Wednesday, November 18, 2009


At first glance, this seems like a very good thing:

Philadelphia Gives Homeowners a Way to Stay Put

... Under the rules adopted by Philadelphia's primary civil court, no owner-occupied house may be foreclosed on and sold by the sheriff's office before a "conciliation conference," a face-to-face meeting between the homeowner and the lender aimed at striking a workable compromise. Every homeowner facing a default filing is furnished with counseling, and sometimes legal representation.

... In some cases, deals are struck that lower monthly payments for borrowers and allow them to retain their homes. When a homeowner cannot afford the home even at modified terms, the program helps to create a graceful exit, in which the borrower accepts cash for vacating the property or signs over the deed in lieu of further payment.

It also seems like a rebuke to the caution and timidity of the Obama administration:

Those outcomes are similar to the ones produced by the Obama administration's $75 billion program aimed at stemming foreclosures.... But in Philadelphia there is one crucial difference: the mortgage companies have no choice but to participate. They have to attend the conferences and negotiate in good faith or they cannot proceed with a sheriff’s sale.

But there are some problems:

... Some suggest the city's program is plagued by the same basic defect as the Obama rescue plan: Nearly all the loans that have been modified have been altered on a trial basis, requiring homeowners to reapply for an extension of the terms after only a few months -- a process that appears rife with obstacles, according to participants.

"There's no teeth to the conciliation program," said Matthew B. Weisberg, a Philadelphia lawyer who represents homeowners in cases involving alleged mortgage fraud. "It's a largely ineffective stopgap prolonging what appears to be the inevitable, which is the loss of homes."

Still, Mr. Weisberg grudgingly praised the plan.

"It's arbitrary and unpredictable," he said, "but it's better than what anybody else is doing."

There's the failure of liberalism in what's supposed to be the post-conservative Obama era: the president's approach to huge problems is weak and watered down ... and the "cutting-edge" approach at the non-federal level is only slightly less weak and watered down.

In a better world, negotiation would be mandatory and settlements would stick -- nationwide -- and the wheeler-dealers would shut up and take it, as the inevitable price to be paid for the government's benevolent decision not to allow their entire playhouse, otherwise known as the global economic system, to go through the laissez-faire process of collapse and rebirth, which would have meant a far longer and more painful downturn, in all likelihood a full-blown depression. But the profound corruption of our political system means that supposedly liberal Washington pols search for much more direct ways to improve the bottom lines of the wheeler-dealers, bypassing relief for ordinary schmucks altogether.

"Liberal" Democrats inevitably fail in this country because, as a result of our money-drenched political culture, their main promise -- advocacy of the interests ordinary people rather than those of the powerful -- becomes impossible to fulfill. Right-wingers don't have this problem; they say they're going to help the capitalists, and they do. The trickle-down that's supposed to derive from that may never arrive, but at least they're not saying one thing and doing another. Democrats always let us down. How can they not?

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