PICK A SIDE – Homes and Foreclousures

Currently, there are more empty homes and condos (20 million unoccupied) on the market than people who actually need homes, we have a surplus. Why don’t we make them available to people based on their income? A new – urban renewal program.

Here’s the plan:
You must be an American Citizen. This must be your primary residence. Your income can not exceed somewhere between $43,000 and $60,000 a year; that can change, but let’s start there as a base. If you have kids or are supporting a disabled person there’s room for adjustments.

You enter into a home/condo lottery in each state and you win a home or condo – the cost of the mortgage will be based solely on your income over the last three years, so you need at least three years of federal and state income tax forms. If your income goes up at any time during the life of the mortgage so does the rate or cost of your mortgage payments, but only if your income goes up above inflation and the poverty line. If your income falls at any time your payments go back to the original rate.

This is better and far more stable for any community than giving the money to the banks.

This can also works for current home owners who are about to lose their homes.

Bottom line is we’re going to be buying these crap assets anyway mine as well get some property out of it.

What about moving up or moving out? You can sell your home any time, but then you opt out of the program for at least 3 years and lose any and all equity.

After 7 years you get to keep any and all equity if you sell, but the houses, must remain in the government program for at least 30 years. Which means you can only sell that particular property to people eligible for the program. There would also be fees if opt out early; cost of paper work, unless in cases of death.

This program also promotes a more equal ownership society.

All you need is someone with guts in the Congress and in the White House to promote this or some version of it.

I also purposes a top interest rate of a 30 years fixed mortgage at 4%.

Sure it needs some tweaking, chime in below with your suggestions, but it’s either this or the banks steal more and make us all slaves.

We have only two choice right now in this country, support the Wealthy Corporate Socialist Elites who are hell bent on robbing and destroying this nation or start supporting We The People.

It’s time to to pick a side.


Additions 02/11/09

Up Scale Homes and Condos:
The foreclosed upscale houses and condos is where the FEDS and States can recoup some of the money tied to bad assets– this will require a higher interest rate and a higher income. These properties will be made available to those who join in the service to the nation; doctors, lawyers, and teachers who work in low income clinics, hospitals, schools, the justice system representing low income people for at least 10 years.

The house or condo must still be the primary residence, payments are still adjustable and they must live there at least 14 years to claim any equity and sell to like buyers for at least 30 years.

Shell Homes:
Gutted homes must be ready to live in – no existing city code violations – the money made from the upper scale homes and seized property from indicted bankers and loan officers will be poured into these shell homes and condos. Green jobs will apply to make them state of the art energy efficient; solar, hydro or wind where possible.

Organizations like Habitat, Tech Schools and Urban Development Programs (UDP) at universities will be asked to comply and develop training programs. Returning Vets from the Middle East get first crack at job training.

…..
a little more help in explaining what happen
02/11/08
We Don’t Trust You

Credit Default Swap (CDS)

Collateralized Debt Obligations (CDO)

Structured Investment Vehicle (SIV)

So here’s the question, let the banks go belly up and wipe out the share holders, or make the next three generations of tax payer pick up their tab and keep paying the bankers, board and share holders?

Seems we are bailing out the CEOs board and share holders, we need to get something in exchange, the property.

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13 Comments

Filed under business, politics, science and technology, social epistemology

13 responses to “PICK A SIDE – Homes and Foreclousures

  1. Hi Jan!

    I have just a couple comments regarding your plan.

    Who really owns these ‘surplus’ houses? Do they come from a cache of government backed foreclosures? Or are all empty houses fair game? And if so, what about the real owners of these properties? How will they be remunerated? Should they be grateful for having their property seized by the state to help institute fairness in society? And yes I include corporations and banks in this question.

    What about houses in upscale neighborhoods that come with high maintenance costs and HOA dues? Will the people who ‘win’ this house be given a special dispensation not to maintain or pay their fair share to the HOA community? What about the rights of the Community when ‘The Beverly Hillbillies’ move in? What about the majority of hard working people who have paid full price for their investment? People who have not gotten themselves into trouble, only to have the guy next door given a house for half the price and feel no obligation to maintain it adequately?

