Florida and the Foreclosure of the Ownership Society

by ALAN FARAGO

In light of the economic crisis and the collapse of dreams of economic security for millions of Americans, it is worth looking back at the “Ownership Society” that helped trigger the housing boom, then bust. This is along the same lines as President Obama’s State of the Union speech last night (through which House Speaker John Boehner looked like he had eaten a frog. Note to Boehner: do you really think that helps your cause). Obama began with a recitation of the mistakes made by powerful Washington officials and Wall Street financiers who are now trying to throw voters off course with the “politics of envy”.

President Obama did not linger on the history, but you might. Consider for example a speech delivered on “The Ownership Society” by President George W. Bush on June 18, 2002 and still available on the HUD website. Reading it today, reminds of the barb by Groucho Marx who was a comedian not a pundit, “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies.”

Today Mitt Romney and Newt Gingrich lunch with the Latin Builders Association in Miami (called “mighty” by this morning’s Miami Herald but more on the order of “fallen”.) an unanswered question for journalists: what was the role of the South Florida builders, their lobbyists and bankers like the US Century Bank board of directors including Ramon Rasco and Sergio Pino, who lobbied the Governor Jeb Bush and HUD Secretary Bob Martinez for fiscal policies that ran the economy into the deepest ditch since the Great Depression?

Here is the grand plan from the Bush speech, and if you read through to the end, note that 9/11 did indeed provide a rationale for unleashing GOP fiscal policies that enriched a few and set the economy on a full speed course to wreck itself on the rocks, to be scavenged like the reef wreckers did in Florida’s olden days. Think of those ship captains who went to church on Sundays set out lanterns on Monday to steer the unwitting and gullible to rocky shallows where their treasure might be lost and then found.

“… The problem is we have what we call a homeownership gap in America. Three-quarters of Anglos own their homes, and yet less than 50 percent of African Americans and Hispanics own homes. That ownership gap signals that something might be wrong in the land of plenty. And we need to do something about it.

We are here in Washington, D.C. to address problems. So I’ve set this goal for the country. We want 5.5 million more homeowners by 2010 — million more minority homeowners by 2010. (Applause.) Five-and-a-half million families by 2010 will own a home. That is our goal. It is a realistic goal. But it’s going to mean we’re going to have to work hard to achieve the goal, all of us. And by all of us, I mean not only the federal government, but the private sector, as well.

And so I want to, one, encourage you to do everything you can to work in a realistic, smart way to get this done. I repeat, we’re here for a reason. And part of the reason is to make this dream extend everywhere. I’m going to do my part by setting the goal, by reminding people of the goal, by heralding the goal, and by calling people into action, both the federal level, state level, local level, and in the private sector. (Applause.)

And so what are the barriers that we can deal with here in Washington? Well, probably the single barrier to first-time homeownership is high down payments. People take a look at the down payment, they say that’s too high, I’m not buying. They may have the desire to buy, but they don’t have the wherewithal to handle the down payment. We can deal with that. And so I’ve asked Congress to fully fund an American Dream down payment fund which will help a low-income family to qualify to buy, to buy. (Applause.)

We believe when this fund is fully funded and properly administered, which it will be under the Bush administration, that over 40,000 families a year — 40,000 families a year — will be able to realize the dream we want them to be able to realize, and that’s owning their own home. (Applause.)

The second barrier to ownership is the lack of affordable housing. There are neighborhoods in America where you just can’t find a house that’s affordable to purchase, and we need to deal with that problem. The best way to do so, I think, is to set up a single family affordable housing tax credit to the tune of $2.4 billion over the next five years to encourage affordable single family housing in inner-city America. (Applause.)

The third problem is the fact that the rules are too complex. People get discouraged by the fine print on the contracts. They take a look and say, well, I’m not so sure I want to sign this. There’s too many words. (Laughter.) There’s too many pitfalls. So one of the things that the Secretary is going to do is he’s going to simplify the closing documents and all the documents that have to deal with homeownership.

It is essential that we make it easier for people to buy a home, not harder. And in order to do so, we’ve got to educate folks. Some of us take homeownership for granted, but there are people — obviously, the home purchase is a significant, significant decision by our fellow Americans. We’ve got people who have newly arrived to our country, don’t know the customs. We’ve got people in certain neighborhoods that just aren’t really sure what it means to buy a home. And it seems like to us that it makes sense to have a outreach program, an education program that explains the whys and wherefores of buying a house, to make it easier for people to not only understand the legal implications and ramifications, but to make it easier to understand how to get a good loan.

There’s some people out there that can fall prey to unscrupulous lenders, and we have an obligation to educate and to use our resource base to help people understand how to purchase a home and what — where the good opportunities might exist for home purchasing.

Finally, we want to make sure the Section 8 homeownership program is fully implemented. This is a program that provides vouchers for first-time home buyers which they can use for down payments and/or mortgage payments. (Applause.)

So this is an ambitious start here at the federal level. And, again, I repeat, you all need to help us every way you can. But the private sector needs to help, too. They need to help, too. Of course, it’s in their interest. If you’re a realtor, it’s in your interest that somebody be interested in buying a home. If you’re a homebuilder, it’s in your interest that somebody be interested in buying a home.

And so, therefore, I’ve called — yesterday, I called upon the private sector to help us and help the home buyers. We need more capital in the private markets for first-time, low-income buyers. And I’m proud to report that Fannie Mae has heard the call and, as I understand, it’s about $440 billion over a period of time. They’ve used their influence to create that much capital available for the type of home buyer we’re talking about here. It’s in their charter; it now needs to be implemented. Freddie Mac is interested in helping. I appreciate both of those agencies providing the underpinnings of good capital.

There’s a lot of faith-based programs that want to be involved with educating people about how to buy a home. And we’re going to have an active outreach from HUD. (Applause.)

And so this ambitious goal is going to be met. I believe it will be, just so long as we keep focused, and remember that security at home is — economic security at home is just an important part of — as homeland security. And owning a home is part of that economic security. It’s also a part of making sure that this country fulfills its great hope and vision.

See, I tell people — and I believe this — that out of the evil done to America will come some incredible good. (Applause.) You know, they thought they were attacking a country so weak and so feeble that we might file a lawsuit or two, and that’s all we’d do. (Laughter.) That’s what they thought. We’re showing them the different face of America. We’re showing them that we’re plenty tough. When it comes to taking somebody trying to take away our freedoms, we’re tough, and we’re going to remain tough and steadfast. (Applause.)

But I also want people to see the deep compassion of America, as well. I want the world to see the other side of our character, which is the soft side, the decent side, the loving side. I want people to know that when we talk about dreams, we mean big dreams. And when we talk about a free society, we want a society in which every citizen has the chance to advance, not just a few.

And part of the cornerstone of America is the ability for somebody, regardless of where they’re from, regardless of where they were born, to say, this is my home; I own this home, it is my piece of property, it is my part of the American experience. It is essential that we stay focused on the goal, and work hard to achieve that goal. And when it’s all said and done, we can look back and say, because of my work, because of our collective work, America is a better place. Out of evil came incredible good.

Thank you all for coming by.”

Alan Farago is conservation chair of Friends of the Everglades. He can be reached at: afarago@bellsouth.net

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