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To The Honorable Senator Elizabeth Warren,
You are not my Senator, but as one of the millions of American citizens living in a District and State where my Representatives and Senators in Congress are unresponsive, save to the corporate interests who bought their allegiance, I was hoping I might entreat you to hear my issue. I am a 38 year-old who would like to own a home, but never will (unless change is made).
I would like your help in making the changes needed to get me (and the millions like me) a home.
The Backstory
When I was in my mid-twenties, I married and started a life with a woman. She was the primary breadwinner and through her, we were able to get financed for a small house at the beginning of the housing crisis. After a few years, we divorced and while I worked hard to maintain the home for a few years, eventually the expense of it became too much for me to handle on my own. I made the tough choice to abandon the house and it was foreclosed upon.
That was almost a decade ago. I just celebrated my six year anniversary with my new wife and I have been financially responsible ever since the foreclosure. I would like to be able to offer my new family at least as much (if not more than!) I had more than a decade ago. However, in attempting to get a house now, I have discovered it is a virtual impossibility and I know I am not alone.
The Situation
On the eve of our anniversary, my wife and I started looking for houses. We have been looking almost exclusively at foreclosure houses, primarily in rural areas. With a traditional mortgage, we learned that a $50,000 house with taxes and homeowner's insurance would run us $502/month. That is less than we pay for rent at our apartment (which is HUD-compliant and many of the residents live here subsidized, but we do not).
I am a small business owner, running a small business out of my apartment. For the past three years, I have never missed a rent payment (in fact, I am frequently paid ahead on the rent) or been late on any of my bills. I recently went to a local credit union to try to get financed for a mortgage because I have done, and have been doing, everything I am "supposed" to do in order to improve my credit rating and financial standing. I was denied acceptance for a mortgage because - despite being able to prove that I have a history of such payments being manageable and within my means - as a small business owner, my income did not meet the rigid threshold demanded by new Federal banking standards.
According to the credit union's mortgage company, the payment on a home loan cannot be more than 43% of one's gross income. As a small business owner runs my business from home, I was unable to illustrate that. But, that got me thinking.
I am a United States citizen and I was taken advantage of. I was the victim of a big business that gave my family a predatory loan and was inflexible and harsh when my personal economic standing changed. I did not go into getting a mortgage in an uneducated fashion, either; we went to a local financing institution and within a month of closing on our home, our mortgage was sold twice, ending up at Citi . . . a big company I explicitly did not want to do business with! I was victimized and the business institutions that took advantage of me and robbed me of a place to live are still in business.
And now the Federal government is helping them stay in business and keep me from getting a house.
A Modest Proposal For A Solution
I am writing to you today because, like most hard-working Americans, I have a solution and I am hoping it might speak to you in such a way that you would want to put forth legislation to help millions of Americans.
Regulating the banks so it is harder to get housing loans helps banks and financial institutions while hurting would-be homeowners. The way Congress legislated following the house financing crisis that caused people like me to lose their homes when we defaulted on our loans has made it so it is harder to big banks to make loans that will cause them to lose money. That strategy did nothing to get people who lost their houses back into homes.
I would like to pitch a strategy that would make more American homeowners. That is good for the tax base, it is good for businesses, and it is good for democracy (home owners vote in higher proportions than renters and working poor people who do not have a vested interest in their land and property).
To empower Americans to become homeowners, the U.S. government should do the following:
1. Strip businesses of the ability to own residential property,
2. Federally-back housing loans,
3. Revise foreclosure laws to protect homeowners,
and 4. Compel businesses that engaged in home loan practices to finance clients they previously wronged.
The first component is an essential one. Unlike many supplicants, I am perfectly aware that there is a difference between the government and the economy. Businesses are not people and they should not have all of the rights of living, breathing, citizens. If businesses are not allowed to own residential property, they may only act as a financier in transactions between citizens and the government. Putting up a firewall between business and government in the residential housing market would entirely rewrite the dynamic in the United States. People who run into financial trouble would not risk their property being repossessed by the bank. If business entities could not take possession of residential property, the momentum would be on negotiating to keep homeowners in their homes. After all, if residential property that was foreclosed upon went back to the government (local, state or federal, depending upon the jurisdiction) the government would want to negotiate to keep people owning the property. The banks would not want to push the government to take back land and the government would not want the residential properties empty. Private citizens win.
Federally-backing housing loans would give private citizens the negotiating power of the Federal government. Home financing companies act as bullies to those to whom they loan money and they threaten the most basic, primal need for shelter that humans have. If housing loans were Federally-backed, homeowners would have a resource and regulations that those loaners would have to follow that would end the intimidation of homeowners.
Revising foreclosure laws is an essential aspect of revamping the problems that precipitated the housing crisis. At this point, the pressure is on borrowers and homeowners to make good on their debts. Of course that is important; it would be ridiculous to state otherwise. However, in the balance between a government meeting the basic needs of its citizens and protecting business interests, meeting the basic needs of citizens should be prioritized. Shelter is a basic, essential, human need. In a country the size and climate of the United States Of America, having shelter is an undeniable need. As an instrument of government, laws pertaining to home ownership should prioritize keeping a safe, livable shelter around each citizen over protecting business interests that demand a payment of $X by Y date . . . or else! There are vast tracts of residential land in the United States that would be non-competitive to be the primary residence for citizens. In a country where there is so much wealth that so many people at the top of the economic pyramid have a primary, secondary, and/or rental properties, it should be criminal for those who do not have the same access to a shelter. Instead of revising the loaning laws (which protected the vast wealth of businesses that had money to lend), changing foreclosure laws so that it is harder for people to lose their property is essential.
Finally, would-be homeowners in the United States who were wronged by the predatory practices of big mortgage companies need justice and legislative action to become homeowners again. If I were assaulted, the State would use me to prosecute my attacker to get their criminal action stopped. I would then be able to sue for damages for the emotional repercussions of the violence done upon me. My attacker's assets could be seized and their wages garnished to provide me with counseling and the means to create a safe environment in which to take back my life.
I was victimized by predatory loaning practices and a mortgage company that refused to work with me to help me keep my house when the economy took a turn for the worse. The Federal Government's reaction - by putting up restrictions that make it harder for people like me to get housing loans - is analogous to allowing a serial killer to put all their assets into a trust so they cannot be forced to pay damages after they go on a spree and are caught. The only way the big financial institutions will be brought to justice is if they pay. They need to pay in such a way that they are made to feel as powerless as an evicted, foreclosed, homeowner. The Federal Government can compel them to use a percentage of their available funds to loan to those who were victimized by their predatory practices over the last fifteen years.
I call upon you, Senator Warren, I beg of you, to lead that charge through legislative action. Thank you for your attention and consideration.
Sincerely,
W.L. Swarts
© 2015 W.L. Swarts. May not be reprinted without permission.
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