Fayette foreclosures: Education will help

Tue, 07/03/2007 - 4:12pm
By: Letters to the ...

I read with great interest the first installment of your series on the foreclosure market in Fayette County.

Affordable housing is a major concern for many of my constituents. Each and every family that has lost its home to foreclosure in Fayette County deserves our sympathy and compassion.

All is not lost, however.

While we certainly have much to do in order to ensure that something like this does not repeat itself, there are steps that we can take right now to stop this trend in its tracks.

Financial education is a significant first step in arresting this problem. Most importantly, we can better educate homeowners so that they know that there’s always somewhere to turn for help – starting with their lenders.

At the first sign there might be a problem, homeowners should contact their lenders. The sooner the problem is addressed, the more help you’ll be able to get.

Community organizations, state programs, and even lenders themselves offer programs to help people straighten things out, get back on their feet, and avoid defaults and foreclosures.

For example, Freddie Mac, whose programs and partnerships reach every community in the country, recently announced that it will devote $20 billion to existing and future sub-prime loans. With this funding, thousands of families will be able to find a fair, flexible, and affordable way to hold onto their homes.

Things don’t have to get worse before they get better. If homeowners know about the help that’s out there, and lenders large and small follow examples like Freddie Mac, we’ll be taking a big step toward reversing this foreclosure crisis for good.

Representative Virgil Fludd

Tyrone, Ga.

[Democrat Rep. Fludd’s House district includes part of north Fayette County.]

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Submitted by helpful lawyer on Wed, 07/18/2007 - 7:43am.

Rep. Fludd suggests that help is available for many homeowners who are experiencing mortgage payment difficulties and that these homeowners should avail themselves of that help by taking action early.

I agree entirely with him.

One of the frustrations of serving as a lawyer is having to contact someone who owes money to your client and finding that the debtor does not respond. If people don’t respond, you don’t have any choice but to sue them. If they’d talk with you, you could perhaps work out something, but dead silence is rude and counter-productive.

Killing the goose that laid the golden eggs may be what some people will accomplish by carelessly denouncing lenders as predatory. Many lenders have been encouraged and gone out of their way to try to extend loans to people who have historically been discriminated against. If someone is called a vulture for trying to help the poor, he’s not going to try to help the poor anymore.

Statistically speaking, there will always be some defaults on loans. That’s part of the business. The interest rate level tends to reflect the level of the risk. Some defaults are caused by honorable reasons, such as ill health.

Some defaulting borrowers are accused of not having read or understood their loan agreements. I am going to tell you the ugly truth: a lot of these agreements are not intended to be read or understood. They are composed by heartless distant anonymous lawyers in response to a slew of complex laws poised to entrap their clients in technical violations.

These agreements get printed into extraordinarily lengthy forms which people are asked to sign without reading. Everybody does it, including HVAC, cable and phone repairmen and car dealers. They say “sign here,” and if even only 10% of the people stopped them and said, “Wait, I’ve got to read what you’re asking me to sign,” the wheels of commerce would grind to a halt. It’s become hypocritical to blame people for not reading and understanding what they sign. The whole legal game on forms is a sham, and it’d be nice to encounter judges who realize it.

But I digress. Rep. Fludd gave excellent advice.

Submitted by too bad on Wed, 07/18/2007 - 6:11am.

There are 2 things that are very obvious. First, the local governments need to put a MORATORIUM on any new building untill the glutt of avalible houses are sold. They owe it to the taxpayers who have their houses on the market and have supported the local governments [by paying their taxes] for years. These people who can't afford their houses, can't sell them either because there are thousands sitting on the market. It seems the local governments help their developer buddies first and foremost. You have only to look at Tyrone. An ex town planning counsil member turned developer. He was never turned down for anything untill recently. We now have a subdivision with a community septic tank, it is really a gass on windy days. The developer has sold all, and off the hook. Another of his subdivisions next to it is in foreclosure now. He sold it to builder and walked away. On Palmeto road you will see a bunch empty buildings the same developer bought. The local tax paying companies that were there are gone, but he hasn't got any new ones to take their place.
Second, federal government, is letting the banks take advantage of people who have less than perfect credit. These are not good will loans. The penalities and interest on them are unreasonable for someone with good credit, much less someone with out. The whole thing is designed to fail. But the banks get theirs, at the taxpayers expense. In other words, Virgil, you the government, are letting them screw the little people and asking the rest of us taxpayers pay for this set up. Don't play innocent! The kind of mess the lenders are doing should be against the law. It is preditory lending at its best!