    What about the rights of the existing homeowners when these properties are sold at less than fair market value consequently depressing market values even more.

    There are many empty abandoned homes that have been gutted of fixtures and wiring. Or have deteriorated due to neglect. Some of these homes will cost more to repair than to raze and start over. Do you suggest that the people who win one of these homes should just be thankful for their good fortune and do all that they can to make a silk purse?

    Lowering the lending standards on FHA/VA loans is what started this whole mess. Government mandated ‘fairness’ and social meddling in affairs of the market created too much pressure to include everyone in home ownership although home ownership is not a right. Do you propose that we move further down that road?

    This is more complicated than just redistributing the empty houses.

    Jim

  2. good questions – if they are foreclosed, fall into foreclosure, owned by a bank that took the bailout, or part of the bad assets package we are getting stuck with they belong to us now.

    If an empty house or condo is owned by a company or individual the government can invite them to be part of the program, if they refuse they are on their own. Full is better than empty. With such a good deal by the Feds it will be hard for them to sell so they will be compelled to take the deal or sit on the property until the market turns – as Ron Paul said the housing market will have to fall a lot more to adjust; the bubble was big, there will be even more houses on the market, perhaps doubling in the next year.

    The upscale houses and condos are a bit tougher, but if they are foreclosed this is where the FEDS and States can recoup some of the money – require a higher interest rate and a higher income, make them available only to those who go into service for the nation, like the the medical arts and work in low income clinics or hospitals for at least 10 years. The house must still be the primary dwelling, payments are still adjustable and they must live there at least 14 years to claim any equity and must sell to the like buyer for at least 30 years.

    If the neighbors are worried about potential new owners the can go to a stable bank, be approved for an at market value loan and buy the houses themselves, just like now. The rest of your question is one you can ask regardless of who sells the house. May I remind you what Reagan said about home ownership? Any other worries these people have in regards to the demise of their community can be addressed in a class action law suit against the CEOs, boards of the banks that failed them and seize their assets.

    The gutted homes must be ready to live in – no code violations – the money made from the upper class homes and seized property will be poured into these shells. Green jobs will apply to make them state of the art energy efficient, perhaps even solar, hydro or wind. Organizations like Habitat, Tech Schools and UDP at universities will be asked to comply and develop training programs. Returning Vets get first crack at the jobs.

    The last part of your comment: You’re right and wrong, it was bundling and the lenders lied about people’s income and the loans they were applying for to get their bonuses, we will have to prosecute and confiscate these loan officers assets, add them to the pool.

    I don’t want to prejudge here, but I get the impression that you fear the Beverly Hillbillies more then the crooks who destroyed the nation?

  3. In many ways, I like the idea. I mean, from my perspective, it would solve many of my problems. I’m younger, married in the last few years, and a kid on the way. Our credit isn’t “in the dumpster” by any means, but we do have a couple negative ticks on it. Unfortunately, with the current lending situations, any negative ticks are enough to get you disqualified, and it looks like we’re stuck renting, even though we do better at paying our rent than most mortgage holders these days.

    That being said, I’m not sure I could throw all my weight behind this as it is. There are other issues I’ll get to, but the primary reason is that more government control makes me nervous. I’m one of those loonies that thinks that the government is already way too involved in our daily lives as it is, and really needs to back off. I think for that one reason alone, this proposal makes me slightly uneasy.

    Additionally, JimmerSD brought up a great point about who owns each home. Obviously, the idea of automatically including all the government held homes is great, but the line where you say that the covernment can invite them to join the program troubles me. The government has one way of encouraging people to get on board with their ideas: taxes. Look at cigarettes as an example, where you’re paying more in taxes than the actual cost to make the things. Makes me glad I don’t smoke – if I did, I know I would really feel the governments invitation to quit.

    Of course, the argument could be made that maybe it would be a good idea to penalize people who own empty homes with taxes. I mean, we have luxury taxes for other frivolities in life. Surely if you can pay extra for a boat or RV you rarely use, you can pay extra for a home that gets little use. In fact, many unoccupied homes are so because they’re “vacation homes” for couples with decent income.

