Yesterday I sat down to read the paper, something I have not been able to do for well over a week. I never expected to get emotional right off the bat, and when I say emotional, I mean the exact opposite of crying.
When I came across an article about the Minneapolis City Council and their recent resolution regarding local foreclosures, I actually had to walk away from the paper before I crumpled it up and threw it into the trash. Since it was buried on page six of the Pioneer Press, many have most likely missed it.
The non-binding resolution passed by the Minneapolis City Council is calling for lenders to stop foreclosures for the next three months. Apparently the city council thinks that the “pressure” they are putting on local lenders by passing resolutions like this will make banks stop causing families to lose their homes. The only problem with their thinking is that banks make loans, and the common motto told to buyers upon signing a mortgage is if “you don’t pay, you don’t stay”. Further, the last time I checked, families lose their homes because they break the agreement they signed with the lender and stop paying their mortgage.
Don’t think the council came up with the idea themselves. The group, ACORN (Association of Community Organizations for Reform Now), pushed for the vote and is thinking about getting the Saint Paul City Council to pass a similar resolution:
“the 25 largest subprime mortgage lenders agree to a three-month suspension of foreclosures of owner occupied properties in the city” and further asks lenders “to make every effort during suspension period to help customers avoid foreclosure and remain in their homes”.
They also want those facing foreclosure to get their rates reset or modified to allow them to afford the loan. The council further said,
“Tough times require real solutions, not rhetoric…I hope everybody feels good about hitting banks over the head with a stick, because that’s what we’re doing”.
I have a question, why should we feel good about giving it to the banks? You know, I would really like to borrow their stick and hit them over the heads with it and ask, “What are you thinking?”. The Minneapolis City Council should not be wasting their time coming up with useless resolutions like this one. The “symbolic” gesture won’t do any real good, but the time wasted cannot be given back to topics that might actually help local homeowners, like, hmmm….lowering property taxes.
The fact is, when buyers sign the note on their new house, they make an agreement with the lender, stating they will make monthly payments and pay back the loan. It is their responsibility as home owners to make sure they understand what they are signing. I have sympathy for those facing foreclosure because my family almost went through it. But I was raised to take responsibility for your actions, even for those that stink, and the thought of the government coming in and bailing out people facing foreclosure, or worse, forcing lenders to fore go foreclosures, is a little scary to me. When did it become public policy to bail out anyone that makes a bad decision?