tag:blogger.com,1999:blog-68417060917218005322024-03-05T01:33:03.441-08:00Struggling Home Owners Share StoriesAnonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.comBlogger31125tag:blogger.com,1999:blog-6841706091721800532.post-19329521598512651062016-02-04T12:19:00.002-08:002016-02-04T12:23:06.710-08:00WALL STREET BECOMING SOME OF OUR LARGEST LANDLORDS<br />
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An article by Seattle City Council member Lisa Herbold today in <i>The Seattle Times</i> reminds us that hedge funds and private-equity firms have amassed 200,000 homes we lost during the Great Recession. To top it off, they receive special treatment from our government: To summarize: Some 95 percent of delinquent Fannie Mae, Freddie Mac and HUD loans have gone to hedge fund, private-equity funds and Wall Street banks. Yet, <b><i>these federal agencies will not write-down the debt for homeowners,</i><i> but are writing it down for Wall Street speculators. </i></b> She writes:<br />
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The speculators can then turn the properties into rentals - often bundling them<br />
into securities for investors, just like the bundling practice with mortgages that<br />
led to the housing crash. Rents are then inceased and contribute to displacement<br />
of poor and working families - particularly African-American and Latino families.<br />
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Herbold would rather see the agencies sell delinquent mortgages to nonprofits, which work to prevent foreclosures and to create much-needed affordable housing. "In the Seattle metro area, 19.5 percent of the bottom-tier homes are still underwater . . . the continued loss of equity is bad enough without another insidious angle of the crisis, revealed in a 2014 article in <i>The Seattle Times</i> by Sanjay Bhatt who reported: "Amid the region's tightest housing supply in a decade, a Wall Street-backed company stormed into the Seattle metro area and bought, on average, 10 homes a day."<br />
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She goes on to say that last month, RealtyTrac reported that in the Seattle area, the percentage of homebuyers paying cash rose to more than 31 percent. "These cash-buyers are typically large investors who often don't live in Seattle or have the same kind of stake in our city. The last thing we need is federal agencies selling our precious housing stock to hedge funds and private equity firms" she says.<br />
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Herbold and other elected officials and community groups on Thursday will ask the GSEs to reveal the number of delinquent mortgages that are in our cities and where these loans are located. "There is no reason to sell these bundled mortgages to Wall Street speculators when they could be working with us on viable alternatives" (i.e., sell the delinquent mortgages to nonprofits who can modify the terms with principal reduction, whenever possible).<br />
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Source: <i>The Seattle Times</i> article: Wall Street's Impact on Seattle's Housing Affordability, Feb.4, 2016.<br />
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<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-32728628366274729132016-02-03T17:40:00.000-08:002016-02-03T17:40:01.453-08:00THE WEALTHY CONTINUE TO MAKE IT DIFFICULT FOR HOMEOWNERS -- EVEN OWNERS OF MOBILE HOMES<br />
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<i>The Seattle Times'</i> ongoing investigation of the mobile home industry (along with<i> BuzzFeed News</i> and the <i>Center for Public Integrity</i>) - begun after media alerted consumers last December about how Clayton Homes (a company owned by Warren Buffett's Berkshire Hathaway) systematically targets minority borrowers and charges them higher rates - has Washington state Gov. Jay Inslee calling for the state legislature to find ways to protect our 450,000 mobile home residents from abusive sales and lending practices in the mobile-home industry. [I'm not clear whether this includes manufactured homes. I will check and revise this posting.] When people fall behind on their loans, Clayton Homes, a company that dominates mobile-home lending, sales and manufacturing (AND SELLS THEM THROUGH A NETWORK OF MORE THAN L,600 DEALERSHIPS) repossesses the homes and resells them (presumably, rather than working with the homeowners to stay in their homes). They also finances more than a third of all mobile-home loans, more than any other lender by a factor of seven, according to the <i>Times'</i> article.<br />
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A bill sponsored by Representative Cindy Ryu and backed by Governor Inslee would give consumers more protections from excessively high interest rates and foreclosures by mobile home lenders. According to today's article in <i>The Seattle Times </i>["MOBILE HOMES GET INSLEE'S ATTENTION/Calls for State Study, Feb, 3, 2016], "a bill backed by Gov. Inslee and the state Department of Commerce calls for a study of how the industry sells, finances and repossesses the homes. Supporters say state laws that protect conventional homebuyers typically do not safeguard people buying homes. Commerce director Brian Bonlender said the key difference is that mobile homes are typically financed with personal-property loans. They want to find ways to "stop unfair practices that could leave some Washington homeowners out in the cold."<br />
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"The consumer protections around those are much less significant," Bonlender said in an interview. Unlike mobile-home puchasers, buyers of conventional homes in Washington enjoy extended timelines to resolve financing problems and foreclosure mediation, he said.<br />
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The nation's leading mobile-home company extracts <i>billions of dollars </i>from poor customers by deceiving them about loan terms and charging high rates of interest.<br />
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Nationwide, nearly 18 million people live in mobile homes, the article reported.<br />
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<b>At the federal level,</b> lobbyists for the mobile-home industry tried to roll back consumer protections but the bill stalled. Last April, the U.S. House of Representatives approved a bill that would raise the interest-rate thresholds at which additional consumer protections would take effect. The bill would overwhelmingly help Clayton Homes. The proposal was also included in a larger U.S. Senate bill in 2015 that was approved in a committee, but it did not make it to the Senate floor for a vote.<br />
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Sources:<br />
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<i><a href="http://Seattle Times">Seattle Times</a></i>/reporters Mike Baker and Daniel Wagner, Feb, 3, 2016<br />
<a href="http://buzzfeed/">BuzzFeed.com</a><br />
<a href="http://Center for Public Integrity">Center for Public Integrity.com</a><br />
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On the Web, read <i>The Mobile-Home Trap series:</i> seattletimes.com/category/mobile-homes/<br />
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<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-87240098100034861522015-10-16T20:08:00.003-07:002015-11-16T09:37:15.586-08:00ANOTHER WAY YOU CAN LOSE YOUR HOME<br />
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Nov. 16, 2015 - There is another way you can lose your home: through fraud, of course. More on that later (next posting), but it's about shell companies who set themselves up as LLCs. They often have only a PO box. They like to find people who are delinquent or whose house is in need of repair/maintenance. Always verify a business and the individuals you come in contact with. I plan to summarize a NYT article on this particular type of fraud, and will post it soon.<br />
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Oct. 2015 - If the roof on your home is 20 years old or older, your insurance company might not continue to insure you. If you don't have your house insured and you have a mortgage, you can lose your home.<br />
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This issue was brought up on The Property Man television show a couple of weeks ago, but the solution was not given at the time (a couple was about to lose their home for this reason). I plan to do more research and will post my results. I have a cedar shake roof that was new when I bought the house almost 20 years ago. It has thick shakes, which I believe has a longer than 25-year expected life; maybe 50 years.<br />
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<b>UPDATE:</b><br />
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I called the Washington State Insurance Commissioner and was told that an insurance company has to give you 45 days if they are not going to renew your policy and they have to give a reason. The person I spoke to said he has never known of a case where an insurance company refused to renew because of the <b>age</b> of a homeowner's roof. (The condition of the roof would be another matter.)<br />
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You should check with your own state's office of insurance. Homeowners have to stay one step ahead of the people who would actually like to see you lose your home (many servicers) or insurance companies who are looking for another captive clientele to enrich their coffers.Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com1tag:blogger.com,1999:blog-6841706091721800532.post-45491509555607137802015-09-17T05:12:00.002-07:002015-10-13T09:53:41.644-07:00LANDLORD RENTNG ROOM GETS CHARGED WITH BREAKING AND ENTERING<br />
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It all started over a space heater.<br />
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Here's the backstory: To make ends meet, a sixty-eight year old woman, recently widowed, decided to post an ad on Craigslist for a tenant to rent her downstairs bedroom. (Actually, it was a former living room turned into a bedroom.) A prospective tenant, a woman in her thirties, came to her house with a car full of belongings, a 14-year old daughter, and a dog. She explained to the owner of the home that she and her daughter needed a place to live so she could begin her assignment at the local military base Fort Lewis (renamed Joint Base Lewis-McChord or "JBLM") as a medical specialist, and so her daughter could enroll in school.<br />
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She thought she was turned down because she had a child and a dog. The landlady felt a little sorry for the woman and showed her the room. The young woman and her daughter liked it as soon as they saw it. So after the requisite paper work was done, they had a room and the landlady had a tenant to help with expenses.<br />
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The first indication of a problem occurred one day when the tenant Teresa Dale, left for work, her daughter left for school, and the dog was left in a cage. All day long the dog whined and barked. Later that evening, landlady discussed the barking dog issue with her tenant. The tenant explained that the dog had peed on her pillow and she was punishing him by keeping him in a locked cage all day. Landlady explained that it was animal abuse - not to mention annoying - and told her to desist from such behavior. Tenant agreed.<br />
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A month or so later, tenant complained the room was too cold. She was given a space heater and warned not to leave it on when absent from the house. She ignored the warning several times. So one day the landlady entered the room to turn off the space heater. When tenant returned home, she immediately called the county sheriff to press charges against her landlady for entering into her room without permission [landlord-tenant regulations require a two-day notice unless emergency]. Although the deputy sheriff or clerk who took the call tried to dissuade tenant from filing formal charges [landlady found out later], the charge was filed.<br />
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A few weeks later, landlady received a notice in the mail of the charge. She sent a letter explaining that under the rules and regulations governing landlord-tenant matters, a landlord is within his or right to enter a tenant's room unannounced if she fears imminent danger to the premises or to a person.<br />
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A few weeks later, the landlady received a letter from the county sheriff (for whom she voted) which offered to clean her record if she would agree to pay over $600.00 to attend a class two times a week for about eight weeks. Landlady politely declined.<br />
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The process continued and the landlady received a letter from the county Prosecuting Attorney. She then decided to hire an attorney at a cost of $1,500 and planned to have a hearing before a judge.<br />
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During this process, tenant did not inform landlady what she had done, and landlady did not tell tenant that she knew what tenant had done. Everything was "friendly or polite" between the two parties. <br />
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Before a hearing could be scheduled, landlady suggested to attorney that he inform the tenant's "witnesses" (a young couple who shared an adjoining room) that they would be subpoenaed for a deposition. The young couple, by then having relocated to a place 200 miles away, declined to cooperate.<br />
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Meanwhile, landlady waited until the end of the month and gave tenant a rent increase of $200.00 monthly or 30 days' notice to vacate premises (in accordance with the rules and regulations, of course). Tenant chose to pay the higher rent.<br />
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What landlady discovered later was that tenant was in trouble at her workplace for "pushing a supervisor who outranked her" and was awaiting a disciplinary hearing by her military command. Therefore, there was no incentive to move to look for another place to live if she was going to be forced out of the Army.<br />
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To summarize, within a couple of months, the tenant moved out of the house and returned to her home in Oklahoma. Apparently, she had been kicked out of the Army. Sounds like she had an anger problem.<br />
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<b>Lesson learned:</b> If you're a landlord, don't allow a space heater in rooms or put something in writing that gives permission for you to enter the room, without notice, if a space heater is left on when there is no one around to monitor the safety of the fire hazard.<br />
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<b>Another lesson learned: </b> A background check doesn't tell you whether a tenant is of good character or not. You often have to live with a person to know how they really are. (Isn't that why many marriages don't last? Because people change and start working against each other, not in support of each other.) <br />
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This story came about because I "Googled" myself a couple of nights ago, and discovered this charge was made public. Of small comfort was reading that the "breaking and entering" charge was <b>dismissed</b>. However, that's not good enough for me and I am going to return to court to have it expunged. I was the landlady in this story. And I am still pissed! Oh, this reminds me of advice I was given by a friend a couple of decades ago: "Never get into a pissing contest with a skunk."<br />
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[TO BE CONTINUED]Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-29355299440544320162015-09-13T12:40:00.001-07:002015-09-13T19:55:21.984-07:00DEJA VU! IS CONDO CRAZE REPEATING ITSELF?<br />
Those of us of a certain age will remember the "condo craze" of the late seventies and early eighties when at its zenith, developers were buying up hundreds of thousands of apartment buildings all over the country, but especially New York City, and turning the units into a buying opportunity for the tenants (and easy money for the developers). The tenants had to make a decision: 1) to purchase the unit - if it were developed into a condominium, 2) buy shares in the unit - if it were developed into a cooperative, or 3) move out and find another place to live The first two options made you an "owner" of your own home. That was a good thing. Right?<br />
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The downside was that you were otherwise forced to leave your community of friends and neighbors because you didn't want to own, or didn't have the money to purchase your apartment.<br />
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In a recent <i>New York Times</i> article, reporter Julie Satow describes how developers and/or investors are acquiring a "supermajority" [usually 75 percent of shares] of apartments in a building, and then maneuvering to evict any holdouts.<br />
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"Former shareholders then revert to either rent-stabilized tenants or market-rate tenants, in which case they could be evicted," stated Gary M. Rosenberg, founding partner of Rosenberg & Estis. He states that in most cases, shareholders retain their shares, which results in an eventual payout once the developer sells the building . . . and if those shareholders have mortgages, the proceeds from the sale are used to pay off the loans. <br />
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Unfortunately, that provides little comfort to those who simply want to stay put. The article describes how former advertising executive Todd Seibert, 75, who owns the top floor of a four-story co-op at 150 East 78th Street, has been forced to seek legal counsel. His attorney, Adam Leitman Bailey, won an injunction to stop the "collapse" of the cooperative. <br />
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Some are happy about a potential buy-out; others not so much. If you fall under the latter category, you might need to take a closer look at your bylaws, get on the board of directors, and discuss the potential of a forced eviction. <br />
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This writer [and former tenants rights activist] remembers the 1982 conversion of over 1200 units of a two-tower apartment house (The Promenade) in Bethesda, Maryland into cooperatives. Despite a two-year protest and lawsuit, the tenants were unable to stop the conversion of their building that was bought by the Gouletas brothers and sister Evangeline for $32,000,000, who turned around and priced the units to sell out at $100,000,000, with only cosmetic changes. To date, the units are primarily occupied by tenants, most investor-owned (not investor-<i>occupied</i>). The lawsuit and tenants protests ultimately resulted in the Maryland Condomium Act of 1984 which required that any future developers set aside 20 percent of the units for the lower-income, the elderly, and/or the handicapped. It did not apply retroactively to the tenants of The Promenade Apartments.<br />
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<span style="font-size: x-small;">For more details, see <i>New York Times</i> article, "How the Co-op Crumbles" by Julie Satow, September 6, 2015.</span><br />
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<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-22134751291397374622015-08-30T14:26:00.001-07:002015-08-30T14:26:21.151-07:00WONDERING WHY YOU CAN'T GET A MODIFICATION?<br />
As most of us struggling homeowners already suspect, there are problems within the federal Home Affordable Modification Program (HAMP) which was offered by President Obama in 2009 (two years into the financial crisis/recession) to help four million troubled borrowers.<br />
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The main problem - as pointed out in a <i>New York Times</i> article [Aug. 2, 2015 by Gretchen Morgenson] - is that the program 1) was made <i>voluntary </i>for the banks, and 2) allowed the participating banks to run the process on their own. <br />
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Morgenson cites a July report by Christy L. Romero (Special Inspector General of the Troubled Asset Relief Program - TARP), that six years after the program was initiated, only 887,000 borrowers are participating in loan modifications.<br />
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Rather than helping the targeted four million struggling homeowners, these borrowers' requests for help have been rejected: CitiMortgage had the worst record [i.e., they rejected my application also], rejecting 87 percent of the loan modification requests. JPMorgan Chase was next, with a denial rate of 84 percent. Bank of America turned down 80 percent, and Wells Fargo rejected 60 percent.<br />
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The lengthy article reveals how the banks often delay requests for modifications in order to be able to charge the borrower more interest and fees, increasing the amount of the mortgage.<br />
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Recently I was able to finally make my one missed payment ($1,987.00) to bring my account current. It has taken me almost two and a half years. Now I'm looking at having to pay $3,000 in late fees!<br />
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For more details and stories on the banks' appalling behavior (and greed), please read her story. <a href="http://New York Times">New York Times</a>, "Slack Lifeline For Drowning Homeowners", Aug. 2, 2015.<br />
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Or wait until next week when I have more time to re-read it and relay the stories to you.<br />
<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-16282040062989160362015-08-25T09:45:00.002-07:002015-09-11T13:51:36.908-07:00WHAT HAPPENS WHEN YOU DIE AND LEAVE A MORTGAGE?<br />
I've been dealing with a mortgage servicer who is determined to get as much money out of me in fees as is possible. The main issue recently has been the servicer taking money out of a suspense account -- too which I had been depositing payments in order to accumulate enough to make up for a missed payment two and a half years ago -- and using that money to pay late fees. In December of 2012, I missed a payment, but have been making subsequent payments on time. The problem is I haven't had sufficient income to accumulate enough money for that missed payment ($2,000) until recently. Last week I sent the servicer over $400 and that should bring me current. No acknowledgement as of yet. <br />
I now owe $3,000 in late fees that have accumulated over two and a half years. I would like to pay $500.00 once or twice a year toward principal, but the servicer won't allow this until the late fees are paid. They are so mean. And greedy. And our laws don't protect consumer very much, do they? My mortgage payment is $1,987, with $1,650 going toward interest; the remainder toward principal ($350). This is the best I can do until I get work. I keep trying.<br />
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This experience with my servicer has caused me to consider how they will handle my mortgage once I pass on (hopefully not for a while). They could foreclose on my house. However, I'm making arrangements to leave my house to a relative (maybe two) with an approximately $300,000 mortgage owed by my expected time of death (maybe 15 years from now). My two young relatives are willing and able to each assume half that amount between them to have such a nice house to own -- when the day comes. It will also be a great place for them to retire to. Or they could rent it out until they are ready to move into it. All is up in the air.<br />
<b><br /></b>
<b>Upon My Death:</b><br />
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My concern (anxiety) is how the servicer will handle this once they are informed I have died. My anxiety will not be allayed until this issue is resolved. The anxiety will probably continue long after my soul leaves my body (if that is possible). There has been so much anxiety for so long it will probably stick around for a long time. Although most can't predict with much accuracy <i><b>when </b></i>they will die, it would be prudent to make arrangements for how you want your affairs handled well in advance of your death.<br />
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<div class="story-body-text">
I plan to do some research and hopefully get some clarification on this issue from my servicer - and will share in my next posting. Meanwhile, every homeowner should seriously consider this issue - especially if you are over 65 or 70 -- and make plans accordingly. According to the Census Bureau, thirty-one percent of people 65 and older
have home mortgages. [<i>New York Times, 2011</i>]</div>
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Tony Guerra (<i>Demand Media</i>) states: "Mortgaged property inheritors generally need to make arrangements with the
lenders to pay off those mortgages. Lastly, mortgaged properties can come with
property taxes owed, liens attached and even estate taxes due." While I expect to be current on my property taxes, and so forth, not everyone will be, and they need to discuss this issue with the inheritors. Or the inheritors need to take the initiative and discuss it with their parents or aunt or uncle or whichever relative is making this generous bequeathal.<br />
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My understanding is that it must be a <i>relative </i>who inherits real property. (I personally think the law should be changed to add non-relatives; however, having to always battle someone to maintain the modicum amount of security I do have, I don't have time to lobby for changes in laws at this point in my life.)<br />
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Also from Tony Guerra: "Relatives inheriting mortgaged homes only are allowed by the Garn-St.
