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Now Even Jesse Jackson is Getting Involved in the Subprime Mess
By JLP | December 7, 2007
Geez…
Now Jesse Jackson has written an op-ed piece ($) for the Wall Street Journal. The title of his piece is “A Marshall Plan for Mortgages.”
Jackson opens with:
This holiday season, families will reflect on the past year and make new goals and resolutions for 2008. But for the two million homeowners who face foreclosure over the next year because of the subprime mortgage crisis, their New Year’s hopes rest not with themselves, but with policy makers in Washington and the investment community on Wall Street.
This is a time for Samaritans, not Scrooges. The enormity of the unfolding crisis is clear. Unfortunately, the remedies to the subprime crisis that have emerged will only slow the threatened economic tsunami, not prevent it.
The Bush administration’s proposed five-year freeze on home-loan rates, while a step in the right direction, doesn’t go far enough. The plan, unveiled yesterday, simply doesn’t help most of the families facing a foreclosure threat. Of the 6.5 million subprime borrowers in total, only about 750,000, or 12%, would be helped, according to some estimates. They are the homeowners who are up-to-date now with their loan payments but would fall behind and risk foreclosure when the loan resets in the coming year.
Of course, it wouldn’t be a Jesse Jackson opinion if he didn’t mention the word “victim:”
Many of the victims of aggressive mortgage brokers were single women, seniors on fixed income, young couples, Latinos and African Americans. They live in every neighborhood in every one of our major cities, and elsewhere. In one block alone on West Madison Street in Chicago, every one of the homeowners is in default on their current mortgage terms. In neighborhood after neighborhood in Chicago, foreclosures have soared to more than 50 per square mile.
Folks, this has become nothing but a way to redistribute wealth. Taking taxpayer money and giving it to people who can’t afford their homes is the most progressive taxation there is. It bugs me the way politicians can “take the high road” with taxpayer money.
Oh, in case you’re interested, you can refresh your memory by reading about the real Marshall Plan.
December 7th, 2007 at 11:09 am
I just threw up in my mouth a little bit…
December 7th, 2007 at 11:13 am
LOL!
December 7th, 2007 at 11:21 am
I was going to fire off a paragraph or two, but I think LOL sums it up best.
December 7th, 2007 at 11:41 am
So basically the people who have been responsible with their irresponsible mortgages get some help and the people who have been irresponsible with their irresponsible mortgages don’t… Maybe it goes to show that people shouldn’t be irresponsible.
December 7th, 2007 at 12:01 pm
Go back to your hole Jesse. The Marshall Plan was put in place to help shore up Europe have years of a massive continental war. We are no where near that dire of circumstances. Oh, and that plan was also aimed at helping other countries because we could provide for ourselves. If WE are in the situation you want to compare it to, WE can’t help OURSELVES.
While I may still have a bunch of debt and a large mortgage, I still did my math and knew what I could afford to pay (the bank offered me much more money that I actually spent). If I lose my job and we were to go into foreclosure, that’s due to MY lack of planning. It’s no one else’s responsibility to bail me out. I’m sorry people are in this mess, but don’t you dare take MY money to help other people fix their dumb mistakes!
Whether you are a business or an individual, how you spend and invest is YOUR responsibility. If you lose it, chalk it up to lesson learned and move on. The mortgage holders and the homeowners are the one’s in trouble here. They can help each other out if they work together a little bit. There is no reason for government to get involved. It’s time for a little personal responsibility.
December 7th, 2007 at 12:43 pm
I don’t know why so many people think that house foreclosure means the end of the world. It’s not like you lose your belongings; you can still rent an apartment and buy a house later (if you actually have the means to pay for it, of course).
If we start paying for financially inept people’s mortgages, what next? Car loans? Credit cards? I think freezing rates is fine, but bailing people out with taxpayer money for being financially inept, forget it.
December 7th, 2007 at 12:45 pm
[...] unknown wrote an interesting post today onHere’s a quick excerptBut for the two million homeowners who face foreclosure over the next year because of the subprime mortgage crisis, their New Year’s hopes rest not with themselves, but with policy makers in Washington and the investment community on … [...]
