A boost for refinancing mortgages

The following is a piece I wrote for the News and Observer and that it where it was originally posted.

Since January 2009, decision-makers in Washington have been hit or miss when it comes to solving the housing crisis. Perhaps a more accurate portrayal is that there have been a lot more misses than hits.

During this political season it is common for both parties to talk about what they will do after the election for jobs, the economy and the housing market. What they seem to forget during the election season is that work can still be done.

In the coming weeks, North Carolina Sens. Richard Burr and Kay Hagan will have a chance to do that work and assist struggling homeowners in this state by helping them to lower their interest rates.

Nationally, almost a third of homeowners are “underwater” on their mortgages, meaning they owe more than the house is worth. Despite historically low-interest rates right now, these homeowners are often saddled with higher interest rates because they cannot refinance while underwater. Many other families cannot refinance either, because the closing costs and fees are too high.

Burr and Hagan will have a chance to act on a package of three bills in the Senate – Sens. Barbara Boxer and Robert Menendez’s Responsible Homeowners Act, Sen. Dianne Feinstein’s Expanding Refinancing Opportunities Act and Sen. Jeff Merkley’s Rebuild Equity Act – that would impact the economy and the housing market.

This package would allow all homeowners to refinance into today’s low rates, including Fannie Mae and Freddie Mac loans, by expanding the Home Affordable Refinance Program to remove restrictions on who is eligible. Homeowners would also be allowed to refinance to a 20-year mortgage and keep the same payment; this allows underwater homeowners to get “above water” faster with more money going to principal.

Finally, the high closing costs that prevent many from refinancing would be eliminated because the federal government would cover them. All homeowners who are current and have a 580 FICO score would qualify.

In North Carolina alone, 368,962 families would qualify and save on average $2,900 a year, according to a recent report by the Center for Responsible Lending. That is a savings of over $1 billion in lower mortgage payments that can affect our state’s economy. Across the nation, over 4 million homeowners would be able to save over $10 billion; this not only saves homes from potential foreclosures and abandonment but also puts millions of families on more stable financial ground.

The mortgage crisis isn’t over yet, and the decision-makers in Washington need some hits to make up for all their misses. This is work that can be done now, and is more important than empty campaign promises. Homeowners can’t wait until after the election, while the housing market drags down our state’s economy.

This is not an end-all solution, but a first step in the right direction. If we want to truly address the housing crisis, we can’t just help those behind on their mortgage; we must also help those who make their payments despite higher rates and being underwater. Burr and Hagan need to take a stand for our state’s homeowners and economy and support this package of bills.


The power of media

I will preface this by saying that I am not a Miami Heat fan, I do not have a favorite NBA team just love watching it and following certain athletes. Two players I rather enjoy watching are Lebron James and Dwyane Wade. I don’t care about their lives off the court as so many do, but they are two of the best players in the world. Most people, even avid basketball fans, have an opinion of these two based on how the media talks about them. I avoid reading or watching any basketball analysis after a Heat game, because the media covers it in such extremes.  When they win, everyone loves them and talks about when they both are at the top of their game, they should never lose.  When they lose, their off the court habits get discussed, their perceived lack of commitment gets discussed, and you would think they are the two worst people in the world on and off the court.

This media dance has made these two of the most hated athletes in the world.  The fact that the greatest player ever only won 6 championships despite playing 15 seasons in the NBA.  I know six is a lot, but if the greatest player ever could not win every year, neither can Lebron and Wade.  I am not defending either of them, but want to make a larger point about the media and how it dictates our thinking.

The same concept translates to politics and the news media.  The lack of unbiased reporting has contributed mightily to the political divide of this country.  We have the extremes like Fox News for the right and MSNBC for the left. CNN has extremes within its own host.  What none of these stations offer is an unbiased viewpoint on any issue.  Everything is to the extreme one way or the other and there is no middle ground.  When our media is that extreme, the truth often gets shaded to make their viewpoint more appealing to their audience which gets them bigger ratings.  The end result is a divided country whose views are to the extremes with no middle ground, and yet we wonder why our politicians can’t get anything done.

I think the biggest way to have an informed country is for more unbiased media.  We need to have the issues discussed with no bias, and then let the people make the decisions for themselves.  As of now, the extremes in our media already dictate where people stand.  Let’s remove the bias from both sides and let people make their own conclusions.

Are career politicians the problem?

One think I enjoy doing in debating.  Politics, sports, food, anything really is fair game for a debate in my book.  This weekend as I had another “discussion” on Facebook, whose views are often at the other end of the spectrum, we had a rare moment of having something in common. Term Limits.  As we went back and forth about over two days and a range of topics from size of government, racist history of political parties, government programs versus private sector programs we had nothing in common.  Which is not unusual.  That all changed though when we got on the topic of politicians representing this country correctly.