Germain Depository Institutions Act of 1982* to assume the existing mortgages. A
relative assuming a mortgage on an inherited home must live in the home and
also make all required payments, however. Relatives inheriting mortgaged homes
and intending to assume their mortgages can also keep those mortgages in their
deceased relative's name. Processes for relatives taking title and recording an
inherited property's deed are generally the same as for non-relatives."<br />
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I'm not sure why anyone would want to keep a home in their deceased relative's name. Maybe there's some tax or other advantage. Will have to do more research.<br />
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<br />
<br />
<br />
__________<br />
* I had never heard of this law until I googled "inheriting property" a couple of days ago. I remember Rep. St. Germain from the time I worked in Washington, D.C. and on Capitol Hill (and used to frequent the Prime Rib Restaurant on K Street, also frequented by St. Germain and other legislators, lobbyists, etc.). If I knew then what I know now, I of course would have paid more attention and maybe even have tried to influence the congressman to make certain changes in the bill. I have a "causist" inclination, but any extra time I had was devoted to another cause - that of tenants rights. I was part of the picketing of the Promenade Tenants Association in Bethesda, Maryland, that took place over a two-year period (1982 to 1984) when the building was converted to a cooperative - destroying a really great community of middle and upper-middle class tenants. (I usually lived in the maid's quarters -- small efficiency units!)<br />
<br />
<br />
<br />
<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-68686723180290023922015-06-26T16:27:00.001-07:002015-10-25T01:07:00.295-07:00SERVICERS CONTINUE TO MISBEHAVE<br />
<br />
<br />
<br />
<br />
<b>UPDATE:</b> Today, October 24, 2015, I filed the following complaint against Seterus, Inc. with the Washington State Attorney General:<br />
<br />
I had my mortgage with Citimortgage until February 1, 2014, when it was turned over to Seterus. The statements I get from Seterus are confusing, especially since they forced me into an escrow account for property taxes in April 2015. My usual mortgage (P&I) has been $1,987.35. Since April, I have been paying an additional $250.00 for property taxes (including what they projected I would owe over the next year). Recently (Oct. 2, 2015) they sent a letter stating another change would be made to my escrow account, and said I would know what the change is when they finish their analysis in 30 days.<br />
<br />
My income is under $4,000 a month (unless I rent a room - sporadically) and I missed a payment in December '12 or January of '13 and wasn't able to get caught up until September 2015. Now that I am current, they seem to be charging me almost $5,000 in late fees and interest, and I do not know how they compute the interest. The late fees are charged at the rate of $58.56 monthly. The late charges by Citimortgage were a total of $1,192.32 when they transferred my mortgage to Seterus. Plus I'm being charged $13.50 for a drive-by property inspection. I already paid it but keep getting charged for it. They said the payment must have been applied toward late fees.<br />
<br />
So, I am being charged $58.56 a month times the 20 months I was delinquent (a rolling delinquency with Seterus). All my payments have been paid by the due date since the one time I missed a payment). This totals $1,171.26. Adding to that the $1,192.32 I owe Citimortgage, you get an amount owed of $2,363.50. Plus whatever amount of interest they are charging me at whatever rate comes to almost $5,000. I would like to know how they compute the interest rate and how much I owe to whom for late charges. They now say I no longer owe late charges for Citimortgage, but I never paid them.<br />
<br />
My mortgage takes up two-thirds of my income. I do not see how I can pay the exorbitant late fees and interest they are charging me or when it will end. They are licensed to do business in Washington and all over the country. But I hope Washington will rescind their license considering how they are gouging me and others, in Washington and elsewhere. (See ConsumerAffairs.com for other complaints from others throughout the U.S.)<br />
<br />
The person who answered my last complaint is the following:<br />
<br />
Krystal Alexander<br />
Consumer and Government Affairs<br />
Seterus, Inc.<br />
<br />
Their address is 14523 SW Millikan Way, Beaverton, OR 97005. Their correspondence address is PO Box 2008, Grand Rapids, MI 49501-2008. (I understand that is just a PO box.) When I write to them I use their headquarters address in Beaverton.<br />
<br />
My loan number is 25459116.<br />
<br />
I tried to get information over the telephone, but was unsuccessful. The Customer Service Representative said she didn't know how they computed interest or exactly what I owed in total. I would like a breakdown of what I owe to Citimortage and to Seterus for late fees and interest (and how it is computed) and what I owe for property taxes (need to know what amount they paid and what amount I have paid to date and what amount they project I will have paid or must pay through the next twelve months, or at least by by May 1, 2016 (which will be exactly a year from the time they forced me into an escrow account--it was the end of April 2015).<br />
<br />
Your record shows an old complaint to Citimortgage, but that has been resolved. I am considering this to be a new complaint. A copy was sent to the CFPB. <br />
<br />
I don't like this mortgage company. I didn't choose them. I would like to know whether I can get another mortgage company. Is it possible?<br />
<br />
________________________________________________________________________________<br />
<br />
UPDATE: Another complaint filed with CFPB:<br />
<br />
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<span style="color: black; font-family: "Courier New"; font-size: 10.0pt;">CFPB Complaint # 150929-001841 Oct. 13,2015 8:30 PM</span></div>
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<span style="color: black; font-family: "Courier New"; font-size: 10.0pt;">As follow-up to the above-cited complaint, this is to let you know
that I am now current with my mortgage, having sent Seterus over $400.00 in September.<span style="mso-spacerun: yes;"> </span>However, today I received a letter stating
they would be making a change to my escrow account (for property taxes) and
that I would be receiving an escrow account analysis statement 30 days prior to
such a change.</span></div>
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<span style="color: black; font-family: "Courier New"; font-size: 10.0pt;">I called Seterus to try to find out what was planned, but no one
could tell me why their statement showed I was owing 4,263.94 for interest and late fees when their August statement showed I owed only $2,488.18 ($1,584.03
for interest; $800.65 for late charges, and $13.50 for a property inspection
(which I had already paid them).<span style="mso-spacerun: yes;"> </span>I do
not know what happened between August and October except that I paid sufficient
money to bring me current.<span style="mso-spacerun: yes;"> </span>The
difference in the two statements is $1712. They are relentless.</span></div>
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<span style="color: black; font-family: "Courier New"; font-size: 10.0pt;">I was only one payment behind on my 2013 tax payment plan when Seterus forced me into establishing an escrow account for property
taxes. But I was current with 2014 taxes.<span style="mso-spacerun: yes;"> </span>They forced me
to pay an additional $250.00 every month, added to my mortgage of
$1,987.35.</span></div>
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<span style="color: black; font-family: "Courier New"; font-size: 10.0pt;">They are always manipulating their records and have confusing
bookkeeping/ accounting methods which I do not understand.</span></div>
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<br />
<span style="color: black; font-family: "Courier New"; font-size: 10.0pt;">Please help me.<span style="mso-spacerun: yes;"> </span>This is
very stressful and is causing me to become physically ill, including raising my
blood pressure.<span style="mso-spacerun: yes;"> </span>I just want to know once
and for all what they want, how they calculate interest and late fees, and what changes are coming.</span></div>
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<span class="rndatalabel6"><span id="rn_FormReviewFieldDisplay2_119">Consent to publish the description of what
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<h3 style="vertical-align: top;">
Desired resolution <a href="https://help.consumerfinance.gov/app/mortgage/ask#currentPage=1"><span style="color: #73be59;">[Edit]</span></a><span style="color: #26231d; font-family: "Helvetica","sans-serif"; font-size: 11.0pt;"></span></h3>
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<span class="rndatalabel6"><span style="color: black; font-size: 9.0pt;"><span id="rn_FormReviewFieldDisplay2_140">What do you think would be a fair
resolution to your issue?</span></span><span class="rnformreviewfielddisplay2"><span style="color: black; font-family: "Helvetica","sans-serif"; font-size: 9.0pt;"> </span></span><span style="color: black; font-family: "Helvetica","sans-serif"; font-size: 9.0pt;"><br style="mso-special-character: line-break;" />
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<span style="color: black; font-family: "Courier New"; font-size: 10.0pt;">To explain how they calculate interest and late fees.<span style="mso-spacerun: yes;"> </span>What period of time?<span style="mso-spacerun: yes;"> </span>How much is owing from previous servicer,
Citimortgage and how much is owed to Seterus since they took over the account
on Feb. 1, 2014. Also, how do they calculate property taxes for next year when they don't have the rate change?</span></div>
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<span class="rndatalabel6"><span style="color: black; font-size: 9.0pt;"><span id="rn_FormReviewFieldDisplay2_151">Email</span></span><span class="rnformreviewfielddisplay2"><span style="color: black; font-family: "Helvetica","sans-serif"; font-size: 9.0pt;"> <span id="FormReviewFieldDisplay2_151_DataValue"></span></span><span style="color: black; font-family: "Helvetica","sans-serif"; font-size: 9.0pt;">jrapril@aol.com</span><span class="rnformreviewfielddisplay2"> </span></span></span></div>
<br />
<br />
_____________________________________________________________________________<br />
<br />
DRAFT<br />
<br />
June 29, 2015<br />
<br />
Mr. Mel Watt, Director<br />
Federal Housing Finance Agency<br />
400 7th Street SW<br />
Washington, D.C. 20024<br />
<br />
Re: Citimortgage, Inc., Account No. ____________<br />
Seterus, Inc., Account No._________________<br />
<br />
Dear Mr. Watt:<br />
<br />
I sent you a letter dated May 1, 2013 (copy attached), but you have not responded. I am writing today (June 29, 2015) to tell you the latest action taken against me despite my efforts to keep my home from going into foreclosure.<br />
<br />
On February 1, 2014, Citimortgage transferred my account to Seterus, Inc. At that time, I still owed a few hundred dollars to Citimortgage for property insurance they charged me during a five-month lapse (due to problem with a tenant, explained in the attached letter). After I paid off the insurance (no claims were ever made), that left a mortgage payment of $1,987.35, which I have been paying on time every month for the past two and a half years. However, two and a half years ago, around December of 2012, I didn't have enough money to make a payment and skipped that month's mortgage payment. I have been paying into a suspense account set up by Seterus since that time and had accumulated all but about $400 toward the delinquent payment of $1,987 (plus late fees).<br />
<br />
On April 30th of this year, I paid my property taes as usual at the county courthouse. The following business day, I discovered Seterus had paid the taxes for me (for 2013 and 2014)and forced me, after that, to pay an additional $239.31 each month into an escrow account for property taxes. Today I discovered they took the money I had been accumulating toward the delinquent payment and put that toward the taxes (do not know whether it was past, present or future property taxes). I was on a payment plan for the 2013 delinquent taxes (about $900 owing) while keeping current with the current year's taxes.<br />
<br />
I then had to return to the courthouse to get a refund for my taxes (as Seterus had already paid them).<br />
<br />
I was paying taxes on time for the past year+ and do not think they were acting properly when they took my money to pay the taxes I had been sending into the escrow account for the delinquent payment. They took this to pay my property taxes, despite the payment plan I was following. Now I have to start all over again by paying a hundred or two hundred here and there as I have extra income. I also have accumulated to date $2,000 in late fees which I plan to pay once that single delinquent payment from two and a half years ago is made.<br />
<br />
I continue to pay two-thirds of my income, which comes from a pension and social security, towards housing costs. Is there anything you can do to help me with my FannieMae-backed loan I look for work, but being over 65 years old, I am not being offered jobs, despite much work experience and a BA degree.<br />
<br />
Is there anything you can do to assist me?<br />
<br />
/s/ Saundra J. Raynor <br />
<br />
<br />
Here is what I wrote on May 1, 2013, to which no reply has been made:<br />
<br />
FHFA - To Whom It May Concern:<br />
<br />
As an "underwater" homeowner, I am writing to ask whether your office is able to provide any assistance with my many attempts to have my mortgage payments lowered.<br />
<br />
In February 2013, I was told by Citimortgage that I didn't have enough income (for a modification). I then advertised to rent my house and leased it for one year at $1800 a month to a person who responded to my ad. I sent a copy of the lease to Citimortgage for their review. They then said my income was TOO HIGH and rejected my application. In their rejection papers they stated "excessive forebearance" would be required. I ended up having to evict the family for nonpayment of rent and that, along with stolen furniture and other items, cost me $30,000. The insurance company cancelled my insurance once I filed the claim. The claim adjuster then rejected my claim for theft because I wasn't living there when the theft occurred. I have since obtained a court judgment against the former renter, but have little hope of getting any money from him as he moves frequently.<br />
<br />
I am about to apply again for a modification of my mortgage but fear that nothing will help unless I can obtain some loan "foregiveness." Thirty thousand dollars of the $400,000 mortgage represents three refinancing charges of $10,000 each (two by the now-defunct Washington Mutual Bank) when my late husband and I refinanced the house due to his illness. (He died in July 2008, at which time my income was reduced by about 50 percent.)<br />
<br />
Is it possible that a portion of my mortgage could be forgiven this year? My income is less than $3,000 a month (from a small pension and smaller social security monthly benefit). I am not willing to short-sale the house at this time or turn over the deed in lieu of foreclosure I want to continue to live here as long as I am healthy. I am unable to handle deferred maintenance because of the excessively high interest charges ($1650 a month).<br />
<br />
Although I missed one mortgage payment in December, I have always paid my mortgage on time, despite the fact it takes two-thirds of my income. I pay $l,650 towards interest, and only $350 goes toward principal. Mortgage payments were always on time since we bought the house in 1998. Since 2000, my income has decreased as it is difficult finding work at over 65 years of age.<br />
<br />
After my homeowners insurance was cancelled, it took a while to find another company, and because of that five-month lapse, Citimortgage is now forcing me to pay a little over $100.00 monthly for the next 12 months to make up for the lapsed insurance (although no claims were made during the period of lapse). In fact, in my entire life I have never filed a claim against an insurance company.<br />
<br />
Any advice you can give would be appreciated.<br />
<br />
/s/ Saundra J. Raynor<br />
<br />
<br />
Here's an update -- a copy of my letter to Attorney General of Oregon against Seterus, Inc made today July 15, 2015:<br />
<br />
On the first of February 2014, my mortgage was transferred to Seterus, Inc. from Citimortgage. I was at that time one payment delinquent of $1,987.35. Seterus reps told me I could make periodic payments whenever I had extra money and theywould place the payments in a suspense account and once the payments accrued to $1,987.35, they would apply that toward the delinquent payment and I would be current.<br />
<br />
On or about June 30, 2015, I talked to a Marcey _____ who checked with her supervisor Mr.Conkhle (not sure of spelling), and they said I would be current if I made a payment of $2,249.51. This extra amount I thought (from $1,987.35) was for taxes for which they established an escrow account, even though I was on a payment plan for 2013 delinquent taxes and was current with<br />
this year's taxes.<br />
<br />
Today, July 15, 2015, I called to make sure my understanding was correct. Instead, I was told by Becky Stephen that my money in suspense was used to pay late fees. They had months ago agreed that I could make partial payments and would apply them to the mortgage principal and interest once I had the entire<br />
amount due of $1,987.35. Beclu Stephen informed me that because they didn't have a letter in writing directing my periodic payments be applied toward the delinquent mortgage, that they had the right to take the money and apply it to late fees.<br />
<br />
This company (and Citimortgage and others) uses these methods to keep people delinquent, forcing some homeowners into foreclosure. I believe this why they do this. If you don't believe me, please go to www.consumeraffairs.com and type in mortgage servicers and read the hundreds (or thousands) of complaints.<br />
<br />
I think this behavior on the part of Seterus was fraudulent and I would like someone from your office to look into it. They treat hundreds of others the same way (and worse) in that they refuse to accept payments, apply money to late fees or other accounts without permission, and so forth.Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-190804044495024222015-06-25T16:31:00.001-07:002015-06-26T16:59:57.042-07:00MORTGAGE PRINCIPAL REDUCTION - TO BE OR NOT?<br />
<br />
<b> PRINCIPAL REDUCTION FOR DELINQUENT HOMEOWNERS</b><br />
<br />
Opponents of principal reduction say it is too costly. Others say it would save taxpayers millions of dollars. The issue is still being debated. Back in February of this year, Federal Housing Finance Agency Director Mel Watt was studying the idea of reducing principal on properties with depressed values, but would like to do it without incurring costs to taxpayers. Apparently, they don't consider that a portion of the taxpayers ARE part of the 7 million struggling (underwater) homeowners.<br />
<br />
Three years ago FHFA's acting director Edward DeMarco barrred Fannie Mae and Freddie Mac from reducing principal for borrowers at risk of foreclosure. His argument was that the risks would include as many as 19,000 borrowers strategically defaulting on their loans. An Associated Press article stated that about 74,000 to 248,000 homeowners would be eligible for principal reductions from the GSEs, and that an estimated 11 million Americans owe more on their mortgages than their homes are worth.<br />
<br />
Taxpayers have spent roughly $170 billion to rescue Fannie and Freddie. A cost of an additional $260 billion more was projected to support them through the end of 2014, after subtracting dividend payments. The article stated that: "The Treasury Department said in January it would cover part of the cost if Fannie and Freddie could reduce principal when they modify mortgages for troubled borrowers. The department said it would use unspent housing rescue money from TARP - the $700 billion Troubled Asset Relief Program.<br />
<br />
<br />
A <b>Black Knight</b> report found that if any solutions go through, delinquent underwater borrowers would require up to $89 billion. (That works out to about $20,000 $30,000 per delinquent homeowner., I think). According to Housing Wire. com, there are currently approximately four million borrowers in negative equity positions, representing nearly $800 billion in outstanding balances, with $157 billion of that being underwater. For the365,000 delinquent underwater loans backed by Fannie and Freddie alone, it would require nearly $18 billion in write-downs, according to the report seen in HousingWire.com, February 5, 2015.<br />
<br />
On June 12, 2015, Ben Lane of HousingWire.com wrote that the number of borrowers who owe more on their home than it is worth is falling, but there are still a number of borrowers who face a severely steep climb to get out from under their home (referencing a Negative Equity Report from Zillow).<br />
<br />
[to be continued]<br />
<br />
<br />
<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-16254975697009764912015-02-06T12:52:00.000-08:002015-04-03T11:20:29.907-07:00FHFA DIRECTOR DOESN'T APPEAR TO BE INTERESTED IN HELPING STRUGGLING HOMEOWNERS<br />
<span style="font-size: large;">I am getting discouraged as I have spent over $100,000 in interest- only since 2008 for housing-related expenses (mortgage, homeowners insurance and property taxes). </span><br />
<br />
<span style="font-size: large;">My income dropped (about half) to $36,000 upon my husband's death in July '08, right smack in the middle of the crash in real estate.</span><br />
<br />
<span style="font-size: large;">I am not going to post anything else until there is some positive indication coming out of Washington, D.C. that there is an effort to help struggling owners. It is estimate it would take about $97 billion to "make things right" (i.e., principal forgiveness or lowering of interest rates for the millions of us who are underwater: about $20,000 to $30,000 average for each of us, depending on mortgage balance, amount underwater, our income-to-debt ratio, and other factors). It seems they would rather put the money into Defense Department appropriations.</span><br />
<br />
<span style="font-size: large;">Saudia Arabia's King Salman is giving away $32 billion to its citizens, including all government employees, pensioners and students on government stipends. Some Saudi companies are giving comparable bonuses for their employees, putting another few billion dollars into people's pockets. <span style="font-size: x-small;"> [Seattle Times, Feb. 20, 2015]</span></span><br />
<br />
<span style="font-size: large;"></span><br />
<span style="font-size: large;"></span><br />
<span style="font-size: large;"></span><br />
<span style="font-size: large;"></span><br />
<span style="font-size: large;">One would hope that our government could find a way to lessen the burden on many of its citizens (those who haven't recovered from the Great Recession - that supposedly ended four years ago), or maybe our super-rich corporations could become generous and share some of their wealth. But no, it isn't likely either sector will help us. We as a war-mongering nation must put everything possible into other countries' treasuries, or fighting a battle that isn't ours to fight.</span><br />
<br />
<span style="font-size: large;">We do need to continue to fight evil, such as ISIS terrorists, but shouldn't we set aside some money to help our own citizens who are struggling day after day? </span><br />
<span style="font-size: large;"><br /></span>
<br />
<span style="font-size: large;">I am going to concentrate on writing a book. I expect this to be a two-year endeavor. I will post something on this site if I think it would be of interest - or if I become so enraged that I have to say something.</span><br />
<br />
Here's more news: Food bank visits are increasing; they are higher now than before the recession. See March 14, 2015 article EVEN IN BETTER TIMES, FOOD-BANK VISITS ARE UP. "Michelle Dillon made it all through graduate school eating rice and beans, bananas and other inexpensive food she purchased mainly from grocery outlets. But several months after graduating with a master's degree in library and information science and looking without success for a full-time job using that degree, Dillon turned to the Rainier Valley Food Bank to supplement the groceries she buys.<br />
<br />
"To be poor enough to need to use a fod bank, especially as a person born to privilege in this country, is to be the ultimate dirty secret of the new economy", says Dillon.<br />
<br />
Article by Janet I.Tu<br />
jtu@seattletimes.com<br />
206-464-2272<br />
<br />
<br />
<span style="font-size: large;">Please go to HousingWire.com for information related to housing, including any updates on assistance for struggling homeowners. </span><br />
<br />
<br />
<br />
<br />
<span style="font-size: small;">S. J. Raynor</span><br />
<span style="font-size: small;">Feb. 2015 </span><br />
<span style="font-size: small;">jrapril@aol.com</span><br />
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<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-18990014243946693172014-09-09T10:11:00.003-07:002014-09-09T10:11:32.963-07:00CAN YOU USE YOUR PART-TIME EARNINGS TO QUALIFY FOR A MORTGAGE OR REFINANCE?<br />
<br />
<br />
<br />
<br />
If you supplement your income with part-time work, that income might not be considered if you are purchasing or refinancing a home. According to syndicated columnist Kenneth R. Harney, income isn't always income. In his Sept. 29, 2013 column, he asked: If you make $42,000 from your regular full-time job and another $18,000 by working part time at a second job, isn't your gross income $60,000? One federal agency, the Internal Revenue Service, will tell you that it is. However, mortgage lenders, especially Fannie Mae, Freddie Mac and the Federal Housing Administration, will tell you that part-time income generally isn't "qualifying income" for mortgage purposes until it's been flowing for a couple of years. Depending on your specific circumstances, however, the extra $18,000 could be considered if you can <i>document </i>that you've been receiving the extra money steadily for<i> two years and the pay is likely to continue. </i>Harney<i>'s </i>column goes on to state:<br />
<br />
<i>The problem can be especially severe for borrowers with moderate incomes who have solid credit histories and have taken on second jobs to support their families. Robert Montalbo, a loan officer in San Antonio,Texas, with Premier Nationwide Lending, a mortgage-banking firm, says he sees many creditworthy applicants who 'get a (part-time) second job to make ends meet' and who simply want a piece of the American dream - to buy a home of their own. 'Even if they can show they've worked at that part-time job for 16 months straight, I may have to turn them down,' Montalbo said</i>.<br />
