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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2009 > June > 01
Monday, June 1, 2009
Editorial: Foreclosure moratorium key to economy
Ohio is poised to do something significant about the foreclosure crisis.
But lawmakers could end up being so consumed by the hole in the next two-year budget — and the anger and frustration that situation is creating — that they’ll just say the heck with it.
They cannot be allowed to do that. They can make a difference. And if they choose not to act, the very thing they’re obsessing about — the budget and the state’s overall condition — will remain a nightmare.
After all, the one thing that Republicans and Democrats should be in agreement on is that mortgage lending practices, which led to the housing bubble and then the bust, have been a driver behind the economy’s downturn.
That downturn has precipitated the job losses that are precipitating the state’s problems and still more foreclosures.
Ending unnecessary foreclosures is central to stopping the downward spiral.
Recently, the Ohio House of Representatives passed legislation introduced by state Rep. Mike Foley, D-Cleveland, that would require a six-month moratorium on foreclosures.
Note: The legislation would not be a free pass to stop paying your mortgage. Rather, homeowners who are in trouble and who are hoping to have their loan modified would still have to pay 50 percent of their house payment. (If they can’t do that, then they’re probably not good candidates for a loan modification, anyway.)
With the Obama administration just now getting its homeowners’ assistance programs going, a time-out would give everybody a chance to figure out the rules.
Many homeowners don’t know yet if they’ll qualify for federal help. Banks and agencies that help consumers haven’t mastered how to efficiently work through the new paperwork that’s required to tap federal subsidies.
Meanwhile, servicers — those places that collect your mortgage and pass the money on to investors who own the loans — are overwhelmed with requests from borrowers who want to work with their lenders — if they could just get their calls returned.
Even some people in the mortgage industry believe their businesses could be helped by a foreclosure time-out. (They won’t say that publicly because they don’t want anyone thinking that they like lawmakers meddling in their affairs. They’re worried about the precedent a payment holiday would set.)
Lenders do indeed need the breathing space as much as homeowners. In many, many cases, foreclosing on properties actually ends up costing investors dearly.
Empty homes are often vandalized or stripped of everything that’s valuable. In neighborhoods where there are already lots of foreclosed properties that aren’t selling, forcing still more people out of their homes devalues homes even more.
When investors can’t resell vacant properties, or if those properties become worthless, lenders, too, are losers.
Besides the moratorium, the House legislation would — importantly — require that servicers be licensed. Ohio would be the 15th state to take this step.
Over the course of this mortgage crisis, experts have discovered that tons of rules encourage foreclosures, even when that doesn’t make sense.
For instance, if a homeowner stops paying his mortgage, the servicer of that loan has to keep sending payments to the investors who own it anyway. If, however, foreclosure proceedings are started, that gets the servicer off the financial hook, and that business can start charging for foreclosure costs (which are not cheap).
Often, homeowners and investors would be ahead, if instead of foreclosing, the servicer accepted a partial payment, or renegotiated the terms, say, of an unaffordable adjustable rate loan.
Moreover, late fees and penalties are sometimes so hefty that they, more than the loan itself, make it impossible for a homeowner to get an affordable new payment. There’s no reason that some of those charges can’t be reduced or waived, and there should be limits on how high they can go in the first place.
If, to be licensed, servicers had to follow reasonable rules about when they had to offer to renegotiate a mortgage, that could change their financial reflexes.
Not every family in financial trouble can avoid losing its home. But policies can discourage putting people out on the street. The Republican-controlled Ohio Senate — particularly President Bill Harris and Sen. Jon Husted of Kettering — can help that happen.
The goal is not to make sure everybody wins. It’s to make sure everybody loses the least possible.
Permalink | Comments (2) | Post your comment | Categories: City of Dayton, Economy, Editorials, Ellen Belcher, Ohio politics
Editorial: GM saga gets worse, but could be worse yet
The General Motors saga of the past half year has been a learning experience for all. The country has been in uncharted territory characterized by confusion at every stage. If you’ve tried to follow it all closely by getting information from many sources, you have been getting conflicting information.
The phrase “fog of war” comes to mind. Things have been moving awfully fast on many fronts, with imperfect communication and no good fix on what might happen next.
Once upon a time, the people who wanted to save GM thought that allowing the company to go into bankruptcy was the alternative to that; going to court was giving up. That, in fact, was also the view of some people who did not want the government to save the company.
Now, though, bankruptcy is at hand, and the same government that wants to save the company is a driving force.
The government now has some related experience with Chrysler’s bankruptcy and thinks the process might be shorter and less awful than was originally assumed.
While bankruptcy versus bailout was once the great debate, the two courses always had much in common: an authority — either the president or a court — insisting on major revamping.