One of my big issues with politicians, is that today’s political leaders seemed to have forgotten the most important piece about governing the country.  That they represent the people who voted them in and not their own self interests. Nothing seems to happen in Washington these days, because a line has been drawn in the sand and neither party is willing to cross that line to get anything done.  They seem to have forgotten history, where people could reach across the aisle and do what is right for the country. Republicans like to tout Ronald Reagan, but seem to forget that he publicly admitted the need to compromise for the good of the country.

Why has this become a problem? There could be many reasons, but to me a glaring issue is career politicians. Without term limits, elected officials with standing virtually have a career locked down.  So much about election success is name recognition and fundraising. Current Congressperson and Senators have the name recognition when it comes to ballot days.  Also, because they have already worked with the various industries on a many different pieces of legislation, they also will have the inside track on fundraising.  This makes it nearly impossible for challengers to be successful at the polls.  Career politicians have become comfortable, the position is no longer about representing the people, instead it has become about their own self interests.

To me the solution to this is term limits.  We need people in office who will always represent the interest of the people, and eliminating career politicians is a clear solution to me.  Surprisingly enough, it was also a solution of my conservative friend. Will politicians ever go for it, no.  But if enough of us from all political view points can begin pushing this, at some point they will have to listen. However, if we continue to be afraid to speak up, because we fear debate or open discussion about real solutions to our problems nothing will change.

When we open ourselves up to debate and discussion, we will be surprised at how much we can agree on ways to change the system for the better.

What Congress Should Learn from OWS

This post written by me was orginally posted on Policymic and No Labels


Occupy Wall Street has taken off. The movement is quickly spreading across the world, with new Occupy movement surfacing seemingly daily. The movement is not without its critics, who point to the vast number of messages coming out of the protests as a sign the movement does not have a singular voice.

While there may be many messages out there from the participants, it is not hard to find some central themes from the movement. Not just Wall Street needs to be listening. Congress can and should learn a lot from the Occupy movement, using the protests as a motivation to end our partisan gridlock and do what is best for the country.

Neither Congress nor Wall Street is innocent when it comes to causes of the current crisis, and because of this, neither has been good at finding solutions. The OWS movement has come clear asks, listed on their website as a series of complaints against the industry.

Here are a couple that Congress should pay particular attention to: stop illegal foreclosures; no more bank bailouts; and create jobs.

All of these have direct links to actions that Congress can take. People are angry that despite the robo-signing scandal, big banks are still trying to foreclose on homes with fraudulent paperwork and/or without being able to produce the note. Congress can pass legislation making this illegal, which would force banks to clean up their paperwork. The robo-signing scandal has banks like Bank of America facing lawsuits that could cripple them.

This leads to another ask of the movement, no more bank bailouts. Congress should listen, stop fighting the provisions in the Dodd/Frank Act that stop too big to fail, and provide a path to winding a bank down instead of bailing banks out.

The biggest grievance of the movement and every other American is creating jobs. Neither side can agree on how to create jobs, but everyone in Congress should take the growing anger as a sign to put aside partisanship and get some legislation passed. Getting people back to work is the single most important demand. Jobs can help homeowners pay their mortgage and avoid foreclosure, help recent grads pay their student loans, can get people spending money to boost the economy, and can create a bigger tax base to generate more tax revenue.

To me, the message is pretty clear: People are clearly angry by the direction of this country. Even though the brunt of the anger is being directed at Wall Street, Congress is not shielded. The messages should not only be heard by the big banks on Wall Street, but also through the halls of Congress. There are specific asks that Congress can act on, and they should listen carefully to the occupiers. Both Congress and OWS are made up of varying people with different mindsets, yet OWS protesters have managed to find a way to work together.

Here is to hoping that Congress is not only listening, but learning from OWS on how to work together, so they can end the gridlock and do what is best for the country.

Why Obama’s refinance plan is still missing the point

Yesterday, President Obama announced that he used an executive order to revamp the rules for the Home Affordable Refinance Program. The hope is to make it easier for struggling homeowners to refinance their mortgage and take advantage of historic low interest rates.  The new rules include allowing homeowners who owe more than 125% of the value of their home to refinance their homes as long as they are current on their mortgage. The process is also supposed to be streamlined and eliminating some of the fees. White House officials estimate these new changes will help 1 million homeowners (14 million are underwater) get some relief.

Forgive me if I sound skeptical.  The last time the administration announced a refinance plan, they estimated 5 million people would be helped. So far, less than one million have been through the program. Once again there is a lack of standing up to the banks.  The only loans that qualify for the program are those held by Fannie and Freddie.  The reason why the initial version of this plan and other plans to confront the crisis have failed, is because they lack any real pressure on the banks.

