Quickest way to recovery is to clear mortgage debt quickly - East Valley Tribune: Ahwatukee Foothills

Quickest way to recovery is to clear mortgage debt quickly

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Jon Beydler

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Posted: Wednesday, September 28, 2011 4:00 pm | Updated: 1:44 pm, Wed Oct 10, 2012.

It was only 15 years ago. Not quite a generation. The federal budget was nearly balanced, jobs were aplenty, homes were appreciating at about 5 percent a year, there were no wars and people were generally happy with their lives. The good times were rolling!

OK all you tea partiers and wing nuts of the world, here is your test question: Who was our president from 1992 to 2000? No, it wasn't Ronald Reagan. It was Bill Clinton - a Democrat.

Yes, all the haters wanted to discount the Clinton legacy based upon his over-the-top testosterone level. Excuse me Newt Gingrich, would you care to comment?

What former president has ever been as engaged as Clinton in continuing to be a driving force for goodness and positive change in the world years after they left the White House? I guess one could make a good case for former President Jimmy Carter and his work for Habitat for the Humanities and world peace.

The other day Clinton was on NBC's "Today" show where he stated that "the nation could be struggling for the next five years or more to emerge from its economic slump. But focusing on mortgage debt problems could help the recovery."

He went on to say that "the quickest thing we could do to move out of this would be to clear this mortgage debt more quickly."

He called for providing relief to homeowners with mortgage debt greater than the house's worth, either by reducing the amount of debt, adding years to the payoff to reduce monthly payments or converting the loan to rent payments so people can remain in their homes.

We are not going to solve our economic malaise until we finally bring closure to this housing crisis. It has been and continues to be the epicenter of the Great Recession from Day 1.

Even now when the U.S. Justice Department has filed suit against Bank of America and other banks for allegedly defrauding investors for how they repacked home loans as mortgaged-backed securities and sold them on Wall Street as derivatives is disingenuous to American homeowners. The lawsuit is attempting to "make whole" those investors who purchased the derivatives.

Why isn't the Justice Department attempting to "make whole" those homeowners who are drowning in negative equity? The banks are refusing to write down principal balances on these underwater mortgages primarily due to the fact that if they did it would render the derivatives as "junk bonds."

When does a mortgage stop being a mortgage once it becomes a stock? This risky scheme is fraud and homeowners need to be made whole.

Once again, it's time to listen closely to Clinton. Maybe all these candidates running for president, including Obama, can learn a little something about what real leadership is.

• Jon Beydler is a 33-year Valley resident and the former mayor of Fountain Hills who now lives in Chandler

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