House Democrats frame foreclosure problem as People vs. Banks…
Wednesday, February 25th, 2009 By Beth Lear
…and they seek to punish both.
One thing you can always count on in politics is the consistency of the left to make the market the bad guy. This theme appears to run throughout soon-to-be-introduced House Bill 3, which had it’s first hearing today – even though there was NO bill. The actual language should be available for public consumption later this week or early next.
A hand-picked group of three interested parties spoke to the committee members about their perspectives of the proposal. The group consisted of one liaison for the lenders and two advocates for people facing foreclosure. Who was missing?
All responsible home purchasers – that’s who!
If lenders are forced to pay large fees to maintain foreclosed properties or keep delinquent owners in property they can’t afford, and if judges are permitted to rewrite purchase contracts, all those costs will be passed on to anyone who buys a home in Ohio. Additionally these future home buyers, which the supporters of this bill are not considering at all, will receive the burden of higher interest rates, higher mortgage fees and fewer lenders in a state which will have become default-friendly.
Ohio’s problem is not the same as California’s problem. Nationally, the political pressure is for a moratorium for the few states who were caught on the wrong side of the speculation bubble. In the Buckeye state, our foreclosure issue is more closely linked to a combination of fiscal irresponsibility by government regulators, home buyers trying to “keep up with the Joneses”, an economy that’s been weaker than the national average and an unemployment rate that’s been higher.
The real problem is not People vs. Banks, as Marc Kilmer notes in his Policy Brief “Meddling in the Market: Harming Homeowners through Good Intentions”. The real issue is People vs People, homeowners who are paying their mortgages vs those who do not. The 90+% majority of responsible home owners have no seat at the decision-making table. But hard-working, tax-paying Ohioans will still foot the bill in the end.
Tags: foreclosures, HB 3, mortgages, Politics