I am sure a decent number of homeowners will get relief from this move, but the impact on the crisis will be minimal.  These loans are not the ones hurting the housing market, since they aren’t sitting empty or for sale.  These are homeowners who while underwater are still current on their mortgage and not in danger of facing foreclosure.  The administration has said this will be the first in a series of moves, but once again I will not be holding my breath.

Until the President and Congress are willing to stand up to the banks, hold banks accountable, and force them to  help fix the crisis, any program will have minimal impact.  We can’t continue to use a spray bottle on a wild fire when it comes to finding solutions.  Until someone is willing to stand up to the banks that is all we will be doing.

Why Progressives Should Support School Choice

This was originally posted in www.policymic.com and was written by Andrew Hanson, who also writes his own blog I suggest you check out.  It was part of a debate and you can read the other side here.  I think he raises some valid points about choice in the school system with vouchers.

The American debate over school choice dates back at least as far back as the 1970s, a decade after Milton Friedman published Capitalism and Freedom, in which he argued for the establishment of school vouchers that families could use to send their children to a public or private school of their choosing. Friedman’s argument gained influence in libertarian circles because of its resemblance to market systems that included competition. Social conservatives liked the idea of using tax revenues toward tuition at parochial schools.

Progressives have mostly rejected the school choice movement because of its potential to undermine public schools as well as exacerbate inequalities and segregation. But progressives have failed to appreciate just how bad the current system has been at achieving the goals they so vehemently defend. Instead of rejecting school choice altogether, they should embrace the beneficial aspects of a choice system alongside a specific set of revisions that address their concerns.

In the U.S., most funding for public schools comes from local property taxes. This system is both uniquely American and uniquely terrible. It has led to greater inequality and segregation and less social mobility than in other industrialized countries. Poor communities have less property tax revenue than affluent communities and, as a result, less funding for schools. Affluent communities can invest in buildings, facilities, and advanced technology that poor communities cannot afford. More importantly, affluent school districts are able to attract better teaching talent by offering higher salaries and less stressful working conditions. As a result, the U.S. education system exacerbates the inequalities that disadvantaged children enter primary school with. Middle- and upper-class families have a way to get their children out of bad schools: They can pick up and move to the suburbs. Since poorer families are less mobile and often cannot afford to move to suburbia, their choices are limited.

Progressives should be up in arms over these injustices. Most have a “system justification” bias — an inclination to defend the status quo as fair and just. They believe in public schools and they feel the need to defend them against conservative attacks. Consider the conservative critique that public schools are “inefficient.” Progressives typically, and erroneously, respond that efficiency is not important. If a system is inefficient, that means there is a free lunch on the table waiting to be eaten.

However, some progressive criticisms of a “free-market” voucher system are strong. Affluent parents could supplement their voucher with extra income to send their children to better schools, worsening inequalities. The system could become more segregated by race, class, and religion. Teaching creationism in the classroom could undermine scientific education. In general, students’ exposure to varying ideas and cultures could narrow.

Progressives can maintain these concerns without rejecting school choice altogether. Vouchers could be means-tested, or affluent parents could be restricted from using their own incomes alongside vouchers to pay for tuition. A school that accepts vouchers could be required to accept regulations on its curriculum, such as the teaching of creationism in biology. Most importantly, the government could offer additional financial incentives to schools that achieve a desired level of integration.

I share progressives’ concerns about the risks of a free market in education. But a free market is not a necessary feature of a choice system. We can embrace choice while maintaining our commitment to equal opportunity and integration, secularism, and social justice.

Bank Protests can lead to results

The #occupywallstreet fever is spreading the nation with rallies happening in cities all over the country.  While it is good to see the masses, the coverage they get has turned away from bank actions and protests that were happening before the ows movement.  On the west coast groups have been doing targeted actions against banks and in New York a coalition of groups turned out 20,000 people On May 12th to shut down Wall Street after a week of smaller build up actions.

What I want to showcase is that people have been organizing against the banks well before the recent tidal wave. Many of these other marches, rallies, and acts of civil disobedience all have had clear messages and demands unlike the much critiqued ows movement.  Because of this they are seeing results.  Over on the west coast groups like Alliance of Californians of Community Empowerment (ACCE) have joined others in a coalition: Make Banks Pay California.

This week their efforts were able to save a family’s home in L.A., and I would anticipate their success will grow.  This shows that bank protests can lead to results and people should not so quickly write off the #occupywallstreet movement as a phase.  Even though victories like the one in L.A. seem to get lost in the press, they are happening.  As as groups like the ones in California link into the ows movement, their focused messaging and demands will only make the movement stronger.