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.
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.
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Everybody's homes have lost value in the last 4 years. Even those who own them outright. The fact that you have a loan and that now the house is less than the loan is pretty much irrelevant. It is an investment. It went down. Get over it. My facebook stock went down too. It is not the government;s job to fix that. Sorry, no one forced people to pay inflated prices for houses. Here in upstate NY the bubble was pretty small, there has not been massive devaluation. Because people didn't over pay. The fact that the worst is located in a few cities (LV, atlanta, california) shows that it was a local feeding frenzy. Sorry, not my fault, not the bank's fault, and not the governement's fault either.
The housing crisis will fix itself when the jobs crisis is fixed. Attempting to fix it is just taking money from those who made good decisions and giving it to those who made bad.
3 excellent points; Now here's a follow up...
Number one, Take the FINDINGS FROM THIS INVESTIGATION, and DO SOMETHING WITH IT!!
In a serious light of extreme prejudice against failure as option, a balance of re-action to the action that has caused the damage needs to be decided on, brought to light, and EXECUTED. No apologies, the chips to fall WHERE THEY MAY!! Just do it! Tell the banks, "Get ready for jail time for what you did, OR be prepared to take the cut.
Number Two... Before firing him... Answer the question that keeps Demarco doing what he's doing, which is, "If we re-set the motgages, who will pay the banks??" The reason he states, which incites the definite pause is, it would be the TAXPAYER !!!!!!!
Hold it right there!! Stop even FOLLOWING that line of thinking!! Stand up to the banks!! Tell them your value is gone on this, SORRY!! Give a tax incentive or something which helps them to make it up over time, while the Homeowners are also given time to heal from these gaping wounds!!! Then resetting the mortgages becomes much more into view!!
Number Three!!! Explain what benefits to resetting mortgages WOULD LOOK LIKE!!!
Do studies, EASILY done without wasting much money or time, and LET PEOPLE PICTURE IT!! It deserves to be a VISION SHARED!!!! It's a lot easier for people to get moving when they KNOW WHERE THEY'RE GOING!!!
The psychology behind this is fascinating to me. This is a clear, rational, economically sound policy, but people are so freaked out that somewhere, at some point, it's possible that SOMEONE IS GETTING AWAY WITH SOMETHING (unless they're on Wall Street then, hey, what are you going to do?) that they are - a lot of YOU are - willing to let the economy continue to go down the tubes and let communities and families fall apart. Wow.
The right has done such a good job of brainwashing people. Personal responsibility must be paramount for all you little people! Gag.
If President Obama could stop the Republicans from changing the laws pushing Fannie and Freddie to begin handling Non Conforming Loans then the only people stuck with bad mortage would have been the Banks and Finance Companys.
We no longer buy homes seeking to have a home in America .
It is just like a paper stock ! A House's only real value is what someone will pay you for it.
No real way to fix a price.
Why should so-called 'underwater' mortgageholders get special consideration?
Lots of people who are not underwater still have lost jobs, had their income reduced, had other financial or health setbacks ... why all the special fuss over 'underwater' mortgage holders?
It was a bubble.
It burst.
We are all affected by it
People were perfectly fine with bubble economics when prices were on the way up, and naturally they are upset when they lose perceived value (even if that value was bubble value).
The problem is with bubbles and investing in a bubble economy. Lots of peoplel are going to get burned. Naturally people left holding the bag are going to yelp and complain ... but is this really helpful?
Wouldn't it be more helpful to learn about bubbles and their pitfalls?