<br />
Harney tells the story of a branch manager with the Mortgage Network in Danvers, Massachusetts who recounted an experience over a year ago. The manager earned $96,000 a year. He had been self-employed as a certified public accountant for 12 years but had to close his business because of a heart condition. However, two of the CPA's previous clients persuaded him to accept part-time positions for their firms. He received regular salaries from both companies but had worked for only one of them for more than two years. As a result, only the salary from that company qualified as income for mortgage application purposes; the earnings from the other were deemed ineligible by underwriters. The branch manager at the mortgage company had to deny the CPA a mortgage because his second job was not on the books for two years. He had to abide by the guidelines, in this particular case, Fannie Mae's rules.<br />
<br />
Just another constraint to the recovery of the housing market. Statistically speaking, 7.9 million Americans were employed part-time "for economic reasons" in August 2013 - 4.8 million worked part-time because of "slack work or business conditions," 2.7 million "could only find part-time work" - and 19.3 million worked part time for "noneconomic reasons" The proportion of jobs that are part time has been climbing and is now at 20 percent, up from 17 percent shortly before the recession (which official began September 2008). The figures could be higher now because of businesses seeking to avoid paying insurance premiums for full-time employees, especially since the passage of the Affordable Care Act.<br />
<br />
Harney states: T<i>he two-year rule for counting part-time income has been an industry standard for years, and was recently incorporated into regulations adopted by the Consumer Financial Protection Bureau. </i>I say, standard practice is not a law or regulation that has been formally adopted and it doesn't have to be that way. But because homeowners - or the general public - have no lobbying money or power, they have to tolerate some rules that are arbitrary and not in favor of the mortgage applicant.<br />
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<span style="font-size: x-small;"><br /></span>
<span style="font-size: x-small;">Source: <i> The Seattle Times</i>, Sept. 29, 2013</span><br />
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Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-29481251943049096582014-07-29T09:01:00.000-07:002015-02-18T20:53:12.495-08:00UNDERWATER AMERICA: HOW THE SO-CALLED HOUSING "RECOVERY' IS BYPASSING MANY AMERICAN COMMUNITIES<b> July 29, 2014</b><br />
<br />
<b>OUR RECOVERY? NOT INCLUSIVE: STOCK MARKET GAINS, YES. HOUSING, NO.</b><br />
<br />
<br />
The Haas Institute for a Fair and Inclusive Society (UC Berkeley) published a recent study (July 2014) titled, "Underwater America - How the so-called housing "recovery" is bypassing many American Communities.<br />
<br />
<br />
<br />
Their report (lead author Peter Dreier) provides the following highlights:<br />
<br />
<span style="font-size: large;"><b>HARDEST-HIT CITIES</b>: In 57 cities, at least 30% of all mortgaged homes are still underwater. Nearly 1 in 10 Americans live in the 100 hardest-hit cities (28.7 million). 34% of the 100 hardest-hit cities have median household incomes below $40,000. The 100 hardest-hit cities are in 27 states.</span><br />
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<span style="font-size: large;"><b>HARDEST-HIT NEIGHBORHOODS</b>: In 151 zipcodes, at least 50% of all mortgaged homes are still underwater. 10.4 million people live in the 395 hardest-hit zipcodes. 43% of the 395 hardest hit zipcodes have median household incomes below $40,000. </span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;"><b>HARDEST-HIT - COMMUNITIES OF COLOR</b>: In 1 of the 100 hardest-hit cities, African American and Latinos account for at least 40% of the population. In 146 of the 395 hardest hit zipcodes, African Americans and Latinos account for at least 75% of the population.</span><br />
<span style="font-size: large;"><br /></span>
<br />
There were five authors of this study: <b> Peter Dreier</b>, <i>Occidental College</i>; <b>Saqib Bhatti,</b> <i>Nathan Cummings Foundation</i>, <b>Rob Call</b>, <i>Massachusetts Institute of Technology</i>, <b>Alex Schwartz</b>, <i>The New School</i>, and <b>Gregory Squire</b>, <i>George Washington University.</i><br />
<br />
More on this study later.<br />
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<span style="font-size: x-small;"><br /></span>
<span style="font-size: x-small;">Source: www.diversity.berkeley.edu/haas-institute</span><br />
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*****</div>
<br />
ANOTHER STORY TO READ:<br />
<br />
On Rooflines - the<i> Shelterforce</i> blog - please see story by Sarah Hauswald of July 22, 2014 (she worked as former public policy manager at San Francisco Mayor's Office of Housing), titled "Subsidizing the Upper Middle Class? Go to: http://rooflines.org/3793/subsidizing_the_upper_middle_class<br />
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<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com1tag:blogger.com,1999:blog-6841706091721800532.post-6205672096835412982014-07-18T19:05:00.003-07:002014-07-25T19:01:02.951-07:00WASHINGTON STATE HOUSING REPORT<br />
<br />
The housing market is rebounding! First, an analysis in <i>The</i> <i>Seattle Times</i> by<i> </i>reporter Sanjay Bhatt [July 17, 2014] shows that tight supply, high demand and low rates are sending prices in some neighborhoods <b>above the pre-crash peak set seven years ago.</b><br />
<br />
<div style="text-align: center;">
</div>
<b>Home Prices</b>: In the first six months of 2014, the median sale price of single-family homes in King County was $430,000, about <b>five percent shy of the peak set in 2007</b>. Half of the county's 30 submarkets have either surpassed their previous price peaks or climbed to within 5 percent of them. Across King County, 14 submarkets saw average annual home price growth accelerate in the second quarter, with affluent places like Bellevue, Mercer Island and Seattle's Queen Anne and Magnolia neighborhoods posting the highest annual gains, <b>between 19 and 34 percent</b>.<br />
<br />
The average price of King County single-family homes sold was $545,886,
10 percent higher than a year ago. <b>The most expensive areas had the
higher gains: Mercer Island and Bellevue (including Medina, Clyde Hill
and Hunts Point) were up 28 percent and 34 percent, respectively. </b> While
the number of homes sold during the second quarter was lower than last
year, places where homes are relatively affordable and close to transit
saw big jumps in sales activity: Shoreline, Beacon Hill and West
Seattle.<br />
<br />
The prices in Snohomish County - the state's second county largest by population with an estimated 745,900 citizens - have risen by an average of 10 percent annually, with a couple of submarkets up more than 17 percent. However, the volume of home sales is down over the year more than in King County. Second-quarter home sales posted an average price ranging from $329,586 to $467,410, varying between the east and southeast markets. As more people move here to Washington for the lifestyle (water, mountains, climate) and jobs (Amazon, Boeing, Facebook, Google and a large health care industry,) prices in the Seattle area are souring because of limits in housing supply and geography: an urban growth boundary on its east side and water on its west. [San Francisco comes to mind, as it also has a limited supply of buildable land.] Low interest rates help fuel home-price appreciation.<br />
<br />
<div style="text-align: left;">
<b>Rentals and Condominiums:</b>The average rent for a
one-bedroom apartment in King and Snohomish counties was $1,284, up
almost 8 percent annually. (Anecdotally, in 1980, you could get a nice one-bedroom apartment for less than $500 a month.) Vacancy rates in urban apartments are low. Condominium prices aren't doing as well
as single-family homes, except in downtown Seattle and Kirkland (where Google is based; condo sales were up 32 percent over the year). Condos account for about one in five home sales reported by the MLS. King County condos sold in the first half of this year had a median price of $250,000, 11 percent higher than the same period a year ago, but 13 percent below the peak set in 2007. Downtown Seattle and the Kirkland area have hit new peaks: The median condo price in downtown Seattle was almost $450,000, while in the Kirkland area it was $369,000. In 16 submarkets condo prices remain more than 20 percent below the peak (some due to overbuilding). <b> In the second quarter, the region's largest condominium submarket, Belltown-Downtown Seattle, saw the average price of units sold increase 18 percent annually to $576,368.</b><br />
<br />
Wages aren't keeping up with home prices*. See article on <a href="http://housingwire.com/">HousingWire.com</a> July 18, 2014. It remains to be seen whether the second half of the year will look as good for these areas. </div>
<br />
<br />
<div style="text-align: center;">
<b>WASHINGTON STATE'S HOUSING MARKET 1st Quarter 2014</b></div>
<div style="text-align: center;">
prepared by</div>
<div style="text-align: center;">
Washington Center Real Estate Research / Runstad Center for Real Estate Studies </div>
<div style="text-align: center;">
College of Built Environments / June 2014</div>
<div style="text-align: center;">
<br /></div>
<b>[Excerpts]</b><br />
<br />
Inventories of homes available for sale totaled 28,219 single-family homes at the end of the quarter - 0.4 percent above the previous quarter (fourth quarter of 2013), though substantially lower than a year ago. This inventory level represented a 4.1 month supply, a modest shortage of homes on the market relative to demand. The median price home sold in Washington during the first quarter was $248,900, 4.8 percent above a year earlier. Existing home sales fell in the first quarter by 12.1 percent to a seasonably adjusted annual rate of 81,450 units, and dropped 7.1 percent below a year earlier. <br />
<br />
The first quarter of 2014 saw an overall weakening of the Washington State Housing Market at the state level. On a quarter-to-quarter basis, both sales volumes and median sales prices declined. Comparing the first quarter of 2014 with the first quarter one year prior shows a similar slip in both market activity and prices. Not all areas fell, however, and results vary across the different regions of the state. The decline in prices has had a positive impact on housing affordability over the past two quarters. The consistent gains in employment and general economic growth,
especially in the greater Seattle area (King, Pierce and Snohomish
counties) suggest that the economy in the state is slowly recovering from
the Great Recession. <i>[Note: Few underwater homeowners are sharing in the recovery, although some houses have received higher valuations from the county assessor.]</i><br />
<br />
The existing home sales market in Washington State was weaker during the first quarter of 2014 than three months earlier. Overall, sales volume declined by 12.1 percent to a seasonally adjusted annual rate of 81,450 homes sold. Additionally, this level of volume is 7.1 percent lower than one year ago. <br />
foreclosures statewide have declined again for the fourth straight month. Mortgage rates appear to have stabilized and haven't moved much in the past three quarters. <br />
<br />
Quarter-to-quarter sales increased in only 12 of Washington's 39 counties. On a percentage basis, San Juan County led the way with an increase of 31.8 percent. Yakima County experienced the largest gain by pure volume with 230 additional sales in the first quarter of 2014 when compared to the last quarter of 2013. Counties with declining sales counts were more common, with the greatest being a 45 percent drop in the seasonally adjusted annual rate in Skamania County. In terms of raw numbers, King County saw the steepest drop with 4,860 fewer sales - 18.4 percent than the prior quarter. Seventeen additional counties had a sales rate at least 10 percent lower than the previous quarter. Among the 17 metropolitan counties, 12 saw a slower sales rate than during the fourth quarter of last year. Smaller counties routinely have the greatest swings in housing market activity. Just those couties with the ten highest levels of sales activities - Benton, Clark, King, Kitsap, Pierce, Snohomist, Spokane, Thurston, Whatcom and Yakima - this range narrows to a low of -20.5 percent and a high of 11.9 percent.<br />
<br />
Home sales activity is always concentrated in the urban markets. Collectively, 17 counties identified by the Federal Office of Management and Budget as part of metropolitan areas accounted for an annual sales rate of 70,420 homes, 86.5 percent of the statewide total. Last quarter, the metropolitan counties accounted for 88.1 percent of all sales.<br />
<br />
The next group, characterized as micropolitan areas (small cities), is nine counties with a sales rate in the fourth quarter of 7,990 units, 9.8 percent of the total, up from 8 percent last quarter. The remaining 13 counties had a total annual sales rate of 3,040 units, 3.7 percent of the statewide total. These figures suggest a slight shift of sales activity from metropolitan to micropolitan areas.<br />
<br />
<b>Prices: </b> The rate of home sales can be an important indicator of market strength and larger trends to economic analysts. For most households and more casual market observers, home prices are the market metric of most concern. Since the average price of a home sold in a given geographic aea, especially in areas with low volume, can be greatly skewed by a few very expensive home sales, economists tend t prefer to look at statistics on median, not average, home prices . . . indicating that home prices in Washington have been increasing above the inflation rate for several months, although significant variation across markets remains. <br />
<br />
King County** had the highest median home price in the state during the first quarter of 2014 at $419,000. The lowest median price for metropolitan areas occurred in Cowlitz County ($143,000), home to the city of Longview. This represents a median value approximately $275000 less than prices in King County, highlighting the disparity in housing costs between the State's metropolitan regions. Sixteen of the State's 39 counties saw a decrease in median price when compared to the first quarter of 2013 . . . Of the five largest counties by sales volume, only Spokane (1.0%) saw an increase in median sales price less than the overall state average of 4.8 percent.<br />
<br />
<b>Affordability</b>: Home prices are important determinants of affordability, though from a household budgeting standpoint, the relationship between the potential mortgage and monthly income may be more crucial. In other words, those relationships are influenced by lending standards, access to down payments, other recurring financial obligations and their confidence in t he overall economy. After the unusual home purchase market during the recession and early stages of recovery, these traditional affordability standards are descriptive of the current environment.<br />
<br />
Overall, when compared to one year ago, the higher mortgage rates and higher home price (4.8% increase) [as well as low wage growth] have resulted in a decrease of housing affordability statewide. The Runstad Center calculates two measures of affordability: the <i>all-buyer index</i> (measures the degree to which a median income family an afford mortgage payments), and the<i> first-time buyer index</i>. For all-buyers, affordability in the first quarter of 2014 ranged from a low of 88.1 in San Juan County to a high of 406.3 in rural Lincoln County. (San Juan was the only county to have an affordability index of less than 100.) For first-time buyers, the housing affordability index in the first quarter was 86.2, an increase from 83.5 in the closing quarter of 2013. Compared to a year ago, the first time buyer affordability index decreased from 98.3 - a finding mostly attributable to the increase in mortgage rates from the first quarter of 2013. Since an index value of 80 is generally considered to offer meaningful choice and access to ownership housing for first-time buyers, this current market presents a moderate opportunity for well-qualified first-time buyers to enter the ranks of homeowners. The biggest problem remains a lack of properties on the market from which to choose.<br />
<br />
In 23 of the 39 counties, the first-time buyer affordability index exceeded 100 during the first quarter (compared to 30 counties a year ago). Accordingly, achieving homeownership is still a significant challenge in many areas, especially as rent increases remain high in many communities, especially in greater Seattle, making it particularly difficult to accumulate a downpayment. Among the metropolitan counties, the greatest affordability for first-time buyers was in Skamania County (130.0) and was least in King County (62.6). The most affordable for current renters in metropolitan areas to move to home ownership was Grays Harbor County, while Kittitas County presented the greatest hurdle.<br />
<br />
<b>Availability:</b> Rather than rely on a single measure of housing affordability, it is helpful to examine home affordability for several income levels and compare this with the available housing inventory. The four income/asset groups considered are: 1) $30,000 income, 5% downpayment; 2) $60,000 income, 10% downpayment; 3) $90,000 income, 20% downpayment, and 4) $150,000 income, 35% downpayment.<br />
<br />
In each case it is assumed that the household is willing to spend 25 percent of gross income on principal and interest payments [Note: insurance and taxes were not mentioned] and overall debt levels are average. It is also assumed that these buyers could find mortgages at an interest rate of 4.5 percent, which is marginally above the prevailing rate during the quarter. Based upon this income level, downpayment, and debt-service assumptions, we can estimate the purchase price of an affordable home for these income groups. Of the four income/asset categories, the maximum home purchase price would be estimated to be: $129,843, $274,113, $462,565 and $948,852, respectively. These figures illustrate how income growth, coupled with ownership of homes with generally increasing values, can move a household up the ladder of home ownership (providing they retain the equity in their existing home and avoid home equity loans or second mortgages). <i> [Note: This scenario reminds us, of course, of the almost 10 million underwater homeowners currently in the U.S. who have yet to climb out of their situations.]</i><br />
<br />
The question remains as to how much opportunity there is to buy a home within the affordable price range.<br />
In many parts of the state, modest income households, especially those looking for their first home, still face very limited access to the ownership house market. <i> [Note: Again, this blogger wants to remind the reader that for those with modest incomes who might want to "move up" to a house with a second bathroom or second or third bedroom, the lending criteria or formula would most likely be an obstacle, despite your confidence that you could afford to upgrade. It's the arbitrariness and stringent guidelines that are so frustrating and difficult to overcome.]</i><br />
<br />
In conclusion, mortgage interest rates have not been a risk factor for quite a while, but the continued expectation for 2014 is for gradually increasing rates. Some potential buyers will need to be reminded that even with the increases, the prevailing rates in the mortgage market are substantially below the averages of the last 40 years, making the interest side of home purchases a veritable bargain.<br />
<br />
__________________<br />
* Washington state average annual wage rose by 2 percent
last year t $52,635, according to data released by the state Employment
Security Department. The average weekly wage rose to $1,012 from $992.
Both were pushed higher by a 6.5 percent increase in the number of
workers earning more than $75,000.<br />
<br />
The article in <i>The Olympian </i>stated
that a rise in wages also means that jobless benefits will increase.
The minimum weekly jobless benefit will rise $3 to $151, while the
maximum benefit will rise by $13 to $637. The increase applies to
unemployment claims opened on or after July 6, 2014.<br />
<br />
<br />
** <b>King County demographics and a brief history:</b> King County is the 13th most populous county,and 86th highest-income county in the U.S. It has twice the land area (2,115 square miles of land and 191 square miles of water) as the state of Rhode Island. The population of King County (as of the 2010 census) was 1,931,249; with 789,232 households and 461,510 families. Of the households, 27% were with children under 18, 45% were married couples. 9.1% were female with no husband in household, and ____ % were non-families (presumably, individuals, not related, living together in the same household). Almost a third of the population reside in King County.<br />
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<div style="text-align: center;">
* * * * * </div>
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<br />
Sources: <i> The Seattle Times</i>, July 17, 2014<br />
Northwest Multiple Listing Service<br />
Washington Center Real Estate Research, University of Washington,<br />
Runstad Center for Real Estate Studies, June 2014 <br />
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<span style="font-size: xx-small;">jrapril@aol.com</span><br />
<span style="font-size: xx-small;">July 18, 2014</span>Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-82722070147426618652014-07-13T22:50:00.003-07:002014-07-26T16:21:22.158-07:00INEQUALITY: AMERICA'S SCOURGE FOR THE NEXT TWO DECADES? and AN IDIOT'S GUIDE TO INEQUALITYDRAFT 7-13-14<br />
UPDATE: 7-26-14 <br />
<br />
I wasn't planning on another posting until I finished reading Joseph Stiglitz's <b>THE PRICE OF INEQUALITY: How Today's Divided Society Endangers Our Future. </b> I am not finished with the book, and although I usually read from front to back, I skipped to the back when half way through and decided it important to share with those of you who have not yet read the book (it came out last year) the author's predictions for America.<br />
<br />
First,<i> Rolling Stone's</i> Jared Bernstein's comments about the book: <i> "The top 1 percent of Americans control some 40 percent of the nation's wealth. But as Joseph E. Stiglitz explains in this best-selling critique of the economic status quo, this level of inequality is not inevitable. Rather, in recent years well-heeled interests have compounded their wealth by stifling true, dynamic capitalism and making America no longer the land of opportunity that it once was. They have made America the most unequal advanced industrial country while crippling growth, distorting key policy debates, and fomenting a divided society. Stiglitz not only shows how and why America's inequality is bad for our economy but also exposes the effects of inequality on our democracy and on our system of justice while examining how monetary policy, budgetary policy, and globalization have contributed to its growth. With characteristic insight, he diagnoses our weakened state while offering a vision for a more just and prosperous future."</i><br />
<br />
What follows is Stiglitz's vision and predictions for our future (taken from the last two pages of his book):<br />
<br />
<i><b>I<span style="font-size: small;">s There Hope: </span></b><span style="font-size: small;">The political and economic reform agenda in this chapter assumes that while market forces play some role in t he creation of our current level of inequality, market forces are ultimately shaped by politics. We can reshape these market forces in ways that promote more equality. We can make markets work, or at least work better. The Great Recession did not create the country's inequality, but it made it much worse, so uch so that it made it hard to ignore, and it further limited a large segment of the population's access to opportunity. With the right policies, we can make things better. It's not a matter of eliminating inequality or creating full equality of opportunity. It's just a matter of reducing the level of inequality and increasing the extent of equality of opportunity. The question is, can we get there?</span></i><br />
<span style="font-size: small;"><i><br /></i></span>
<span style="font-size: small;"><i>Our democracy, tilted as it may be, provides two routes by which reform might happen. Those in the 99 percent could come to realize that they have been duped by the 1 percent: that what is in the interest of the 1 percent is not in their interests. The 1 percent has worked hard to convince the rest that an alternative world is not possible; that doing anything that the 1 percent doesn't want will inevitably harm the 99 percent. Much of this book has been devoted to destroying this myth and to arguing that we could actually have a more dynamic and more efficient economy and a fairer society.</i></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><i>The 1 percent could realize that what has been happening in the United Stat es (and in other countries) is not only consistent with our values but not even in the 1 percent's own interest. Alexis de Tocqueville once described what he saw as a chief element of the peculiar genius of American society, something he called "self-interest properly understood". The law two words were key. Everyone possesses self-interest in a narrow sense. Self-interest "properly understood" is different. It means appreciating that paying attention to everyone else's self-interest - in other words, to the common welfare - is in fact a precondition for one's own ultimate well-being. Toqueville was not suggesting that there was anything noble or idealistic about this outlook. Rather, he was suggesting the opposite: it was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn't just good for the soul; it's good for business.</i></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><i>The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn't seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this has been something that the top 1 percent eventually do learn. Often, however, they learn it too late.</i></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><i>We have seen that politics and economics are inseparable, and that if we are to preserve a system of one person one vote - rat her than one dollar one vote - reforms in our political system will be required, but we are unlikely to achieve a fair and responsive political system within an economic system that is characterized by the degree of inequality that marks ours. We have seen most recently that our political system can't work if there isn't a deeper sense of community; but how can we have such a sense of community if our country is so divided? And seeing the increasing divide in our economy, we can only ask, What will it portend for the future of our politics?</i></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><i>There are two visions for America a half century from now. One is of a society more divided between the haves and the have-nots, a country in which the rich live in gated communities, send their children to expensive schools, and have access to first-rate medical care. Meanwhile, the rest of us live in a world marked by insecurity, at best mediocre education, and in effect rationed health care--they hope and pray they don't get seriously sick. At the bottom are millions of young people alienated and without hope. I have seen this picture in many developing countries; economists have even given it a name, a dual economy; two societies living side by side, but hardly knowing each other, hardly imagining what life is like for the other. Whether we will fall to the depth of some countries, where the gates grow higher and the societies split farther and farther apart, I do not know. It is, however, the nightmare toward which we are slowly marching.</i></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><i>The other vision is of a society where the gap between the haves and the have-nots has been narrowed, where there is a sense of shared destiny, a common commitment to opportunity and fairness, where the words "liberty and justice for all" actually mean what they seem to mean, where we take seriously the Universal Declaration of Human Rights, which emphasizes the importance not just of civil rights but of economic rights, and not just the rights of property but the economic rights of ordinary citizens. In this vision, we have an increasingly vibrant political system far different from the one in which 80 percent of the young are so alienated that they don't even bother to vote.</i></span><br />