But, of course, now we have a bankruptcy and a bailout, something nobody saw as desirable six months ago. Nor was anybody then talking about the amount of bailout money that has developed, $50 billion.
For communities and individuals who have been part of the GM nexus and are still tied to it via benefits, business contracts and memories, it’s all been pretty much a maze. However, one needs no advanced degree to see that the outcome has to be a much smaller company.
What’s emerging is a company in which the government has a huge stake. Not only must the company thrive for the taxpayers to get their money back; the government will actually be the largest owner, with more than 70 percent of the stock, at least at first.
For a country that never wanted to nationalize anything — that never even seriously debated the idea — it’s a strange development. The president insists that he wants it to be temporary. Even during the ownership lifetime, he isn’t eager for the government to be making business decisions.
And yet, what’s that saying? “Follow the money.” The government has too much invested not to be a player in how it’s spent.
Government involvement of some sort is not all bad. If you’re dependent on a GM pension, as so many in the Dayton area are, you don’t want a desperate, untethered CEO making all the decisions.
It must be said that the Obama administration never took a hard line against bankruptcy proceedings. It always acknowledged that circumstances might arise that would make that course the least bad. It told GM to get its bondholders to accept only 10 percent ownership in the emerging company, or to enter bankruptcy. The bondholders were the ones who decided to take their chances in bankruptcy court. Now, as the case moves to court, GM has already offered them a better deal.
Even absent the bondholders situation, though, there are those who will tell you that bankruptcy proceedings are necessary to resolve myriad disputes.
And so a legend of American industry and a monumental force in Dayton’s history comes to the double ignominy: bailout and bankruptcy.
But worse still for the company and country would have been simple liquidation and disappearance of GM and its contractors. Now questions remain about how bad it will be, especially for the people who have been part of the GM community. But questions are better than some answers.
Permalink | Comments (4) | Post your comment | Categories: Auto industry, Editorials, Local Business, Martin Gottlieb
Martin Gottlieb: Don’t Ask, Don’t Tell just put gay issue in the closet
“Don’t Ask, Don’t Tell” — so odd and awkward — has always had a temporary feel to it. It was a decision to put off a real decision, like, one might say, putting something in the closet. You know the closet will get too full eventually, and you’ll have to make another decision.
During the 1992 presidential campaign, Bill Clinton said he favored ending the American military’s policy of asking potential recruits if they are gay.
(During the Vietnam War, some reluctant straight draftees thought they could claim gayhood and thus avoid service. Unfortunately, a story goes, when one fellow said at the induction center that he was gay, a doctor said, “Prove it.”)
When Clinton was new in office, Republicans — full of the honeymoon spirit — decided to confront him with the issue immediately. They were certain they had public opinion on their side.
At the time, the commander in chief had the power to change the rule without an act of Congress. But Congress moved to make the existing policy on gays a matter of law. The idea was to challenge him to veto it.
What emerged was the clunky compromise that prevails. However, the Don’t Ask, Don’t Tell law doesn’t settle for the concept implied by the name. It specifies that actual homosexual behavior — as opposed to the orientation itself — is grounds for removal.
Few could really have thought that the distinction between behavior and orientation made any sense. But some anti-gay-rights forces thought it would discourage gays from applying by imposing upon them the need for extreme, endless discretion.
Since 1993, the military has expelled thousands of gays: about 1,200 a year at first, dropping to about 600 in the middle of this decade.
What a ludicrous waste of military resources. Set aside for a minute the fact good people are lost. There’s also the process itself.
In the pending case of Air Force Lt. Col. Victor Fehrenbach, there was a three-month investigation. How would you like that job?
Then a board made up of five colonels heard the evidence and found against him. Now the case goes to another board, before going up to the secretary of the Air Force. Already, it has taken a year.
Fehrenbach — the son of another lieutenant colonel, who finished his career at Wright-Patterson Air Force Base — has family here, but is stationed in Idaho. He’s been to such tourist destinations as Iraq, Afghanistan and Kosovo.
A petition submitted in his defense calculates that the Air Force has spent $25 million training him.
Rules against gays in the military have a long history. It’s hard to remember now, but one argument for those rules used to be — even into the 1980s — that gays were peculiarly subject to being blackmailed into revealing military secrets. That argument didn’t surface much in the 1990s.
As DA/DT has proceeded through its doomed life — dooming careers — times have continued to change. Colin Powell, who disappointed many when he expressed a benighted view on the subject back in 1993, now says the matter should be reviewed, precisely because attitudes have changed.
Other countries — Canada, Australia, Britain — have dropped anti-gay policies and have experienced no great national security problems.
Many opponents of gay marriage have insisted that they have nothing against gays, only a view about marriage. If they now oppose overturning DA/DT, they undermine that pitch.
