Mar312014

Renters deserve housing bailouts too

The unemployed consist of both homeowners and renters, but all assistance programs only bail out homeowners because this money is really intended to bail out the banks.

no loan owner left behind copyWhy don’t renters get bailed out out like homeowners? It seems fairly obvious that homeowners think renters are degenerates and losers, and even the government robs working renters to subsidize unemployed homedebtors. But does that mean it’s acceptable to favor one group over another? What happens when renters lose their jobs? Does anyone step forward to pay their rent or allow them to squat like homeowners? Why not?

Renters are no better or worse in the eyes of politicians; both renters and homeowners vote. And even if renters were a degenerate sub-species of humans, reporters and homeowners would be apt to show them at least as much compassion as they show a stray dog or cat. Perhaps we need a new advocacy group? PETR: People for the Ethical Treatment of Renters.

When you think about it, the only reason reporters treat us with stories to generate sympathy for homeowner bailouts is to cover for a stealth bailout of the banks; bailing out homeowners requires sending money to bankers, and since that isn’t politically palatable, it must be cloaked as helping poor, hard-working, honest homeowners who’ve fallen on hard times.

Unemployed, and heading toward foreclosure

03/25/14 08:12 AM—Updated 03/25/14 04:02 PM, By Suzy Khimmunemployed

DISTRICT HEIGHTS, Md.—Renee Brooks thought she had found her peace on Wild Rose Court.

Earning a decent salary as a welfare-to-work case manager, she landed a deal on a townhouse in a cul-de-sac on the outskirts of Washington. When she moved in with her young daughter in 2010, she simply felt relieved to be out of the noisy apartment complex down the road.

“You could hear everything, you could smell everything that people did,” says Brooks, 46, recalling her neighbors’ cigarette smoke wafting up into her old apartment. “Here, I don’t hear nobody talking. After nine, ten o’clock, you don’t hear a pin drop.”

Suddenly, in July 2013, Brooks lost her job. Six months later, Congress cut off her unemployment checks. Now she could lose her home, too. “When my unemployment stopped, I stopped paying my mortgage,” she says.

Brooks is now among the millions of unemployed homeowners who risk default, foreclosure, and huge debt loads—even if they manage to find a job again.

So if this woman were a renter, would anyone care what happened to her? I doubt it.

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I follow housing issues closely, and I haven’t seen any proposals to provide rent assistance for the unemployed. All through the Great Recession, we’ve seen story after story about how homeowners need aid, but apparently, nobody cares if renters sleep in their cars.

When Congress refused to renew federal benefits for 1.7 million jobless Americans in December, they also cut a lifeline for homeowners who are now struggling to make their mortgage payments.

Which cut off the bailout money to the banks….032114-housing-unemployed-03

About 54% of the long-term unemployed live in owner-occupied homes, according to Urban Institute researcher Austin Nichols—a total of 2.9 million Americans, according to the Current Population Survey. So the loss of income may cut off a crucial source of mortgage payments for these households.

So what about the 46% that are renters? WTF? I guess evicting them and sending them to their cars or the nearest homeless shelter is no big deal, certainly not worthy of mention or bailout.

That means many unemployed Americans and their families have even more to lose, without much of a backstop. A federal program that provided direct loans to unemployed homeowners has expired; many state-run programs have dispersed only a fraction of their funds. For many, the only option may be to buy themselves some more time—time that’s yielded few new opportunities for the long-term unemployed.

As a result, new defaults and foreclosures continue to be a drag on the recovery, even though the worst of the housing crisis has long since passed. …

There will likely be an increase in evictions too, not that any reporters will write stories about those unimportant plebs.america_highest_standard_of_living

And for the record, the foreclosures were only delayed by lender can-kicking. The recovery is an illusion.

There may be some relief for unemployed homeowners if they manage to find it in time. But there have been serious problems getting help to homeowners who need it most.Those with loans backed by Fannie Mae or Freddie Mac—who own or guarantee about 65% of all current mortgages—may receive a forbearance from their lender to suspend or lower their monthly payments; the same holds true for the 7.8 million loans backed by the Federal Housing Administration. In 2011-12, the Obama administration extended the maximum forbearance period from six to 12 months to give strapped homeowners more time to look for a job.

Hopefully this is a temporary situation, and [forbearance] gives struggling homeowners some breathing room until they find employment. At that point, they may be eligible for a loan modification,” says Mark McArdle, chief of the Treasury Department’s Homeownership Preservation Office. …

Temporary? Who are they kidding? HAMP loan modifications will become permanent housing subsidies.

Forbearance, by itself, only offers so much relief: For too many long-term unemployed, even a year-long grace period won’t be enough time. Between 2008 and 2012, 11% of those who were long-term unemployed in any given month were working steadily at full-time jobs a year later, the Princeton economists found.

Laying the groundwork for the permanent subsidy….

Susan_Schneider

Laid off in March 2013, Brian Jones is now getting mortgage help from Keep Your Home California, which uses federal Hardest Hit Fund dollars to provide direct payment assistance.

This is a disguised bank bailout. Why not just pass a law that says the unemployed don’t have to make housing payments? That would keep both owners and renters in their homes. Or why isn’t this assistance extended to renters who are in the same circumstances? The answer is pretty obvious, isn’t it?4.2.7

Brooks can’t understand why Congress refuses to restore unemployment benefits that have now been cut off from more than 2 million Americans. Senate Republicans have blocked an extension for nearly three months, and the House GOP has already attacked the latest bipartisan compromise as “unworkable.”

“I know they were one vote away from passing [in February]. I don’t understand—you’re making people homeless and hungry,” Brooks says.

When asked whether she blames Republicans for blocking the bill, she simply replies: “At this point, I would not vote for none of ‘em again.”

Let me guess, is the writer of this story a Democrat?

“Nothing is sustainable without income. Some individuals they understand and accept that. They’re fine with letting the foreclosure process take a while and get to save their money they have, while they’re looking for a job,” says Owen Jarvis, a lawyer at St. Ambrose Housing Aid Center in Baltimore.“Others—they don’t want to hear there are no options. But what can you do?”

So some of his clients are okay with squatting since they, as homeowners, have that option. Unfortunately, renters don’t have that option.

As you can tell, I am incensed by this issue. It really pisses me off to see these sob story bailout pleas only being extended to homeowners. I would probably find these stories offensive even if they wanted to bail out everyone, but the selectivity of their supposed compassion is infuriating to the extreme.

I am appalled by the way our government steals from renters to pay for the mistakes of lenders and homeowners. Renters don’t speak with a coherent political voice, and responsible homeowners are torn between wanting to see their illusory house prices maintained and not wanting to subsidize the bad behavior of irresponsible borrowers. The result is political inaction to stop the government theft.

Why should working renters care if loan owners are allowed to continue to occupy real estate they are not paying for? And why should working renters subsidize loan owners? Either give all unemployed increased benefits or let loan owners lose their houses. Why isn’t anyone upset about renters getting kicked out of their homes?

California_Debtor

If bailout money is doled out to the unemployed, it should show no preference toward homeowners. Renters have bills just like homeowners do, and if a renter is evicted, it’s just as painful as if a homeowner is foreclosed on. The only difference between the two is that bailing out homeowners also bails out the banks, so when you read these sob stories designed to elicit sympathy for a homeowner’s plight, remember that the real beneficiary of the bailout money is a bank.

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