The Truth in Lending Act (TILA) gives home loan borrowers a three-day right to rescind, or cancel, a loan transaction. For these first three days, this right is unconditional, without any caveats. After the three days run out, there is a catch; the borrower has the right to rescind only if the lender has failed to satisfy TILA’s disclosure requirements. Even if the required disclosures are never made, the right of rescission will expire after three years; thus, straying from the pack.
After I wrote my little letter to the President, I wondered what kind of response I would get and perhaps more importantly, whether my message would reach its intended audience….if any.
Well the response to the blog, from my clients and from my blog readers, was instantaneous. Clearly I’m not alone in my thinking.
I may not have received an audience with the President, but I did get to speak with one of his key housing advisers.
Thanks to a last-minute invite from my friend, Congresswoman Debbie Wasserman-Schultz, I was invited to participate in a roundtable led by Shaun Donovan, the Secretary for the Department of Housing and Urban Development.
Most of the people who were there are very involved with HUD, which I am not. I’m pretty sure I was the only private sector person there and I was definitely the only attorney.
There was a universal sentiment among the panel, that they were having trouble getting business done because the banks are not cooperating with them.
I heard time and time again that the banks were not being competitive with one another and further, they are not being compliant. Sounds familiar doesn’t it?
During the meeting, I was able to directly address Secretary Donovan. Up until that point he had talked a great deal about refinancing, about the need to push Congress to pass several bills that he and the President feel will help the housing market. But he hadn’t addressed the 900 lb. gorilla in the room… the banks.
I spent several minutes telling the Housing Secretary the opinions that I have shared here countless times. And when it was all said and done, to his credit, he did not disagree with me.
Dear Mr. President:
As you know historically, since the great depression, refinancing mortgages has been this country’s exit strategy when it comes to pulling us out of the economic ditch.
So it’s nice to see that you are now pushing Congress to pass refinancing reform. It’s the most effective and efficient way to craft a bailout that actually helps everyone.
I’ve seen a number of bailouts which have been structured to save the banks, the bankers, and their bondholders. But never the average Joe.
But the truth is everyone, from the government to the private sector, relies on the consumer to keep the economy going. Saving the banks has so far done nothing to get us out of the economic doldrums.
So your effort to put a few hundred extra dollars in homeowners pockets is certainly a step in the right direction. I sincerely hope this isn’t an election year ploy and a true effort to rev up the U.S.’s economic engine. But you’ve got a long way to go to convince me and the American public that you are serious.
We’ve all heard the speeches, from you and countless other politicians. But what we need now is action.
Since your White House staff is soliciting the public’s opinion on this policy, please allow me to make this direct appeal to you sir.
Continue your focus on the underwater homeowners who are as you like to call them, ‘responsible’. In our efforts to save the ones who have fallen behind, it seems the vast majority of them (9 out of every 10 underwater homeowners are still paying their mortgages) have been forgotten and left out in the cold. You need to do more, much more.
From time to time the South Florida Law Blog invites people who I respect and are friends to post a blog. I introduce you to my dear friend William McCarty, an attorney who lives in the DC area.
“You can always count on Americans to do the right thing—after they’ve tried everything else.”
After three years of record low interest rates and $2.5 trillion dollars of deficit spending we still are no closer to jump starting a self sustaining recovery. Job creation is very weak, housing contracts are anemic despite historically low interest rates and prices, and the stock market is erratic and indecisive because it trades off of short term news rather than long term fundamentals. Even if we don’t have a double dip recession, a 2% or lower growth rate means that unemployment is actually increasing because we’re not creating enough jobs to keep up with our population growth.
We haven’t been able to jump start a self sustaining recovery because we cannot replace the unsustainable phantom wealth of rapid home equity appreciation, quick stock market gains and easy credit with the unsustainable phantom wealth of printed money.
So now we have to face facts:
1. Adjusted for inflation, individual income has been flat for the past ten years and real buying has actually gone down
2. In the near and long term, either taxes will go up or services will go down or both
3. Health care and college costs continue to increase twice as fast as our income