The Observation Deck

Congressman Kucinich, Assistant Secretary of the Treasury for Financial Stability of the United States, listens to Jay Messner speak about his various nightmares dealing with loan reduction, HUD, and other things that hindered his progress.

Mr. Messner was talking about how he had to stand in line for 12 hours just to get forms,
that he had to send in 4 different times because they were lost. Including almost 10 hours
on the phone, including one time for five hours just to get his application filed with Chase
Bank. Who then lost it 3 more times.

He was then taken to Columbus to sit next to Chase Execs and Governor Stricklin as a
model of how good the program is. At that meeting he was assured that he was approved
and his reduction of $197 would be reflected in his next bill, due in September. That August
he was foreclosed, and asked to leave his home by Chase which claimed zero knowledge
of him being approved for anything. Even after they located documents from his day
on stage they continued to pile on late fees and surcharges of more than $6,000 in
6 weeks, and was about to loose everything when Congressman Kucinich stepped in.

Sec. Alisson promised they would look into the loan!

The congressman stated that 90% of the homeowners in Cuyahoga County would be
eligible for loan and payment reduction. Sec. Alisson stated the average for home reduction
was $500 nationwide, and stated "Keep fighting, and try and try again." Most there
thought there had to be a better way.

One issue that was brought up, and I was told they would look into was the possible
conflict of interest by people with housing programs, that also have the ability to buy
foreclosed homes, and then resell or landbank them for development. The Secretary
was outraged to think that HUD programs would be used to gentrify neighborhoods
instead of serving the community residents that were counting on them, and promised
to look into any such thing that was brought to his attention.

In attendance were many councilman from Cleveland and surrounding suburbs, and many
mayors and civic leaders of various programs dedicated to help homeowners through this
crisis. All were thanked for their dedication to doing the right thing, and were asked to
blow whistles on those doing the wrong things such as described above, asking for any
form of payment for loan reduction of consultation. The secretary underlined that the Feds
should be notified immediately of any problems or need for oversight, and that help could
be found by going through http://makinghomeaffordable.gov.

Lakewood had no one there from city hall or any civic programs in attendance.

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Congressional Oversight Panel: [url] http://cop.senate.gov/reports/library/r ... 0-cop.cfm/ url]

A very large battle!

This whole dog and pony show is just part of a whole series of dog and pony shows.

For the last 20 years the policy of the federal government was to encourage and subsidize home ownership by people who had no business owning a house. This whole "crisis" was made in Washington. Federal economic policy can be summed up in a single sentence:

Encourage home ownership to encourage housing appreciation so people can borrow more money on their line of credit so that they can buy more Chinese television sets.

Houses are still over valued. Government attempts to deal with the crisis have aggrevated the "crisis". The most recent result of government policy is an increase in stategic defaults. Consider that crisis Made In Washington as well.

Local governments should be budgeting a further 15% decline in values.

How are we going to afford all those raises?

The reason banks are loathe to modify loan terms is because (1) they have to take a big haircut, and (2) 80% or so of loan modification recipients default again anyway. Loan mods are generally exercises in futility. Even after the modification the “homeowner” is still just a leaky roof away from another default.

Foreclosure should not be a “crisis.” I know it sucks to have to move from one’s home but foreclosure does relieve the financially overburdened “homeowner” of his/her onerous mortgage payment, and property taxes, maintenance, etc. I put “homeowner” in quotes because the occupant is not the homeowner. The bank is. This misunderstanding is a large part of the problem.

A mortgage is a promise to repay the loan, or turn the house back to the bank, one or the other. Being foreclosed on does not make one a criminal. It is clear that far too many “homeowners” are attempting to get loan mods. They should just accept foreclosure instead. 80% of the time it is in their better interest.

Tim Liston wrote:A mortgage is a promise to repay the loan, or turn the house back to the bank, one or the other. Being foreclosed on does not make one a criminal. It is clear that far too many “homeowners” are attempting to get loan mods. They should just accept foreclosure instead. 80% of the time it is in their better interest.

Tim, Tim, Tim

Please, in a perfect world you are nearly correct. But we are speaking of deals made that
were very one sided in many cases.(Yes we should all understand what is being signed).
Made in a down turned economy that saw many loose income completely, or to such an
extent that people have to decide lose their home, buy medicine. Lose their home, pay
credit cards, lose their home, or something else. Much of this is due to the financial
nightmare in the US and world, the financial nightmare in the region, the financial
nightmares at home.


Cleveland Mayor Frank Jackson arrives and greets Sec. Alisson. The Mayor and
Congressman Kucinich had been at an emergency meeting with Continental Airlines about
the future of Cleveland Hopkins Airport. Reports are it does not sound good, as Cleveland
could lose our hub.

While it would be good to just blame homeowners and walk away with a clear conscious it
is much more difficult, if you were to hear the cases. One woman who had signed up for
variable rate now is paying three times what she signed on for originally. Yes we all know
this could happen, but she never realized it would happen in two months.



Then she was approved for reduction and help, and it has never come. Hundreds of hours
tracking down what was approved and promised. People handling her case moved to other
departments, loan moved month to month to other banks. She is only asking for some
sanity at this point.

The real story here is the government has approved funding and help, but has no handle
on how to get it out there. The banks, simply sound like they are throwing forms away. As
person after person and group after group spoke of needing to send 2, 5, 10, 20 of the
same faxes to Chase and other banks once they have been approved, just to get a contact name.

Then there is the pipe dream part of this. Ohio has been given $12 million for help. I have
to think that' would not even cover Cleveland, when you also think the average
homeowner, not just the broke homeowner, on average gets a $500 reduction in monthly
payments. Now I have to think this is inflated because of the price of home on the coasts,
but it is also in part because all property is severely overvalued for many many reasons.

It is a perfect storm and I am not as sure as you that the best way to handle it is to just
put them on the street. However the room for abuse by agencies, lack of accountability,
and marriage of funds in some agencies is a recipe for disaster. If Ohio gets $12 mill, by
the time you get done with management, oversight, expenses, etc. it will amount to nothing.


Pamela E. Bobst, Mayor of Rocky River; Congressman Kucinich, Treasurer Jim Rokakis, Sec. Herb Alisson,
Cleveland Mayor Frank Jackson, and Mayor of Strongsville Thomas P. Perciak,


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