<span style="font-size: small;"><br /></span>
<span style="font-size: small;"><i>I believe that this second vision is the only one that is consistent with our heritage and our values. In it the well-being of our citizens - and even our economic growth, especially if properly measured - will be much higher than what we can achieve if our society remains deeply divided. I believe it is still not too late for this country to change course, and to recover the fundamental principles of fairness and opportunity on which it was founded. Time, however, may be running out. Four years ago there was a moment where most Americans had the audacity to hope. Trends more than a quarter of the century in the making might have been reversed. Instead, they have worsened. Today that hope is flickering.</i></span><br />
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
<i>* * * * *</i></div>
<br />
NOTE: I agree with 99.9 percent of what the author had to say except for his suggestion on how to remedy the underwater homeowner situation. He suggests a "write-down of the principal, perhaps with a debt-to-equity conversion that <b>gives the lender a share in the capital gain when the house is sold</b>." There are lots of problems with that, which I will elaborate on in my next post (probably around Labor Day).<br />
<br />
<br />
<div style="text-align: center;">
<b>AN IDIOT'S GUIDE TO INEQUALITY</b></div>
<br />
<i>New York Times</i> syndicated columnist Nicholas D. Kristof wrote his own "Idiot's Guide to Inequality." Here are his five points - published in <i>The Seattle Times</i> on July 26, 2014:<br />
<br />
1. Economic inequality has worsened significantly in the U.S. and some other countries. The richest 1 percent in the U.S. now own more wealth than the bottom 90 percent. Oxfam estimates that the richest 85 people in the world own half of all wealth. The situation might be tolerable if a rising tide were lifting all boats, but it's lifting mostly the yachts. In 2010, 93 percent of the additional income created in America went to the top 1 percent.<br />
<br />
2. Second, <b>inequality </b>in America is <b>destabilizing</b>. Some inequality is essential to create incentives, but we seem to have reached the point where inequality actually becomes an impediment to economic growth.<br />
<br />
3. Disparities reflect not just the invisible hand of the market but also <b>manipulation </b>of markets. [Quoting Joseph Stigletz] "Much of America's inequality is the result of market distortions, with incentives directed not at creating new wealth but at taking it from others." For example, financiers are wealthy partly because they're highly educated and hardworking - and also because they've successfully lobbied for the carried interest <b>tax loophole that lets their pay be taxed at much lower rates than other people's.</b><br />
<br />
4. Inequality doesn't necessarily benefit the rich as much as we think. At some point, extra incomes don't go to sate desires but to attempt to buy status through "positional goods" - like the hottest car on the block. The problem is that there can be only one hottest car . . . so the lawyer who buys a Porsche is foiled by the CEO who buys a Ferrari.<br />
<br />
5. Progressives probably talk to much about "inequality" and not enough about "opportunity." Some voters are turned off by tirades about equality because they say it connotes envy of the rich; there is more consensus on bringing everyone to the same starting line.<br />
<br />
Kristof goes on to say, "Unfortunately,<b> equal opportunity is now a mirage</b>. Indeed, researchers find there is l<b>ess economic mobility in America than in class-conscious Europe.</b> But the U.S. is one of the few advancing countries that spends less educating the average poor child than the average rich one. As an escalator of mobility, the <b>U.S. education system is broken</b>.<br />
<br />
[Note: For an excellent article on our education system, see Peter Dreier's blog on our elitist education system, July 25, 2014, at www.huffingtonpost.com/peter-dreier/americas-rigged-education-system_b_5621332.html, or follow on www.twitter.com/peterdreier.]<br />
<br />
"Inequality and lack of opportunity today constitute a national
infirmity and vulnerability - and there are policy tools that can make a
difference."<br />
<br />
This blogger would like to add: Yes, the right policies can help a lot, but in a Congress that is divided what are the chances?<br />
<br />
<div style="text-align: center;">
_____<i> </i></div>
<div style="text-align: center;">
<br /></div>
<i>Peter Dreier teaches politics and chairs the Urban &
Environmental Policy Department at Occidental College. He serves on the
Pasadena Educational Foundation board of directors. His most recent
book is <i><a href="http://www.amazon.com/The-Greatest-Americans-20th-Century/dp/1568586817" target="_hplink">The 100 Greatest Americans of the 20th Century: A Social Justice Hall of Fame</a></i> (Nation Books, 2012). </i><br />
<br /><br />
Think about what you just read and how you might begin to put Stiglitz' and Kristof's suggestions (and Dreier's and Krugman's, and others) to work. In the meantime, I will finish my scheduled reading and take care of other business (job-hunting, conducting further research, managing my own small business, maybe squeezing in some volunteer work (political advocacy, for one) and, in general, just trying to keep body and soul together during these stressful times).<br />
<br />
. <br />
<br />
<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-81496110579617366502014-05-15T11:54:00.005-07:002014-07-25T13:52:16.530-07:00TOO MUCH WEALTH TO CONTINUE TO SUFFER<!--[if gte mso 9]><xml>
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<br />
<br />
JUNE 10, 2014 Update: Three stories of note:<br />
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<b style="color: black; font-family: Arial,Helvetica,sans-serif; font-size: 10pt;"><a href="http://r20.rs6.net/tn.jsp?f=001a-Zh07VRJ72UUk-taJ5SMXsFrjJ2OOzznIsdYvASsZuh-aBb01u0O8xTAJ9esqSV1kYXoSYzP7Re8jZChw_GJKxvOUlwuwuqPTQ2ikMKFgcAGPS858bID7-JMJOJCduNjJs7pVbTDLuU-7_5EXjsz8JQAr3cpGdMPkLLjIQZ2i5Mj-Qy-lJQEQtcBKKWDzj-YiLnkTQex_i6t7g5s1rr2nBRj9QJ-jZ2&c=R5UiG2p_lik2SUqZWEGIUQX_Q69wk6bXYa_0q2Hd_iRlAfGn3OE3Bg==&ch=5sybVrYLgcYlXBI7e2pKVZ73R4s0v72ttqApmuO8aACrV3mPp-G2sw==" shape="rect" style="color: black; font-weight: bold; text-decoration: none;" target="_blank" title="http://r20.rs6.net/tn.jsp?f=001a-Zh07VRJ72UUk-taJ5SMXsFrjJ2OOzznIsdYvASsZuh-aBb01u0O8xTAJ9esqSV1kYXoSYzP7Re8jZChw_GJKxvOUlwuwuqPTQ2ikMKFgcAGPS858bID7-JMJOJCduNjJs7pVbTDLuU-7_5EXjsz8JQAr3cpGdMPkLLjIQZ2i5Mj-Qy-lJQEQtcBKKWDzj-YiLnkTQex_i6t7g5s1rr2nBRj9QJ-jZ2&c=R5UiG2p_lik2SUqZWEGIUQX_Q69wk6bXYa_0q2Hd_iRlAfGn3OE3Bg==&ch=5sybVrYLgcYlXBI7e2pKVZ73R4s0v72ttqApmuO8aACrV3mPp-G2sw==">The American Dream Under
Duress?</a> </b><span style="background-color: white; color: #231f20; font-family: Helvetica, Arial, sans-serif; font-size: 12px; line-height: 17px;">
<img align="right" alt="Jodi" border="0" src="http://ih.constantcontact.com/fs183/1102090206336/img/514.jpg" height="112" hspace="5" name="ACCOUNT.IMAGE.514" vspace="5" width="97" /> </span></div>
<div>
<div style="font-size: 10pt;">
By Jodi Weinberger,
<i>Shelterforce</i> </div>
<div style="font-size: 10pt;">
</div>
<div style="color: black; font-family: Arial,Helvetica,sans-serif; font-size: 8pt; margin-bottom: 0px; margin-top: 0px;">
<span style="font-size: 9pt;">
</span>
<br />
<div style="margin-bottom: 0px; margin-top: 0px;">
<span style="font-size: 9pt;">The findings from the new "How
Housing Matters" study showed that over half of Americans are making serious
tradeoffs to afford a roof over their head.The sacrifices include one ore more
family members taking on a second job, putting off saving for retirement,
accumulating credit card debt, making cuts in health care and healthy foods, and
moving to a worse neighborhood with poor schools. The findings also reveal that
there is a lot of skepticism leftover from the Great Recession and many
Americans no longer believe that owning a home is a solid path to building
equity. Although home ownership is still a dream for many, most Americans now
see renting and ownership as equally attractive and believe the government
should be doing more to increase the affordability for both sets . . . June 10, 2014</span></div>
<span style="font-size: 9pt;">
</span></div>
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</xml><![endif]--><b>Housing Solutions: America's Wealthy Could Buy Entire Cities. See HousingWire.com, 6/10/14</b><br />
<br />
<b>How the Private Equity Industry is Looting the Middle Class, AlterNet.org, 6/9/14 </b><br />
<br />
<div style="text-align: center;">
*****</div>
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<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-size: 16.0pt;">THERE IS TOO MUCH WEALTH TO ALLOW MILLIONS OF
STRUGGLING HOMEOWNERS – AND THE ECONOMY –<span style="mso-spacerun: yes;">
</span>TO CONTINUE TO SUFFER</span></b></div>
<br />
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-size: 16.0pt;">NOTE: <i>This is being published despite some technical problems that are causing the text to move around from what I originally typed. Hope to correct later.</i> </span></b></div>
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<span style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-size: 16.0pt;">Most of us know how our "Great Recession" (and extremely slow recovery) parallels the Depression of over eight decades ago (historically and officially from 1929 to 1939, but anecdotally from 1929 through the 1940s). In that era, there was <i>overspending</i>, the <i>stock market crash</i> that wiped out millions of investors, <i>bank failures</i>, <i>reduced purchasing</i> by all classes, subsequent <i>job losses,</i> and <i>climate variations</i> (drought</span></span><b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-size: 16.0pt;"> </span></b><span style="font-size: 14.0pt;"><span style="mso-bidi-font-size: 16.0pt;">conditions in the Mississippi Valley in 1930 forced farmers to sell their farms and seek employment elsewhere). During that period the unemployment rate was 22 to 25 percent of the population. That also parallels today's rate of unemployment, when you take into</span> consideration,
one, those discouraged workers who are no longer participating in the job
market but who are not officially counted amongst the unemployed, and two, those
who work part-time but who prefer full-time work.</span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">We are in a jobs and housing recession and the programs and events that got
us out of the Depression won't help us now. In the event you don't remember, they were: creation of the FDIC, SEC, TVA, WPA and other relief
and recovery measures during the Roosevelt administration, as well as passage
of the Social Security Act and the Employment Security Act.<span style="mso-spacerun: yes;"> Lastly, o</span>ur entrance into World
War II created jobs; subsequently when the war ended in 1945, America was able
to begin a great economic expansion to include homeownership and employment .<span style="mso-spacerun: yes;"> </span>In
general, the beginning of the rise of the middle class, which continued for three
decades, up until the late '70s [according to Anthony B. Sanders; see his blog <i>confounded interest.wordpress.com.</i>. The middle class has been shrinking ever since. There is great progress in one area: Wall Street. The stock market is at record levels. Around 16,700 as of the time of this writing.</span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">But times are different and what worked then won’t
work now.<span style="mso-spacerun: yes;"> </span>A divided America is dealing
with a $17 trillion-plus debt, low GDP, a shrinking middle class, need for
updated infrastructure, tax reform, campaign finance reform, and housing reform
policies – problems confronting government and the private sector, at a time when those who make the decisions that affect everyone are from our wealthy ruling class who, as always, look out more for its own members than the problems facing the average citizen.</span></div>
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<span style="font-size: 14.0pt;">However, my local newspaper on Mother’s Day featured
two articles, one of which discussed a typical underwater household. and the
other featuring a member of our billionaire class.<span style="mso-spacerun: yes;"> </span>The two articles, on the same day prompted
the idea of a possible solution which for some reason few are discussing.</span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">First, the article (“<b style="mso-bidi-font-weight: normal;">Trapped in an underwater mortgage</b>”) <span style="mso-spacerun: yes;"> </span>– written by Kathleen Cooper for <i style="mso-bidi-font-style: normal;">The News Tribune</i> – featured one of tens
of thousands of Pierce County, Washington families who have mortgages higher
than their homes are worth.<span style="mso-spacerun: yes;"> </span>It
described the Allen family (Michelle, David and their three children who live in
a 936 square foot, three-bedroom, one-bath home. <span style="mso-spacerun: yes;"> </span>All they want is a second bathroom.</span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">“We have good credit and we don’t want to ruin it.<span style="mso-spacerun: yes;"> </span>We are Christian and we like to keep our word
. . . if we signed a paper saying we’ll pay for our house, we’re going to keep
up our end of the deal”, stated Michelle Allen.<span style="mso-spacerun: yes;">
</span>“The only way we could get help is if we walk away.<span style="mso-spacerun: yes;"> </span>And we’re not going to do that.”</span></div>
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<span style="font-size: 14.0pt;">Like many struggling homeowners, the Allens are in
negative equity and are stuck where they are until home values increase, which could
be another half or full decade.<span style="mso-spacerun: yes;"> </span>(The
Allens owe about $131,000.<span style="mso-spacerun: yes;"> </span>Purchase
price was $129,000 and they made $25,000 worth of upgrades.<span style="mso-spacerun: yes;"> </span>It was estimated they could sell their home
for their original purchase price, but after taxes and fees, that would net
them about $118,000 – $13,000 short of breaking even, Cooper reported.<span style="mso-spacerun: yes;"> </span>“Michelle Allen calculated that selling at
that price would mean a loss of $60,000 during their seven<span style="mso-spacerun: yes;"> </span>years of home ownership.”<br style="mso-special-character: line-break;" />
<br style="mso-special-character: line-break;" />
</span></div>
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<span style="font-size: 14.0pt;">Seven years after the bust, millions of other homeowners
are stuck in place.<span style="mso-spacerun: yes;"> </span>Many have had to
reduce their spending (and often spend only what is needed to survive), further
adversely affecting the economy.</span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">Obviously, each neighborhood is different, and
some states were harder hit than others, meaning recovery rates will vary.<span style="mso-spacerun: yes;"> </span>As Cooper wrote, it is predicted that 10
years out, home prices will average 60 percent higher than they are now (citing
a study by <i style="mso-bidi-font-style: normal;">MIT’s Center for Real Estate</i>).<span style="mso-spacerun: yes;"> </span>She cited another survey of 100 real estate experts and
economists conducted by <i style="mso-bidi-font-style: normal;">Pulsenomics</i>
that predicted a 20 percent increase in home prices during the next five years.<span style="mso-spacerun: yes;"> </span>That’s not much comfort to those of us whose
lives are being adversely impacted now in so many ways primarily because of our
negative home equity.</span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">Even renters need help.<span style="mso-spacerun: yes;"> </span>According to a <i style="mso-bidi-font-style: normal;">New York Times</i> article [April 14, 2014 by Shaila Dewan]:</span></div>
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<br /></div>
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Nationally,
half of all renters are now spending more than 30 percent of their income on
housing, according to <a href="http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/jchs_americas_rental_housing_2013_1_0.pdf" title="Study from Joint Center for Housing Studies of Harvard University.">a comprehensive
Harvard study</a>, up from 38 percent of renters in 2000. In December, Housing
Secretary Shaun Donovan declared “the worst rental affordability crisis that
this country has ever known.”</div>
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<br /></div>
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<span style="font-size: 14.0pt;">But there is a solution, and of course, it involves an
infusion of cash or some form of credit.<span style="mso-spacerun: yes;">
</span>On April 24, I read reporter Ben Lane’s story in <i style="mso-bidi-font-style: normal;">HousingWire</i> that the settlements of the Federal Housing Finance
Agency’s lawsuits against some of the biggest banks in the world exceed <b style="mso-bidi-font-weight: normal;">$16 billion</b>.<span style="mso-spacerun: yes;"> </span>(Out of 18 lawsuits originally filed, FHFA
has settled 13 of them [<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">FHFA reaches $280 million RMBS settlement
with Barclays </i></b><span style="mso-spacerun: yes;"> </span>[<i style="mso-bidi-font-style: normal;">HousingWire,</i> April 24, <b style="mso-bidi-font-weight: normal;">2014].</b></span></div>
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<span style="font-size: 14.0pt;">If each of now almost ten million underwater
homeowners received $20,000 to $30,000 principal reduction (partially paid by
the FHFA settlement funds), <span style="mso-spacerun: yes;"> </span>it would
erase most of our negative equity.<span style="mso-spacerun: yes;"> </span>This
relief would enable the homeowners to then spend money they otherwise haven’t
been able to, such as on their homes (maintenance/repairs, and a myriad of
other worthy expenditures many have deferred).<span style="mso-spacerun: yes;">
</span>Imagine what a boost to the economy, locally and nationally, that would
provide.<span style="mso-spacerun: yes;"> </span>(Akin to what must have
happened when Wall Street investors received huge bonuses - including after <span style="mso-spacerun: yes;"> </span>taxpayer bailouts of the finance
industry.<span style="mso-spacerun: yes;"> </span>Similarly, when comparing huge
executive salaries with the salaries of the average worker, you have to ask: <span style="mso-spacerun: yes;"> </span>What do they do with all that money, besides invest
it to make more, save it/hoard it, buy mansions and set up trusts for their
children, grandchildren and great-grandchildren?).</span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">But – and this brings me to my second point – the
second article I read on Mother’s Day was by John Dodge, staff writer for the <i style="mso-bidi-font-style: normal;">The News Tribune</i>, about billionaire
Warren Buffett and his son [<b style="mso-bidi-font-weight: normal;">Warren
Buffett let his son follow his dreams, do what he loved</b>, <i style="mso-bidi-font-style: normal;">The News Tribune</i>, May 11, 2014] .</span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">The <i style="mso-bidi-font-style: normal;">Tribune</i> article
mentioned how Peter Buffett, an award-winning musician and best-selling author
and the son of Warren, had become a full-blown world philanthropist, working on
behalf of impoverished and enslaved adolescent girls everywhere.<span style="mso-spacerun: yes;"> </span>His (Peter Buffet’s) message before the
Community Foundation of South Puget Sound on May 8 in Seattle was one of
“equality, love, empowerment and compassion.”<span style="mso-spacerun: yes;">
</span>Why are those qualities limited to philanthropic efforts toward only one
segment of the population?<span style="mso-spacerun: yes;"> </span>Why isn’t he
helping people right here in America who desperately need help, such as
struggling homeowners?<span style="mso-spacerun: yes;"> </span>And why isn’t
some of the money given by Warren Buffett to the Bill and Melinda Gates
Foundation being used to help with the housing mess?<span style="mso-spacerun: yes;"> </span>As you will recall last year Buffett donated
Class B shares of Berkshire stock worth <b style="mso-bidi-font-weight: normal;">$2
billion.</b></span></div>
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<span style="font-size: 14.0pt;">Dodge wrote how in 2006, Buffett “allocated $1 billion
to each of his three children <i style="mso-bidi-font-style: normal;">for
charitable work only</i>.<span style="mso-spacerun: yes;"> </span>This followed
like-minded contributions of $10 million in 1999 and $100,000 in 1997.”</span></div>
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<span style="font-size: 14.0pt;">On April 2, 2014, Peter Coy
wrote an article in Business Week that described how the world’s 85 richest individuals
are now worth as much as 3.5 billion of the poorest.<span style="mso-spacerun: yes;"> </span>One of the comments to that story appeared as
follows:</span></div>
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<span class="author"><a href="http://www.businessweek.com/articles/2014-04-03/top-tenth-of-1-percenters-reaps-all-the-riches">dorkus_maximus</a></span><span class="post-byline"> </span><span class="bullet">•</span><span class="post-meta"> <a href="http://www.businessweek.com/articles/2014-04-03/top-tenth-of-1-percenters-reaps-all-the-riches#comment-1318706080" title="Friday, April 4 2014 10:15 AM">a month ago</a> </span></div>
<div style="margin-left: .5in;">
One can argue that the richest rich are playing by
the rules, earning their wealth, etc., etc. At some point though the moral
argument that they are entitled to their wealth has to give way to the social
argument that such wealth concentration threatens the stability of the society.
Should the wealthiest of the wealthy be allowed to keep their wealth even
amidst civil unrest as more and more of the citizenry are forced to survive on
less . . .<span style="mso-spacerun: yes;"> </span></div>
<b><span style="font-weight: normal; mso-bidi-font-weight: bold;">Two years
ago, there was an article in <i style="mso-bidi-font-style: normal;">Think
Progress</i> by Pat Garofalo [July 17, 2012) which stated:<span style="mso-spacerun: yes;"> </span>“</span> Between 2007 and 2010, while median
family wealth fell by 38.8 percent, the wealth of the Walton family members
rose from $73.3 billion to $89.5 billion</b>…In 2007, it was reported that
the Walton family wealth was as large as the bottom 35 million families in the
wealth distribution combined, or 30.5 percent of all American families.<br />
<br />
<b>And in 2010, as the Walton’s wealth has risen and most other
Americans’ wealth declined, it is now the case that the Walton family wealth is
as large as the bottom 48.8 million families in the wealth distribution
(constituting 41.5 percent of all American families) combined.”</b><br />
<div class="MsoNormal">
<br />
<span style="font-size: 14.0pt;">If the wealth of the
Buffetts, the Waltons and other wealthy families were totaled, imagine how one
tenth (or less) of it would help millions of struggling homeowners and others –
combined, of course, with at least some of the $16 billion the federal
government is collecting from bank settlements.<span style="mso-spacerun: yes;">
</span><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">There would be more than enough money to provide relief for the
majority of homeowners and others who lack adequate housing</i></b>.<span style="mso-spacerun: yes;"> What mechanism could be used to make this come about? A philanthropic effort? Tax credits? Federal government intervention? It</span> is doubtful there is the wherewithal
and courage to effect such a change in our political climate and our “me first”
culture.<span style="mso-spacerun: yes;"> </span></span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">I think there is a moral
argument, as well as a patriotic one, for the wealthiest to come forward to
help where needed.<span style="mso-spacerun: yes;"> </span>If they don’t, we
will likely see a great deal of civil unrest right here in America. It shouldn’t be forced upon
them, but will they help otherwise?<span style="mso-spacerun: yes;"> </span>Will
the Federal Housing Finance Agency come to our aid? <span style="mso-spacerun: yes;"> </span>Shouldn’t there be collaboration between the
private sector and the government to save our economy, our country?<span style="mso-spacerun: yes;"> </span></span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">Even Pope Francis is pleading
for change.<span style="mso-spacerun: yes;"> </span>An article on May 9, 2014 in
<i style="mso-bidi-font-style: normal;">MoneyNews.com</i> titled:<span style="mso-spacerun: yes;"> </span>“<b style="mso-bidi-font-weight: normal;">Pope
Demands ‘Legitimate Redistribution’ of Wealth”</b><span style="mso-spacerun: yes;"> </span>quotes Pope Francis - during a speech to U.S.
