Foreclosures and Missing Mortgages

       During this recession, there is not only a problem with homes being foreclosed upon, but also with documents surrounding the mortgage and who really owns them. The recovery from the foreclosure crisis is slowed by these missing promissory notes-- the original document that is legal proof of who the loan holder is and that the loan holder is entitled either to be repaid or to take back the house. Many cases of the million homes that have gone into foreclosure this year are challenged because of insufficient or lack of proper documentation.
         Many corporations, such as JP Morgan Chase and Bank of America, have acknowledged that their systems were very flawed and have actually suspended their foreclosures while they review them. But their attempts to fix the problem now do not help with the millions of foreclosures that already occurred. This problem would not have occurred had the financial institutions not failed to process loans properly. Many of the documents are missing because of the process of securization, in which mortgage bond are made and then sold to investors. As is the case with many foreclosures, the mortgage changed hands so many times and so quickly that the promissory note could not make it to all destinations or was filed away in a warehouse instead of being sent to the next place. More problems occurred when the banks themselves were trying to stay afloat and save money, or were being dissolved or taken over by a different corporation. "In early 2007, Washington Mutual shipped 1 million loan files from a document warehouse in Houston that it was shutting down to save money. The documents were supposed to go to Juarez, but according to a local news report at the time, WaMu lost track of 100,000 files during the move to Mexico" (Stepen Gandel). This situation was made yet worse by the fact that the files backed-up and saved in the Mortgage Electronic Registry cannot be used in foreclosure cases because its replacement of paper documents was deemed illegal under the Constitution.  This is good news for the homeowners of foreclosed homes but bad for the financial institutions and the economy because many of the foreclosure cases cannot make it through court. Now the banks may have to buy back billions of dollars worth of faulty mortgages which would just further halt the recovery from the recession.

Foreclosures in 2007 (above). Foreclosures in late 2008 (below).

Are American Motivated By Self-Interest or Will They Make Sacrifices?

         In the past few years, as we all know, the economic sector of our society has come under increased scrutiny. The woes of the economy reached an all-time low, in 2008, with the housing crisis and the concurrent recession. Now in 2010, the government is struggling to agree upon and adopt measure through which the economy and society at large can be healed, both in the short term and long term. The deficit-reduction commission recently published their ideas and opinions on the most effective and popular means to achieve stability in the economy.
         As a people, Americans have an "appetite for government benefits that greatly exceeds their appetite for taxes" (Fareed Zakaria). As a result, the country has borrowed vast sums of money to bandage up this issue. The government will not be able to simply patch thing up for much longer, because in 75 years benefits from entitlement programs will be over the government revenue by about $50 trillion, and the deficit, if not attended to, will be equivalnet to about 24% of GDP in 2040 (Time). If the deficit of the economy is allowed to reach these levels, then 2 cures for the economy would be 70% tax hikes or 50% spending cuts which would just harm the country even more. The inequities between the capacity of the economy and its spending must be resolved now and not later. 
         These problems that are a part of the American economy and society today can be remedied by a combination of the measures the deficit-reduction commission recommends. No matter how many programs are cut, a significantly large amount of revenue must be generated. A sound measure to generate more revenue is a national sales tax. Not only would it be efficient, it would also be applied to what any person bought and therefore would be fair to all classes. Another possibility is, in 2050, to raise the social security retirement age by just one year. Even being one of the millions of current young people who would be affected by the measure, I am in support of it. I am willing to make that personal sacrifice, even though many people would be unwilling to sacrifice some of their own personal comforts or luxuries for the benefit of their society. There needs to be a different mindset in the United States, if any new agenda or measure is going to work. I know people are motivated ultimately by self-interest, but when did the health of one's society and the welfare of its people stop being a matter of personal interest?        

