Dold Challengers Offer Ideas on Mortgage Crisis
Some Democrats would require mandatory mediation between lenders and borrowers on underwater loans.
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After Rep. Robert Dold (R-Kenilworth) met with local real estate industry leaders Tuesday to discuss the nation’s housing and mortgage crisis, four of five Democrats hoping to challenge Dold had ideas of their own to share.
Though Dold sees possible legislation as a solution to the difficulties being caused to people because home values are dipping below the mortgage balance on their property, he thinks relaxation of certain regulations now will give some quicker relief.
Dold also recognizes the current reduction of real estate values is one of the major problems for the economy as a whole. “There is no question as we look at the economy and jobs, housing is a big, important aspect to our economy.”
“We can do that but I’m not sure how quickly it would be,” Dold said about possible new laws. “What we can do is give community banks more flexibility. If the appraisal comes in at $470,000 instead of $500,000 maybe the person has to put 22 percent down instead of 20 percent,” he added describing a possible scenario.
Schneider Considers Housing Major Issue
As one of the five candidates seeking the Democratic nomination in the March 20 primary, Deerfield management consultant Brad Schneider sees an improved housing market as a major part of recovery.
“Home ownership is still the pinnacle of the middle class dream,” Schneider said. He thinks cooperation of lenders and homeowners with government assistance in tax policy will help. “We have to get them sitting on the same side of the table rather than fighting with each other.”
Schneider sees a reduction of the principal balance of some mortgages as well as smaller payments as part of the solution. He would add tax advantages into the mix for lenders that must take a loss by reducing the amount they will eventually be paid.
Waukegan community organizer Ilya Sheyman would go even further by passing legislation requiring mandatory mediation between lenders and borrowers under the auspices of the federal government.
“I support Sen. (Richard) Durbin’s (D-Springfield) cram down legislation what will require the reduction of principal,” Sheyman said. “The reduction of real estate values has hurt families.”
Tree Wants Banks to Reduce Loan Balances
Another candidate, Long Grove business owner John Tree, believes banks that made substandard loans that are now under water — a term meaning the loan balance is greater than the property value — should cut the principal.
“Underwater mortgage debt is one of the primary drags on the economy,” Tree said. “Banks are sitting on more than $1.5 trillion in capital reserves. It would take roughly $700 billion dollars for banks to write down underwater mortgages that they are largely responsible for creating.” Tree would have those banks subtract the $700 billion from unpaid bailout money.
Hainesville mathematician Aloys Rutagwibira, another Democratic candidate, is less willing to make accommodations to underwater mortgage holders. “Any modification without any prospect of income to continue making payments is just kicking the can downstreet,” he said.
Additional ideas
A fifth Democrat, Mundelein attorney Vivek Bavda did not respond to Patch’s request for comments.
Dold is keeping an open mind about possible legislation to aid people with mortgage issues, including Durbin’s proposal.
“Congressman Dold is constantly searching for ways to address the housing crisis that is slowing down our economic recovery,” Dold Communications Director Stefani Zimmerman said. “He welcomes looking at the details of any serious proposal to evaluate whether it would be smart policy that is not weighed down by unintended or indirect consequences.”
In other campaign news Wednesday, the Democratic Congressional Campaign Committee named the 10th Congressional District as one of 18 “red to blue” races throughout the country for the Nov. 6 general election, according to DCCC Chair Rep. Steve Israel (D-NY).
The Deerfield Chamber of Commerce
9:17 am on Thursday, January 19, 2012
The government should require Fannie and Freddie to allow people with a good payment history, to refinance into the current rates, with no additional paperwork.. This will do a lot more for the housing problem than dropping the dropping the mortgage balances.
Abigail
9:40 am on Thursday, January 19, 2012
Per the article: "Schneider sees a reduction of the principal balance of some mortgages as well as smaller payments as part of the solution." And: "Tree Wants Banks to Reduce Loan Balances"
Mr. Tree, how would you like it if your customers/clients decided they would only pay you half of what you are charging for your product/services? This is essentially what you and Schneider are asking the banks to do.
So, if someone paid $500,000 for their home and the home is now worth only $300,000--you both want the banks to eat that $200,000? Are you both nuts? The costs of these reductions will be passed on to the rest of us, and those of us who are struggling cannot afford to bail out others.
Your plans are not the answer. If people bought a home they could not afford--or due to job loss or other issues cannot make the payments on--you shouldn't be asking the banks to bail them out. If too many of these loans are readjusted in the manner both of you suggest, it could cause a major collapse in the banking industry. Then what happens--Obama gonna save us? I doubt that. Let them refinance the home at what they owe. Then if they can't pay that--sell the damn house, or let the bank have it!
Typical Democrats want those of us who pay our bills to support those who won't, cannot, or never could. I don't know about the rest of the homeowners posting here, but this is NOT acceptable to those of us who pay our bills.
Your plans are nothing but crazy talk.
Tim F
2:43 pm on Thursday, January 19, 2012
Typical Democrats want those of us who pay our bills to support those who won't, cannot, or never could. I don't know about the rest of the homeowners posting here, but this is NOT acceptable to those of us who pay our bills.
As Margret Thatcher (former Prime Minister of Great Britain) once said " Socialism is GREAT - UNTIL you run out of other people's money".
Charlie
1:22 pm on Saturday, January 21, 2012
Abby, when you look in a mirror, do you see anything? Read your 4th paragraph. It reads, and I quote, "Look at me, I'm Abigail, and I'm really not in touch with reality".
Abigail
9:47 am on Thursday, January 19, 2012
"Hainesville mathematician Aloys Rutagwibira, another Democratic candidate, is less willing to make accommodations to underwater mortgage holders. “Any modification without any prospect of income to continue making payments is just kicking the can downstreet,” he said."