Secretary-General Ban Ki-moon and heads of major U.N. agencies – calling for
the United Nations to promote a “worldwide ethical mobilization” of solidarity
with the poor in a new spirit of generosity. “<span style="mso-spacerun: yes;">
</span>He denounced trickle-down economic theories as unproven and naïve and
urged the U.N. to “promote development goals that attack the root cause of
poverty and hunger, protect the environment and ensure dignified labor for all
. . . challenging all forms of injustices and resisting the economy of
exclusion and the throwaway culture . . .”</span></div>
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<span style="font-size: 14.0pt;">Let’s define “poor”.<span style="mso-spacerun: yes;"> </span>I think the middle class, not generally put
in the “poor” category, needs as much help as the poor, however “poor” is
defined. <span style="mso-spacerun: yes;"> </span>Maybe more.<span style="mso-spacerun: yes;"> </span>The poor have been getting help for decades,
and much of it from the middle class.<span style="mso-spacerun: yes;">
</span>It’s time to address the needs of the shrinking middle class, including its
struggling homeowners.</span></div>
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<br /></div>
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<span style="font-size: 14.0pt;"><span style="mso-spacerun: yes;"> </span>If it’s going to be happen, the sooner the
better.</span></div>
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<span style="font-size: 14.0pt;">* *
*</span></div>
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<span style="font-size: 14.0pt;">_____________________________________________________________</span></div>
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<br /></div>
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<span style="font-size: 14.0pt;">Sources:</span></div>
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<br /></div>
<div class="MsoNormal">
<i style="mso-bidi-font-style: normal;">HousingWire<span style="mso-tab-count: 7;"> </span>Think
Progress</i></div>
<div class="MsoNormal">
<i style="mso-bidi-font-style: normal;">The News Tribune<span style="mso-tab-count: 6;"> </span>The
New York Times</i></div>
<div class="MsoNormal">
<i style="mso-bidi-font-style: normal;">Business Week<span style="mso-tab-count: 7;"> </span>Wikapedia</i></div>
<div class="MsoNormal">
<i style="mso-bidi-font-style: normal;">The Wall Street
Journal<span style="mso-tab-count: 5;"> </span>The
Seattle Times</i></div>
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<br /></div>
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<br /></div>
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Suggested reading:</div>
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<br /></div>
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<ol start="1" style="margin-top: 0in;" type="1">
<li class="MsoNormal" style="mso-list: l0 level1 lfo1;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 14.0pt;">Forbes</span></b>’ article by Steve
Denning on 5/9/14 (Is the creative economy also in trouble?)<span style="mso-spacerun: yes;"> </span>He writes, in part:<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">The
global economy is undergoing what <a href="http://www.forbes.com/sites/stevedenning/2011/05/31/americas-hottest-economist-tyler-cowen-the-great-stagnation/" target="_blank">Tyler Cowen</a> has called “the Great Stagnation,” with
the appearance of prosperity achieved only by big companies and banks
having access to cheap money from central banks. Former Treasury Secretary
<a href="http://blogs.reuters.com/lawrencesummers/2013/12/16/on-secular-stagnation/" target="_blank">Larry Summers</a> has declared that the U.S. has entered a
period in which current low economic growth should be considered “the base
case for economic planning”: declining levels of investment, spending,
consumption and growth are the “new normal.”</i></li>
</ol>
<div class="MsoNormal">
<br /></div>
<ol start="2" style="margin-top: 0in;" type="1">
<li class="MsoNormal" style="mso-list: l0 level1 lfo1;"><b style="mso-bidi-font-weight: normal;"><span style="font-size: 14.0pt;">Mandelson Matters</span></b>:<span style="mso-spacerun: yes;"> </span>Another amazing story of a struggling
homeowner (Arthur Pritchard, resident of San Francisco):<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>“<i style="mso-bidi-font-style: normal;">We all agree:<span style="mso-spacerun: yes;"> </span>We want to keep people in their homes if
possible . . . sort of.<span style="mso-spacerun: yes;"> </span></i>May 12,
2014:</li>
</ol>
<div class="MsoListParagraph">
<br /></div>
<div class="MsoListParagraph">
http://mandelman.ml-implode.com/2014/05/we-all-agree-we-want-to-keep-people-in-their-homes-if-possible-sort-of/?fb_action_ids=631655430253112&fb_action_types=og.likes&fb_ref=.U2-6reuwUs8.like<br />
<br />
<br />
UPDATE: July 20, 2014<br />
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
<b>WHY AREN'T PHILANTHROPISTS HELPING AMERICA'S MIDDLE CLASS?</b></div>
<br />
Last November 13, 2013, <i>60 MINUTES </i>aired a show on The Giving Pledge, a group of billionaires who have pledged to give at least half their money away. Some of the billionaires featured were Bill and Melinda Gates, Warren Buffett, Sarah Blakeley (Spanx founder), as well as the founders of E-Bay, and other big companies and wealthy corporations. (Complete list to be made available in a future update.)<br />
<br />
The segment was aired again tonight, and it made me wonder: <i> Why are so few Americans who have been suffering (and continue to) being ignored by philanthropists?</i> Yes, I know: The Gates Foundation helps the plight of the homeless. But how about the plight of the Middle Class?<br />
<br />
The Giving Pledge membership requires its members to have at least one billion dollars and pledge to give half of it away. The group's policy is not to give to "individuals" - and only to nonprofit organization. (Can we, the Middle Class, form ourselves into a nonprofit?) Yet, they are giving billions to help with education and vaccinations worldwide, money to research important issues such as climate change, nuclear proliferation, medical research, water quality, and so forth. All while millions of Americans have lost homes (as will many more in the near future)<br />
<br />
While our own country's infrastructure is falling apart, we've been helping other countries build roads, highways, and other infrastructure in the Middle East.and other countries. Why do American taxpayers continued to be abused in this way while other countries benefit from our money?<br />
<br />
The philanthropists and their efforts are, of course, laudable. But likeable? Not by the truly needy middle class men and women who need just a little relief and assurance from someone, somewhere that there is hope for us and our families. And the next generation. (Not those who will be recipients of the largest transfer of wealth the country has ever seen -- when our current wealthy elitists die off.)<br />
<br />
Suggested Reading; <i> Screwed: The Undeclared War against the Middle Class </i>(Thom Hartmann, 2006)<br />
<br />
A new book just out: <i>The Murder of the Middle Class: How to Save Yourself and Your Family from the Criminal Conspiracy of the Century</i> (Wayne Allyn Root, July 2014). The inside flap reads:<br />
<br />
<br />
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<b>Uncovering the Crime of the Century -</b><i>The great American middle class is dying—and not from natural causes. For
the first time in modern history, the American middle class is no
longer the wealthiest in the world—in fact, the net worth of the average
American family is down a whopping 40 percent, and the typical American
family has seen its inflation-adjusted income fall for five years in a
row.<br /><br />Think things are going to get better?<br /><br />As bestselling
author Wayne Allyn Root points out, it is hard to be optimistic when
more Americans are now on welfare than work full time in year-round
jobs; close to 50 percent of Americans don’t even have $500 in savings;
most Americans have "subprime" credit ratings; and for the first time in
history, American businesses are failing faster than they are being
created.<br /><br />The future of the American economy is not that of a
world leader, but of a country that will soon be playing second fiddle
to China, which will pass the United States as the world’s richest
economy this year. It’s a future where Americans become more dependent
on government—one of the fastest growing sectors of our "economy" is the
number of people taking disability payments—and where "jobs" are
increasingly temporary (already America's second-largest employer is a temp agency).<br /><br />What can you do to protect yourself and your family from America's economic decline and fall?<br /><br />The first step is to recognize who is responsible. The Murder of the Middle Class
exposes the crime and indicts the conspirators, from the Obama
administration to their willing accomplices in big business, big media,
and big unions—naming names and pointing out their misdeeds.<br /><br />But
Wayne Allyn Root doesn't just prove the crime and profile the suspects,
he provides bold solutions to save American capitalism, the middle
class, the GOP . . . and YOU! This middle class warrior gives you the
game plan and the weapons to fight back.</i></div>
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Once I finish reading <i>The Price of Inequality</i> and other books on my bedside table (and the dining room table and the living room coffee table), I'll get to<i> The Murder of the Middle Class </i>and report back to you.<i><br /></i><br />
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<i><b>UPDATE: July 23, 2014 (Seattle Times): 1 in 25 New Yorkers a millionaire</b></i><br />
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Reporter Walter Hamilton of the<i> Los Angeles Times</i> says a recent study (released yesterday) by<i> Spears </i>magazine and consulting firm<i> Wealth Insights </i>shows the Big Apple ranks fourth in a listing of the top 20 global cities based on the position of their population. <b> </b><i>WealthInsight</i> analyst Oliver Williams was quoted as saying, "New York has long been the bastion of wealth not only in America, but the world. It has the second largest millionaire and largest billionaire population of any global city." Monaco, Zurich and Geneva claimed the first three spots.<br />
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Not surprisingly, most of the highest-ranked cities are <i>banking </i>and <i>financial </i>centers, including Frankfurt (no. 5) and London (no. 6).<br />
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<span style="font-size: x-small;">Source: <i>The Seattle Times,</i> July 23, 2014</span><br />
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Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-26201266683327569822014-03-10T13:31:00.002-07:002014-03-10T16:03:50.124-07:00ARE YOU REGAINING EQUITY IN YOUR HOME?<div class="separator" style="clear: both; text-align: center;">
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You don't want to see a Foreclosure or For Rent sign on the front lawn do you? Of course not, and I certainly don't, but there's constant anxiety that this will happen. Despite newspaper articles and HousngWire reports that positive equity status is on the rise, not all of us will be experiencing that anytime soon.<br />
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It is reported that rising prices helped 2.5 million homeowners who were previously underwater regain positive equity status during the second quarter of 2013. However, approximately <b>7.1 million homes were still in negative equity</b> at that time and an estimated 10 million homeowners, or about 21.1 percent of all homeowners with a mortgage, remained “under-equitied,” with less than 20 percent in home equity. (That would include Yours Truly.)<br />
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They say prices are expected to continue rising in 2014, which will lift more homeowners into positive territory. According to realtor.com®, median list prices for homes in October rose 7.57 percent above the same month of 2012.<br />
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This explains why so many outside investors are storming into the Seattle metro area and buying an average of 10 homes a day. First: <b>Fannie Mae</b> and <b>Freddie Mac</b> reported positive earnings in the third quarter of 2013, influenced by rising home prices, <b>largely driven by investor purchases.</b><br />
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<i>The Seattle Times (</i>March 9, 2014) reported that this trend began last April, amid the region's tightest housing supply in a decade. They revealed a subsidiary of investment giant<b> The Blackstone Group </b>- <b>Invitation Homes</b> (a 1600 employee company) - has been purchasing the homes from banks, foreclosure auctions or individual sellers, and turning them into rentals. It's another form of "flipping" except that they are a large corporation and their buying up these homes cuts out the ambitious, hardworking individuals who otherwise would be buying the homes themselves, renovating them, and selling them at a small profit. It also pushes back the first-time buyer who is trying hard to save for a down payment. And of course their intrusion into the real estate market aids in pushing up prices as they have the ready cash that most of us lack. <br />
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Reporter Sanjay Bhatt wrote that<b> Blackstone </b>has spent $8 billion amassing a portfolio of 43,000 single-family homes nationwide (almost 1600 in the Seattle region by <b>Invitation Homes</b>).<br />
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"Over the past two years, institutional investors such as<b> </b>Dallas-based <b>Invitation Homes, </b>New York-based <b>Pretium Partners, and</b> California-based<b> American Homes4Rent</b> have spent more than $20 billion to acquire 130,000 U.S. homes destined to become rentals", according to investment banking firm <b>Keefe, Bruyette & Woods</b> (offices in Richmond,VA, Hartford, CT, Boston,MA, Austin, TX, Atlanta GA, New York and London). They are targeting three-bedroom homes in middle-class neighborhoods. The article states that about half the homes they bought in the Seattle metro area were in foreclosure or owned by a bank. Locally, about half of the homes bought last year were in western Washington in King, Snohomish, and Pierce counties.<br />
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In response to some criticisms from some neighborhood homeowners, a spokesman from Invitation Homes said the company has 22 employees in the Seattle market . . . and the company requires its contractors to obtain necessary permits for all repair work. He also said, defensively, "This is no different from back in the 1970s and 1980s when they were professionalizing apartment buildings: apartment buildings were being purchased and bundled together into real-estate investment trusts."<br />
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<i>"Professionalizing apartment buildings"? What a giant MISNOMER! Back in the '70s and '80s, do you remember what was actually going on? The <b>condominium craze.</b> Men and women, old and young, were being kicked out of their homes (apartments) so they (big businesses) could convert them into condominiums and cooperatives (mostly NYC). I remember one example in particular. A company named American Invsco (no longer in business) which was owned by the Gouletas brothers and sister Angelina (who later married former NY Governor Carey) bought hundreds of buildings throughout the nation during the '70s and '80s. One, in Bethesda, Maryland, was The Promenade, which consisted of two towers of high rises. The approximately 1500 units were sold for $32 million in 1982, and the units were then priced out to sell for a total of $100 million (with only a few cosmetic changes made to the lobby). But the tenants (many wealthy) formed a tenants association and protested and picketed for two years. Their efforts resulted in the Maryland Condominium Act of 1984 which provided for 20 percent of any converted apartment building to be set-aside for low-income, the elderly and the disabled. Unfortunately, the law wasn't retroactive and didn't benefit the protestors, who had their units bought out from under them (when their leases expired). (I was closely involved with this effort, so I have a clear recollection of what was happening then.)</i><br />
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<i>American Invsco eventually went under, but not before the three principals took $25 million each out of the company before filing bankruptcy. </i><br />
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What the large institutional investors are doing now isn't much different: they have simply found another way to prevent the 99 percent of us who are not wealthy from having the security of owning our own homes (apartments, then or single-family houses, now). In the '80s, it took congressional hearings, media attention, and protests by ordinary men and women to stop the condo craze. That is what it will take to stop the continued disintegration of the middle class in the area of housing.<br />
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<i> <b> QUOTE OF THE DAY</b></i><br />
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<i>In total, 7 million Americans have been served with the bitter taste of foreclosure. On the flip side, since we know that roughly 30% of all purchases have gone to investors and Wall Stree</i>t </b>(http://www.doctorhousing bubble.cm/mobility-united-states-economic-mobility-geographic-mobility-myth), <b><i>we can say that probably over this same period 2,000,000 homes are now in the hands of some sort of investor (i.e., big money, small money, foreign money, and second homes). You also have to wonder how many of these people who lost their homes in foreclosure are itching to get back on the horse and buy again. Credit standards are fairly tough for getting a loan today even though rates are low. And those with the credit and income are battling it out in flippervilles.</i></b><br />
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- Dr. Housng Bubble <br />
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<span style="font-size: xx-small;">jrapril@aol.com</span><br />
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<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-76942822019520597762014-03-10T11:10:00.001-07:002016-01-14T10:53:54.298-08:00WHAT HAPPENS WHEN YOU FAIL TO MAINTAIN PROPERTY INSURANCE?UPDATE: I am current with my mortgage, but now have to pay $3,000 in late fees/interest. The servicer said I could make monthly payments. So, I guess it's another two or three years before that's behind me.<br />
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ANYHOW, TODAY, JANUARY 14, IF ANYONE IS TRYING TO CONTACT ME, PLEASE BE AWARE I HAVE NO PHONE SERVICE BECAUSE OF A TECHNICAL PROBLEM. TRYING TO GET HOLD OF COMCAST, BUT IT'S BEEN DIFFICULT. THEY PUT ME ON HOLD AND THEN DISCONNECT. MY CELL PHONE IS MISSING - ALONG WITH A WATCH AND DIAMOND RING. THERE MUST BE BETTER TIME AHEAD. - Saundra Raynor<br />
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There are times when struggling homeowners are stretched so thin that they don't have the money to pay anything other than their mortgage, food, transportation, and other necessary expenses. So something has to go. Often it's delaying property taxes or the homeowners insurance. Here is what happened to me when I filed a claim with American Commerce Insurance Company for a $30,000 theft of my belongings when I had to evict a tenant who rented my house for a year. (Will never do that again.) About a week after filing the claim (the only one I've ever filed in the entire time I paid insurance), I received a cancellation notice. A few weeks later my claim was rejected. I was so busy trying to track down the thieves (the family I evicted) that I wasn't able to get other insurance for five months. When my servicer <b>CitiMortgage, Inc.</b> discovered this lapse in insurance, they notified me I would have to pay insurance which they would arrange (triple what I had been paying) or I had to get my own. So of course I got my own (which cost even more than what I had been paying with <b>American Commerce</b>).<br />
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<b></b>So in addition to the $1600 a year I now have to pay for insurance, I was charged $1,200 (despite no claim during that five-month lapse), and paid almost $100 a month until it was paid in full (I finally made the last payment last week).<br />
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I also made arrangements to pay my 2013 property taxes monthly beginning the end of February 2014. The Washington state legislature amended the property tax law (last year) to allow delinquent homeowners to pay monthly or quarterly as long as they stayed current with taxes owing for the subsequent (current) year. It's been a struggle to make the payment for delinquent taxes and save up for property taxes due on April 31, but I have been doing it. (Now I have to get caught up with my mortgage. I am one payment behind.<br />
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<i>In this state, if you don't pay property taxes for three years, they will initiate foreclosure. And it's not through the judiciary; it's done on the courthouse steps!</i><br />
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Did you hear about the class-action lawsuit filed in a Florida federal court that arose from Wells Fargo "force placing" homeowners with two insurance companies (<b>Assurant Inc</b>. and <b>QBE Insurance Group</b>) when the homeowners failed to maintain property insurance? According to HousingWire on March 6, 2014, the insurance companies agreed to repay homeowners in cash up to 11% of the premiums they paid before March 24, 2012 ("a significant monetary relief). The amount wasn't disclosed (most likely a condition of the settlement). (They wouldn't want people to think they are greedy with no sympathy for struggling homeowners, would they?)<br />
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The story went on to state that "conflicts arise when banks opt for expensive policies or when they allegedly get commissions from the insurers, and that <i>forced placement</i> or <i>lender placed</i> insurance purchases are not an unusual mortgage servicer practice when the owners fail to maintain insurance. So be aware. They are monitoring closely.<i> The vultures are circling!</i><br />
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"Last week this same judge (Frederico Moreno) that approved the settlement granted final approval to another forced placement involving<b> JPMorgan Chase</b>. <i> (http://markets.housingwire.com/housingwire/quote?Symbol=321%3A748628).</i> Judge Moreno has also ordered an agreement be filed in a sepa<b>r</b>ate case against <b>Bank of America</b>. <br />
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Lastly,<b> Citigroup </b>and Assurant agreed in yet another forced placement suit to pay $110 million to homeowners. No specifics.<br />
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<b>NOTICE:</b><br />
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<b>IMN's Mortgage Servicing Rights Conference is getting underway</b>. HousingWire will cover the events through two days of panels. The IMN is hosting the conference as it grows past a $10 trillion market, with an explosion of mortgage-servIcing rights purchased by nonbanks.<br />
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<i>(As an aside, <b>Citimortgage, Inc</b>. recently turned over my account to another company, <b>Seterus, Inc.</b> Seterus just sent me a Notice of Pre-Foreclosure Options.</i><br />
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<span style="font-size: xx-small;"><i>jrapril@aol.com</i></span><br />
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Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-7526599845770053892014-03-04T09:41:00.000-08:002014-03-09T15:44:42.733-07:00SOME UNDERWATER HOMEOWNERS WILL BE HELPED SOON<span style="font-size: large;">Ocwen Financial Corporation committed to continuing its principal forgiveness modification program, putting into their program at least $2 billion over three years, according to <i>HousingWire<a href="http://housingwire.com/"></a></i> on March 3, 2014. The servicer entered a consent judgment agreement with the U.S. District Court for the District of Columbia on Feb. 26. The program includes underwater borrowers at imminent risk of default and is designed to be sustainable for homeowners while providing a net present value for mortgage loan investors that is superior to that of foreclosure.</span><br />
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<span style="font-size: large;">On another front (Washington state), the legislature passed a law that allows homeowners who are delinquent in paying their property taxes to pay monthly or quarterly. Prior to this change, we had to pay in one lump sum. They've ignored my lobbying efforts to raise the exemption amount to $35,000 annually to $40,000. If your income is over $35,000, even by a few hundred dollars, you have to pay the school levies which amount to about $1,500 a year for those whose homes are valued at $300,000. The Washington Education Association is a very strong, powerful lobby and we have many teachers here with an average salary of $70,000 annually.</span><br />
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<span style="font-size: large;">Washington will credit eligible property owners with out-of-pocket expenses for prescription drugs and for yard work expenses of almost $4,000. But who pays that much in yard work expenses on an income of $35,000 or less?</span><br />
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<span style="font-size: large;">Please share with me the laws in other states that help underwater and delinquent homeowners. Email me at jrapril@aol.com.</span><span style="font-size: large;"><br /></span><br />
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Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com1tag:blogger.com,1999:blog-6841706091721800532.post-1810955677952853242013-10-28T12:13:00.003-07:002013-11-21T10:02:35.174-08:00UPDATE: Our Last Hope? New Head of Federal Housing Finance Agency<a href="http://www.wsj.com/">www.wsj.com</a><br />
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<b>NEW LEADERSHIP OF FHFA WILL DETERMINE WHETHER STRUGGLING HOMEOWNERS WILL GET SOME RELIEF</b><br />
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U.S. Representative Mel Watt, from Charlotte, NC - President Obama's nominee (last May) to head the Federal Housing Finance Agency - is probably our last hope for some relief from our half decade struggle to hang onto our homes.<br />
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Adam O'Daniel, writing for the The Charlotte Business Journal, reported a couple months ago that HUD Secretary Shaun Donovan - who spoke at the <a class="ct saveLink" href="http://www.bizjournals.com/profiles/company/us/nc/raleigh/nc_bankers_association_/3329106">N.C. Bankers Association’s</a>
American Mortgage Conference - told the attendees that it is time to wind down mortgage giants Fannie Mae and
Freddie Mac (under control of the federal government since September 2008), and asked that private dollars be used to support more of the mortgage market
and launch a new federal entity to replace Fannie and Freddie. <a href="http://www.bizjournals.com/charlotte/">www.bizjournals.com/charlotte/blogbank_notes/2013/09/hud-secretary-shaun-donovan-wind-down.html?page=all </a><br />
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Secretary Donovan stated at the conference that lawmakers have a chance this fall to reform the nation's housing and mortgage system, and he pushed for mortgage bankers and lobbyists to support President Obama's four principles for the future of government housing policy (i.e., • <i>Usher private capital back to the center of the system</i>. (Fannie and
Freddie have purchased 90% of the mortgage market paper since the Great
Recession.) • <i>Replace and slowly over time wind down Fannie Mae and Freddie Mac. • Preserve a system that provides 30-year home financing for safe, responsible borrowers.</i> • <i>Provide a system that offers opportunity to low- and moderate-income borrowers.</i><br />
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Republicans are critical of Rep. Watt, fearing he will promote principal
reduction and the easing of mortgage standards, putting the American
taxpayer and homeowner at risk all over again. <i><b>Isn't that what is needed? Struggling homeowners, most of whom have been paying their mortgages at great sacrifice and facing losing their homes because of the downturn in the housing industry, need a little relief from a situation they are not entirely responsible for. Helping us would <u>not </u>put the American taxpayer or homeowners at risk all over again. In fact, a little relief would benefit the overall economy by putting more money back into it once our mortgages have been adjusted, in part, through principal reduction. I am sure I'm not the only homeowner paying half or two-thirds of my income toward housing.</b></i><br />
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The U.S. Senate is now set to vote on the confirmation of Representative Watt to lead the FHFA. President Obama, at the time of the nomination, praised Rep. Watt for his effort to rein in "unscrupulous mortgage lenders". As expected, many Republican legislators do not agree with the President’s
assessment of Watt as the right person for the job at the right time.<br />
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On July 18, the Senate Banking Committee approved Watt’s nomination by a
vote of 12-10, which was split along party lines. Watt will need the
support of at least 6 Republicans to gain the 60 votes needed for the
Senate to take up his official confirmation. As of now, Richard Burr (R-NC)
is the only Republican who has endorsed Watt so far.<br />
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After the recent fiasco in Washington, D..C. (government shutdown, debate over raising debt ceiling, etc.), Americans are tired of the acrimony and obstructionist tactics by the right, and many are beginning to leave their centrist position and lean more to the left. I'm one of them.<br />
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UPDATE: Oct. 31, 2013: Senate Republicans blocked Watt's nomination. Out of the 60 ayes needed, the nominee received 56. For full story, see today's Wall Street Journal blog: <span style="font-size: x-small;">http://blogs.wsj.com/washwire/2013/10/31/why-republicans-dont-want-mel-watt-to-oversee-fannie-freddie/?mod=wsj_valettop_email. </span><br />
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<span style="font-size: x-small;">UPDATE: Nov. 21, 2013. The U.S. Senate voted today to change the filibuster rules in a 52-48 vote, a simple majority. This means President Obama's two judicial nominees and one executive nominee (Mel Watts to head the FHFA) will go forward. The last time filibuster rules were changed was in 1975.</span><br />
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<span style="font-size: x-small;">saundraray1952@gmail.com</span><br />
<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-6522362932023160632013-10-26T11:40:00.001-07:002013-11-20T17:52:47.474-08:00HELP REALLY IS ON THE WAY. IT'S OFFICIAL!<br />
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<b>$4 BILLION DEAL REACHED WITH JP MORGAN/CHASE FOR MISLEADING INVESTORS</b>.<br />
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Although it was great to hear the news on TV last month, I enjoyed opening my local newspaper (<i>The Seattle Times</i>, Oct. 26, 2013) and reading that JPMorgan/Chase had reached a deal with the Federal Housing Finance Agency <a href="http://www.nytimes.com/2013/10/26/opinion/reparations-from-banks.html?hp&_r=0">http://www.nytimes.com/2013/10/26/opinion/reparations-from-banks.html?hp&_r=0</a>. The FHFA regulates banks and apparently are the only ones who can pressure the banks to consider some loan principal forgiveness or deferment (or offer lower interest rates) for homeowners struggling to meet their mortgage obligations, especially those who are "underwater.". [The current acting director Edward DeMarco has not been willing to offer any relief for underwater homeowners. All eyes are turned toward President Obama's nominee Rep. Mel Watts, to head the agency, upon Senate confirmation, hopefully early next year.]<br />
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Now that they have reached a $13 billion dollar settlement of a 2011 lawsuit brought by our government, providing a $4 billion homeowner relief payout from JPMorgan Chase - maybe some of us struggling homeowners will be given a little help in modifying our mortgages. The article stated that "The bank is committing $4 billion to help struggling homeowners reduce their mortgage balances". Those, like me, who have a history of refinances with Washington Mutual - which Chase bought in 2008 - should be first in line to receive assistance of some kind. (Anything would help.) Washington Mutual lied when they submitted my mortgage re-fi applications (and many others', of course) for approval. During that time period (2002 to 2008) ownership of my loan reverted to FannieMae. (If you are not sure whether your mortgage is owned by Fannie Mae or Freddie Mac, go to their website: <a href="http://www.freddiemac.com/">www.freddiemac.com</a> and <a href="http://www.fanniemac.com/">www.fanniemac.com</a>.)<br />
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<i>"JPMorgan sold $33 billion in mortgage securities to Fannie and Freddie between 2005 and 2007 . . . that was the second-most sold to those agencies ahead of the crisis, behind only Bank of America. The securities soured after the housing bubble burst in 2007, losing billions in value." </i><br />
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To summarize, the U.S. Department of Justice accused JPMorgan, Bear Stearns and Seattle-based Washington Mutual - the country's largest savings and loan bank, of selling mortgage securities to Fannie Mae and Freddie Mac but <i>did not fully disclose the risks of the securities</i>, which ultimately imploded, and added to the burgeoning financial crisis. The mortgage securities that JPMorgan sold to Fannie and Freddie
included billions that were packaged by two institutions that failed in
2008 - Wall Street bank Bear Stearns and the savings and loan institution Washington Mutual. JPMorgan bought Bear Stearns and
Washington Mutual in deals brokered by the government. <span style="font-size: x-small;"> [<b>Author's note:</b> 2008 was the year my spouse died and I had to take $10,000 of his $16,000 in life insurance benefits to pay for a re-fi to get out from under a negative amortization loan, raising my mortgage payment by $500 monthly while, at the same time, having to contend with $1,000 a month less in income upon my husband's death through loss of half his pension and all of his Social Security benefits.]</span><br />
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This $13 billion settlement is the largest sum a single company has <i>ever </i>paid to the government.<br />
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DeMarco was quoted as saying, "This is a significant step as the government and JPMorgan Chase move to address outstanding mortgage-related issues." A larger amount, $6 billion, will be passed on to investors who sustained losses on mortgage securities. [The same investors who refused to allow some principal forgiveness on my mortgage last year and the year before that, and the year before that? The same investors who are still getting a large portion of my interest at $1650 a month for the past five years?]<br />
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The articles goes on to say that JP Morgan will pay about $2.74 billion to Freddie and $1.26 billion to Fannie for the securities it sold. The bank is also paying $1 billion for home loans it sold to Fannie and Freddie ahead of the crisis.<br />
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UPDATE: Newswires today (Nov. 19, 2013) reporter the JPM settlement has now been signed. Struggling homeowners,<i> including those who had refinanced with Washington Mutual,</i> will be receiving some relief in the way of mortgage principal forgiveness or a lower rate of interest, resulting in many of us having to pay only a third of our income toward mortgages rather than the two-thirds that so many of us are struggling with today (and have been doing so for several years).<br />
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The Associated Press article goes on to state: "The magnitude of the payout reflects a broader strategy shift within the Justice Department to hit Wall Street where it hurts most: the bottom line. Once content to extract multimillion dollar fines that critics dismissed as little more than a slap n the wrist, prosecutors ave signaled to the nation's biggest banks that the billion-dollar mark is a floor rather than a ceiling." <br />
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The State of New York will receive $400 million, part of which will go toward helping the people who need relief from the damaged wreaked by Superstorm Sandy. The rest will fund underwater homeowners. <a href="http://housingwire.com/">housingwire.com</a>, <br />
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There will be a third party administrator to see that qualifying homeowners obtain some relief. More information is expected from the Obama Administration on Tuesday, November 26, 2013.<br />
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<span style="font-size: xx-small;">saundraray1952@gmail.com.</span><span style="font-size: xx-small;"> </span><br />
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<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-28597315143271811042013-10-18T14:34:00.000-07:002013-10-19T09:30:54.279-07:00WILL MINE BECOME A "VAMPIRE" FORECLOSURE?Today is the first time I've head the term "vampire" foreclosures.<a href="http://The Palm Beach Post">The Palm Beach Post</a>. The article by reporter Kimberly Miller states that these foreclosures are defined as "homes that have gone through the court proceedings and are bank-owned and still occupied by their previous owners."<br />
<br />
I say, That's one way to fight back!<br />
<br />
Although there are no foreclosure efforts at this time (to my knowledge) on my home, I have no doubt that CitiMortgage and FannieMae and the other investors would love to take possession of my home and sell it at a cheap price so the next owner (probably hand-picked by the bank) can reap even more profits. Yes, I'm one mortgage payment behind - and have been for nine months - and yes, their fees have jumped so far to over $900. This means instead of having to pay them $2,000 to catch up, I have to pay them over $3,000 for my one-payment delinquency because of their late fees. But I am not giving up.<br />
<br />
The article quotes Daren Blomquist of RealtyTrac <a href="http://realtytrac.com/">realtytrac.com</a> as saying that "Up until recently, the banks have not had a huge motivation to kick them out because home prices were not increasing and the banks had so many properties they were dealing with." Miller goes on to report that "47 percent of bank-owned homes are occupied by their previous owners."<br />
<br />
"These are still distressed properties and will typically sell at a cheaper price", said Blomquist.<br />
<br />
Lastly, Miller's article concludes: <i>A slowdown in asking prices has already been measured by online real-estate analysis firm Trulia. Jed Kolko, chief economist for Trulia,</i> <a href="http://trulia/">trulia</a> <i>said expanding inventory and a decrease in investor activity is leading sellers to lower their expectations. 'Asking home prices give us the first look at where home-sale prices are headed, and they point to a slow-down'", </i><br />
<br />
NOTE: Future posts will be on 1) residential appraisal methods and practices and 2) an analysis of one homeowner' rejection of a HAMP application (hint: the investor was the obstacle).<br />
<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0North America47.517200697839414 -119.179687527.467413197839413 -160.4882815 67.566988197839407 -77.8710935tag:blogger.com,1999:blog-6841706091721800532.post-61364747944868988692013-10-17T06:51:00.000-07:002013-10-17T06:51:49.517-07:00A Superb Analysis of our Economic Crisis by S. Aronowitz<br />
<br />
<span style="font-size: large;">Facing the Economic Crisis</span><span style="font-size: large;"><span style="font-weight: normal;"><span style="font-size: small;"><span style="font-size: large;"> </span>(by Stanley Aronowitz) </span></span></span><br />
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The main news since the Summer of 2008 has been the global
economic crisis, an event described by economists and most pundits as a
“financial meltdown” caused by the irresponsibility of US lending
institutions and consumers alike in offering—and accepting—“sub-prime”
mortgages, interest-only loans, and a series of complex derivative
financial instruments. Many of the variable mortgages, which were
initiated during the credit-driven bubble of the 1990s (and welcomed by
the Clinton administration) and whose growth accelerated in the first
years of the new century, require homebuyers to put no money down.