    The problem in that thought process arises in the facts that some homes are intentionally left unoccupied and off the market for good reason. For example, for a year before she died, my wife’s grandma moved into an assisted living home and left her home unoccupied and off the market, because she wanted to see it go to a family member after she passed away. I think that’s a legitimate reason to have an empty house, and I know I’d be irate if a government official had stormed into her room at the nursing home and insisted she give up her home or pay some ungodly tax.

    Really, here’s what I would propose: The government should give all of their seized empty homes to Habitat for Humanity, and encourage all owners of empty homes to do the same. offer a huge tax incentive, such as a rolling write-off of 150% the home’s current market value, where you could break up the value of your home into multiple tax years until you used up all the value. In other words, I donated a 100,000 home tis year but I would only need to write off about 20,000 worth of home sale this year to recollect 100% of my income tax. So I take $20,000 from my donated home write-off, leaving a balance of $130,000 I can use next year, and the year after, etc…

    The reason I promote Habitat is that they already have an excellent system in place. They are used to both building new homes and rehabbing existing homes. They give super-low interest loans for their homes, and aside from the meticulous work history you mentioned in the original blog post, they also require you to produce “sweat equity” on your home, actually doing manual labor to build/improve your home and the homes of others. When a habitat home comes into the community, it improves the overall neighborhood quality, not 50% of the time, not 90%, but 100% of the time. The homeowner has taken courses, done hard work, and is guaranteed not to be a lazy bum that will trash the place or treat it like a hand-out.

    So there ya go. You asked for responses, there’s a novel of a response for ya!

  4. Re: jim
    Looney – the reason we are in this mess is because of not enough government regulation.

    Invitation and Tax Write Offs: this is helpful to anyone who is about to lose their property and wants to keep their credit clean or lessen their debt – people who bought investment property, can’t meet the payments and about to fall into bankruptcy.

    Taxes: we should tax the things that are bad for us before we tax income.

    Unoccupied: this is only regarding foreclosed homes, homes in distress or homes that are part of a bankruptcy. Provisions are already available for situations like your wife’s grandmother through her estate.

    Tax Incentives: see Invitation and Tax Write Offs.

    Habitat: It’s a fine organization, but not big enough, I purpose more organization like them including church groups and HUD. I also purpose that higher educational institutions develop programs to meet the needs of the new jobs that will be created. I don’t think people who receive the home should necessarily be involved in their refurbishing, since they will not be living in the homes while under construction. Many will probably be low to modest wage workers and the handicap who are already trying to make ends meet. That’s not to say some community service elsewhere couldn’t be required, however, these people are already working hard.

    Guarantees: There’s never a guarantee that someone will ‘not to be a lazy bum that will trash the place or treat it like a hand-out,’ however, most homeowner and people who want to purchase a home who fall on hard times are not. I’m tired of people thinking the worse of the little guy when the destruction of this nation and planet has been perpetrated by the wealthy elite.

    Our attitudes about the average fellow American has to chance or this country is doomed.

  5. One of the little mentioned remedies that FDR instituted was to bulldoze empty houses in an attempt to stimulate the housing market. Since Roosevelt was slightly right of your average Dem these days, the idea of destroying property rather than redistributing homes to those of little means would seem aberrant to today’s Democrat. FDR’s idea was to stimulate the economy.

    I was watching the Congressional hearings today when a certain congressman asked why banks would ever refuse help from the Federal Government. He seemed at a loss. Then again I learned a long time ago never ask a question that you don’t know the answer to. The banker answered, rather matter of factly “because they don’t want the government in their business”. The Congressman nodded as though he had won an argument and released the floor.

    My point is that because a person or a company doesn’t want the Federal Government prowling around doesn’t make them Anti-American or criminal.

    Your plan to dole out nicer homes to those who dedicate service to the nation smacks of Soviet era class structure. Some are a little more equal. Others are rewarded for their dedication to the party. The whole plan is fraught with peril.

    True. HOA’s and higher end communities will opt to buy distressed properties. The middle class communities will be killed. Those who can’t afford to step up against the Feds to defend their property rights will be washed out and left to their own means.

