It’s housing, stupid

Focus like a laser beam on housing.

Just writing down all of California’s underwater mortgages to market value would pump more than $20 billion into the state, create more than 300,000 jobs, save Golden Staters an average $810 a month on mortgage payments and “fix the housing crisis once and for all,” according to a new grass-roots study.

The study, “The Win/Win Solution: How Fixing the Housing Crisis Will Create One Million Jobs,” says, nationwide, writing down mortgages would inject $71 billion per year into the national economy, create more than one million jobs annually, and save families $6,500 per year on mortgage payments.

The study comes from the Alliance for Californians for Community Empowerment (ACCE) and the New Bottom Line (NBL) and points to the fact that consumer spending, for better or for worse, is the mojo that gets the economy off and a large chunk of consumer spending comes from housing.

Picking up, in some ways, where ACORN left off, the two demonstrative community coalition-based groups recognize housing has long been an economic cornerstone.

Along with the cost of a roof overhead, household operations, insurance, fuels and utilities, water, sewage and trash services, furnishings, tapped equity expenditures, and more, housing accounts for about 40 percent of the Consumer Price Index, an index of consumer expenditures, according to the U.S. Bureau of Labor Statistics.

It’s a vicious cycle.

Consumers can’t buy a home without a job.

The unemployed consumer can’t get a job in a bleak economy.

A weak economy won’t get stronger without a viable housing component.

Housing remains soft when even employed home owners struggle to keep a roof over their heads.

Repeat.

Thanks to taxpayers, big business, including mogul mortgage lenders, got their bailout from the Feds.

It’s time to give some power back to the people.

“One in five Americans owe more on their mortgage than their home is actually worth. Collectively, underwater homeowners will have to pay down $709 billion in principal before they can start building equity in their homes. Every effort to reboot the housing market to date has failed because it has not done the most essential thing: reduce the massive debt load carried by underwater homeowners,” the report says.

The Feds can’t do it, because they emptied the nation’s coffers, bailing out banks and, even under the Obama Administration, remain nearly as inept and as laced with the same special interests as they were before the Greatest Recession since the Great Depression.

Banks, with their hiked-up credit card and debit card fees, with their tight-fisted lending requirements, and their continued lack of transparency, have squeezed more than enough to afford a bailout for struggling homeowners.

The Win-Win report says the nation’s top six banks paid out more than twice the cost of the plan ($71 billion per year) in bonuses and compensation alone ($146 billion in 2010). Currently, with the nation still in the throes of recovery, the nation’s banks enjoy a historic nest egg of cash reserves amounting $1.64 trillion.

“Six billion dollars per month that is currently going to mortgage payments would instead go toward buying groceries, school supplies, and other household necessities. As consumer demand picked up, businesses would start hiring again,” the report says.

Grassroots organizations across the country are calling on state attorneys general, who are investigating the banks for foreclosure fraud, to stand firm for a settlement agreement that includes large-scale principle reduction for underwater borrowers; and does not to release the banks from claims beyond the robo-signing scandal.

This would provide real restitution for homeowners and allow states to sue the banks for wrongdoing connected to the origination of toxic mortgages and the steps leading up to foreclosure.

“Homeowners across the state and country nation are struggling to keep up with their underwater mortgages. We could create a second stimulus with a cost to taxpayers by writing down the principals and interest rates on all underwater mortgages to market value,” said Peggy Mears of ACCE.

ACCE and NBL get voters’ vote,

The people still want their slice of the American Dream and they expect the legislators for which they voted to give it up, according to a National Association of Homebuilders’ survey.

Nearly three out of four voters — 73 percent of both owners and renters — believe Uncle Sam ought to provide tax benefits to promote homeownership.

The sentiment cuts across party lines with 79 percent of Democrats, 71 percent of Republicans and 68 percent of Independents supporting tax perks that come with homeownership.

Even when told that getting rid of the mortgage interest deduction would help ease the federal budget deficit, 65 percent of voters opposed any proposal to abolish the tax provision, with 69 percent of Republicans, 69 percent of Independents and 59 percent of Democrats opposing eliminating the deduction even if it would help the federal budget deficit.

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