Interest rates on these kinds of mortgages, which begin at 5%-9%, are
slated to rise within a few years when they can double, triple, or
balloon even more. In September 2008 we began to hear of massive
foreclosures in almost all sections of the country. The projections for
2008 and 2009 were for 2 million homes (six percent of the US total) to
go into serious default. New home construction came to a screeching halt
and commercial building suffered only slightly less pain. In a few
weeks of October, several major banks, bloated with bad loans, had
failed, prompting the Fed to inject billions of dollars into the
financial markets; others, like Merrill Lynch, merged with more stable
partners. But the venerable old-line investment banking house Lehman
Brothers was fated to fail when the Treasury Secretary and the Fed chair
refused to extend bailout funds. Of course, goliaths like Citibank,
Bear Stearns, the insurance giant AIG and a few others were deemed “too
big to fail” by the Treasury Secretary, Hank Paulson. By the end of the
month the banking system, which held trillions of dollars in
unredeemable mortgages, business and credit card loans, was teetering on
the brink of disaster, and the crisis was widely described as a
“financial meltdown.” Many leading investment banks disappeared and
those that remained were reconstituted and converted into bank holding
companies.<br />
By October 2008, mobilized by Paulson and backed by the Fed chair Ben
Bernanke, Congress quickly passed a massive $700 billion bailout to
financial institutions without scrutinizing the fine print. For
different reasons, only a band of arch- GOP conservatives and a few
liberal Democrats were prepared to let the system collapse, respectively
hoping that the market would self-correct or that it would force a more
radical program of extensive re-regulation (of the kind that had last
been mooted – and rescinded – by the Carter administration and a
Democratic Congress in 1978). The purpose of the bailout legislation
was, initially, to permit the government to purchase vast quantities of
the bad securities at, or near, nominal value; in effect, this was a
major infusion of cash into the banking and insurance systems without
imposing stringent conditions on how the banks and insurance companies
could spend the money. However, within weeks of President Bush’s signing
the bill into law and in the wake of the banks’ refusal to loosen
consumer and business credit, Paulson announced that this strategy was
being replaced by a policy of purchasing bank shares, a direct infusion
of cash in return for which the government would assume a measure of
temporary partial ownership but would not assume outright ownership and
management of the system. Nor, as it turned out, did the Federal
government closely supervise the use of the funds they had so generously
given. Within weeks, complaints resounded throughout the economy that
the banks, instead of loosening their lending policies, were holding the
money close to their chests. Of course business loans were tightened,
but many would-be buyers of homes, cars and other durable goods, not to
mention borrowers of much-needed cash to pay their bills were turned
away on one pretext or another, often because their credit rating was
not top-of-the-line.<br />
Meanwhile, jobless rates began their steep ascent. In reporting the spectacular job losses, the <i>New York Times</i>
ran an investigative story that argued the official figures were only a
fraction of the true extent of joblessness. According to the <i>Times</i>
the number of discouraged job seekers who left the labor market,
premature retirees who had no prospects but to accept inadequate
pensions, and recent high school and college graduates who simply did
not look for work, might swell the actual figure by four or five
percent. By early December, the National Bureau of Economic Research
(NBER) reported that the economy had been in recession since December
2007, a year before they declared the recession “official.” This
revelation prompted no leading politician or economist to ask why the
information had taken so long to be determined and revealed. The
conservative NBER explained that it often takes that long to check their
calculations and come up with a definitive judgment. That they felt
obliged to offer an explanation at all was no doubt in response to the
unspoken suspicion that the delay had something to do with the
presidential election. Many believe that if the recession had been
declared in the midst of an election season, candidate Obama could have
prepared to vacation in Hawaii for more than just a few days.<br />
The NBER’s admission that the economy was in recession at least ten
months before the financial meltdown poked a huge hole in the initial
view that excessive and wanton lending was at the core of the troubles
and that the crisis was exclusively financial in nature. Since 2002 the
emerging recessionary signs were assiduously ignored by virtually all
mainstream quarters. Fall 2006 witnessed the beginning of sagging
economic growth, falling housing prices that prompted a severe slowing
of new housing starts and sales, and gradual increases in jobless
applications. The fact that throughout the first decade of the new
century plants continued to close and reduce workforces (not only in the
Midwest but in the South as well) was not registered as a sign of a
slowdown in the midst of so-called “prosperity.”<br />
<br />
Indeed, the erosion of US manufacturing was barely noticed in
official circles. According to the conventional wisdom the US economy
had become “post-industrial” -well on the way to realizing the belief
that ours is a service economy and that it is better to let others such
as the Chinese and Koreans produce material goods. If the US remained a
major producer of food, armaments (for national security reasons),
aircraft, heavy machinery such as machine tools, trucks and specialty
steels, these were necessary to maintain our trade balances, but were
not otherwise fundamental for insuring economic health. According to
postmodern economics our future lay in specializing in various forms of
“immaterial” production. So, we could afford to lose the remnants of
once huge garment and textile production industries, even when it was
already certain that the US was no longer the center of basic steel and
car production. Software, research, and the growth of higher education
(both as the center of innovation and, in terms of employment and
capital formation, a major industry), pharmaceuticals and other
activities linked to the health care industry, and entertainment, would
surely fill the gap left by the demise of the “rust belt” industries.
And so what if the past thirty years were times of wage stagnation and
decline, we had perfected a magnificent credit system (the main spur to
consumption) that seemed to know no limits. Or so the story went.<br />
The bare truth is that what has been taken as economic expansion
since the early 1970s was a symptom that the United States (and the UK
and other European countries) have survived a genuine period of economic
decline by means of a dramatic increase in the creation of huge
amounts of fictitious capital. Fictitious capital is a speculation on
future economic performance. Fictitious capital is an ordinary function
of the credit system: manufacturers borrow and lend money from each
other and from banks to finance purchases of raw materials and labor on
the promise of a future repayment when the value of their products is
realized through sales, either within the production sector or through
wholesale and retail purchases. But when these such loans are exchanged
by banks to businesses and non-commercial consumers on a long-term basis
at exorbitant interest rates, and and when these loans become the basis
of at least 2/3 of economic activity, an element of systemic
instability emerges. And when when consumers or business owners default
on their payments on a large scale, and when finally the bubble bursts,
the whole system reverberates collapse.<br />
Which is exactly what happened. Small producers, retailers and
building contractors would routinely borrow money from banks or other
lending institutions with which to purchase raw materials, rent stores
or industrial facilities and hire labor – on the premise that consumers
would in turn receive loans from lending institutions and have
sufficient income sufficient to pay their credit debts on time. But as
the the edifice of debts finally collapsed and credit flows froze, what
Marx termed a “realization” crisis ensued—commodities cannot be sold at
profit rates that are sufficient to stimulate further investment in
plant, equipment, construction and labor. In order to alleviate their
inventory glut business is obliged to reduce prices, but this tactic may
take years before capital investment on a grand scale resumes. As long
as deflation lingers new investment is bound to remain tepid. What
follows is a period of layoffs, downsizing, and falling prices. Many
American dreams of homeownership become nightmares as the amount of the
mortgage loan exceeds the exchange value of the home.<br />
<br />
For thirty-five years, the private sector has not produced a net
increase in good jobs. The work it has offered is increasingly low-wage,
temporary and contingent; it work usually carries no benefits and is
often of a casual nature. The growth of jobs in computer-mediated
services and software production was counterbalanced by losses in
manufacturing; job losses due to mergers and acquisitions in the retail
industry were barely matched by growth in fast food employment. Over the
past decade, as the private sector failed to create new jobs but relied
increasingly on contingent and temporary labor to meet short-term labor
requirements, the public sector (especially education and health care),
became the main source of new, decent paying jobs. As the Federal
government abdicated responsibility for a variety of services, state and
local bureaucracies added jobs. Of course, besotted by the conventional
neo-liberal ideology that only the private sector is a job creator,
economists and politicians conveniently ignored this fact and continued
to insist that whatever the service, the private sector can do it
better, and more efficiently. What net increases in private sector
employment occurred were largely, if not exclusively, the result of
contracts awarded by federal, state and local governments who adopted
both the mantra and practice of privatizing public goods. Although
industrial production held steady, factory jobs stagnated during the
boom because computer-mediated production began to dominate key
industries and, contrary to the hype that computer-based manufacturing
creates more jobs than it destroys, the reverse is actually the case.
And eventually the technology sector, of which the bubble in software
and communications (dot.com) companies were the leading edge, burst; as
early as 2000, this sector began to experience mass layoffs, the effects
of which were noticed for about fifteen nano-seconds but quickly
relegated to the back burner.<br />
<h3>
A New ‘New Deal?</h3>
Five prior administrations beginning with Carter relied on monetary
policy to address economic problems (interest rates were their major
tool) and had strenuously avoided using the tool of fiscal stimulus—that
is, increasing spending on public goods and consequent job creation and
income support—to address economic grief. After flirting with the
possibility of a job creation program, the Obama administration opted
for the historic model, exemplified by the Federal government’s solution
to the Savings and Loan Crisis during the 1980: bailout at the top.
Given the depth of the 2007-2010 crisis, the Obama administration
proposed a stimulus plan of nearly $750 billion, exponentially greater
than the miniscule $25 billion it originally pledged. Some jobs were
saved, but few were created. We should not expect miracles because job
creation is far down the priorities list of the stimulus package: after
18 months of official recession, the emphasis remains bank and insurance
bailout, intended, ostensibly, to loosen credit. Liberal economists
like Paul Krugman, for example, have consistently urged that another
trillion dollars be injected into the economy, chiefly to the financial
sector. The economic policy of the Obama administration focuses on
finance, and indirectly, on re-stimulating the debt-based consumption
that led to the crisis in the first place. It is clear that beyond the
creation of more fictitious capital, the Obama team has few alternative
ideas.<br />
<br />
Nevertheless, as he took office, the new president promised to save
or create 2.5 million jobs in his first term. To begin with, Obama has
warned that the 2.5 million job figure is a long term projection. How
much money would it take to create 1 million jobs, about 7% of current
unemployment? This is a tricky calculation. Would the program(s) be
contracted out to private employers or would the government be the
direct employer? If contracts are let at 30% gross profits, fewer jobs
would be created. And what average wage would be offered? Would the
government insist on “prevailing wages” as in the construction industry?
If the new jobs paid 50% above the poverty level, for example, they
would match the current national average of about $20 an hour. The sum
required to create a million jobs at prevailing wages, would range from
$60-$75 billion annually, depending on whether the Obama administration
replicated the New Deal practice of government as direct employer or
continued the extant policy of privatization.<br />
<br />
There is also the problem of contracting out these activities. During
the Great Depression, the Works Projects Administration, a government
agency, was the direct employer; today, in the era of privatization
federal and state governments often contract to private companies to
perform these tasks. This means that profits must be factored into all
expenditures; like the privatized US health care system, it is more
expensive than socialized production and the job payoff is less.
Moreover, under this contracting regime there are fewer controls over
hiring practices; people of color tend to be shortchanged. Which would
mean that the level of oversight would need to be much more stringent
than any administration has been willing to implement. What is the
warrant for believing that the Clinton-era appointees who dominate
Obama’s economic policy team will be willing to reverse past practices
of relaxing government controls, especially if the Obama administration
persists in advocating the politics of compromise with a Republican
Party dedicated to scuttling any program that would increase government
intervention in areas not related to the war and national security.<br />
<br />
Progressives hope that Obama will usher in a “new” New Deal. But the
New Deal of yesteryear was never intended to pull the United States out
of the depression. Even though it employed more than a million workers
in government projects, as late as 1940, unemployment still hovered
around 20% of the labor force. In 1937, four years after Roosevelt took
office, the United States was plunged into a new recession from which it
did not recover until the advent of the war economy. What the New Deal
accomplished went well beyond its relatively modest economic impact;
more important was its ideological and political force. In contrast to
Herbert Hoover and the first New Deal’s focus on stimulating economic
activity by pouring capital into business corporations, controlling
prices and wages in order to foster profits and limiting its direct aid
to the unemployed to feeding the hungry, the so-called “second” New Deal
put money in the pockets for the jobless through public works and
service programs, promised to save small farms from foreclosure through
government purchases of crops and paying farmers to retire part of their
growing capacity in a land bank. But it was the farmers themselves who,
through direct action and mass organizing, sometimes prevented
evictions, created cooperative enterprises to oppose the big processing
corporations and, even before the depression became official, created
their own political vehicles. And, after the mass strikes of 1933 and
1934, conducted without a legal framework for union recognition, in 1935
the National Labor Relations Act guaranteed workers the right to
organize unions of their own choosing, established a procedure for
official union recognition and collective bargaining, and outlawed
company unions and competitive unionism within the same bargaining unit.
In short, the second New Deal was a consequence of a popular upsurge,
not only the brainchild of FDR and his advisors.<br />
<br />
It remains an open question as to whether the organizations at the
base of the Obama administration will match or even exceed the
achievements of the movements that forced the second New Deal into
existence. There is little or no prospect that the deepening economic
crisis can be significantly reversed within the current framework of
neo-liberal capitalism – at least not when unemployment, wage stagnation
and declining living conditions are taken as the relevant indicators.
The stock market may rise for a time and prospects for certain
professional and technical employment categories may improve, but the
situation remains grave for youth, women (whose jobless rate exceeds
that of men for the first time since World War II), blacks and Latinos,
the elderly and semi-skilled workers. <br />
<h3>
The Politics of the Crisis</h3>
After eight months in the White House, the new administration has
demonstrated, to the disappointment of even some of its fervent
supporters, that it has virtually no plan to address the growing jobs
crisis except through a program of “trickle down.” The most it has done
is to extend unemployment benefits beyond the statutory 26 weeks limit,
and supplement the food stamps program. Either the Obama administration
actually believes that the huge sums handed over to financial
institutions and the car industry will, over time, pull us out of the
recession or, lacking a genuine protest movement from below, it simply
experiences little pressure to do anything different. I suggest that the
latter is the case and even some of Obama’s supporters are beginning to
come to that realization – witness Krugman, <i>New York Times</i>
columnist Bob Herbert and MSNBC talk show host Rachel Maddow’s
increasingly critical public comments. The administration obviously
believes it has enough breathing room to await an economic turnaround
without sacrificing its political standing or directly confronting the
large financial corporations with proposals to shift funds in order to
directly assist the unemployed and those facing foreclosure. Under these
circumstances, its economic advisors have accepted the conventional
wisdom that we are in the midst of an ordinary recession which will peak
at 18 months to 2 years. Although this length of time is somewhat
longer than the last three recessions—2001-2002, 1990-91, and
1982-1983—they believe it is well within the range of normalcy.
Skeptics, notably Nobel Prize winners Joseph Stiglitz and Paul Krugman
and NYU professor Nouriel Roubini have cast some doubt on this
prognostication – but to little effect since all of them generally
support the administration’s economic strategy and merely fault it for
not being bold enough.<br />
<br />
On August 21, 2009, Fed Chairman, Ben Bernanke,
looked into his crystal ball and opined that the recession was bottoming
out—about the fifth time he made such a statement that year. The
statement appeared to be geared to the stock market and intended to
assuage popular fears that the recession was damping home sales and
creating more uncertainty in the labour market. Few in the public debate
and certainly nobody in the ranks of policy-makers has heeded the
warnings that persistent job loss and lackluster consumption were
weighing heavily on the prospects for economic recovery. In fact, in
numerous statements, the president himself has warned that unemployment
would grow well beyond the declaration of official recovery, a tacit
acknowledgement that substantial Federal jobs and income support are not
on the horizon.<br />
<br />
Obama’s poll numbers declined in summer 2009, a reflection of growing
disappointment with the performance of his administration on the
economic crisis, health care reform, and the accelerated war in
Afghanistan. But polling is only an indicator of public sentiment. As
“progressives” fret, the organized opposition to Obama’s programs still
comes mainly from the Right. Liberals are divided between those who, in
fear of Right-wing putschism (which recently displayed its strength in a
plethora of town meetings on health care reform), are clinging to the
administration and those who wring their hands and voice their
disappointment more loudly. But neither the labor movement nor the
mainstream of the civil rights, feminist and environmental movements are
prepared to openly oppose a Democratic administration on a broad range
of economic issues.<br />
<br />
The seriously divided labor movement regularly issues statements
calling for a jobs program but has, until now, shown no political will
to mobilize its own still vast membership (16 million)—as it did during
the 2008 elections when it handed $250 million to the Democrats—to
demand a share of the trillions that the Bush and Obama administrations
have given or lent to a few key Wall Street banks and insurance
companies. Progressives in the main liberal organizations, intellectuals
and the AFL-CIO and Change to Win leaderships have replied to criticism
that they are willing to give Obama “the benefit of the doubt” and have
stood idly by as joblessness spreads. Until Spring 2009, Organized
Labor’s main legislative priority was Congressional passage of the
Employees Free Choice Act (EFCA), which would have required employers to
recognize unions on the basis of card-checks rather than a mandatory
secret ballot election. When the administration and the Democratic
Congressional leadership pronounced the bill “dead”, the unions –
notwithstanding brave words to the contrary – folded their tents and
followed the administration’s call for rapid passage of health care
reform. But at no time in the first year of the Obama administration did
they put the dire economic situation facing workers at or near the top
of their agenda.<br />
<br />
The reasons for the unions’ passivity, even as their membership and
economic power continues to wane, should not be sought in conspiratorial
theories of perfidy or complacency. According to such views, union
leaders have simply lost their edge. That is, they sit on top of a
bureaucracy that tends to inure them from rank-and-file suffering: while
workers are straining under the burden of job losses, stagnant wages,
employer demands for “furloughs” and wage reductions, and rising food
and health costs, their leaders seem to have other fish to fry. While
there is some truth to such perspectives, they fail to address the
deeper causes of labor’s organized passivity in the economic crisis.
