The Observation Deck

Okay, I'll admit I'm stirring the pot - but these issues bug me.

I listened to the debate tonight with interest. I heard Senator Clinton call for a moratorium on home foreclosures. It seemed like a reasonable and humane step. Senator Obama appeared to agree with her. Yet I remember a night at a Democratic Club meeting not long ago where our Local officials (County and State) Democrats were talking about speeding up foreclosures. I thought it was unbelievable that they wanted to hurry up taking the homes away from citizens who may have lost their jobs and missed a few payments, because it was taking them a little longer than normal to find work. I always thought that the Democrats were supposed to help the average worker into getting the American Dream. \

Reminded me a little of of my daughter's favorite Christmas movie "It's a wonderful life" The local democrats that night were reminding me of Mr. Potter whereas tonight I see that the national ones have turned into George Bailey.

While I was still in a state of shock about this difference between our National and local Dems, I heard Senator Clinton say that she now opposed building the fence on our southern border for immigration purposes for among other things EMINENT DOMAIN and again Senator Obama indicated that their positions were very similar. It wasn't too long ago that our own Democratic State Senator Dale Miller was one of only 3 state senators to vote against real Eminent Domain reform in the state of Ohio. Building a fence for national security seems to me to be in the real public interest. Maybe the National Democrats have decided that property rights are important not only to Republicans - but to all Americans.

Is this due to campaign contributions? Is it because developers tend to fund so many local campaigns? Is this a property grab? With our local democrats wanting both quick foreclosures and eminent domain for economic development. Why are our local politicans so out of step with their national party?

The goal of shortening the duration of foreclosure cases typically stems from the argument that if your neighbor's property is going to be neglected or outright abandoned, you want that neglect to occur for as brief a period of time as possible. I don't believe that goal is rooted in any other kind of self-interest.

Many of Lakewood's foreclosed homes are non-owner-occupied investment properties. If George Bailey were losing to his mortgagee a few duplexes 25 miles from Bedford Falls, all of which are overseen by a listless property manager, I think the comparison would be more accurate.

I should add that I'm distinguishing the national problem from a Lakewood-centric problem. It's worth looking into how many of our foreclosures here in the city are the types that fit within the national candidates' platforms. Perhaps because so many of our homes are investment properties, a distinction should be drawn. I recognize, of course, that a certain number of Lakewood's foreclosures will, indeed, force unfortunate homeowners from their homes, and for that I share your compassion, Lynn.

Thank you for your response Kevin.

I was careful to mention that it was County and State officials that were saying this - not city ones.

Ohio has different problems I think than say California where mortgages are upside down (the amount owed is more than the market value) and interest only mortgages were given. This makes it much easier to walk away from a bad mortgage.

Most Ohio residents have put their life savings into their home and it is normally their largest investment. In the olden days you took a loan with a bank like First Federal of Lakewood (George Bailey) who knew you and your family. If there were a real problem - they may be willing to work with you. Now you are getting a loan from a company you don't know and they are often selling the mortgage to an even more distant group - often foreign owned. They don't care what happens to the citizens of Lakewood, they just want their money. I recently heard of a woman who lost her job and got behind. She then got a job and sent in her current mortgage payment and a portion of the back payment. The mortgage company sent her payments back and said if you can't pay in full - we don't want any. She is devastated that they don't want to work this out but to take her home.

While I sympathise with the people that are living next to an abandoned home. I think maybe a distinction can be made in this economy with the people that are desperately working to save their homes and the people that really want to walk away from the problem.

All good points, Lynn, and a telling and tragic vignette. I wonder how much longer these loan servicers will be refusing money.

I heard Senator Clinton call for a moratorium on home foreclosures. It seemed like a reasonable and humane step. Senator Obama appeared to agree with her.

Would a moratorium on foreclosures encourage people - granted, only a certain kind of people - to not make payments?

Is this due to campaign contributions? Is it because developers tend to fund so many local campaigns?

Speaking of campaign contributions, I heard a couple of pundits on NPR recently. They were asked what change they would like to see in campaign reform, and both responded that all candidates should get free air time for commercials. That would do a lot to level the playing field and give lesser known and third-party candidates more of a chance.

But alas, the two pundits then went on to explain that this would never happen because networks make too much money from political ads.

Brad Hutchison wrote:

I heard Senator Clinton call for a moratorium on home foreclosures. It seemed like a reasonable and humane step. Senator Obama appeared to agree with her.

Would a moratorium on foreclosures encourage people - granted, only a certain kind of people - to not make payments?

From what I have heard, it wasn't a moratorium on foreclosures in the sense that everything stops. It was more of a delay so that homeowners and lenders can have time to work out deals that help both. If a deal can be struck where a new loan with fixed and reasonable rates can happen, why not? If things can't, well, the delay at least gives homeowners more time to find new living arrangements.

It would be interesting to put to either candidate the issue about investment homes on the foreclosure block because clearly that isn't a part of their discussion. When I hear politicians speak on foreclosure, they seem to talk about not wanting to send people to the streets which is not going to be the case when the home is empty and falling apart.

This is the take I have gotten listening to folks on NPR talk about it. Maybe that is reading too much into it, though.

Lynn wrote:

The mortgage company sent her payments back and said if you can't pay in full - we don't want any.

From what I have seen and heard - that is pretty standard. So for anyone who falls on hard times temporarily, it makes it extremely difficult to get everything back on track.

Charyn Compeau wrote:Lynn wrote:

The mortgage company sent her payments back and said if you can't pay in full - we don't want any.

From what I have seen and heard - that is pretty standard. So for anyone who falls on hard times temporarily, it makes it extremely difficult to get everything back on track.

Yes, legally acceptance of a partial payment can be construed as agreement to a renegotiation of the original terms. It IS standard.

On any debt, you need to get it writing that the creditor will accept anything other than what is specifically laid out in the original contract.

Kevin –

You wrote, “Many of Lakewood's foreclosed homes are non-owner-occupied investment properties.â€￾

Do you have an actual number on this? Is the City cross-referencing properties currently in auction, bank-owned, in pre-foreclosure or in actual foreclosure against the type of structure – single family, double, triple, apartments, apartments above store fronts, etc.?

As I wrote in the “Attn: Zip Code 44107â€￾ on February 6:

44107 foreclosure cases in 2006 and 2007 - 602
44107 properties currently in auction - 264
44107 properties currently bank owned - 622
44107 properties currently in pre-foreclosure – 417

I believe that only a careful, thorough analysis would allow us to tailor local policies to deal with properties in different stages. The national and county politicians seem to have voiced a blanked approach.

Thanks for your input.