Submitted by dollaradayandfound on Wed, 07/18/2007 - 6:51am.

The capitalist system doesn't work that way.
Eventually, all of the old houses and all of the new houses will sell.
The difference being that many of the old houses will sell for 10-20% less than the new houses.
This is, of course, due to the competition.
Also, bad loan companies will also make money with the selling of these houses.
Houses, like stock, aren't meant to make make on in a short term no more than are stocks. Only professionals can do that!

Submitted by thebeaver on Thu, 07/05/2007 - 10:39am.

Representative Fludd letter to the editor doesn't even address personal responsibility that might prevent people from purchasing a home that they cannot afford. The lenders are partly to blame, however the person that signs on the dotted line has ultimate responsibility to ensure that they know what they are getting themselves into. "Most importantly" take personal responsibility for your actions, and don't go looking for a government program to bail you out. All that amounts to is a transfer of wealth from responsible individuals to irresponsible individuals.
Liberals like Fludd don't like to talk about personal responsiblity and look at ways to prevent people from getting into financial difficulty to begin with. No, they would rather look for another government program, because thats what socialism is all about.

The Beav

Cyclist's picture
Submitted by Cyclist on Thu, 07/05/2007 - 5:42pm.

is going to save all the poor and the down and out because the evil system is not fair. Anyone need some income property!!!!

Submitted by swmbo on Fri, 07/06/2007 - 2:12am.

I agree with you, in part. People who are stupid enough to over-extend themselves shouldn't look to the government for a bail out. (For now, I won't get into the government bailout in the Savings & Loan disaster or the bailout of the airline industry's decades-long mismanagement under the guise of 9/11 collateral damage.)

But, having said that, the problem is what happens to the neighborhood when a bunch of houses go into foreclosure. Worse yet, is when the over-extended homeowner manages to keep the house but can't keep up the property and rents it out. The neighbors had no hand in making the bad loans or selling the house to someone who, clearly, couldn't afford it but they are stuck living with the repercussions of that person's financial failure. So, for what it's worth, I'd rather have Fludd trying to do something to get those people back on track than watch our great county bear the burden of having them drag us down.

If you and I are always in agreement, one of us is likely armed and dangerous.

zoes's picture
Submitted by zoes on Wed, 07/11/2007 - 1:25pm.

The people who are losing their homes to foreclosures do not need to be bailed out or put 'back on track'. When you can't pay your mortgage, you sell your house!! Duh. To sit around bemoaning the unfairness of it all and not pay your bills or do something about it until someone comes along and throws you out of your house, repossess your car, garnishes your wages, etc is pure trash behaviour.

Submitted by dollaradayandfound on Thu, 07/05/2007 - 1:26pm.

The world has always been full of ignorant people who need protection from loan sharks.
I would have bought a house at 18 if someone would have loaned me the money!

Submitted by thebeaver on Wed, 07/11/2007 - 11:29am.

$ -
That's what parents are for. To teach you financial and moral responsibility.

Submitted by dollaradayandfound on Wed, 07/11/2007 - 3:10pm.

Children who are not taught personal responsibility due to ignorant parents, or dysfunctional families... which effects all races...are not at total fault and it is our duty to help them!
Some of the ones taught will also fail, and some of the ones not taught will succeed.
All those stock manipulators and crooked bankers WERE taught personal responsibility and they set about hogging up money.
It is not black and white!

Submitted by skyspy on Wed, 07/11/2007 - 4:29pm.

It is not about race that is true.

Why should I be held accountable or have to help someone out of their mistakes and poor choices?
Nobody held a gun to these people and forced them to buy homes they can't afford, or have kids they can't afford. This shouldn't be my problem.

Submitted by thebeaver on Wed, 07/11/2007 - 3:15pm.

Fine, just don't create another government program and take my hard earned dollars to educate people to stay away from crooked lenders.
People have to take responsibility, and should not rely on government for everything!!

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