According to the big-business media, the latest proposal from the federal government to spend $50 billion to help people who are behind on their mortgages is “A Bold U.S. Plan to Help Struggling Homeowners.” (New York Times, March 26)
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This headline sounds promising. However, you do not have to read far to find that what is driving the plan is not concern that millions of people could lose their dwellings and become homeless. The purpose is to slow the growing number of foreclosed homes that are swelling banking and investment portfolios and driving down the overall value of real estate investments. An AP story (March 26) states honestly, “The Obama administration says the plan will help stabilize the real estate market by keeping many borrowers out of foreclosure.”
The $50 billion is to come from money already set aside for mortgage relief. In order to be eligible for the program, homeowners must prove they are collecting unemployment benefits and be less than 90 days behind in their mortgage payments. Even if this program is successful in helping the 4 million eligible homeowners, it won’t prevent an estimated 12 million foreclosures from occurring over the next three years. One in four homeowners have mortgages that are said to be underwater—that is, they owe mortgages that are greater than the value of the homes.
It is only under capitalism that housing, a fundamental human need, is seen not as a human right, but rather another commodity used to make money, regardless of the consequences for human beings. Capitalist speculators exploited working people’s legitimate belief that homeownership would provide a vehicle for a stable living situation. Mortgages were sold with initially affordable payments that ballooned to unaffordable levels. This resulted in record foreclosures, the collapse of the housing market and the plummeting of housing values such that people now own homes worth less than the balance on their mortgages.
The relief program does not carry the force of law; therefore it is not binding on the banks or mortgage companies. For newly unemployed homeowners who seek relief, the program caps their monthly mortgage payment at 31 percent of their income for only three to six months.
The seeming assumption on the part of the government is that this period gives people enough time to find a job and resume payments on the mortgages. With the official national unemployment rate as of February at 9.7 percent (Bureau of Labor Statistics), the prospect of finding a job in 180 days is extremely unlikely. There are over 6.1 million jobless workers who have been jobless for at least 27 weeks who need mortgage relief, are more than 90 days behind on their mortgages and thus are not eligible for this program. (HispanicBusiness.com, March 26)
That the program caps mortgage payments at 31 percent of monthly income implies that under normal economic conditions workers are paying more than one-third of their income in mortgages. Compare this to Cuba, where the maximum allowable rent or mortgage a worker can pay by law is 10 percent of income, and there are no evictions, foreclosures or homelessness. These facts show how much profit is made from treating housing as a commodity and not a human right in this country.
Housing should be a guaranteed right. Speculative investing in housing should be a crime. The Party for Socialism and Liberation calls for an immediate ban on all evictions and foreclosures and the cancellation of all underwater mortgages. All vacant homes and apartments should be used to house the homeless. Make the bankers pay!
