcement stated in committee the cards are no good, and still the banks are taking them.

  • posted at 2:51 pm on Sat, Mar 21, 2009.


    Acampo_Mom: if you can't sell it and you can't pay for it,leave it and bankrupt it; and start your life over. These are the options available to you. But what the government should not do is bail out those who are in over their heads. Where will this lead? Where will it end?Oh I know, I'm hard-hearted and cruel with such answers. Well, the world is a cold and heartless place, in case you haven't noticed. We are each responsible for our own brand of happiness; not your next-door-neighbors. Why should they be put on the hook (or their grandchildren and beyond) simply because people got themselves into financial trouble and then placed the solution on the taxpayers?We live in a spend, spend, spend society. The idea of living within the means of most Americans is distasteful to them. If they can't have it now (on credit), then it's unfair. Everyone should own their own home, fancy car and all of those other expensive things, right? Wrong! Only those who put in the work for them are entitled to them. Planning is the key. Lack of it results in where we are now.

  • posted at 12:58 pm on Sat, Mar 21, 2009.


    LodiSafeway said: "The solution is simple: those who cannot afford their homes should either find a way to buy one within their means or go out there like millions of other Americans and rent." I've heard this a lot...Why, if one cannot afford their house do they not just sell it and move into something more affordable??? Because the houses are UNsellable! If for example; I currently owe $235,000 for my house (which appraised just over a year ago for $350,000) but it is currently worth about $205,000 AND I've seen a decrease in my income, how do I get out of the house to move into something cheaper?? Well there it is...the answer...let it go back to the bank, which is what has led to the "mortgage crisis"; everyone had to let their mortgages go into foreclosure. THIS is what they are trying to prevent...more foreclosures. They don't give a hoot about people losing their houses. It wouldn't be the home owners receiving a bailout as much as it would be the banks. Wouldn't the banks rather be getting SOMETHING instead of having to deal with foreclosures???

  • posted at 5:27 am on Sat, Mar 21, 2009.


    How can anyone be taken seriously when they state in one sentence that, "[d]ue to past government interference in lending conditions...government action is necessary to correct the mistakes of the past?" If ever there was an excellent example of an oxymoron, this is it.Mr. Beckman, the next to last paragraph in your letter is equally as nonsensical. Why should those who have gotten behind in their mortgages be bailed out? Is this where it will end? Or will the government need to intervene with credit card holders as well to force the lowering of interest rates that were previously agreed to between the lender and the borrower? The solution is simple: those who cannot afford their homes should either find a way to buy one within their means or go out there like millions of other Americans and rent.Our government was never intended to be actively involved in our individual pursuits of happiness; I don't see how We the People are going to be able to shoulder much more of this idiocy that has taken over in Washington and many state Capitals. It's not funny anymore.

  • posted at 4:44 am on Sat, Mar 21, 2009.


    John Beckman: Nope. Sorry. Government rules and regulations got us into this mess.If you put more of the problem, the problem gets bigger.Washington, D.C. is so corrupt that it can't be fixed. we need another government, if only the Joint Chief's of Staff would support a new government.

  • posted at 2:24 am on Sat, Mar 21, 2009.


    No John,The government got us into this problem and more government interference will only delay the inevitable. The market needs to correct. Your suggest plan will only help to make debt slaves out of people who should not be in their houses in the first place. Face up to the fact the bedroom communities of Stockton, Lodi, Manteca etc, are toast for the next 3 years min. There was so much overbuilding it will take that long to burn off the inventory. By then the dems will have killed the state so it could be 5, 10, 15 years before there is major construction of SFR in the area again.


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