    I bought in a nice community because I don’t want Jeb and the gang moving in next door. If the Feds had enforced the laws already on the books and didn’t try to strong-arm the financial industry into taking every applicant for fear of prosecution on Federal Equal Opportunity charges this whole mess would never have happened. Bush and Clinton are both to blame. Cox should be in jail.

  6. How does this help me? I’ve been unemployed for almost 3 years.

  7. FDR: I don’t know about your FDR story, you didn’t add a citation, but if true I’m guessing many of those houses were shacks and not fit to live in. I also hope as a modern citizen we have progressed in housing and living conditions since; though if you want to keep people illiterate and society unsafe make sure they stay homeless and uneducated.

    Banks:The facts are they took the money it is our business now, they belong to us. Also I never said that good solid banks not too big to fail should surrender – In fact in this very blog I tell how big banks tried to ruin the solid small banks (google National City Bank) and are still trying to take control.

    Soviet: this is not soviet style, please get over it. We already have programs for the public good and you use them everyday, we call them police, firefighters, nurses, doctors, hospitals, new medicines, universities, the military… You couldn’t afford any of those services without the help of these hard working low wage workers. Think about that next time you need a paramedic or a doctor.

    I don’t know if you are Christian, Muslim, Jew, or Atheist, but you must have some sense of humanitarianism in you towards your fellow citizen and neighbor. Most of the people in this country are not KKK Members or Welfare Queens, this isn’t the TV show COPS.

    As far as some more equal than others, I’d take a gander at Wall Street and then please remember your place in their service and don’t forget to call them by their rightful name, Master.

    Right now you have communities falling apart because of foreclosures, a full house is better than an empty one as the people who are left living in Modesto, California and parts of Detroit, Michigan will tell you.

    Distressed Properties: First, you do not understand what happen in the mortgage crisis, you sound like you have some Rush Limbaugh version of things. The loans made by brokers and loan officers including the big unregulated banks was pure theft, they bundled these false illegal loans and sold them on the market, they couldn’t get them out there fast enough so they started making them up. Housing should never be for sale on Wall Street.

    The majority of people who got these loans don’t even know who owns them any more. So stop blaming the little guy. It was a mouse trap, Bush knew and did nothing to stop it. This was Enron all over again, people were lied to and forcibly stuck.

    Second, the first waves of ARMs loans are about to come due, these loans are your upper class gated and semi-gated communities, you want to blame the little guy now wait until you see the wrath these babies unfold, you haven’t seen nuthin’ yet!

    Bush and Clinton: BTW where were you when participation in government was required? I guess one person alone can’t do much, eh? In the end we get the government we all work towards.

    The bottom line is these are your fellow citizens, you don’t have too many choices left, you are either with the corrupt bankers or with your fellow citizens, you may soon have to pick which side you’re on.

    Stop being afraid, there is no boogie man, just real life.

  8. sukatra – Do you live on air? You must have some kind of income.

  9. I think that most of our disagreement isn’t over the fact that something should be done, but more who should be doing it. I am dead set against big government, and I don’t know what (if anything) would change that view. I think the government already has it’s fingers in places they aught not. I think Fannie and Freddie should never have been founded in the first place, and that bailouts might have prevented (or perhaps simply delayed) a depression that frankly, I think we needed as a country. I think giving more power to the government in hopes of solving this problem is like putting more money into powerball tickets in hopes that you’ll eventually get the right numbers.

    You’re right, our fellow americans deserve assistance if we can give it. You’re right, empty homes are a pity. But I have a real fear of letting the same people who got us into trillions of dollars of national debt try to solve our housing crisis. The government would need a major reform before I would trust it to decide who gets what.

    Case in point – I lost my “day job” through no fault of my own in October. I immediately applied for unemployment. The government, bless their souls, rejected me. This was about the same time as that family who named their son Adolph Hitler was making the news, and let me tell you, reading how both of those parents were living off welfare when I, a hard worker, was just rejected for unemployment (something I actually EARNED by working), left real sour note in my pallet.

