Senator Sherrod Brown recently announced a proposal aimed at reducing the amount of time it takes to approve a short sale to 60 days. While I applaud the Senator’s noble effort at attacking this widespread problem, I hold little hope that it will simplify the process. Based on Washington’s recent track record, it will likely complicate an already convoluted process for aspiring homeowners.
Banks are now too big to fail. They are also, as Attorney General Eric Holder, is finding out, too economically powerful to prosecute. Put more simply, they have grown too big to jail.
Our Senator is right when he says:
“It’s not just that they are too big to fail… they really are too big to understand and too big to manage. They are certainly too big to regulate. And they have only gotten bigger since the financial crisis.”
In essence, Senator Brown hits the nail on the head. The banks have grown too large to regulate and control. However, this creates a conundrum when Washington attempts to implement further regulations on them. Adding another level on an already poorly constructed home will not fix the underlying problems with the foundation. The correct solution is not more of the same. In fact, if the current policies are extended, we will only see more families homeless, more communities blighted by bank owned mold farms, more schools without revenue, and a continued decline in property values.
The biggest problem with Washington insiders is their inability to create policy that will positively affect those on Main Street where our families live and work. Washington never asks how their policies will benefit guys like me who are fighting at the street level for the rule of law. And in Hamilton County, where 31% of homeowners are underwater, and in a state where 1 in 4 homeowners are putting their hard earned dollars to mortgages that exceed their home value, we don’t need more bad law. We need our senators to undo the problems that caused and extended the housing recession. We don’t need “feel good” policy that will only give the banks another opportunity to game the system.
The last time the federal government inserted itself into the housing crisis, it resulted in absurd outcomes for homeowners attempting to receive mortgage modifications.
Consumers that currently qualify for a loan modification have been denied because they use the wrong shade of yellow highlighter on their application.
Homeowners have been denied a modification because they made $1.50 too little per month. According to federal regulations, a cup of coffee can mean the difference between keeping and losing your home.
A homeowner was told by a bank they made $5.00 too much per month and that a monthly obligation of $7.95 would qualify then for a modification. Once they subscribed to Netflix, they qualified.
Ladies and Gentlemen, when banks are using our money, when our government financially rewards banks for taking houses, and when they are above the law while hiding under regulatory policy, we all end up paying the price for them being too big to fail.
Senator, we can start improving the situation by enforcing the law the way it was written and intended. We can have a Country where the rule of law is applied equally without predetermined winners and losers.
That is the America I want to tell my clients they live in. That is the America I want my kids to grow up in.
Jonathan Dever is Cincinnati foreclosure defense attorney who represents homeowners and businesses facing financial difficulty. www.deverlaw.com 531-823-2112