Perhaps the least noticed among these is the degree to which the
unions—and the social movements that arose during and after the 60s—have
become what C. Wright Mills once termed a “dependent variable” in the
political and economic “set ups”: the unions—and the movements—lack
autonomy from either the state or the corporations with which they
bargain; they experience themselves as subordinate to and dependent on
these institutions. While these relationships can easily be
characterized as instances of “class collaboration”, what often remains
unexplained are the origins of this situation and the forces that
maintain it. In what follows I would like to venture an informed
speculation.<br />
<h3>
Historical Transformations</h3>
Since the 1950s, Organized Labor has hitched its fate to capital.
During the Cold War it shed all of its socialist ideas and a good number
of its militant socialist and communist activists as well. In fact,
union leaders have come to believe that capitalism is in their and their
members’ best interests and that full-blown systemic opposition is
tantamount to political and economic suicide. This attitude was already
encouraged during the heyday of the New Deal, but reached its apogee
during the Cold War – when the permanent war economy and US global
economic power enabled key sections of the American working class to
achieve an unprecedented degree of job and income security. Of course, a
major element in the new perception that workers were an integral part
the corporate capitalist order was the initiation by the state and its
financial partners of an extensive credit system that permitted
working-class people to borrow money with which to own their homes, send
children to college, go on vacations, and regularly update their cars.<br />
<br />
After the defeat of Congressional legislation that would have
established a National Health Service and the stagnation of the social
security (pension) system, unions in key industries (such as steel,
auto, coal, electrical, communications, oil and transportation)
negotiated a “private” welfare state with their employers, thereby
taking the air out of efforts to enact a publicly-financed universal
health care program and extend the welfare state. The bare truth is that
since the passage of the Wage-Hour law of 1938, the only major
extension of the welfare state was Medicare, passed in 1966. While the
unions can take considerable credit for its passage, they were moved
only to apply the necessary pressure after they found that “their”
corporations refused to insure retirees.<br />
<br />
These deals were of a tri-partite nature. In most cases, the health
and pension contributions were paid in lieu of wages and to private
insurance companies, even where the union administered the services.
Since 1955 many major unions have become “partners” with some of the
leading insurers who provided benefits in return for fairly substantial
fees. Moreover, the provision of benefits under the union contract
rather than under public authority allows union leaders to claim credit
for health and pension improvements and so gave them a political base
(needed for reelection to union office) that would not have been
available under socialized medicine. In some instances, the traffic
between unions’ health and welfare staff and these private insurers was
fairly heavy. Many unions hired consultants from Wall Street firms to
advise them on how to handle their benefits programs. During the fiscal
crisis of 1976-77 these consultants actually acted as intermediaries
between the union leadership and city officials in New York, Detroit,
Chicago and elsewhere who successfully persuaded the unions to grant
concessions, most of which are still in effect.<br />
<br />
In 1975 union membership was about a quarter of the labor force. This
was down from 35% in 1953, but organized labor was still driving wages
and benefits levels for all workers. Having organized millions of public
sector employees, the AFL-CIO was not only a powerful fraction of the
national Democratic Party, but was also able to name many of the party’s
candidates at the state and local level. But the “rational” basis of
Labor’s close alliance with capital began to vanish in the 1970s. The
last thirty years have witnessed the massive deindustrialization of
America and a profound decomposition and recomposition of the working
and salaried middle classes. Except in the public and health care
sectors, union organizing slowed to a crawl. By 2009 union membership
was only 7% of the private sector labor force and slightly less than 12%
of the entire labor force. Today, what was once an industrial union
base of 7 million members has been reduced to less than 2 million. And
the composition of that membership has radically changed: public and
private sector service and transportation employees are now,
overwhelmingly, the majority of union members. <br />
In the main, having bowed to the view that globalization and
technological innovation are engines of “progress” and that workers’
pain was temporary, the unions accepted the inevitability of these
losses. After conducting a fairly vigorous campaign to defeat the North
American Free Trade Agreement in 1993, the bulk of Organized Labor has
settled for crumbs at the table of capital. When some auto, meat packing
and steel workers locals protested capital flight or refused to accept
concessionary bargaining, the national leaderships ruthlessly suppressed
these movements, sometimes by agreeing to plant migrations used by
corporations to thwart militants. For example, the UAW leadership looked
benignly on as the big three auto companies removed plants from the
Detroit area and Flint—the heart of the union’s traditional strength—to
the American South and to rural areas. Belatedly, they took something of
a stand against outsourcing auto parts production to Mexico, China and
other developing countries – but they presented their objections in the
form of crass “Buy American” slogans.<br />
<br />
The union leadership—and a considerable portion of its members—are
suffused with fear that if they conduct a determined struggle against
wage freezes, pension and health care reductions and plant closings,
they will lose everything. They are facing capital without weapons that
they believe can win. The past thirty years of steady retreat is a tale
of collective worker anxiety as much as corporate boldness in testing
workers’ resolve to protect their hard-won gains. The so-called Treaty
of Detroit, whereby the Auto union all but ceased its shop-floor
militancy in return for regular raises, early retirement with a
substantial pension, and a reasonably good health benefits program, has
been dead for almost thirty years now. The bare truth is that the UAW
and other unions have no strategy that takes into account to counter the
fact that the post-war era’s tacit “treaty”—in auto, steel and other
major industries—between labor and capital of the post-war era was
abrogated by management and that capital has no interest in a new accord
that would constrain its room to maneuver. In the face of a situation
where they have no place to turn except to their families and their
communities, workers have beat a steady retreat, forever setting up new
rear-guard positions until the ground appears to have completely shifted
under them. It is no exaggeration to claim that the United States
working class has become invisible in the public sphere and to itself as
a class. Workers now often seem , often despondent, seem caught in a
sado-masochistic relationship with not only with capital and but also
their own their union leaders who are often indistinguishable.<br />
<br />
We have witnessed several generations of labor’s dependence and at
least a generation of workers that have never experienced a victory over
capital. The political defeat of the unions has reverberated throughout
the entire society. The basis of this broader effect of labor’s decline
should be fairly clear: apart from the Churches, the unions remain the
largest, most resource-blessed and visible force in the modern liberal
camp. Their demise has reduced the prospects for the less organized
sectors of society that remain relatively unprotected from the
vicissitudes of the economic crisis. In the absence of meaningful
struggle at the level of civil society and the workplace, millions have
turned to electoralism in the hope that government can solve their
problems, i.e. to a Democratic Party taken over by neoliberal interests
and ideology. The 2008 Obama victory was based on these hopes but is
already in the process of producing widespread disillusion. <br />
<h3>
The Politics of Distraction</h3>
Labor’s reliance on Congress and the Democratic Party may be
interpreted as a strategic shift from the relative autonomy unions
enjoyed until the late 1940s. Although some of the “progressive” unions
joined the Roosevelt coalition during the 1930s, most of this alliance
was forged at the national level. At the local level, most unions still
relied on their own shop floor forms of direct action. One of the
Treaty’s main provisions was union agreement to observe a “rational”
process of adjudicating the thousands of grievances that regularly
glutted the channels of contract enforcement. Most of the grievances
resulted from management’s willful abrogation of the provisions of the
bargaining agreement. Where once most of these grievances were settled
on the shop floor, by the early 1950s their resolution became subject to
a complex bureaucratic process that ordinarily favored management. The
move to political action within the framework of the two-party system
was a sign that some quarters of the labor movement had given up its
weapons of economic independence.<br />
<br />
Despite growing skepticism about its policies, the Obama
administration does have a well-articulated strategy to keep its labor,
social movements and liberal intellectual base quite busy: it has
successfully shifted the ground of the debate from the economy to health
care reform. The decision arguably reflects the orientation of the
administration toward the crisis: it has adopted a program that
implicitly views rising unemployment as a symptom that can only be
addressed by alleviating the financial crisis, and even then only
eventually. To be sure, the provision of universal health care has long
been on the progressive agenda. During the New Deal, and again during
the fight for a National Health Service in the late 1940s, the
proposals, like in Europe, were to finance universal health care through
the Federal tax system. As was the wont of the Roosevelt
administration, health care would be subject to a separate tax from
income levies. Such is the case for social security, including Medicare.
But the Obama administration has chosen a piece-meal approach to the
issue. In the first place its program is to address the needs of the 50
million uninsured by offering a “public option” to enable all citizens
to buy low-cost insurance, in addition to which it would increase social
security taxes. So employer-based and personal insurances would not be
replaced under the Obama/Democratic Congressional plan. The plan
supplements existing health insurance programs and is intended as much
to regulate costs as to extend benefits. As many observers have pointed
out, the Obama plan amounts to a bonanza for for health insurers and,
more generally, the health and pharma industries.<br />
By mid-year the unions and liberal organizations had, in effect,
turned their backs on the effects of the economic crisis and were
primarily concerned to defend the Obama administration’s health
program—which included a publicly-financed health insurance option. They
were quickly forced to defend it not only against relentless
conservative opposition but also against suggestions by members of
Obama’s own administration that the public option could be dropped if it
stood in the way of passing a bill. Despite the threat issued by the
next presumptive AFL-CIO president, Richard Trumka, i.e. that Organized
Labor might sit out the next election if the Democrats do not pass a
public option in their health legislation, there is little doubt that he
would have great difficulty putting his money where his mouth is. Labor
is so intertwined with the Democratic Party that any actions that might
result in its distancing would surely generate significant internal
opposition. <br />
The Left’s relation to the economic crisis, to health care debates
and to the Obama administration tends to reflect the actual relations of
power in American politics. That is, none of the existing forces to the
left of the administration have either the credibility or the political
will to intervene on the basis of an anti-corporate capitalist approach
to the crisis. Perhaps its most effective intervention over the last
two years is to have launched a national campaign for single payer—i.e.
socialized—medical care. More than five hundred union locals, state and
local labor bodies have endorsed the campaign; thousands of physicians,
the 60,000 member California Nurses Association and some important
national unions (e.g. The United Steelworkers, The United Auto Workers,
American Federation of Teachers) have formally endorsed the single payer
option. And it is a growing movement. Even as the Obama plan remains
stalled in a series of compromises which will cripple the effectiveness
of the version that Congress will ultimately pass, it may be that the
fight for single payer will constitute the best option for Left
intervention in the near future. Compared to the monumental task of
reversing neoliberal economic policies across the board, health care is a
manageable fight.<br />
<br />
But on the fundamental politics of the economic crisis, on the class
nature of the Obama administration’s program, for instance, the Left has
been unable to mount either a counter-movement or to propose an
alternative that can gain some public traction. At the local level,
there are some attempts, initiated by community organizations, to
organize the unemployed and stage small protest demonstrations against
the banks’ takeover of the stimulus package. But the Left has been
unable to forge an independent position in the debate. It remains
reactive, on the one hand, to the retreats by the Obama administration
and, on the other, to the expressions of disappointment by progressive
and liberal public intellectuals. With some exceptions, the Left shared
an expectation that Obama, who ran on a centrist platform, was really
somebody else. But the fault is not his. Obama never pretended to be
more or less than he is. As one commentator has stated: illusion leads
to disillusion. On a more accurate understanding of the character of the
Democrats and the political perspective of the Obama camp, there was
never ground for either position.<br />
<br />
In the main, the Left has become a dependent variable of the
progressives, the liberals and the movements that provide their social
and political base. Lacking a “party” of its own (by which I mean not a
third electoral vehicle, but an independent radical political
formation), the diverse individuals and institutions of the Left remain
buffeted and uncertain where to take their stand. Some are tied to the
same electoralism that has afflicted the once vibrant movements. Against
all evidence to the contrary, they harbor vain hopes that the
progressives can push the Democratic Party to the Left and so loosen its
ties with financial capital and force the Democrats to move on pressing
economic and social issues. Others, imprisoned by “third party”
electoralism, are confident that disillusioned progressives and a
section of labor and other movements will become the political base of a
new national party. And still others contemplate their retirement from
politics and a peaceful return to private life.<br />
<br />
Perhaps the most interesting are those who are engaged on two, quite
distinct fronts: labor and community activists who fight, chiefly at the
local levels, for a politics of resistance and alternative. Their ranks
are relatively thin, but in some places they have enjoyed some success
in opposing gentrification, creating significant environmental
initiatives and building unions that are not of the bureaucratic mold.
Others are exploring the concept of new radical political formations,
some from anarchist and others from non-dogmatic Marxist perspectives.
In this camp are not a few black and Latino intellectuals and a
smattering of whites who refused the blandishments offered by the
progressives within the Democratic Party and on the sectarian Left.<br />
<br />
The real problem for the Left is that it has no firm moorings on
which to build new radical political formations. Postmodern politics has
effectively undermined the concept of the totality, mislabeling it
“authoritarian.” Many hesitate to develop theories of practically
anything and have instead resigned themselves to either identity
politics or single issue struggles without making an effort to link them
together. Notions of the supersession of class and political economy
make it impossible for them to confront the economic crisis or engage in
a politics that links issues together and transcends local struggles.
But theory should clearly be at the top of our list. While this is not
the place to elaborate such a theory, I want to conclude with a set of
questions that urgently need answers if the Left is to have a chance at
making practical interventions that make a difference in facing the
crises of our time:<br />
<ol>
<li>As a starting point the Left must call into question many of its own
presuppositions, its taken for granted assumptions, the unstated
theoretical basis of its own politics. For example, should the Left ask
whether the working class—and the trade unions—have the ideological
capacity and the political will to remain at the heart of radical hope?
And if we are still socialists, what does this mean in the light of the
failures of the Communist and Social Democratic versions of socialism?</li>
<li>What is the significance and content of the race question in the
United States? Has the Left made an adequate contemporary class analysis
of black and other subaltern formations in order to discern the
patterns that have conditioned the black and Latino freedom movements?
Do we have an adequate understanding of the race/class articulation?</li>
<li>Although the state remains the primary scene of politics, in view of
the global character of capital, what are the relevant global forms of
class organization and struggle?</li>
<li>What is the role of political intellectuals in the struggle for a new society?</li>
<li>Is reform still possible in contemporary capitalist societies? Or
have we reached the point where we should expect struggles for reform to
almost inevitably be frustrated? Then what? In this connection, note I
have not outlined an alternative program of economic policy. If state
and capital have become so tied together that the demand for “government
action” is likely to mean strengthening those ties rather than
transferring power and resources to the people, what are the new targets
of struggle?</li>
<li>What is radicalism’s conception of democracy? To what extent can
liberal representative political institutions be incorporated into a
radical democratic society? Or must they be replaced, root and branch?</li>
<li>How does the rise of the new immigration of the past quarter century bear on Left political perspectives everywhere? </li>
</ol>
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http://www.stanleyaronowitz.org/new/facing-the-economic-crisis</div>
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Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-4655433548245024772013-10-16T19:09:00.000-07:002013-10-17T06:30:25.748-07:00Reflections on Seattle by Stanley Aronowitz<div class="details">
<span style="font-size: x-large;">REFLECTIONS ON SEATTLE </span>(by Stanley Aronowitz) </div>
<div class="details">
<br /></div>
<div class="details">
September 2, 2009 <a href="http://www.stanleyaronowitz.org/new/reflections-on-seattle-1999#comments"></a></div>
<h3>
</h3>
<b>I</b>. Humans seem to need commemorative celebrations. The importance of
commemorations can hardly be underestimated. Beyond reaffirming our
common species identity, they often help us recall important milestones
that the complex of cultural and political influences conspire to
facilitate forgetting. 2009 is auspicious in this regard: it is the
150th anniversary of the publication of Darwin’s <i>Origin of the Species</i> (but have we forgotten Marx’s <i>A Contribution to the Critique of Political Economy</i>, an important precursor to <i>Capital</i>?—this
‘forgetting’ has clear ideological roots in the disparagement of Marx
and historical materialism which is deeply ingrained in our collective
discourse); and the 200th anniversary of the birth of Darwin and of
Abraham Lincoln, the latter an occasion for the publication of dozens of
recent books on the Great Emancipator and a chance to reflect on the
fate of blacks since that fateful proclamation. It is also the fiftieth
anniversary of the Cuban Revolution. Now, in much more restricted
precincts, we recall the dramatic second “Battle of Seattle”—second
because the first one was in 1919 when the working people of the city
“downed tools” and conducted a general strike, an event that has
attracted only a few historians.<br />
The mass demonstrations at the meeting of the World Trade
Organization (WTO) were conducted in protest against capitalist
globalization, proclaimed by media, politicians, and corporate America
as a boon to the country and only temporarily hurtful to some workers.
The common hype was that the jobs shipped to Mexico and elsewhere were
mainly done by immigrants and in industries that are low paid and
Americans don’t want to work in anyway. Of course, this explanation was a
gross falsehood. Outsourcing combined with systematic disinvestments in
US production industries destroyed many of the best-paying
working-class jobs, laid countless cities and towns prostrate, and
lowered the living standards of millions of Americans.<br />
<br />
The WTO is the third leg of the international economic cooperation
fashioned by the “advanced” industrial countries and the international
financial institutions to control the developing world. As is well
understood by critics of the various arrangements installed by the World
Bank, The International Monetary Fund and WTO, the deal is that these
former colonial and dependent societies submit to regulation of their
domestic politics as well as economic lives in return for development
loans, repayable on demand, some technical assistance in health and
education fields as well as industry. What is at stake in this
arrangement are the conditions of investment by transnational
corporations in their domestic economies. But the terms of “development”
also affect the economies of the developed countries, particularly, but
not exclusively, the workers. Governments in the developing countries
have been obliged to repay the loans at prevailing interest rates,
before considering the social welfare of their own people. In fact,
among the forms of resistance by some countries has been their refusal
to pay on time and the demand to “restructure” (reduce) the loans or
forgive them entirely. It may be argued that the left turn of a number
of Latin American countries over the past decade is directly linked to
resistance to debt repayment, that radicals and reformers have claimed
that the loans were made by corrupt governments and they should not
inherit them. Even as protest and resistance in the United States has
ebbed over the same period, WTO and other institutions of finance
capital are under siege elsewhere.<br />
<br />
“Seattle” was notable for at least four reasons:<br />
<ol>
<li>It was the most public manifestation of a growing, but hitherto
invisible movement against the two decades of galloping
de-industrialization of America and its consequent erosion of wages and,
more generally, living standards. The Seattle demonstrations called
attention to the betrayal of American workers exemplified by NAFTA and
other “free trade” agreements that opened the way for US investment
abroad and for the export of jobs, including well-paid jobs, to low-wage
countries.</li>
<li>It concentrated the growing frustration of blacks and Latinos,
women, workers, and youth with the pro-Big Business orientation of the
Clinton administration. Contrary to the tendency of progressives to
endlessly give the Democrats the “benefit of doubt” the thousands of
demonstrators who traveled to the WTO meetings, and their supporters who
raised money to send them, broke recent precedent and dared to
challenge, in the streets, the “progressive” credentials of the
Democratic party and its national government, in deeds as much as words.</li>
<li>Ideologically, it brought together an unprecedented alliance of
labor unions, feminists, anarchists, and people of color in a common
fight. During the preparation and the immediate aftermath of the events,
there was an outpouring of commentary that looked forward to the
possibility that the main actors would forge a common, long-term,
struggle against capitalist globalization, in broad terms. Many
recognized that the largest union contingents such as the Steelworkers
sought relatively limited safeguards such as might be provided by
Congressional legislation to safeguard workers’ rights in developing
countries, and some wished to enact more stringent government
regulations of foreign investments that result in plant closings.
Feminists, angry that these investments mercilessly exploited women and,
in close alliance with governments at home and abroad, disregarded
women’s as well as workers’ rights; youth, many of whom were
self-defined anarchists joined the protests for, among other reasons,
they saw the fight as an opening round in the struggle against
capitalism itself that, in the pursuit of large profits, they believed
would not stop until it had subjugated the entire world, including
themselves. Where several previous generations of post-World War Two
American youth were somewhat justified in their belief that the system
offered a them a relatively secure economic future, the palpable
deterioration in life-chances in Western capitalist societies helped
produce a new wave of militancy.</li>
<li>For the first time since the civil rights sit-ins and the mass
disruptions of the Vietnam-war era, thousands engaged in public acts of
civil disobedience that almost completely halted traffic and ordinary
activities of the Seattle core. Caught by surprise, city officials and
the police were unprepared to deal with the brazenness of the
demonstrators until, after most of the embarrassment was registered, the
Mayor called in National Guard reinforcements to break the back of the
street blockades that the demonstrators had set up. And, lost in the
drama of street protests, the Leftist International Longshore and
Warehouse Union (ILWU) contributed to the protest by shutting down the
West Coast ports for a day, a form of politics that has, for decades
been unimaginable for virtually the entire labor movement. </li>
</ol>
The styles of protest varied from direct action, chiefly of the young
and the ILWU, to the peaceful marches staged by the industrial unions
that had experienced severe job losses for the previous two decades. The
range of demands also crossed the spectrum of radical to liberal
strategies. Anarchist and other radical youth broke through the timid
90s politics by raising anti-capitalist slogans. They wanted nothing to
do with reform proposals such as were advanced by some women’s groups
and others who wanted a voice, specifically to bring social movement
representatives to the table of WTO proceedings. The unions, in the
main, marched for protections against unfair labor competition. They
reiterated Organized Labor’s objections to NAFTA seven years earlier:
trade agreements without enforcement of fair labor standards inevitably
result in job losses in the most economically advanced countries. Some
went a step further to advance the concept of selective protectionism.
Steelworkers protested against the practice by which developing
countries “dumped” steel and steel products at prices which undercut the
ability of US industry to survive. At a time when decent waged jobs
were already becoming scarce, shuddered mills meant, in many cases, that
workers would suffer long term unemployment or be forced to accept low
paying jobs in the informal economy, the service sector or in non-union
construction.<br />
<br />
Among the major contradictions in the drama of the second battle of
Seattle was that, for the first decade after NAFTA in 1993–94 was
instituted, some social and trade union movements in the developing
world saw the treaty and its replicas for other countries as a path to
their own modernization, to finally lift themselves from the scourge of
poverty, hunger and disease. I remember meeting union people and
intellectuals in Mexico City in the mid-1990s. The first question they
asked is why American unions were so opposed to NAFTA. They wondered
whether this was a reflection of an attempt to protect their privileged
position, asked if there was a racist dimension to American labor’s
opposition to the treaties. I answered that, although there certainly
were folks who objected to NAFTA from an objectively rightist position,
the emergence of new forms of domination of the developing and developed
world were properly attacked.<br />
It was not until the end of the century that these skeptics of “North
American” protectionism began to clearly see the consequences of NAFTA.
