Showing posts with label Uncle Sam. Show all posts
Showing posts with label Uncle Sam. Show all posts

Friday, August 21, 2015

[OPINION] David Sarasohn: Uncle Sam's failed mortgage-relief program

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At the end of January 2009, less than a month in the Senate and a brand-new member of the Senate banking and housing committee, Jeff Merkley saw a problem in how the Obama administration was planning to deal with the Great Recession's mortgage crisis.

"Folks in key positions at the top of the Obama financial team," he cautioned, "are more oriented to Wall Street than families."

Despite Merkley's concerns, the administration proceeded with its Home Affordable Refinance Program and Home Affordable Modification Program, promising to adjust 4 million mortgages to keep families in their homes. Endangered homeowners would get in touch with their mortgage holders, get their payments reduced with the help of $50 billion in federal money set aside for the purpose, and both families and neighborhoods would be stabilized.

By that summer, the phones in government offices — and some at The Oregonian/OregonLive — were swamped by calls from applicants complaining about banks losing applications and documents, repeatedly asking applicants for the same information, telling homeowners not to make mortgage payments because they were applying for modification and then telling them they were in foreclosure because they hadn't made payments. By the end of 2009, Merkley warned, "There are some incredibly telling signs that this is not going well. The program is, so far, a huge disappointment."

By the end of the next year, the program that had promised to modify 4 million mortgages had totaled just over half a million. To the House financial services committee, Jack Schakett, Bank of America's executive for credit-loss-mitigation strategies, conceded "ineffective communications with customers, shortcomings in document maintenance, misunderstandings about program requirements and the inability to comply by some borrowers."

In 2011, Merkley introduced a bill to require banks to provide a single contact for applicants, to allow homeowners to refinance with different providers and to let bankruptcy judges modify the terms of mortgages, as they can with other debts. By then, Republicans had taken the House, and the issue was dead.

A report issued at the end of last month by Christy L. Romero, special inspector general of the Troubled Asset Relief Program, explained just how the program — which after six years has modified 887,000 mortgages, instead of 4 million — ended up as less profit than loss. With participation voluntary for the banks, all banks rejected the majority of applications — led by Citibank with 87 percent — and roadblocks in the process led virtually all applicants to be rejected the first time around. The report told of homeowners improperly rejected four times before finally, with legal help, getting approved.

"We are constantly seeing problems," Romero told The New York Times, "with the way servicers are treating homeowners and not following the rules. I don't understand why there hasn't been a stronger policing from Treasury on servicers."

To Merkley, his six-year-old doubts and objections about the program have all been painfully confirmed.

"The program was and is poorly defined," the senator said this month, and he holds to his diagnosis of the basic problem: Obama's economic advisers — Treasury Secretary Timothy Geithner and National Economic Council Chairman Larry Summers — "were more concerned about strengthening the banks than helping families."

Partly as a result, the ultimate decisions were all made by the mortgage holders, often distracted by their collecting fees on overdue payments.

"There were fundamental conflicts of interest and poor design," concluded Merkley. "There is an incentive to prolong the process. The only point when it's in the interest of the banks (to complete the modification) is when a family is just about to go under."

Which, not occasionally, was too late.

The bail-out programs have now been extended through 2016, but nobody expects them to make much progress toward 4 million modifications, or in fact to make much progress at all. Merkley reports his office now gets only about one call a month on modifications — most of the people who needed help having found another approach or, more likely, having left their house.

Instead, Merkley thinks about what could have been the effect of the 3 million mortgage modifications that were promised but never achieved.

"That's a lot of families not relocated, of kids staying in their schools, of marital tensions that would have been directly reduced," he says. "It would have had a strengthening effect on the economy. It would have been a real win-win."

Instead, with the design and operation of the program, and how hard it was for homeowners to get help, the recovery didn't move as much.

But a lot of American families did.
David Sarasohn's column appears on Wednesdays and Sundays. He blogs at davidsarasohn.com.


Monday, July 27, 2015

WHEN SAM CRIED UNCLE

Never eat with your fingers, my late mother said, but when I am really hungry all bets are off. Never start driving with a cold engine, my mechanic said, but when I have to get somewhere fast all bets are off. Never extrapolate a principle from an anecdote, my logic teacher said, but when I need to report the voice of the people as a journalist all bets are off. The first Joe Sixpack I talk to is nominated as the Oracle of Delphi.

