As the big banks, the multinational corporations and the wealthiest Americans all reap the rewards of massive government rescue funding and tremendous tax giveaways, it seems that only one group in the country has been left out in the cold: everyday people in communities like Metro Detroit.
Where is the rescue for the American autoworker whose job was shipped overseas? Where is the bailout for the owner of the corner store struggling with less and less business? Where is the assistance for the family struggling to keep their home amidst the highest levels of unemployment in recent memory?
Something has got to give.
I believe that the best way to revive our economy is to assist hardworking people in communities like ours. Right now, we can do this by cutting personal debt and stopping the terrible spread of foreclosures.
My plan is simple: Give struggling homeowners the right to delay foreclosure for up to two years so they can have time work out better arrangements with their mortgage lenders. During this time, homeowners would have to pay a “fair market rent,” which would take into consideration factors including the balance remaining on the mortgage and local housing market conditions. In most cases, this rent payment would be considerably lower than payments set a few years ago in the heyday of high home prices.
The proposal is not a free pass for folks who behaved irresponsibly, taking out mortgages for vacation homes or seeking to avoid payment altogether. It requires that homeowners eventually pay the amount owed under the original mortgage terms if no alternative agreement is reached. Yet I believe the proposal provides our community’s struggling homeowners exactly what they need: additional time. This is our most powerful tool for stopping evictions.
It’s likewise a powerful tool in the fight against neighborhood blight. Banks kicking people out of their homes has awful consequences not only for families but also for their neighbors, our schools and our region’s economy. This is why I’ve been fighting for homeowners since my time in the Michigan Legislature.
Now, I know that mortgages are not the only form of debt that’s crushing our community. And I understand that much of this debt results from job losses and an economic downtown that was beyond our community’s control. That’s why I’m working hard to make sure that Congress takes further action to help reduce several kinds of personal debt. I’m demanding that politicians in Washington take some steps as quickly as possible:
• Cut as many federal student loans as possible and cap interest rates and eliminate penalties and fees on additional government-issued student loans.
• Make private student loans — especially those written under unfair terms — eligible to be dropped in bankruptcy court.
• Empower the new consumer watchdog group in Washington (known as the Consumer Financial Protection Bureau) to get to work restricting banks from using unfair practices to take advantage of low-income borrowers.
Congress has sold the farm to pay for endless wars, tax giveaways for the super-wealthy and bailouts for the banks. But, in contrast, we can take these steps to reduce consumer debt at very little cost. It’s time to take a stand for people struggling to make it in America.
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