HOMES PRICES CONTINUE TO FALL - HELLO, WASHINGTON!

July 8, 2009

When you see real estate prices falling in Manhattan, you know things are bad. Two years into a total collapse of residential home values, our elected officials in Washington continue to ignore the herd of elephants in the room. These bureaucrats continue to treat this disaster like they initially handled the destruction from Katrina. At least eventually the Federal and State government woke up and decided the pictures of homeowners living on their roofs was poor PR.

Well, to date, our representatives in Washington are still dozing, while housing values continue to sink below the rising waters of taxes, corporate bailouts and growing deficits. When are our officials going to put some effort into addressing this issue? It still comes down to the banks, hedge funds and insurance companies would need to take a hit to resolve or at least arrest the decline and those greedy players are convinced that this won't happen. Their lobbyists are doing a great job keeping the bunch in Washington from tackling the problem. Until one of our elected officials takes up the fight, we intend to lump the all of them into one ineffective group interested only in protecting their political lives.

Can someone in Washington take charge of this critical component of our economy? We immediately need an independent group charged with reviewing all pending foreclosures and stopping those who can prove income and a reasonable potential to fulfill a new fixed-rate mortgage commitment. Those who were speculating and obtained mortgages via "no doc" loans either go to the end of the line or would be ineligible to participate, just let them walk with no credit penalty and take over the property. The "no doc" loans were a huge part of the problem and most were in way over their heads right out of the gate.

New property values must be established when re-negotiating the new mortgages, and this is where the banks and mortgage companies dig in their heels and the accountants start ripping their out hair. That's too bad, but if an economic turnaround is going to happen in most of our lifetimes, they're going to have to deal with it. We've made this point before, but the pain needs to be shared and so far, the homeowner is the only one feeling it!

This would be a fantastic opportunity for one of our Congressional representatives or maybe the Republican minority to generate huge constituent support. Mr. Boehner, Mr. Cantor, Mr. Bachus let's address this crisis NOW!