Medal of Honor, Representative of Disgrace

        Oh, the society that we live in. At the same time that the Medal of Honor is is given out for the first time in decades, a member of the House of Representatives is reelected and then found guilty of 11 counts of ethics violations. Never can there be a time of just pride and honor in the United States, there is always a shadow looming. Although nothing came be taken away from the event of receiving the Medal of Honor, its reflection on the country can be diminished by the conviction of Charles Rangel.
        On November 16th, President Obama awarded the Medal of Honor to Staff Sergeant Salvatore Giunta. The recipient still says that even with his new title he will never be more than Sal to those that are truly important to him. He is just a simple and humble 25-year-old from Iowa, but when his country needed him, he grew into "a soldier as humble as he is heroic" (President Barrack Obama). At the age of 22 in 2007, he ran into enemy fire to help and rescue fellows soldiers when his team was ambushed by insurgents. He continued to complete 2 tours in Afghanistan. He is the first living person to receive the award since the Vietnam War.What he chose to do for his comrades and his country is heroic in and of itself and is made even more so amidst all the skepticism and doubts about the morality and motives behind the mission. He was willing to sacrifice his safety and his life, and did not respect anything in return.  In witnessing his devotion to his country and his mission, I was able to accept the conflict in Afghanistan as more valid then I ever have before. To me, the fact that he was willing to literally put himself in harm's way to protect others, gives more support to the efforts in Afghanistan; because if the American soldiers involved, who have actually witnessed what is going on are willing to do that, then the war must be valid.

      It is just sad to me that something was taken away from the pride that should accompany this event because of what Charles Rangel chose to do and how he betrayed the trust of the country. It is all just in a week of America, I suppose.

How Long Will The Tea Boil?

         

          Recently, an evangelization of the Tea Party agenda has occurred. It is essentially a revolt against the Washington government, large governmental spending, and even the Republican Party. One must ask what they can accomplish by themselves. Well, a good number of them, including Marco Rubio and Rand Paul, got themselves elected last week. They saluted the movement that fueled their victory and the people who voted them in and said “We’ve come to take our government back” (Rand Paul). But just how will they do that, because actually achieving change in government is a lot harder than just decrying the previous Congress and administration. Up to this point they have acted as a mob trying to enrage the people to rally behind their cause, without offering any coherent, legitimate or reasonable means to actually achieve their goals. Will the movement be different now that they actually have members in positions of some kind of power in government? Will they actually achieve change? Will they have to abandon some of their principles to do so? The nation will have to wait and see.

          What the new government must do to actually change the current state of the government and the country are, many times, contrary to what the Tea Party activists have proclaimed as the only means they would be willing to adopt. All through the recent campaigning season leading up to the election on November 4^th, Tea Party candidates were advocating lower taxes and spending cuts but they did not say how they would take action.  To save the economy, as any reasonably- minded person knows, the government must raise taxes and encourage spending by its people in order to increase revenue for the government, but also lower its own spending. Are they will to do these things, even though it would most likely turn their volatile support base against them? They must be willing to raise the taxes on the very same people that elected them, because the deficit will just keep widening if they don’t. They must be prepared to cut middle-class entitlements, such as Medicare and Social Security, against the efforts of almost all democrats. They must be ready to take on the Pentagon, as well, because its spending, at $717 billion, accounts for “half of all discretionary spending” (Fareed Zakaria, Time).  They also must be ready to make concessions to the president; otherwise they will have to work over him which would surely cause major problems. They must work hard to halt a government shutdown, like that of 1995. They must refuse any and all earmarks that could further curtail funds from the national government. They need to weary and work hard to reduce the national debt, because it is getting close to the $ 14.3 trillion national debt ceiling. If not dealt with quickly and effectively, and if the ceiling is not increased, it has the potential to cause a global financial crisis. The current situation of the United States has a very grave potential, made all the worse by the national government’s history with bipartisanship. “If this looks like a prescription for gridlock, it is. It could leave independent voters disappointed that Washington isn’t delivering solutions. And it could leave the Tea Party’s activist base as frustrated with the pace of change as the hopeful democrats who preceded them” (Michael Crowley, Time). Hopefully this will not happen again.