Foreclosure Scandal

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I am surprised by letters in local newspapers from persons who actually believe the Obama stimulus plan is the way to cure our economic ills. These letter writers are optimistic about the plan even though many admit that they don’t fully understand it. Members of congress who voted for the plan didn’t fully understand it either; in fact, they didn’t even read it.

Although the public may be in the dark about the specifics of the stimulus plan, they are not fooled by House Bill 200: Helping Families Save Their Homes in Bankruptcy Act of 2009. Homeowners can easily grasp the unfairness of the government’s arbitrary reduction of the mortgage payment and interest rate for a neighbor living in a home comparable in value to their own. What kind of government would make them continue to pay $1,300 a month with a 5% interest rate while allowing their neighbor to pay only $500 with 3% interest? What kind of precedent does this policy set?

But liberals do not usually worry about the precedent they are setting or the side effects of their proposals. They are only concerned about the short-term benefits of their actions and how well they play with certain voting groups. The mortgage bailouts are indeed popular with certain groups of Americans and they fulfill campaign promises.

During the recent presidential election, when questions were raised concerning what government should or shouldn’t do about mortgage foreclosures, Barack Obama stated that, if elected, he would take steps "to reduce what borrowers owe on their mortgages." Joe Biden echoed Obama’s comments in the vice-presidential debate: "what we should be doing now — and Barack Obama and I support it — we should be allowing bankruptcy courts to be able to re-adjust not just the interest rate you’re paying on your mortgage to be able to stay in your home, but be able to adjust the principal that you owe."

Based on the past behavior of Washington, we can assume that once it acquires the power to reduce mortgage payments and interest rates for certain chosen families having financial problems, it will soon expand its use of this power to other situations. Indeed, the Obama administration is already under pressure from the powerful National Fair Housing Alliance, a consortium of over 200 civil rights agencies, to "change the demographics of neighborhoods."

The position of the National Fair Housing Alliance was stated recently by Lisa Rice, its vice president. After discussing our nation’s failure to achieve Dr. Martin Luther King’s dream of a pure egalitarian society, Ms. Rice stated: "As long as we live in racially and ethnically separated communities, we’re never going reach the dream." The Alliance wants the federal government to eliminate "separated communities."

But there has been no outpouring of complaints from minorities demanding that government alter the composition of communities that might not be diverse enough to satisfy elites. There is nothing unfair about the current housing laws that have been in place since 1968. It doesn’t matter if you are white, black, Latino, Korean or Cambodian. If you have the financial wherewithal, you can purchase a home in any neighborhood in the USA. I haven’t read of any homeowners objecting to families of other racial and ethnic groups moving into their neighborhoods as long as the new families could comply with existing financial requirements. (To my knowledge, only convicted sex offenders can be legally excluded from certain neighborhoods. However, if this group organizes and claims victim status, it should be able to force a removal of that restriction.)

If the Obama administration tries to force a change in the demographics of neighborhoods it will use a technique that has been successful in the past. It will claim that owning a home in the neighborhood of your choice is a "right," no different from other rights such as life, liberty and the pursuit of happiness. Consequently, the government will be justified in giving financial assistance to those who cannot afford such a home. The left describes this as a way to "de-concentrate poverty." But the right disparages it as "entitlement Nirvana."

It takes years of working and saving before the average family is able to buy a home. The dream of one day owning a home has always been a strong incentive to frugality. What will happen if Washington bureaucrats begin using government subsidies (i.e. taxpayer funds) to place families in homes they cannot afford simply to change the demographics of neighborhoods? One thing is certain. The American tradition of working hard and saving will be even further diminished.

Already there are sporadic protests against mortgage bailouts by the government. If the Obama administration uses taxpayer funds, either overtly or covertly, to change the demographics of neighborhoods, it might finally provoke widespread acts of civil disobedience by the usually "silent majority." It’s about time this group started making some noise.

Gail Jarvis [send him mail] is a free-lance writer.

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