There are other solutions available that do not require an across-the-board suspension of the due process clause. I have often advocated for the SAM, or the shared appreciation mortgage, which gives to beleaguered borrowers exactly what they need (time, not money)—reduced payments but not reduced principal.
Ultimately, the federal government is there to act in precisely the sort of situation in which 11 million homeowners find themselves in 2012. The right solution to the foreclosure crisis will be one that reflects the nature of the problem and the country; that is, one that reduces rate, not principal—except where appropriate—and recognizes that punishment is less important than solidarity. It will acknowledge that everyone contributed to this problem—banks, brokers, borrowers, and of course, the federal government itself. However, it will not sacrifice constitutional principle in the heat of this particularly searing moment in American history.
The Obama plan is not a solution, but it is a step in the right direction. We need to cooperate and collaborate with each other to solve the mortgage crisis and minimize the personal tragedy it engenders. And we need to find solutions that recognize that real estate prices will rebound, as will America in general. However difficult it is to muster it at this moment, optimism is something that has always characterized this country, and will continue to serve it well in the foreseeable future—and is something exuded by President Obama, as it was by Presidents Kennedy, Reagan, Clinton and other American icons…
You're absolutely right, Clint. It is halftime and we can and will make the finish line. That's something we Giants fans understand all too well.
Adam Levin is chairman and cofounder of Credit.com and Identity Theft 911. His experience as former director of the New Jersey Division of Consumer Affairs gives him unique insight into consumer privacy, legislation and financial advocacy. He is a nationally recognized expert on identity theft and credit.