Talking points for the Homeowners Bank Protection act of 2008

*THE HOMEOWNER AND BANK PROTECTION ACT IS A RESOLUTION FROM CITIES AND STATES TO THE CONGRESS, FOR THE PURPOSE OF INTRODUCING A BILL THAT WILL IMMEDIATELY FREEZE FORECLOSURES, HALT EVICTIONS, AND ALLOW PRICES OF MORTGAGES TO FALL, DEFLATING THE BUBBLE, TOTALLY.  MORTGAGES WILL BE RESET LOWER, AND HOMEOWNERS WILL KEEP THEIR HOUSES BUT MAKE FAR LOWER PAYMENTS.   IT ALSO PROTECTS FEDERAL AND STATE CHARTERED BANKS, KEEPING THEM OPEN FOR REGULAR BUSINESS AND PERSONAL ACCOUNTS, WHILE MOVING TO ELIMINATE THE SPECULATIVE DEBT THAT HAS BEEN ACCUMULATING OVER THE PAST DECADE. 

*THIS IS NOT A BAILOUT.  THERE WILL BE NO TAXPAYER MONEY SPENT EITHER TO PAY OFF THE BAD SECURITIES OF THE BANKS OR COVER THE LOWER MORTGAGES.  IN THE 1930’S, THE GOVERNMENT UNDER FRANKLIN ROOSEVELT KEPT THE BANKS OPEN, LOWERED MORTGAGES, AND HALTED FORECLOSURES.  HOWEVER, BUSINESS AS USUAL WILL GO ON FOR THE HOMEOWNER, BUSINESSMAN, AND BANKER.

*THIS RESOLUTION HAS PASSED OVER 85 CITY COUNCILS, INCLUDING:

INDIANAPOLIS, GARY, ST. LOUIS, DETROIT, AKRON, PHILADELPHIA, NEWARK, PROVIDENCE, PITTSBURGH, ETC.  IT HAS BEEN INTRODUCED INTO 15 STATE LEGISLATURES, INCLUDING:  NEW YORK, PENNSYLVANIA, MICHIGAN, INDIANA, FLORIDA, MISSOURI, ETC.  IT HAS PASSED FIVE       STATE LEGISLATURES:  RHODE ISLAND, ALABAMA, AND THE MISSISSIPPI HOUSE OF REPRESENTATIVES, THE VERMONT HOUSE,  AND THE KENTUCKY SENATE.

*THE RESOLUTION HAS BEEN READ AT A CONGRESSIONAL HEARING BY CONGRESSMAN JOHN CONYERS, AND SEVERAL CONGRESSMEN HAVE NOW COME OUT FOR A FREEZE ON FORECLOSURES, INCLUDING: REP. DANNY DAVIS (IL), REP CHAKA FATTAH (PA), AND SEN. HILLARY CLINTON (NY).   TREASURY SECRETARY HENRY PAULSON RECENTLY CALLED FOR A THIRTY  DAY FREEZE ON SOME FORECLOSURES, A RECOGNITION OF THE PRESSURE BEING GENERATED BY THIS RESOLUTION.

*FORECLOSURES IN OKLAHOMA CITY ARE ALSO ON THE RISE.  ACCORDING TO REALTY TRAC, THERE ARE 3470 PROPERTIES IN SOME PHASE OF FORECLOSURE.  THIS MEANS THAT ONE IN 58 HOUSEHOLDS ARE NOW IN THE FORECLOSURE PROCESS.  AT THE END OF THE THIRD QUARTER OF 2007 OKLAHOMA CITY RANKED 64^TH IN THE CITIES HARDEST HIT IN THE U.S. BY THE FORELCOSURE TIDAL WAVE.

*FORECLOSURES ACROSS THE COUNTRY HAVE BEEN SKYROCKETING. 2 MILLION PROPERTIES WERE FORECLOSED ON IN 2007, ACCORDING TO REALTY TRAC.  FORECLOSURES ROSE 60% IN FEBRUARY ALONE, AND ARE EXPECTED TO SKYROCKET AS THE CRISIS DEEPENS.

*FORECLOSURES IN CHICAGO ARE NOW ESTIMATED TO BE 26,000 PROPERTIES, ACCORDING TO REALTY TRAC, WHICH MEANS 1 IN 38 HOUSEHOLDS ARE IN SOME STAGE OF FORECLOSURE.  IN HARVEY, IL, 900 PROPERTIES ARE IN FORECLOSURE,  WHICH MEANS THAT 1 IN 10 HOUSEHOLDS ARE IN FORECLOSURE. 

*CLARK COUNTY, NEVADA HAS 38,123 PROPERTIES IN SOME STAGE OF FORECLOSURE, ACCORDING TO REALTY TRAC.  THIS TRANSLATES INTO ONE IN 13 HOUSEHOLDS IN SOME PHASE OF THE FORECLOSURE PROCESS.

