Are We the American “Whos?” – Are There Any “Hortons” In Washington?

Lately, I get the nagging feeling that Americans actually believe that politicians care about THEM as people.  I do not buy it for one minute.

Have you ever had personal communications with representatives in local, state, or federal government?

Have you tried to write, email, or phone your U.S. House Representative or Senator?

Have you seen what you get when you do?

Except in rare cases, you get “boilerplate” position letters, sent by staff, who must glance briefly at incoming correspondence to see which stock reply to send.

I think we get far less than taxation without representation.  I think we get no respect at all.  I think we are the “Whos” in the Dr Seuss book “Horton Hears a Who.”

Want examples?

In January 2009, I sent emails to my Congressman, both U.S. Senators from the state of Texas, and President Obama.

“An Alternative to Foreclosure,” (see my blog in the April archives) which proposes using “Mortgage Conversion Contracts,” instead of foreclosure for viable homeowners.  The owner exchanges equity and mortgage for a market rate lease, with an option to buy.

I had several real estate and mortgage experts review the idea for legality and viability.  They thought it was a great idea.  They also suggested that it needed to be endorsed and encouraged by the Federal Government.

This approach avoids foreclosure costs, credit devastation, evictions, empty houses, damaged neighborhoods; it leaves the homeowner in the house, with undamaged credit, and an option to repurchase, if they recover.

No response.

Two and a half years later, with millions of families devastated, housing markets in shambles, a gigantic overhang of foreclosures, the headlines read, “Banks need to rent those foreclosed homes they own.”  Duhh!

Likewise, I sent emails to propose the instant stimulus of suspending FICA withholding for both employees and employers, as did John McCain in his campaign:

  • Employees take home 6% more
  • Employers reduce payroll costs by 6%
  • Employees have more to spend each month
  • Employers benefit to the extent they employ
  • Employers have less incentive to lay off staff
  • Less administrative expense for employers and government
  • Resume FICA gradually as necessary

No response.

Instead, this year, the government implemented a 2% partial suspension of FICA withholding for the employee only.  Today they make a big deal out of extending it.  What do you think the impact would have been if the government had suspended FICA two years ago, for employees, and business owners who still cannot get a loan at the bank?

What possible motive could the politicians have for ignoring real solutions to the problems we are facing today?  Could it be that politicians do not care about us at all, except at election time? Could it be that power is all they want? Do problems help politicians keep and gain power?

Apparently the denizens of Washington, DC know that all they need to do is give the illusion that they hear us, pretend they represent us, promote class warfare, use rhetoric, and vague platitudes, and we will still believe them.

Each of us needs to make sure our government knows we are here.  They need to treat us with respect and give us their attention, no matter how small we may be to them.

If you feel like a “Who,” join me in yelling as loud as you can,  “Hey Washington, WE ARE HERE!  WE ARE HERE!  WE ARE HERE!”

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An Alternative to Foreclosure

One of the stressful prospects facing many American families is losing their homes through foreclosure.  The Federal government is searching for ways to prevent this from happening.  The situation is difficult to solve with conventional thinking.

  • The homes cannot be sold for the price the owners paid.
  • In some cases, the homes cannot be sold for the balance of the mortgages.
  • Many of the mortgages have adjustable rates, which have risen significantly to the point that the payments are beyond the families’ ability to pay.
  • Foreclosures depress the market values of neighborhoods.
  • Vacant homes invite unwanted elements into the neighborhood.
  • Foreclosure gives the mortgage holders the costs of the process and the burden of managing or selling the homes in a depressed market.

The homeowners want to remain in their homes, but they have limited incomes to pay for housing.  Even if the homeowners remain in their homes, they may never recover the amount of the mortgage when they sell.  Foreclosure would create financial and legal costs for everyone and destroy the credit rating of the homeowners.

The mortgage holders do not want the costs of foreclosure and they have limited abilities to manage or sell the homes.  The neighbors want their neighborhood to keep its value and safety.

What can we do?

How would it be if the homeowners could remain in their homes at a cost within their budget?  What if the mortgage owners could still receive a return on their investments?  What if the costs and stigma of foreclosure and its aftermath could be reduced?  What if the costs to the taxpayer could be reduced or eliminated?

Consider this:  A new agreement between the homeowner and the mortgage holder:  a “Mortgage Conversion Contract.”  The homeowner gives up ownership of the home in exchange for relief from the mortgage and an affordable lease of 3-5 years with an option to buy the home after that.

  • The homeowner remains in the home, without the problems of bankruptcy and with the possibility of becoming a homeowner again.
  • The mortgage holder becomes a landlord with rental income and time for the market value to recover, once the current crisis passes.
  • The Federal government could subsidize creation and implementation of a model “Mortgage Conversion Contract” to speed the process and assure fairness.
  • If the homeowners qualify, they could receive rent subsidies under existing government housing programs.

This concept could ease the stress and costs on millions of American homeowners and the holders of their mortgages. How does that sound to you?