    I fought my case, and it took until just last month, but eventually I won. Of course, during that time we’ve given up every frivolity we ever had, sold off whatever we could, and the only reason I have Internet access is so I can job hunt. Of course, the government wasn’t supporting us in our time of need, when my wife is pregnant and I’m unemployed, and there was no renumeration for the time I was fighting my case. That’s how the government rolls – they’re a big, evil, faceless mob who would rather crush the little guy under 6,000 tons of red tape than help him to his feet.

    I’ll be the first to admit that not every government program is evil incarnate. I was part of the Americorps program, and it does a lot of good. The problem though, is that the people in government who want to do good are grossly outnumbered by the ones who want to be political.

    Honestly, I think the best thing the government could do would be to point private citizens to a private program, and to give that private program as much funding as it can. I just don’t see this as a place for government.

    But that’s just me 🙂

  10. Unemployment is a State Government qualification issue – if your employer refused your claim there’s little the state can do, but allow you to appeal. If you violated the terms of your unemployment you’re allowed to address the issues before an appeals court. That’s democracy. If the private sector ran the show you’d get nothing and have no say about anything.

    As far as baby Hitler, I don’t know what they receive, but I’m certainly not going to trust the general media about a sensational story. Most times they make things up or just get it wrong. It’s brain fodder to get you to buy their paper and read their ads, it’s LCD News. If there’s a legitimate investigative journalist working on the story I might be more interested in reading the details.

    If government doesn’t work it’s up to its citizens to reform it – that means you. It’s called Civic Pride – if you don’t turn onto politics, politics will turn on you.

    Same goes with the lobbyists. If you don’t get active they will rue the day. We know this, because we just saw it happen these last eight years.

    The last time the government let the private sector take control we ended up with a mortgage and banking crisis. Halliburton/KBR charging our military $60 for a hand towel, and electrocuting our soldiers in the showers. We saw Blackwater torture and kill innocent people for sport in our name. We saw contracts given to a nefarious foreign nation to build our embassy with tax payer dollars. We saw over 4000 men and women die for oil companies. We saw our industrial base disappear for the sake of Global Corporation to other countries with lower labor standards that produce sub-standard products now poisoning our people through toys and pharmaceuticals. Today we see how those sub-standards have spread into our own nation as unregulated corporations blossom and investigative cut backs have been imposed. These cut backs are coming home to roost, we are killing our own children with peanut butter, tomatoes and spinach.

    The private sector’s unregulated greed is worse.

    What we have had for the last 8 years has been a Plutocracy – Corporatism.

    The pendulum is swinging back for an adjustment. You have a chance to be part of the solution. Your government is as good as the people who participate – It’s your job as a citizen to watch it, at least keep abreast of the issues by supporting and reading legitimate watch dog groups.

    Just voting is no longer enough and if you think someone else is going to do it for you I can tell you from experience they’re not going to do it with your best interest at heart.

    Frankly, after what the private sector has done to this country with the aid of bought and paid for government officials I don’t know if the US as a nation will survive. I think we are very divided as a people and hate each other too much, but I think if more people get involved and take some civic pride we might have a chance.

  11. I think we’re closer to saying the same thing than you think…

    “That’s democracy. If the private sector ran the show you’d get nothing and have no say about anything.”

    That’s true enough in 2009. However, you have to keep in mind that things like unemployment insurance are new-ish in regards to US history. If I were working in the private sector in pre-New Deal times, when government welfare didn’t exist, I would have been part of a union, and when I told my union about the unfair release from my job, they would tell my company to give me a fair severance or face a potential strike. That was the original purpose of unions, and if we got rid of all this governmental oversight, I’d be more than happy to let the unions make a comeback.

    As far as the “Baby Adolph” thing goes, if you Google “Adolph Hitler Campbell disability” you should find more than enough proof from both news and bloggers about the Campbell family and how they live off disability (despite seeming highly functional). They’re a prime example as to why the system is broken. I doubt their kids would have ever been taken away had they not become a staple of national news.