NEVADA LEADS THE NATION IN FORECLOSURES, WITH ONE IN 165 IN FORECLOSURE, A RISE OF 68% IN THE PAST YEAR.  

* OHIO RANKS THIRD IN THE NATION IN FORECLOSURES,  AND  CLEVELAND RANKS 5^TH IN THE NATION AMONG CITIES WITH 49,000 FORECLOSURES IN THE METROPOLITAN AREA. OHIO OVERALL HAD 153,200 FORECLOSURES LAST YEAR, AN 88% INCREASE FROM 2006

*FORECLOSURES IN LORAIN COUNTY, ACCORDING TO REALTY TRAC NOW TOTAL 3589 PROPERTIES IN SOME PHASE OF FORECLOSURE, WHICH MEANS THAT 1 IN 29 HOUSEHOLDS ARE IN THE FORECLOSURE PROCESS.  IN THE CITY OF LORAIN THERE ARE 1332 PRROPERTIES IN THIS CATEGORY WHICH TRANSLATES INTO 1 IN 19 HOUSEHOLDS.

*FORECLOSURES IN LOUISVILLE, KY, ACCORDING TO REALTY TRAC NOW TOTAL 3051 PROPERTIES IN SOME STAGE OF FORECLOSURE.  THIS MEANS THAT APPROXIMATELY 1 IN 36 HOUSEHOLDS ARE IN THIS CATEGORY.

*MAHONING COUNTY, OHIO NOW HAS 2379 PROPERTIES IN SOME STAGE OF FORECLOSURE, ACCORDING TO REALTY TRAC, WHICH IS ONE IN 42 HOUSEHOLDS; BUT YOUNGSTOWN HAS 1739 PROPERTIES IN SOME STAGE OF FORECLOSURE, WHICH IS APPROXIMATELY 1 IN 18 HOUSEHOLDS IN THIS STATUS

*METROPOLITAN WAYNE COUNTY, MICHIGAN, WHICH INCLUDES DETROIT,  LEADS THE NATION IN FORECLOSURES IN MAJOR METROPOLITAN AREAS.  ACCORDING TO REALTY TRAC, 49,000 PROPERTIES ARE CURRENTLY IN SOME PHASE OF FORECLOSURE IN THE COUNTY.  THIS MEANS THAT ONE IN 15 HOUSEHOLDS ARE IN FORECLOSURE IN WAYNE COUNTY.

*BRIDGEPORT, CT. CURRENTLY HAS 1469 PROPERTIES IN SOME STAGE OF FORECLOSURE, ACCORDING TO REALTY TRAC.  THIS AMOUNTS TO ONE IN EVERY 34 HOUSEHOLDS IN FORECLOSURE.  THE SATE OF CONNECTICUT IS AWASH IN FORECLOSURES WITH HARTFORD, NEW HAVEN, AND BRIDGEPORT ALL RANKING IN THE TOP 100 CITIES IN THE NATION HARDEST HIT IN THIS EPIDEMIC.

*ACCORDING TO REALTY TRAC, STARK COUNTY, OHIO,  HAS 4,610 PROPERTIES IN SOME STAGE OF FORECLOSURE, ROUGHLY 1 IN 32 HOUSEHOLDS.  NEARBY SUMMITT COUNTY HAS 7114 PROPERTIES IN FORECLOSURE, AGAIN APPROXIMATELY 1 IN 31 HOUSEHOLDS.

*AMONG OTHER CITIES IN THE REGION, AKRON RANKED 11^TH IN FORECLOSURES, DAYTON IS 17^TH, TOLEDO IS 20^TH AND COLUMBUS IS 23^RD.

*THIS SITUATION IS WORSENING BY THE DAY.  HOMEBUILDING IS SLUMPING TO A TWENTY YEAR LOW. AS OF MARCH, 2008,  HOME SALES ARE DOWN 30% OVER THE PAST YEAR;  AND PRICES ARE FALLLING PRECIPITOUSLY.  ACCORDING TO THE FEDERAL GOVERNMENT, PRICES HAVE FALLEN ANYWHERE FROM 4% TO 30% ACROSS THE NATION.  ON MARCH 27, THE S % P/CASE-SHILLER INDEX REPORTED THAT HOME PRICES IN 20 METROPOLITAN AREAS FELL 10.7% IN THE PAST YEAR. THIS MEANS THAT MANY HOMEOWNERS ARE NOW FINDING THEMSELVES IN UPSIDE DOWN SITUATIONS:  THE PRICE OF THEIR MORTGAGE IS SIGNIFICANTLY HIGHER THAN THE POTENTIAL SELLING PRICE.  THE NEW YORK TIMES ON FEBRUARY 22 REPORTED THAT 8.8 MILLION HOMEOWNERS, OR 10.3% OF THE TOTAL ARE UNDERWATER. THIS IS THE HIGHEST TOTAL SINCE THE GREAT DEPRESSION.