But Fehrenbach might be a victim of timing. President Barack Obama would like to end DA/DT, obviously. But the White House is declining to take up the issue quickly. Sympathy for that decision is, unfortunately, appropriate.
The president has more urgent fights to fight. And this is a hot-button, divisive issue. He came in as a healer. But he has had to put forth other divisive initiatives. He doesn’t need another.
Also, he needs to build up some chits with the military, become established as a commander in chief who connects with the troops. His refusal to release those pictures of torture might help. Meanwhile, Michelle Obama is focusing on the needs of military families.
Polls show military people in general less agreeable to gays in the military than the general population. But evidence is widespread that the leaders are mellowing, having come a long way with the rest of the country.
Fehrenbach is doing the right thing in fighting publicly for his job. The more cases the public sees — and people in the military see — of justice and common sense going ludicrously astray, the better.
Permalink | Comments (3) | Post your comment | Categories: Civil Rights, Columns, Martin Gottlieb, National Politics, Wright Patterson Air Force Base
Guest column: Dayton, ‘dying cities’ fighting back
By Peter Benkendorf and Mike Elsass
American humorist Mark Twain said the reports of his death were greatly exaggerated.
While there is nothing funny about dying cities, it seems the report of the death of 10 American cities, as declared by Forbes.com last summer, was equally premature.
This summer, from Aug. 7-9, neighborhood activists, artists, public officials, academics and the media from the so-called “10 Fast Dying Cities” list — Buffalo, Canton, Charleston, Cleveland, Dayton, Detroit, Flint, Scranton, Springfield, Mass., and Youngstown — will be gathering in Dayton to share and celebrate the most innovative community revitalization projects taking place in their cities.
We’ve dubbed the gathering the “Forbes 10 Fast Dying Cities Symposium and Arts Festival: Celebrating the Human Spirit.” (Read more at www.tenlivingcities.org.)
There is no doubt that these cities — nine of which are in the Midwest — have fallen on hard times. But if citizens make the community, and not the other way around, then the dubious distinction of the Forbes list is serving as a powerful call to action for people who care too much about their hometowns to let them die.
In Buffalo, an innovative program has been developed to use local labor to demolish and salvage vacant houses. What a terrific model: one program that offers employment, reduces material going to landfills and raises revenue through the sale of reusable building supplies and architectural artifacts, while starting a process of bringing neighborhoods back to health.
In Flint, the Genesee County Land Bank was recently recognized by Harvard’s John F. Kennedy School of Government for its work returning foreclosed properties to the tax rolls, or, when gifted, to a higher and better condition than when received.
In Dayton, the public and private sectors have come together to create the Greater Downtown Plan, a bold vision for business and residential repopulation of downtown during the next decade.
Across the board, we are seeing adaptive reuse of buildings, a commitment to green space and neighborhood gardens, investments in our waterfronts and new collaborative ventures dedicated to creating community wealth. A number of cities are deploying “local currency” programs as an economic-development tool, and there is a return to volunteerism, as a survival necessity, but also as a source of personal fulfillment that is affecting real change.
Everything in nature has a life cycle. Cities are no different. We can wallow in our situation, or we can see this moment as an opportunity to invest.
Look at the Kalamazoo Promise, which pays for college education to students who finish high school. The program has created a buzz for Kalamazoo and is being replicated around the country.
So what might the Youngstown Promise or the Scranton Promise look like?
The intellectual, organizational, financial, emotional and spiritual resources to transform our cities already exist. We can choose not to confront our challenges — because they seem too expensive and complex — or we can resolve to determine new futures.
It will take, however, a different kind of approach, involving business, government, community organizations, and the people to produce the as yet unseen levels of engagement, imagination, partnership and progressive pragmatism that will define 21st century communities.
And that is what the “Forbes 10 Fast Dying Cities Symposium and Arts Festival” is about. Not a wake, but a rebirth. The symposium will feature:
— Discussion of community wealth creation, collaboration, green planning and regionalism.
— Breakout sessions on the role of media, libraries, universities, government and the private sector in revitalization.
— Presentations of the most innovative projects in each city.
—Panel discussions and brainstorming sessions to share ideas about what is working well and not so well.
— New relationships and new possibilities.
Every idea is the spark for another. Every inspiration is the source of new inspiration. And the arts festival, including the creation of a collaborative piece by artists from all 10 cities, will demonstrate that we are truly alive, thank you very much.
Peter Benkendorf, executive director of Involvement Advocacy, and Mike Elsass, owner of the Color of Energy gallery, both of Dayton, are the originators of the “Forbes 10 Fast Dying Cities Symposium and Arts Festival.”
Permalink | Comments (8) | Post your comment | Categories: City of Dayton, Guest Columns