At least this Democrat candidate has more common sense. The rest of this sorry lot--Sheyman included--just wants to get elected by those in financial trouble and then the rest of us foot the bill.
When are the voters going to wake up and smell the BS these people are shoveling?
Charlie
2:42 pm on Monday, January 23, 2012
Abby, are you a fiverr, or just a juco campaign worker with a paid axe to grind? Sophomoric belligerence degrades effective problem solving, and does not flatter one's image. I don't care what party our congressman comes from, as long as we get something better than the incumbent shallow hal dolt we have now. Suggest you might do better writing phony trip adviser or angie's list reviews.
RB
10:53 am on Thursday, January 19, 2012
I agree that the solution should not include tax payers taking any hits for bad decisions made by banks or homeowners. It is an unfortunate situation but those of us not not under water bear no responsibility for this problem. Perhaps banks could work with home owners better with financing or if the bank wants to take the reduction, fine...just not taxpayers.
Abigail
12:47 pm on Thursday, January 19, 2012
Agreed, RB. I am not my brother's keeper if my brother won't take responsibility for his own actions. Makers vs takers.
Hopefully the makers will win.
RB
4:15 pm on Thursday, January 19, 2012
I don't think a position that asks banks and homeowners should pay their own bills is necessarily Republican or Democrat. I don't know of Democrats who are "typical" as you describe. It's simple to lump Government helping those that need it into a comparison of paying off over bought houses. Someone losing a job may not be able to afford a giant house, that does not mean society should not help them through unemployment insurance (already paid for by business, not a hand out), but they may not be able to afford the house any longer. A different situation is a house that has dropped in value since purchase. There is no way that taxpayers should be on the hook for the difference. The market should take care of it and we are already taking a hit in falling property values associated with this unregulated fiasco. Better regulation could have prevented this along with those regulating agencies doing their jobs. If banks can't handle the paperwork or proper appraisals...that's their problem. If they own a loan that has no asset value....that's their problem.
Daniel Krudop
6:52 am on Sunday, January 29, 2012
"unemployment insurance (already paid for by business, not a hand out)"
RB, I would invite to to visit the following link. Put in the taxes you pay and then drop down to "Job and Family Security" under that category you will find "Unemployment Insurance" where you will see how much you paid into the fund. There are valid reasons to not consider unemployment insurance a "hand out," but it is not revenue neutral. It has been a major player in discussions over raising the debt ceiling so we can borrow more money to extend benefits.
http://www.whitehouse.gov/issues/taxes/tax-receipt
Ellie
9:53 pm on Friday, January 20, 2012
A good job market would help homeowners the most. Illinois unemployment figures just came in for last month -- a disgraceful 9.8 per cent unemployment! It's time to throw the Democrats out. Wisconsin has 7.1 percent. Iowa has even lower figures.....
Charlie
2:53 pm on Monday, January 23, 2012
Good judgment would help more. Good people with poor judgment and little financial discipline over-extended themselves. Good people of all political persuasions drank the Kool-Aid. If you think either party is the solution, then you know little about how to craft solutions and indicates that you aren't a very qualified problem-solver.
Abigail
3:03 pm on Monday, January 23, 2012
Charlie, I realize you are trying to goad me into a debate by insulting me, but it won't work. YOUR sophomoric insults don't intrigue me at all.
Charlie
8:59 pm on Monday, January 23, 2012
Well, guess what hun? You might find that your polemics are insulting, deliberately antagonistic, and sad. Now that might work for a PAC backed TV spot in support of a dolt, but not so sure that PACS recruiting messengers like yourself to spam online comment forums like this one is very fulfilling. You're not a very effective spin doctor., and judging from the debate I'm watching on TV now, your party, using your style of warped rhetoric is helping to re-elect the incumbent president in a landslide. Sad. Very very sad. for you.
RB
7:48 am on Tuesday, January 24, 2012
It does stand to reason that if the Republican Party is the answer to all our problems, the debates would show some of the needed intelligence and discipline to Govern. Not seeing it, but it is entertaining!
I just read that Newts Tax Plan would reduce revenue by over $800 Billion per year! Romneys? Over $150 Billion per year! Crazy!!! This country needs tax reform but not less revenue! Jeez!
Abigail
9:36 am on Tuesday, January 24, 2012
Charlie, were you born a moron--or have you been working at it all of your life? Whatever the case, at least you are good at something.
Jon Hall
10:24 am on Tuesday, January 24, 2012
What do glaucoma and religious "values" political agendas have in common? A story on p7 of today's NYT biz section "Stem Cell Treatment for Eye Diseases Shows Promise" caused me to stop and reflect. Future generations-our grandchildren-will be looking back 30 yrs from now while they are slowly going blind from some inherited form of macular degeneration and wonder why my generation obstructed hope for healing blindness. Atta-boys all around for religion-the leading cause of death and mental blindness. Religious "values" voters + tea party in congress has almost killed every form of advanced medical research industry in US, and are delivering ownership of medical cures, distribution chains, and intellectual property everywhere offshore. It's so ironic and sad that these "values" dictate this across-the-board lack of vision. Right here in my district, a dolt will tell me what I want hear when I speak with him face-to-face. Then he'll go back to DC and vote with the "values" pak. Look at what we have right here in this dolt's district. We are a medical industry mega-center. dolt! Have one of your people talk to one of my people so we can set up a re-election photo-op of you coming out of a meeting at Takeda, or Baxter, or Abbott where you just held a forum on medical technology and its potential to create cures and jobs in your district. Be a good dolt. I want to see it reported here in the patch next week. Better yet? Hold your photo-op at the VA hospital.