Yes, at first some areas of Mexico, notably the border region with the
United States, seemed to be beneficiaries of NAFTA. New plants were
opened (the maquiladoras), jobs were created at wages that exceeded the
average for semi-skilled industrial labor in the country, and living
standards improved. Of course, working conditions were abysmal and
workers were often treated badly. These oppressions eventually led many
to seek to organize unions that were not affiliated with the official
Confederation of Labor, official because it was a virtual subsidiary of
the party of government, the PRI. The heavy hands of both the US
employers and the Confederation of Labor were laid upon activists who
promptly found themselves on the streets, either in strike activity or
the lines of the unemployed. In some instances, working class solidarity
led to capital flight; US investors came to Mexico in order to escape
unions, not to negotiate with a much more militant type. These plants
often moved to China or reopened in another state of Mexico. NAFTA did
help, unintentionally, to spur the organization of an independent labor
movement which, however poor and weak, struck fear into the hearts of
the ruling circles and US investors.<br />
<h3>
II</h3>
An anti-globalization movement emerged from the Seattle
demonstrations. Seattle was replicated, sometimes on a larger scale, at
every subsequent WTO meeting: Quebec, Prague, Genoa, Barcelona and
elsewhere. Hundreds of mainly young American activists traveled to these
demonstrations and returned with renewed determination to mount another
large protest in this country. A relatively modest rally of about
10,000 people was held in Washington in April 2000, but was notable for
the absence of the unions. What had happened is not hard to fathom.
There is little doubt that the relatively staid Steelworkers and Service
Employees were not pleased that young people had literally taken over
the downtown area of Seattle and subjected themselves to mass arrests
and, in some cases, beatings. For these organizations had come a long
way from the days of the general strikes, the factory occupations in
auto and rubber (the sit-down strikes), and the mass steelworker
protests in Chicago that led to what became known as the Memorial Day
Massacre. The appropriate forms of struggle, for them, were always
peaceful and law-abiding. For this reason they were reluctant to join
radical, anti-capitalist youth who not only wanted to up the ante on the
movement’s ideological perspective, but were prepared to employ tactics
of direct action that the labor movement had invented, but long
abandoned.<br />
<br />
The second reason that the anti-globalization movement—supplemented
by student-led anti-sweatshop activities of considerable, but
circumscribed proportions—failed to reach the level of a substantial
political force is the powerful influence of the liberal wing of the
Democratic Party, of which the unions are an integral component. For
them, the 2000 elections—indeed electoral activity, in general—is the
only genuine forum for debate about social and economic policy. And with
the conservative mood of the country still operative, many liberals
feared direct action would mar their chances to retain the White House
and Congress. Never mind that Bill Clinton had promoted NAFTA and became
a fervent salesman for free-trade policies, signed the notorious
Welfare Reform Act in 1996, and failed to enact a significant health
care reform. Or that his anointed successor, Al Gore, followed the
neo-liberal path set out by the Clinton administration, a path that was
deeply committed to the retention and expansion of the American Empire.
According to their lights, the alternative was worse and they would be
damned to permit a band of young radicals to spoil the show. Outgunned,
the anti-globalization movement mutated into what became known as the
World Social Forum, of which more below.<br />
<br />
Finally, the trauma of 9/11/2001, an event whose reverberations still
dog any possibility for social change. The attack on New York Trade
Center’s twin towers and the Pentagon, now the perennial topic of
conspiracy theorists who doubt that its perpetrators acted entirely
independently of the Bush administration, nevertheless became the
occasion for the intensification of the National Security State. In
short order, certain foreign nationals, largely of Arab origins, were
rounded up, the academic freedoms of some Middle Eastern scholars in US
universities were curtailed and, most egregiously, the militarization of
a large swath of US society was accomplished.<br />
<br />
The political and cultural aftermath of the attack is difficult to
recall; the story of 9/11 still awaits its social historian. But anyone
who lived through the period in New York and Washington D.C. will
remember the presence of armed troops in the streets, and the
restrictions imposed by New York’s mayor Rudolph Guiliani on pedestrian
and automobile movement for months. Perhaps more significant was the
dramatic shift in the political environment. A bipartisan Congressional
majority swiftly capitulated to almost every demand by the Bush
administration: to enact laws that in the words of some critics “tore up
the Constitution”; gave the administration virtually unlimited powers
to round up, detain and imprison suspected “terrorists.” The War on
Terror became the priority business of government, a profound
transformation that led to US troop interventions in Afghanistan and
Iraq with only a murmur of protest by a tiny minority of liberal
lawmakers and liberal media. The vast majority of Democrats and their
liberal wing were either silent or, in fear, joined the war. In this
environment some public institutions, like universities, hastened to
fall in line. Professors who dissented from the war policies were not
often fired, but some were and, in many academic quarters, a pall
descended on the ivy walls.<br />
<br />
Under these conditions the anti-globalization movement did not die,
but, instead, morphed into the World Social Forum (WSF). After an
initial meeting at Porto Alegre, Brazil, which was a truly impressive
gathering of indigenous people, intellectuals, activists and insurgent
politicians, chiefly in the developing world, WSF and its regional
replicas became the main site for discussion and debate about global
economic and social issues. Meetings in Latin America, Europe, India and
the United States have resembled large idea fairs. Participants range
from anarchists, community organizers, many of which are situated in
rural areas of developing countries, and, increasingly, liberal and
populist politicians from the Global South. In time the Ford Foundation
and other private organizations became the main funding sources for WSF.<br />
Today, chastened by a powerful effort emanating from the advanced
industrial societies to create a new world order, albeit one that might
accommodate some of the urgent needs of developing societies, WSF has
become a bulwark against the radicalism that marked the second battle of
Seattle and its progeny. Whence the failure to build a serious
anti-globalization movement. I would argue that, in addition to the huge
influence of liberals in all countries who have helped fashion a new
approach to forging a modern Empire in which the United States plays the
leading role and the institutions of international finance are still
potent technicians, the radicals’ lack of political organization must be
reckoned with.<br />
<br />
The old slogan “think globally, but act locally” is based on the
concept that all politics is local. To these shibboleths must be added
the deep suspicion harbored by many activists and intellectuals against
central organizations—parties and otherwise. Clearly, we now confront a
situation in which progressives and radicals must act globally as well
as think globally. But lacking adequate resources and especially
organizational perspectives, the great anti-globalization movement and
its concomitant, the struggle against transnational capitalism, remains
weak, ideologically impoverished, and fragmented. And of course, given
the still pervasive national contexts in which labor struggles are
conducted, the labor unions—still the most potent among the forces
opposing capitalist globalization—have retreated.<br />
<br />
Finally, the question of whether movements with diverse ideological
perspectives can form cross-border alliances remains unanswered. Those
who would come to the table of international institutions such as WTO
and the World Bank are no less in need of a battle plan than those who
insist that the system needs to be overturned. But, unlike the pre-World
War One period when leftists of various stripes did not let their
divergent analyses and programs stand in the way of joint action, even
after the collapse of Communism we are still divided. Therein lies the
challenge. To paraphrase Lincoln “a movement divided cannot stand.”<br />
<div id="comments">
<h3 id="responses">
</h3>
</div>
Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-73022395479208602182013-10-16T11:33:00.005-07:002013-10-24T11:31:04.146-07:00SNIPPETS OF OTHER STRUGGLING HOMEOWNERS' STORIESNear Philadelphia, the situation of Jay and Bonnie Silverstein [ <a href="http://www.npr.org/2012/30/145995636/freddie-mac-betting-against">www.npr.org/2012/30/145995636/freddie-mac-betting-against . . . ] </a>exemplifies the problems millions of us homeowners are facing. Their story of hardship is similar to mine.<br />
<br />
To
summarize, the NPR story explains how the Silversteins had to "short
sell" a home long after purchasing a newer home around the time of the
economic crash that began in 2007. Their mistake, they admit [i.e.,
buying a second home before their first one was sold] cost them most of
their retirement savings when they had to drain their 401(k) to make two
mortgage payments for over two years. But their other mistake, which
so many of us are guilty of, was in having an overbundance of confidence
in our financial institutions and the real estate market - obviously
highly manipulated by the insiders.<br />
<br />
Like me, the
Silversteins have a modest pension and have been making timely mortgage
payments despite being squeezed hard. They, as I, have been unable to
secure a re-fi which would lower their interest rate and, thereby, save
them about $500 a month. This is the amount I need and would receive if
I were successful in securing a re-fi or modification of my mortgage
through a lower rate of interest. For me, it would mean paying only
half of my income toward housing, not two-thirds, as I am doing now.<br />
<br />
The Silversteins are in financial limbo because of a Freddie Mac<i> rule that restricts people with a short sale in their history from refinancing for up to four years</i> (after the short sale).<br />
<br />
In my case, a <i>Fannie Mae underwriting rule prevents them from considering income I receive from renting out rooms</i>
from time to time. But this is the only income source available to me
for supplementing my pension and social security benefits - which
together total less than $3,000 a month. My mortgage payment is
slightly under $2,000 a month.<br />
<br />
All of these struggles
are continuing for us while the Freddie Mac and Fannie Mae CEOs are
earning millions of dollars a year in compensation. Aren't you
outrageous? Isn't it time to do something?<br />
<br />
<span style="font-size: xx-small;">saundraray1952@gmail.com</span><br />
<span style="font-size: xx-small;"> </span><br />
<br />
<br />
<br />Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0tag:blogger.com,1999:blog-6841706091721800532.post-68290961183766660982013-10-14T11:36:00.001-07:002013-10-16T08:59:44.790-07:00A Philophical Thought: Are Politics Adding to the Misery?<div class="firstHeading" id="firstHeading" lang="en" style="text-align: justify;">
<i> </i></div>
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</span></a><br />
<br />
<div class="MsoNormal" style="background: white; margin-bottom: 10.0pt; margin-left: 1.3in; margin-right: 1.2in; margin-top: 0in;">
<i> </i><i style="mso-bidi-font-style: normal;"><span style="color: black;">I am in politics because of the conflict
between good and evil,<span style="mso-spacerun: yes;"> </span>and I believe
that in the end good will triumph.</span></i></div>
<div class="MsoNormal" style="background: white; margin-bottom: 10.0pt; margin-left: 3.4in; margin-right: 1.0in; margin-top: 0in; text-indent: .1in;">
<span style="color: black;"> – Margaret Thatcher</span></div>
<h1 style="text-align: justify;">
<i> ______________________________________</i></h1>
<b style="mso-bidi-font-weight: normal;"><span style="mso-spacerun: yes;"> </span>(DRAFT)<span style="mso-spacerun: yes;"> </span></b><br />
<b style="mso-bidi-font-weight: normal;"><span style="mso-spacerun: yes;">
</span><span style="mso-spacerun: yes;"> </span>Introductory Statement</b><br />
<br />
Stories such as mine recently entered on my blog, and that of Sheila Ramos [<a href="http://www.propublica.org/article/%20the-great-american%20foreclosure-story-the-struggle-for-justice-and-a-place-to-call-home/">http://www.propublica.org/article/the-great-american
foreclosure-story-the-struggle-for-justice-and-a-place-to-call-home/</a>] -
which inspired me to write my own story - as well as the untold
stories of millions of other men and woman undergoing the same experience - need
<i style="mso-bidi-font-style: normal;">to understand the dynamics that have been
working against us for so long</i>. We all need to know for certain what
our country's political philosophy is or should be with regard to the policies
and beliefs of our elected leaders that affect our well-being, including in the
area of housing and property rights. We at least deserve an explanation -
understood and accepted by all - as to who and what specifically is responsible
for our societal woes, including the ongoing threat to the millions of us who are in jeopardy of losing our homes. The answer isn't just one political
party. It is the system by which they arrive in their positions.<br />
<br />
Although my corpus callosum is of average size and my IQ isn’t extraordinarily
high, I still have strong opinions that I do not hesitate to share. (This
propensity for forthright bluntness doesn’t increase my popularity, but that
doesn’t matter to me. I’ve never been popular.) So I am going to
take a giant leap of faith and hope someone will agree with the idea and help
generate more discussion:<br />
<br />
I feel that someone (actually, a group of our country’s greatest minds)
should get together and define the type of political philosophy that governs –
or should govern - our policies that so greatly affect all of us. This
imaginary group would set out to define a set of principles and values as
guidelines (not simply “conservative” or “liberal” beliefs in a general sense,
but lay out <i style="mso-bidi-font-style: normal;">specifics</i>) that our
leaders would use to govern their actions. This (imaginary) document
or “contract with America” should be viewed by everyone who cares to
participate in our democracy; those who care about the direction our country is
headed. Then the contract - no longer imaginary - would be used as part
of the electoral process: i.e., a political candidate either agrees with it, or
part of it, or not. But he or she would be able to assure the voters, in
a concrete way (not abstract) that their values, articulated honestly, are in
line with the majority populace or at least their individual
constituencies.<span style="mso-spacerun: yes;"> </span><br />
<span style="mso-spacerun: yes;"> </span><br />
As a voter, I don't want to have someone representing me who doesn't
represent my values. Today as I try to articulate something way above my
head, I can't help but question why we as a country should continue with a
two-party system with ideological battles that result in obstruction and
gamesmanship. I'm referring of course to our current government shutdown,
debt ceiling debate, and other crises (our bailout of corporations, as well as
the auto industry; the high unemployment rate, and other structural elements
that have so many of us in limbo). There has to be change. Why is
the minority calling the shots?<br />
To start the conversation as to whether this idea has merit, let’s talk a
little about <i>political philosophy. </i> Wikipedia’s definition of this
particular discipline of social science is as follows:<br />
<br />
<div style="margin-bottom: 5.0pt; margin-left: .6in; margin-right: .6in; margin-top: 5.0pt;">
<b>Political philosophy</b> is the study of such topics as <a href="http://en.wikipedia.org/wiki/Politics" title="Politics">politics</a>, <a href="http://en.wikipedia.org/wiki/Liberty" title="Liberty">liberty</a>, <a href="http://en.wikipedia.org/wiki/Justice" title="Justice">justice</a>, <a href="http://en.wikipedia.org/wiki/Property" title="Property">property</a>, <a href="http://en.wikipedia.org/wiki/Rights" title="Rights">rights</a>, <a href="http://en.wikipedia.org/wiki/Law" title="Law">law</a>, and the enforcement
of a <a href="http://en.wikipedia.org/wiki/Legal_code" title="Legal code">legal
code</a> by <a href="http://en.wikipedia.org/wiki/Authority" title="Authority">authority</a>:
what they are, why (or even if) they are needed, what, if anything, makes a <a href="http://en.wikipedia.org/wiki/The_purpose_of_government" title="The purpose of government">government legitimate</a>, what rights and
freedoms it should protect and why, what form it should take and why, what the
law is, and what duties citizens owe to a legitimate government, if any, and
when it may be legitimately overthrown, if ever. In a <a href="http://en.wikipedia.org/wiki/Vernacular" title="Vernacular">vernacular</a>
sense, the term "political philosophy" often refers to a general
view, or specific ethic, political belief or attitude, about politics that does
not necessarily belong to the technical discipline of <a href="http://en.wikipedia.org/wiki/Philosophy" title="Philosophy">philosophy</a>.
In short, political philosophy is the activity, as with all philosophy, whereby
the conceptual apparatus behind such concepts as aforementioned are analyzed,
in their history, intent, evolution and the like.<a href="http://en.wikipedia.org/wiki/Political_philosophy#cite_note-1"><sup>[1]</sup></a></div>
In the mid-1950s, I wasn’t even an adolescent, but I was already aware, in
an unknown, inexplicable sense, that something wasn't quite right in my
world I suppose it was an acute awareness of my particular place in
society (at the lower, working class end). That “subtle awareness”
became more prominent as I matured, of course, but I seldom felt empowered to
do much about it. Yet, I tried to find that power.<span style="mso-spacerun: yes;"> </span>I thought it would help if I worked as had as
I could as a white collar wage earner. I had other aspirations, too:<span style="mso-spacerun: yes;"> </span>I wanted to go to college.<span style="mso-spacerun: yes;"> </span>I wanted to be appreciated and
respected.<span style="mso-spacerun: yes;"> </span><br />
<br />
I fell for the myth that if you work hard you will succeed. That only
applies to some people and under the right circumstances.<span style="mso-spacerun: yes;"> </span>By the way, I finally got that sought-after
college degree – but not until I was sixty!<span style="mso-spacerun: yes;">
</span>So far it hasn’t done much good.<br />
<br />
As I sit here now in my "golden years" and as I read what I
should have read and studied decades ago, I marvel how a particular
sociologist – the one I am about to quote – saw the truth of what was going on
and how our society was failing so many of us. He was able to see and
articulate <span style="mso-spacerun: yes;"> </span>this failure so clearly, and
it still applies today - especially today, October 16, 2013. Here is an
excerpt of a speech that sociologist C. Wright Mills delivered in Canada in
1954. The passages have been taken from <i>The Politics of Truth: Selected
Writings of C. Wright Mills</i>, ed. by John Summers (Oxford University Press,
2008), pp.90-91.<br />
<br />
<div style="margin-bottom: 5.0pt; margin-left: .6in; margin-right: .3in; margin-top: 5.0pt;">
<i style="mso-bidi-font-style: normal;"> …between the state and the
economy on the one hand, and the family and the small community on the other,
we find no intermediate associations in which we feel secure and with which we
feel powerful. There is little live political struggle. Instead, there is
administration above, and the political vacuum below.</i></div>
<div style="margin-bottom: 5.0pt; margin-left: .6in; margin-right: .3in; margin-top: 5.0pt;">
<i style="mso-bidi-font-style: normal;">The effective units of power are
now the huge corporation, the inaccessible government, the grim military
establishment. These centers of power have become larger to the extent that
they are effective; and to the extent that they are effective, they have become
inaccessible to individuals like us, who would shape by discussion the policies
of the organizations to which we belong.</i></div>
<div style="margin-bottom: 5.0pt; margin-left: .6in; margin-right: .3in; margin-top: 5.0pt;">
<i style="mso-bidi-font-style: normal;"> It is because of the
ineffectiveness of the smaller human associations, that the classic liberal
public has waned, and is in fact being replaced by a mass society. We feel that
we do not belong because we are not – not yet at least, and not entirely – mass
men.</i></div>
<div style="margin-bottom: 5.0pt; margin-left: .6in; margin-right: .3in; margin-top: 5.0pt;">
<i style="mso-bidi-font-style: normal;"> We are losing our sense of
belonging because we think that the fabulous techniques of mass communication
are not enlarging and animating face-to-face public discussion, but are helping
to kill it off. These media – radio and mass magazines, television and the
movies – as they now generally prevail, increasingly destroy the reasonable and
leisurely human interchange of opinion. They do not often enable the listener
or the viewer truly to connect his daily life with the larger realities of the
world, nor do they often connect with his troubles. On the contrary, they
distract and obscure his chance to understand himself or his world, by
fastening his attention span upon artificial frenzies.</i></div>
<div style="margin-bottom: 5.0pt; margin-left: .6in; margin-right: .3in; margin-top: 5.0pt;">
<i style="mso-bidi-font-style: normal;"> We are losing our sense of
belonging because more and more we live in metropolitan areas that are not
communities in any real sense of the word, but unplanned monstrosities in which
as men and women we are segregated into narrowed routines and mileux. We do
not meet one another as persons in the several aspects of our total life, but
know one another only fractionally, as the man who fixes the car, or as that
girl who serves our lunch, or as the woman who takes care of our child at
school. Pre-judgment and prejudice flourish when people meet people only in
this segmental manner. The humanistic reality of others does not, cannot, come
through.</i></div>
<div style="margin-bottom: 5.0pt; margin-left: .6in; margin-right: .3in; margin-top: 5.0pt;">
<i style="mso-bidi-font-style: normal;"> In this metropolitan society,
we develop, in our defense, a blasé manner that reaches deeper than a manner.
We do not, accordingly, experience genuine clash of viewpoint. And when we do,
we tend to consider it merely rude. We are sunk in our routines, we do not
transcend them, even in discussion, much less by action. We do not gain a view
of the structure of our community as a whole and of our role within it. Our
cities are composed of narrow slots, and we, as the people in these slots, are
more and more confined to our own rather narrow ranges. As we reach for each
other, we do so only by stereotype. Each is trapped by his confining circle,
each is split from easily identifiable groups. It is for people in such narrow
mileux that the mass media can create a pseudo-world beyond, and a
pseudo-world within themselves as well. <u>1</u>/</i></div>
<div style="margin-left: .6in;">
[Cited from www.philosophicalsociety.com/political
philosophy.htm#polphil-def . . . Retrieved Oct. 11, 2013]</div>
<div style="margin-left: .6in;">
<br /></div>
Most of us don't feel secure and we don't feel powerful. The
power remains in corporations (primarily banking, insurance, and other
financial institutions), government, and the military establishment. They
are getting most of their money right out of our pockets.<span style="mso-spacerun: yes;"> </span>And we feel powerless to change the
system.<span style="mso-spacerun: yes;"> </span>We feel alienated.<br />
<br />
As Mills said almost 50 years go, we are losing our sense of belonging
"<i style="mso-bidi-font-style: normal;">because we think that the fabulous
techniques of mass communication are not enlarging and animating face-to-face
public discussion . . ."</i>, we do not meet each other as persons [<i style="mso-bidi-font-style: normal;">but know one another only fractionally, as
the man who fixes the car, or as that girl who serves our lunch, or as the
woman who takes care of our child at school.]</i><br />
<span style="mso-bidi-font-style: normal;">(Of course back then we didn't even have the Internet. Mills must be rolling over in his grave about now.)</span><br />
<span style="mso-bidi-font-style: normal;"> </span><i style="mso-bidi-font-style: normal;"><br /></i><br />
<i style="mso-bidi-font-style: normal;"> <span style="mso-bidi-font-style: italic;">It is necessary that we achieve consensus</span></i>. We the
people - not those who are appointed or elected to govern, set policy, and so
forth - need to collaboratively delineate the values and goals we want to see
in the behavior of our leaders. This can be done, but not the way most
elections are conducted (traveling all over the state or country, espousing
general, nonspecific goals of bringing everyone together, having a true, working democracy, blah, blah, blah. There needs to
be a <i>written contrac</i>t, something in black and white, that our elected
leaders agree to abide by once they are in power. And this contract
should be drafted by us - we the people.<br />
<br />
Fifty years ago we didn’t have the World Wide Web.<span style="mso-spacerun: yes;"> </span>Now we do.<span style="mso-spacerun: yes;">
</span>Let’s use it for the good of everyone.<span style="mso-spacerun: yes;">
</span>Do you have the courage to go to your legislative representatives, present
them with a written set of values, goals, and standards you would want them to
abide by while they are in office?<span style="mso-spacerun: yes;"> </span>I
don’t know whether I myself have enough courage to approach <i>each one</i> of my
legislators – state and federal.<span style="mso-spacerun: yes;"> </span>There
is one in particular that I know would not even listen to me as he has refused
in the past to engage in conversation with me in any form (but his staff knows me very well).<span style="mso-spacerun: yes;"> </span>A little encouragement would help. Who said it first - There's power in numbers!<br />
<br />
<br />
* * *<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
______________<br />
<div style="margin-right: .2in;">
<i><u>1</u>/<span style="mso-spacerun: yes;">
</span>By the early 1950s C. Wright Mills had given up hope that the labour
movement ‘was capable of stemming the tide of almost complete corporate
capitalist domination of economic, political and cultural life’ (Aronowitz
2003). He had turned more strongly to theories of mass culture and mass
society, and became more pessimistic about the possibility of effecting
significant political change. This judgement was strengthened by his analysis
of the new middle class in White Collar (1951).</i></div>
<i><span style="mso-spacerun: yes;"> </span></i>[Cited from <i>www.InFed.org</i>;
retrieved October 12, 2013.]<br />
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<![endif]-->Anonymoushttp://www.blogger.com/profile/09163425009050753842noreply@blogger.com0