Anthony M. Freed

Anthony M. Freed
Location
Eugene, Oregon, USA
Birthday
February 17
Title
Editor - Director of Business Development
Company
Infosec Island Network
Bio
Anthony is a researcher, analyst and freelance writer living in beautiful Eugene, Oregon. Anthony founded Information-Security-Resources.com in 2008, and merged forces with the Infosec Island Network in January of 2010. Infosec Island is committed to serving the needs of SMBs and mid-market enterprises across many industries, as well as nonprofits, government agencies, educational organizations, and the infosec community at large. Contact Anthony at afreed@wireheadsecurity.com regarding all aspects of business development, client and community relations. Many opportunities are currently available for business and strategic alignment at Infosec Island. Anthony also writes about the finance industry - particularly information security related topics - and is a fervent advocate of both freedom and accountability. Prior to founding ISR, Anthony received notoriety as a financial and business freelance journalist, including having numerous articles published by leading media syndicates such as The Chicago Sun-Times, Business Week’s Business Exchange, Seeking Alpha, InvestorCentric, OpenSalon, Bear Market Investments, Alacra Pulse, ML-Implode, Reuters, and dozens more. Anthony has worked as a consultant to senior members of product development, secondary and capital markets from the largest financial institutions in the country, and he had a front row seat to the bursting of the credit bubble.

NOVEMBER 19, 2008 6:24PM

A Foreclosure Solution so Simple it Would Work

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A Foreclosure Solution so Simple it Would Work

By Anthony M. Freed

Here is the solution to most of the ills of the current housing crisis - in the form of a languishing US House Bill that would allow homeowners facing foreclosure the option to stay in their homes as renters, and perhaps even compel their lenders to be more cooperative with the distressed borrowers when negotiating loan workouts.

That's right - a solution to the foreclosure problem that would save banks from certain ruin, keep homeowners in their homes instead of out on the streets and onto Public Assistance, put a bottom on the housing price crash while allowing for high-cost areas to come into par with median income levels, and save the taxpayer trillions of dollars in debt that is to be piled on to the trillions of dollars in debt we already own.

Sound too good to be true? That is understandable considering the constant barrage and misinformation being shoveled by the Federal Government's sycophants like Paulson and Bernanke, the ridiculous political posturing of Barney Frank and his faux-hearings orchestrated to merely put the "official story" into the congressional record, and the complete and utter surrender of the Fourth Estate to news cycles and sound-bites.

The newest old proposal you have never heard of: Saving Family Homes Act.

Millions of people face the loss of their homes over the next few years. While the politicians in Congress have developed a wide variety of complex schemes in order to hold back this flood of foreclosures, including one passed into law last summer that provided up to $300 billion guarantees for new mortgages on homes facing foreclosure, none have had much impact thus far.

The unavoidable problem with these schemes is that it is difficult to design a plan that aids families facing foreclosure without giving an incentive to other homeowners to also default on their mortgage.
In addition, it is hard to justify taxing the people who are struggling to keep up with their own mortgages in order to help those who default. It is even harder to justify taxing ordinary people to help out the bank executives, who issued hundreds of billions of dollars of bad loans.

As a result, to date these programs have not prevented a tidal wave of foreclosures and evictions. The number of foreclosure filings (there are typically two or more filing for every actual foreclosure) is now approaching 300,000 per month.

I am sure there are some drawbacks somewhere in this plan, and it can be expected that there will be responses to this article and the legislation that will make some reasonable arguments as to why this bill should continue to languish in committee - as it has since MAY 2008.

But, I defy anyone to come up with a plan that is more practical, more easily implemented, would help more borrowers and lenders, and that would save the American Taxpayer trillions of dollars and a protracted economic downturn, perhaps even an economic depression.

With passage of this bill, the banks would be forced to either become the nation's landlords - which is a business they do not want to be in under any circumstance - or working with homeowners to refinance or modify mortgages into affordable 30 Year Fixed products at current market rates.

This bill, or something similar to it could also provide opportunities to the renting ex-homeowners to later assume a mortgage and repurchase the home from the bank when the economy or as their personal financial situations allow.

While the basic point of the right to rent is simple, it can be extended in various ways to further aid homeowners. Bernard Wasow, at the Century Foundation, has proposed some additional measures to facilitate the transition to rental status or possibly a return to ownership. Daniel Alpert, of Westwood Capital, has a somewhat different version that creates a mechanism for homeowners to buy back their homes after five years.

The alternative is a tsunami of foreclosures that further drives housing prices down for all of us as the banks potentially become the owners of 1/3 of all US homes, a drawn-out cycle of bank failures and continued taxpayer bailouts of a 'select' few banks, and ultimately the destruction of the dollar as a world currency with permanent state of stagflation.

That would be the end of the middle class.

The Bill: H.R. 6116: Saving Family Homes Act of 2008

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Comments

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Isn't this an expansion on what Clinton proposed during the primary season? I remember them doing a bit on this bill on public radio's Marketplace program.
I'll see what I can find on that - thanks. Funny hopw it only took one Bill to get hundreds of billions to the wealthy, profit-fat banks - but nothing effectual for the people who are footing the bill.

I want to see the new AG go after those ill-gotten profits, bloated salaries, crooked stock-options, and unjustifiable mega-bonuses that were taken during the bubble.

That could be hundreds of billons...

Thanks Turtle
I live in Tsunami Land....San Joaquin County California....
Driving around the entire county is like being in a wierd film...house after house after house after house..street after street...some developments have mostly unsold new houses.. previously green and well maintained neighborhoods are wounded, with dead, tall dry grass, weeds, discarded toys and items of clothing, cardboard boxes alonside the barren driveways, broken windows...missing A/C units!
The last time I had the same deeply certain level of knowing how irreversible and nightmarish something had become ,was flying over Mexico City for the first time and looking down at an ominous dark brown mound instead of sky...only it was the sky...
this housing crisis here is beyond the crisis stage...the human suffering has just begun.....
What can the average citizen do?
Just make a lot of noise Grandma - make a hell of a lot of noise...