*THE COLLAPSE OF THE BANKING SECTOR IS EQUALLY DEVASTATING. IN THE LAST 5 MONTHS, OVER $ 285 BILLION OF DEPRECIATING BONDS, MANY TIED TO MORTGAGES, HAVE BEEN WRITTEN OFF.  THE COLLAPSE OF THE MORTGAGE BUBBLE HAS IN TURN RUINED THE MONOLINE INSURANCE COMPANIES THAT INSURE MUNICIPAL BONDS.  THIS HAS NOW DRIVEN INTEREST RATES ON MANY CATEGORIES OF MUNICIPAL BONDS UP THREE AND FIVE FOLD.  AS AN EXAMPLE, THE UNIVERSITY OF PITTSBURGH MEDICAL CENTER JUST HAD THE INTEREST RATE ON ITS NEW BOND JUMP FROM 3.5% TO 17% IN ONE WEEK! AS OF APRIL 2, NATIONAL CITY BANK OF OHIO IS NOW VERY CLOSE TO BANKRUPTCY, HAVING LOST $1.2 BILLION IN MORTGAGE BACKED SECURITIES AND OTHER PAPER.  THE BANK HAS SHED 3,000 JOBS. ON APRIL 21, ITS STOCK FELL BELOW $10 A SHARE, AND IT WAS BAILED OUT BY $7 BILLION BUYOUT OF STOCK BY A MORGAN BANK RELATED COMPANY.  IT IS THE 10^TH LARGEST BANK IN THE NATION, AND SHOULD BE PROTECTED BY THE PROVISIONS OF THIS ACT.  IT’S FAILURE WOULD RUIN THOUSANDS OF LIVES.

*THERE ARE TENS OF TRILLIONS OF DOLLARS OF SPECULATIVE BONDS THROUGHOUT THE BANKING SYSTEM.  THE NEW YORK TIMES REPORTED ON FEBRUARY 17 THAT THE CREDIT DEFAULT SWAP DERIVATIVES, WHICH ALLEGEDLY INSURE AGAINST CORPORATE DEFAULTS, NOW TOTAL $45 TRILLION.  THIS INFLATED BUBBLE HAS LITTLE ACTUAL LIQUIDITY BACKING IT UP AND IS RIPE FOR FAILURE, A CRISIS THAT WOULD DWARF THE COLLAPSE OF THE MORTGAGE RELATED BUBBLE. 

* SO FAR, $188 BILLION OF MORTGAGE-BACKED SECURITIES HAVE BEEN WRITTEN OFF BY THE BANKS AND BROKERAGE FIRMS, AND TRILLIONS MORE ARE IN THE SAME DISTRESSED CATEGORY.  FEDERAL RESERVE CHAIRMAN BEN BERNANKE HAS FOOLISHLY SPENT OVER $600 BILLION IN BAILING OUT THE BANKS TO NO AVAIL, WITH $400 BILLION IN BAILOUTS JUST THIS PAST WEEK.  BROKERAGE FIRMS ARE AT THE EDGE OF FAILURE, AND THE BANKS ARE NOT FAR BEHIND.  THIS RESOLUTION PROTECTS THE CHARTERED BANKS FROM FAILING, BUT DOES NOT SPEND A NICKEL OF TAXPAYER MONEY TO DO SO.

*IN GREAT BRITAIN THIS CRISIS REACHED THE POINT THAT THE GOVERNMENT RECENTLY NATIONALIZED THE FIFTH LARGEST BANK IN THE COUNTRY, NORTHERN ROCK, DUE TO THE MORTGAGE DEBACLE.  THIS RESOLUTION OPPOSES ANY BAILOUT OR NATIONALIZATION, AND INSTEAD PROPOSES TO WRITE OFF ALL SPECULATIVE PAPER.  HOWEVER, THIS RESOLUTION PROPOSES TO MAINTAIN ALL NORMAL BANKING ACTIVITY OF BUSINESSES AND INDIVIDUALS, AND GOVERNMENT.

*THIS RESOLUTION IS MODELED ON SIMILAR INITIATIVES TAKEN TO HALT THE FORECLOSURE CRISIS IN THE GREAT DEPRESSION.  THOSE INITIATIVES WERE ADJUDICATED FAVORABLY IN THE SUPREME COURT, INCLUDING THE FAMOUS MINNEASOTA MORTGAGE MORATORIUM ACT OF 1933, WHICH SET THE PRECEDENT FOR THIS ACTION.