Halt the Foreclosures, Aid Mortgage Crisis Victims
A statement of the Committees of Correspondence for Democracy and Socialism
August, 2007
Action to aid the millions of people in our country facing the loss of their homes due to the crisis in the mortgage business is long overdue.
It is clear now that the crisis is affecting not just the recipients of “subprime” mortgages but others who had been considered more credit worthy. They too were lured into taking out home loans with an artificially low interest rate to be reset at a higher rate – often hundreds of dollars a month more. A huge number of such loan arrangements were made over 2005 and 2006.
Now the housing bubble is busting and the working class and middle class mortgage holders – a disproportionate number of them minorities - are facing a very real and very personal crisis. It will only get worse. By this fall the rates on over $50 billion adjustable rate mortgages will rise for the first time. It is estimated that over the next year and a half about $1 trillion worth of mortgages, or 12 percent of the nation’s total, will reset. It is now estimated that in the end – unless something is done to prevent it - is somewhere in the vicinity of 2 million people could lose their homes to foreclosure.
Nothing like this has ever happened before.
We must be clear, attempting to place the blame for the crisis on the people who were lured – or tricked – into home loan arrangement that now threaten them with financial ruin is reprehensible. The mortgage mess that has ensnared millions and contributed to general economic crisis that now spans the globe is a direct result of governmental policy. In the wake of the dot-con bust, the people who manage the U.S. economy pursued policies that created an unsustainable increase in government and business debt, soaring costs of residential property and an orgy of home mortgage lending that reaped billions of dollars for the bank and mortgage companies. In the absence of effective regulation, prudent lending standards were ignored and, as is usually the case in such an atmosphere, eager unsuspecting home buyers often became the objects of flimflam and fraud.Each day brings new scary reports on the effect of the mortgage crisis on the general economy and the tribulations of lending companies who thrived while the lending orgy was still going on. However, the real victims of the crisis are being left out in the cold. It’s time for action. People should not be facing loss of their homes and with it the accumulated savings of their working lives.
It’s time for:
- A moratorium on home foreclosures, evictions and auction sales, enacted an enforced on a national, state and local basis.
- Holding mortgage brokers and banks which have made predatory loans trough trickery or deception responsible for their actions and the reduction or elimination of unfair repayment penalties.
- Legislation prohibiting lenders from making mortgages that the borrower clearly has no ability to repay.
- Federal economic assistance for people facing and assistance in renegotiating loans with reasonable payment arrangements.
We call upon CC-DS members and friends across the country and other progressive, labor and social organizations to contact their elected representatives demanding that they promote effective action to meet the crisis.
Committees of Correspondence for Democracy and
Socialism
520 Eighth Avenue, 14th Floor NE
New York, NY 10018 (212) 868-3733
national@cc-ds.org
www.cc-ds.org