Saturday, February 05, 2011
Foreclosure moratorium–Hawaii vs. Obama
by Larry Geller
Hawaii may be where Obama was born—but he left. And he left us behind.
For one thing, he has looked after bankers making extreme and obscene profits…
In 2010, total compensation and benefits at publicly traded Wall Street banks and securities firms hit a record of $135 billion, according to an analysis by The Wall Street Journal. The total is up 5.7% from $128 billion in combined compensation and benefits by the same companies in 2009.
[Wall Street Journal, On Street, Pay Vaults to Record Altitude, 2/2/2011]
…while the average American has been left swinging in the wind.
No place is this more clear than in Hawaii, where foreclosures have run rampant.
Hawaii has one of the worst foreclosure rates in the country. In January, mortgage fraud was cited as the reason why the state’s foreclosure rate is the 11th highest in the nation.
[Big Island Video News (media release), Hawaii house advances Mortgage Foreclosure Moratorium bill, 2/2/2011]
While at the Legislature this week to testify on an unrelated bill, I heard Rep. Herkes address the members of his committee on the proposed 5-month mortgage moratorium on non-judicial foreclosures. He related the story of a family that fell behind in payments briefly, if I recall the story, but who then arranged with the bank to come current, and was in fact doing that. Nevertheless, and unexpectedly, they were foreclosed and lost their home.
Let’s face it, banks are profiting from the profound suffering of average Hawaii citizens. Stopping predatory non-judicial foreclosures is a good first step to protect families.
Rep. Herkes wants a moratorium while the Legislature figures out what to do. The bill number is HB894 and passed both the Consumer Protection and Judiciary committees on Wednesday. If passed on the House floor, it goes to the Senate.
This bill should not have been necessary, had our president kept his promise to the American People:
Before he took office, President Obama repeatedly promised voters and Democrats in Congress that he’d fight for changes to bankruptcy laws to help homeowners—a tough approach that would force banks to modify mortgages.
“I will change our bankruptcy laws to make it easier for families to stay in their homes,” Obama told supporters at a Colorado rally on September 16, 2008, the same day as the bailout of AIG.
Bankruptcy judges have long been barred from lowering mortgage payments on primary residences, though they could do it with nearly all other types of debt, even mortgages on vacation homes. Obama promised to change that, describing it as exactly “the kind of out-of-touch Washington loophole that makes no sense.”
But when it came time to fight for the measure, he didn’t show up. Some Democrats now say his administration actually undermined it behind the scenes.
[Propublica, Dems: Obama Broke Pledge to Force Banks to Help Homeowners, 2/4/2011]
I find it hard to show pride that Obama was born in Hawaii. He’s not treating us as should a person who cares about the place where he grew up. In fact, from first appointing the banksters who caused the economic crisis in the first place to be in charge of the “fix” right up to the present moment of presidential inaction, he is betraying us. There’s really no other way to put it.
Follow the bill, consider submitting testimony to support it. It’s easy to do that these days, right from the Capitol website.
Bailing out poor decision makers on the home owner side is almost as bad as bailing out bank and appraisers who made these insane loans. However, if the net result of a moratorium is not a bail out, but a restructure that doesn't result in indentured slavery, then I am for it.
The moratorium is on non-judicial foreclosures only, as I understand it. Banks have been discovered robo-signing the paperwork on the Mainland. Some states allow these types of foreclosures, some do not. The moratorium will permit the Legislature to figure out what it should do.
Obama is another bad joke, just ask the "Black Community". He has done nothing for them. You're correct, Larry, there is no pride to be felt that Obama was originally from Hawai'i. I feel very much discomfort anytime Abercrombie refers to his "in" with Obama, it does not speak well for Abercrombie.
I had this fantasy that Abercrombie would visit the Department of Health and discover Obama's Kenyan birth certificate. Don't mind me, the disappointment is sometimes overwhelming.
To be fair, Obama has done good, but can't seem to communicate it.
if I understand this correctly: every American who bemoans Obama's tenure is clamoring back to the golden days of W?
Not at all, and that is a very sad perspective when one expresses disappointment in Obama.In my opinion W and crew are criminals.
Obama is not and never will be all things to all people. He was handed a mess. The deleveraging of the housing industry will take time, it will be painful but it must be allowed to run it's course. I have nothing but respect for the cool headedness and objective performance of the President.
Love this site! On this issue, I don't believe the moratorium will have any effect other than keeping housing prices here at insane levels. Foreclosures result in lower housing prices and with crackerboxes in Kapolei going for 500k, that's a good thing, not a bad one. The government is simply trying to reinflate another bubble. The bottom line is that houses in Hawaii are beyond the reach of most average working people and delaying foreclosures only keeps them high. Why should someone who fell behind on their payments be allowed to stay in a home and help keep prices high, so that others who might be able to make payments are priced out? It makes no sense, but little that the government does nowadays.