    I agree, just voting isn’t enough. I haven’t been as active up here as I used to be before I moved to Minnesota, but in my Nebraska days I was VERY active in government. I regularly wrote letters and made phone calls to my senator (one time he actually chatted with me on the phone for almost an hour). I attended city government meetings and even some state government assemblies (where I discovered that I really didn’t like Ernie Chambers). I think being part of these things informs us and gives us a window to be a part of government. In a nutshell, I feel very strongly that we are to be a part of our government. But just because I feel that we need to be a part of our government doesn’t mean that I feel that we should bloat it with stuff that probably has the forefathers rolling in their graves.

    As far as your stance on the private sector goes, I think you’re throwing the baby out with the bathwater on this. (Honestly, if I weren’t such a friendly fellow, I’d have been too offended by you likening private sector groups like Habitat for Humanity to Haliburton and corporate losers to even bother to respond but like I said, I’m friendly.) The folks in the private sector who have caused all the problems we face aren’t at all the same people who can make changes for the better. I can guarantee you that not one person on the Habitat board of directors had anything to do with the housing crisis. In the US, most of the charity, disaster relief, and general helping of others comes from private citizens and non-government run non-profits while government run groups like FEMA fall all over themselves when problems arise. Considering that they do most of the good in America, I think it’s just a little asinine to make statements that the private sector should be hands-off from helping others, wouldn’t you agree?

    In closing, I’ll say it again – your plan has a lot of potential, but I don’t want to see it entrusted to some government committee that’s blind to the needs of real people. Let’s entrust the plan to the decent, qualified people in the private sector – not the greedy corporate suits who caused so much trouble, but the decent folks doing not-for-profit work that know about helping others inside and out. I think that’s how it would do the most good.

    Okay, hopefully that made some sense. It’s late, I’m tired, and I’m going to bed. Cheers! 😀

  12. Union: You’re off on the Union dates – Unions didn’t reach that kind of power until the 1950’s- (see: teamsters, Hoffa) but, I’ll give you a start date where Unions stared to take power – UAW 1941. After WWII Europe got guarantied government socialism and our gift to the American people was strong Private Unions. What people and countries are doing better now? Think about it.

    Sorry, in a Union you had few to no rights pre-FDR or even post-FDR unless you were in a very select and small group of unions. In most cases back then if you even thought of joining or forming a union you could be fired without good cause. Brush up on your labor union history.

    “Adolph Hitler Campbell disability” Googled. Still found nothing, but junk You’ll have to provide a proper URL.

    Voting isn’t enough: you really didn’t say anything here. Working on/in government takes constant vigilance and “…should bloat it with stuff…” is a pretty empty and an ambiguous statement at best.

    Habitat for Humanity to Haliburton: Habitat is non profit – Haliburton is for profit how did I liken them?

    You’re kind of all over the place here….

    FEMA: which was started by Jimmy Carter who also started Habitat For Humanity did a fine thing. FEMA was a good agency until Bush got hold of it.

    Which was pretty much Bush’s Mojo; to make good government programs ineffective by underfunding them and putting people who had no idea what they were doing in charge.

    Which is what he also did, and is being investigated for in regards to the Justice Department, and we will soon see, if Obama has the guts, on a whole list of other Government Departments and issues.

    Private Sector: I never said the private sector should be hands off. I said when the government takes over, rescues, if you will, members of the private sector it belongs to us. They failed, they do not get a say any more. Leave the good guys alone. If it’s too big to fail, it’s too big to exist, break them up.

    Let’s be clear about a few things.
    In the private sector the company is beholden to its stock holders first. Even that didn’t happen with the Mega-Banks, they told stock holders if they didn’t like what the board was doing to sell their stocks. The arrogance! We see now that wasn’t such a good idea to allow. Good Corporations have a responsibility to the society that supports them.

    Further, I don’t believe in corporate personhood, that needs to be abolished.

    What I think you don’t understand is that Corporations under Bush have taken over the government. This needs to be remedied and fast. We’re not talking about Joe’s Hardware Depot, we’re talking about Mega-Corporations that are setting government policy. That’s a Plutocracy – Corporatism (see; Mussolini).

    You’re going to have to wrap your head around this pretty quick to understand what is going on within the halls of Congress and your country. This isn’t about The People and their Big Fat Government this is about Muliti-National Corporations lowing our living standards and dictating our way of life.

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