This brings us to the story of how I came to appreciate the greatness of the first Reagan Tax Cut at 30,000 feet.

Airborne over the heartland, sipping watered-down Diet Coke and munching on stale peanuts, having snickered my way through the pap in the airline “magazine” and made three abortive stabs at writing a column on the barf bag, I was left with no other choice: it was time to stop ignoring my seat neighbor. He was a nice guy about forty-five, with a thriving business, and the rare bird who would admit out loud to being a Republican.

The subject got around to my career and the evolution of my political consciousness. I talked about getting behind Reagan back in 1976, when I was just eighteen, talking him up to skeptics for four years, and then the exhilarating ride to victory in 1980. I described the legislative battles that began after that, pushing for the 1981 and 1986 tax cuts, and what a huge sea change was accomplished by getting the top tax rate down from seventy percent to as low as twenty-eight before it began inching its way back up to its current 39.6.

 “Wait a minute,” he says, clearing his throat apologetically. “Are you trying to tell me they used to take seventy cents of tax off a dollar of earnings?”

OMG! It hit me like a sudden airplane lavatory flush, like a food service cart behind the knees, like a spasm of turbulence, like the credit card bill after the vacation. This guy who is forty-five now was just ten in 1980. He cannot even conceive of a world where you make a hundred dollars, 70 for Uncle Sam, 30 for you. Richard Daley getting the dead guys to vote in Chicago is not an image he can register. Tip O’Neill smoking his huge cigar poolside in Florida and cutting deals with labor leaders is not in his database.

This is a source of great pride for the GOP. Its accomplishments in the Reagan Era are what define the perimeter of today’s political spectrum. A politician who suggested a return to a seventy-percent rate could not get one percent of the vote even if he was running against Michael Vick for dog-catcher.

But I would argue the key to all of it, the Caitlyn Jenner moment when there was no turning back, came in the first Reagan tax cut, the Economic Recovery Tax Act of 1981. Lowering the top rate from seventy to fifty provided the moral pivot. By rejecting the notion that the government can ever own more of your human output than you do, it revived the principle of the autonomy of the individual citizen. People can no longer be brainwashed into believing the ruling class knows better than we do how to run our lives.

All this happened in twenty-one days of astonishing leadership. The newly elected President Reagan had the Congress running scared. His popularity was immense and Democrats challenged him at their peril. A tide in the affairs of men had turned against them, and there were slings and arrows preventing them from stealing outrageous fortunes. With Reagan lifting the country’s spirits after the Carter malaise, and promising that his tax cut would restore the sovereignty of the individual without cutting the Treasury’s bottom line, the Democrats were stymied.

Twenty one days. The bill was introduced in the House on July 23, 1981. There were some wrangles and modifications; at one point the President had to go on TV and appeal to the citizenry. Popular opinion stood overwhelmingly with the President; on August 3rd and 4th, the two Houses of Congress passed the bill. By August 13, a scant three weeks after the bill began its odyssey, it was signed by a casual Ronald Reagan on his ranch in the hills of California. It was High Noon for Republicans, film noir for Democrats.


Via: American Spectator


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Friday, November 22, 2013

EPA power grab? Pols, states claim new water reg could bring feds into your backyard

A river runs through it -- and Uncle Sam isn't far behind. 
That's what several Republican lawmakers and even state farming groups and local governments are warning, after a draft rule from the Environmental Protection Agency proposed expanding which waterways are federally protected under the Clean Water Act. 
The concern is that the move could give the feds authority over virtually any stream or ditch, and hand environmentalists another way to sue property owners. In other words, critics say, the government might soon be able to declare jurisdiction over a seasonal stream in your backyard. 
If so, good luck getting a permit to expand building space on your property, or marketing your land to prospective developers. 
"(The) draft rule sent to the White House for review could expand the EPA's regulatory power to give the agency unprecedented new authority over seasonal streams and ditches on private property," Rep. Lamar Smith, R-Texas, chairman of the House Science, Space and Technology Committee, said in a statement to FoxNews.com. 
Via: Fox News Politics
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Thursday, September 19, 2013

Is This the Creepiest Anti-Obamacare Ad Ever?

Generation Opportunity unleashes creepy Uncle Sam in new video

A new ad from Generation Opportunity urges Americans to “opt out” of Obamacare by showing the consequences of government-controlled health care: Uncle Sam in your gynecologist’s office.

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