Three simple questions expose the peril facing millions of Americans - and the grave danger in which American Dream now finds itself.
Number one, why is a good man like Jaime Gonzalez losing his shirt, while trying to keep up with interest payments on his modest Florida home? Why won't the banks do anything to help him? And when will his Senators, Bill Nelson (D) and Marco Rubio (R), take the one step that would make things right for Mr. Gonzalez -- and for millions of other Americans, just like him?
Do you remember when buying a home was a part of the American Dream?
Jaime Gonzalez does. It was that dream that encouraged the retired state police officer and his wife, a retired nurse, to purchase their home for $150,000 in Oviedo, FL in 2004. With 3 children, 6 grandchildren, and one great grandchild, the house was part of their dream for the future.
They pay $1,493.53 towards that dream every month. Of that, only one hundred dollars goes towards their principle, the other $1,393.53 all goes towards their massive interest rate of 7.5%.
So why doesn't Jaime, and the millions of Americans who are in his position, refinance? Jaime's mortgage company refuses to let him, and regulatory barriers are stopping him from finding another bank to take advantage of today's rock bottom interest rates. Meanwhile, banks continue to rake in billions of dollars every year off of homeowners.
Like most folks in Florida, their home is worth tens of thousands of dollars less than their original mortgage. That means selling isn't even an option.
This month, Congress -- including Gonzalez's Senators, Marco Rubio (R) and Bill Nelson (D) -- has a chance to help. A package of three proposals currently in the Senate would make it easier for underwater homeowners like Jaime to refinance.
With one in three homes, more than 15 million homes altogether, currently worth less than their owners owe, it's a full-blown crisis. These folks are underwater and they are getting socked with sky-high interest rates. They're suffering through sky-high interest rates with no way out and no hope of putting a dent in their debt.
The banks that got us into this mess, meanwhile, are putting up barrier after barrier to keep homeowners like Jaime from refinancing to the now much lower rates. Refinancing could help 11 million Americans stay in their homes by saving them on average $2,500 per year.
It would be a real help for Jaime. He's been trying to refinance his home loan to get a lower interest rate, but the bank hasn't budged. For now, he and millions of other Americans are just getting by. Without Congress' help, how long will that last?
Congress must take action.
Of course, this is just the first step. In the long term, we must fight for widespread relief for homeowners from the burden of unfair debt. This means a swift and thorough investigation into mortgage fraud by banks and lenders responsible for the crisis, as well as large-scale, direct principal reduction to reset loans to fair market value.
But as a first step, this is a vital lifeline for millions. It's the biggest proposal to come out of Congress in a long time. And it has a real chance to pass, even in today's dysfunctional political system. There are those who will block this proposal, and it will be very clear that they are choosing the side of big banks and lenders over everyday Americans.
I sincerely urge Senators Rubio and Nelson -- and all those who represent the millions of underwater homeowners in this country -- to choose the right side.
Van Jones is co-founder of Rebuild the Dream, an organization pushing for widespread homeowner relief through its nationwide "Hope for Homeowners" campaign. Learn more and add your name at www.RebuildtheDream.com