Saturday, March 29, 2008

Letter to the Washington Post, #8

I can guarantee with near-absolute certainty that the Post will not publish this letter. So, at the same time I send it in to the paper, I'm going to put it up here.

The Post’s carefully worded editorial, “Home Truths (March 28),” managed to balance every nuanced point with its opposite. The result is fairly routine for the Post—an editorial worth less than the paper it’s printed on.

Here’s the question for the editorial board: Do you support targeted assistance for homeowners with mortgage problems, or not? If not, please say so more clearly.

If you do, consider supporting a strategy that includes the ingenious, and ingeniously named, “Own-to-Rent” proposal advanced by the Center for Economic and Policy Research (CEPR).

Own-to-Rent would require mortgage-holders to offer to rent a property to its occupants at fair market rates before foreclosing. What would this accomplish?

First, it would force banks and other mortgage-holders who don’t want to become landlords to consider renegotiating loans to monthly payment levels that would be closer to market rents and more affordable to homeowners facing foreclosure.

Second, legislation could be written that would force mortgage-holders to absorb most or all of the loss connected to the deflated value of the home. Banks would not be forced by law to renegotiate, but they would be permitted to do so under the terms outlined in the law.

In successful renegotiations between mortgagees and lenders, occupants would have a chance to remain in their homes, lenders that profited greatly during bubble times would take the lead in stabilizing market values, and there would be no government-sponsored bailout.

Check out Own-to-Rent at the website for CEPR:

Jeff Epton
807 Taylor St., NE
Washington, DC 20017

202 506-7470

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