December 7th, 2007 at 1:52 pm
Go, JLP, go!!!!!!
December 7th, 2007 at 3:19 pm
It’s interesting to see all the opposition to helping people who were deluded into signing away their lives for housing. Owning a home is a dream for many and if some shyster showed up with an easy way to fulfill that dream it would have taken a saint to turn it down. What about all the corporate bailouts over the years? (airlines, Chrysler, savings & loan.) At least here the funds go towards decent working folk. The alternative is throwing them out on the street and having their lives shattered. Have you no compassion?
December 7th, 2007 at 3:40 pm
Greg,
I didn’t care for the corporate bailouts either.
Are you not familiar with the term PERSONAL RESPONSIBILITY?
Where does it stop? People get deluded into thinking they need a $50,000 Lincoln Navigator and then find out that they can’t afford it. Should we bail them out too?
Trust me. The politicians are masking this as having compassion when in reality it’s about looking like they’re looking out for people. It’s a joke.
December 7th, 2007 at 4:27 pm
Where does it say that this is a bail out? I haven’t see anywhere that any tax payer money is being spent. This is just a propsed rate freeze.
The term bail out was floated by the media well before the details of the plan was known and everyone has just run with it. It is not a bail out… the government isn’t putting any money into the deal.
Having said that, I would have prefered that the situation would have been left alone. Let the market sort it out for itself.
December 7th, 2007 at 4:30 pm
Jay,
Where do you suppose the money is going to come from?
December 7th, 2007 at 5:03 pm
The money is going to come from the investors who bought out the mortgage-backed securities.
Which will cause it’s own problems:
(from BusinessWeek) “Indeed, a big stumbling block to workouts so far has been the fear by loan servicers—who manage the pools of mortgage-backed securities—that they could be sued by investors in those securities who might be worse off if a loan is modified. ‘You will see class-action lawyers salivating over this,’ says Bert Ely, a longtime consultant to financial institutions.”
Will there be a social impact on those who don’t qualify for relief? Yes, in that those same investors are going to demand that future mortgages come with higher rates to compensate them from the haircut that they are taking now.
The question is whether the pool of angry still-renters and capable-of-refinancing homeowners is going to be louder than the still-current homeowners who see their neighborhoods going down the chute (vacant properties, crime, etc) because their neighbors are just turning in the keys and who just want someone to DO SOMETHING.
That the latter group is concentrated in Florida and Ohio is not immaterial.
December 7th, 2007 at 5:09 pm
By money I assume you are referring to the money that the lenders will miss out on by charging lower interest? If that is the case, the lender will either just miss out on it or charge higher intrest on other ‘products’.
Of course a lender could choose not to participate in this rate freeze and continue with the contracts as written.
Again, this isn’t a bailout and I would have prefered that they would leave well enought alone. But… noone asked me!
December 7th, 2007 at 10:32 pm
[...] All Financial Matters writes about Jesse Jackson, sub-prime mortgages and the Marshal plan! [...]
December 7th, 2007 at 11:06 pm
We already have a Marshal Plan in place, it’s called “China buying US Treasuries” and as long as the money keeps coming, there won’t be a great depression.
December 7th, 2007 at 11:47 pm
It’s hard to find any innocent parties here. The borrowers are to blame of course, but so are the brokers and mortgage officers who sold loans they KNEW were not sound, collected their commissions, and sold the bad loans to others.
PF readers know there is a LOT of financial unsophistication out there, and most of these first-time buyers were hardly sophisticated financially.
December 8th, 2007 at 11:56 pm
An ounce of prevention is worth a pound of cure. Can’t our politicians see that it’s time for some personal finance education in our public schools’ curriculum? Or is continued ignorance in our populace a desired (needed?!!) trait?
December 9th, 2007 at 7:31 pm
You see? Even Jesse Jackson sees homeownership as a ‘right’.
I suppose he’s also implying that his ‘victims’ who he names as ’single women, latinos, african americans etc.’ are by definition dumber than other groups??
So Jesse says it’s ok for a minority by definition to be dumber when asking for handouts?
Baloney.