Thirty five point three billion and 15.7 million. Revealed this week, these two numbers perfectly capture the state of our economy and the lack of action by President Obama and his administration.
Thirty five point three billion dollars is the first quarter earnings of the financial industry, the highest earnings reported since before the economic collapse.
Fifteen point seven million is the number of homeowners in this country who owe more on their mortgage than their home is worth. That means that nearly one in every three mortgage holders is trapped, upside down or underwater on their mortgage. Put simply, Wall Street has more than recovered while the American people sink further and further away from economic security.
Conservative groups are attempting to portray Obama as a Wall Street pawn, and these numbers make that claim all too difficult to refute.
Wall Street's return to record profitability didn't happen by accident; a few short years ago the industry was on the brink of collapse, brought on by their own short-sighted and dangerous gambling with other people's money. They were rescued from their own hubris with trillions in tax-payer funded bail-outs and backstops, and have come roaring back. Meanwhile, far too little has been done to support the victims of Wall Street's criminal and negligent behavior.
One way to start to even the scales is by easing the debt burden on underwater homeowners by resetting their mortgages. Resetting mortgages at fair market value is the most efficient way to get our economy moving again and would put more than $6,500 into the pockets of the average underwater homeowner each year. With an extra $6,500, families could afford expenses, big and small, that they have been putting off. This would have a ripple effect throughout the economy, pumping $71 billion into the national economy, creating an estimated 1 million jobs and generating much-needed tax revenue.
Resetting mortgages also benefits the lenders, which publicly held banks are finally starting to realize. Foreclosure means an average loss to a lender of $60,000, in heavily affected states that number ranges from $115,000 to over $250,000. Restructuring a family's mortgage is much cheaper, keeps the family in their home, their children in school, and the community whole.
It's time to make the mortgage lenders and banks pay for what they did to American homeowners and begin to make Americans whole again. Here are three things the President can do to make it happen.
- It has been almost four months since President Obama announced the formation of a mortgage-backed securities fraud task force during his State of The Union, but there has been little to no significant progress to date. President Obama must put the full resources to hold Wall Street accountable. He must demonstrate to the American people that an aggressive, vigorous investigation into the banks is a priority for this administration.
- Fire Ed Demarco and replace him with someone who will order Fannie and Freddie to let their borrowers reset mortgages to fair market value. DeMarco is the head of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac and over half the mortgages in this country, and refuses to help millions of Americans reset their mortgages to fair market value. He even has gone so far as to hide recommendations from his own advisors that would help homeowners and the housing market.
- Push America's banks to reset mortgages to their fair market value and put an end to foreclosures so the housing market can stabilize for everyone. America has bailed out the banks for years -- the President must urge the big banks to pay us back.
If he doesn't do these things, 15.7 million underwater voters are going to want to know why this President Obama is not fighting for them come Nov. 6.