Underwater? Help Is On The Way! Mortgage Relief from Fed

  Well, my fellow Politicos, it’s been a wild week – so much to talk about! So many things that I have included a couple of links at the bottom of the post for you because there won’t be time to discuss them together here this week. But the main thrust of my post this week is the issue that could affect your kitchen table politics the most.  Right now, 10.7 million homeowners in the U.S. are “underwater” in their loans, meaning that their homes are worth far less than when they purchased them. That’s one in every four families. The crisis is worst in Nevada, Arizona, Florida and here in California, where 30% of borrowers owe 50% or more of their home’s value. There are over a million California families who are upside-down, and ove a hundred thousand in New York alone. With such a large number of families in crisis, it puts any economic recovery at risk. What choices do families who are underwater in their home loans have? Very few. You can’t afford to sell it at a loss because you’d still be deeply in debt; You can walk away from the home, like 588,000 homeowners did last year, even though they could still afford to pay the mortgage – just stop paying and let the bank foreclose. Or, like 40% of folks,  you can stay and keep paying your mortgage, if you can still make the payments, and continue to hope against hope that someday housing prices will rise to at least the level they were when you bought the house – if you got in at the early end of the bubble, your chances are better that if you ought at the peak. That’s where we are now, hoping against hope that something’s gotta give, having been taught all our lives that you don’t walk away from your debt, you keep your commitments. It is simply the integrity of the middle class homeowner that keeps the housing market even afloat right now. So when The President came out in his State of The Union and said that he’d be uniting the State Attorneys General and the U.S. Attorney General to prosecute the responsible parties that caused this mess, prosecuting the banks that bundled our loans and used them as chips in their high-stakes game of Texas Hold-’em, I saw a glimmer of hope on the horizon. Then, within a matter of days, I heard that there was a $25 billion settlement with the banks – turns out it’s been six months in the making. Finally, someone addressing these abuses. And that’s what they are, abuses. But I also thought, “Hey, that was happening way too fast,”...