"I would prefer not to have the government meddle with contracts freely signed between two consenting parties. The purpose of government should be to enforce contracts, not rearrange them when one side finds it expedient to do so."

We need to understand that many of these mortgages were not freely signed contracts: they were predatory and violated most state and federal consumer protction laws (TILA, RESPA, UDAP) and were as such void ab initio and subject to a right of recission. These high-cost deals are loaded with junk and other unearned fees, hidden ballon payments, and rates tied to the LIBOR (how in the world any variable rate deal can be tied to something as obscure as the LIBOR and be considered anything but a contract of adhesion is ludicrous. There is simply no real bargaining and it's a take it or leave it proposition). Many of our clients thought they were getting into a fixed-rate deal only to find their interest rates jump as much as 12% after the "teaser" period. Seniors, who owned their homes outright, were lured into equity stripping scams. And we haven't begun to discuss servicing scams. The exploitation has been naked, brutal, shameless, and widespread.

My experience dealing with these issues leads me to believe that once we have stripped out all the predatory aspects of the loans and set them up with a reasonable--8%--fixed-rate, conforming product, these defaults become reliable, performing loans. Rep. Franks's auction plan is appealing. Hillary's talked about it--and I wish Obama would consider it.

Posted at March 27, 2008 11:50 AM in response to Foreclosing Foreclosures: Mitigating the Housing Crisis

Great post, urbinato, and its nice to read the comments of other TPM aficianados.

I agree that Sen. Obama could do very well here. Southern Illinois is every bit as red as most of NC and he made inroads in rural areas there that could be duplicated here. Furthermore, NC similar metropolitan areas to Illinois generally, Chicago excepted of course. And the experience with Harvey Gantt makes his doing well more plausible. I, too, know some republicans here who are giving him a look--HRC would not ever be a consideration.

I'm having difficulty getting excited about the statewide races--seems more of the same. The Dems control the mansion and the legislature, yet it's strictly DLC-style with no progressive legislation for the poor and working class. Perdue and Moore are no more exciting than the ever-bland Easley, who accomplished so little it makes one wonder what was his point if not governing? Orr's a libertarian who made some progressive rulings while on the Supremes, but we'll probably reduce our already abysmally low taxes should he manage to catch fire.

State Senator Kay Hagan is a decent, if unexciting pol, but her campaign--calling it such is a stretch--is in complete dissarray. They had trouble finding someone to take on the woefully deficient Liddy, who wins 'cause she gets the home cookin' vote. But a loss with a good campaign now sets the table nicely for someone to take on Burr in two years. Doesn't it.

I've only been here (the Triangle) since '97, and although I supported John Edwards against Faircloth, can anybody tell me with a straight face that he could get elected to anything here? (OK, maybe to the board of the trial lawyers.) I feel so sorry for all those people around the country who bought into his millworker's son schtick. I could never get myself to believe it, and his stint at the UNC Poverty Center changed no one's mind over there either. He was classic form over substance with a dash of expediency. I don't think an endorsement from him will make a dime's worth of difference in May.

Sure like to from y'all about any progressive Tar Heel candidates we might could support. (I love that phrase...)

Posted at March 19, 2008 7:43 PM in response to North Carolina: Democratic leadership lining up behind Obama