Pro-Black People Policy Alert: Support Republican low-rate mortgage proposal

Republicans push low-rate mortgage in U.S. stimulus | Economy | Reuters

Mitch McConnel is pushing for a provision in the stimulus bill that would drive down mortgage rates to 4%. 30 year mortgages at that price point would make it easier to purchase a home and for people who refinanced, could save them thousands of dollars over the course of a year of mortgage payments. This is a Political Season Pro Black People Policy Alert

Why should black folks support such a provision? Because the last decade or so has seen a tremendous growth in home ownership and homeonwership remains a traditional path to generational wealth building for the vast majority of Americans. This is perhaps even more true for blacks. The economic downturn is wiping out hard earned wealth gains among blacks as financially devasted families lose their homes. Before this is all over, blacks may lose two generations of wealth gains. A provision such as this one is very much in the interest of black folks to support. Think of it like a 30 year tax break that puts money in your pocket from the get. The even better aspect of this is that it costs the government very little to do it. Because of the economic crisis, investors are parking their money in US Treasury bills as the safest place to keep it for now, which means the government can borrow huge amounts of money at very low rates, like 3%. If they relend that money at 4%, they pass on the benefit of that low cost money to homeowners and the government even makes a little change on the spread. No deficit hit. Its a win win.

Not only should blacks support insertion of this into the stimulus bill though, we need to push a little further in terms of implementation. Many black folk who got mortgages in the last several years got put into sub prime loan products. Sometimes because that was the risk profile of the borrower, but sometimes despite the fact that they could have gotten into a conforming loan. Either way, those mortgages ranging anywhere from 8-11%, are draining black folk dry as they pay these heavy financing costs and leaving even more people exposed to foreclosure, which costs everyone. In addition, I suspect that people who are in sub prime products are more likely to spend the savings they get from refinancing, thereby stimulating the economy with their spending, which is in fact the whole point. This proposal in my view gets even better in terms of impact on black folks if provision is made to get people out of high cost sub prime loan products.

Now, the Heritage Foundation does not like it, and I actually agree with them with regard to doing this to stimulate home sales. Mortgage rates are already quite low, so I think this provision is of marginal benefit on that front. Their other major contention is that its an income transfer from the financial sector to homeowners who don't really need it, which feels more like an ideological issue that does not help anybody per se, which is why I think the additional twist ought to be providing relief to those stuck in sub prime products. Considering how much income in the form of taxpayer dollars has been transferred INTO the financial sector, I really don't think its a problem to let some of that circulate back where it came from in the first place.

With a tweak or two, I think this is a good idea and firmly in the interest of black folks to support. Its action time. Call and email your senator and your represenative and the White House. Tell them you support the republican proposal AND that you want provision to be made to make these low cost mortgages available to people stuck in sub prime loan products. Use the links above, get their phone number and call their office now. Ask for the legislative assistant working on housing or on the stimulus and tell them you support Mitch McConnel's proposal for lowering mortgage rates AND that provisions should be made for people stuck in high cost sub prime mortgage products to refinance out of them, because those people are likely to circulate those savings back into the economy, increasing stimulus. Do it now, do it today.

Mr. President: Beautiful

Optics

I like the way this looks, I like the message the lunch conveys, I appreciate Bush's gesture in hosting it and his comments to the press which I regarded as quite sincere. If only that the spirit of this event would permeate all of Washington and the country.

Reflections on "The One"

In the service of the presidency

I've been pondering a variety of impressions and vibes being thrown off by this historic transition that is occurring.

I marveled and laughed out loud as I watched a clip of President-Elect Obama's visit to the White House to speak with President Bush and saw the unmistakable swagger of a black man as Barack Obama walked down the hallway with the President. Brothers and sisters all over the country noted it too, from my mother in Ohio to the brothers at the barbershop down the street.

I thought about the inspiration that Obama is giving to black men in America. I believe its out there, a palpable, tangible upward effect on the psyche of brothers, the presence of a black president. I know that I'm aware of it. Its not a sudden thing, but a slowly growing feeling. Forget "I wanna be like Mike". I wanna be like Obama. I'm catching thoughts running through my head like quicksilver..."Obama did it. Now you gotta do your thang".

I wonder if something akin to it but in a weird reverse way, might be happening in the minds of white people. Is Obama's triumph causing some whites to gradually begin to perceive black men in general in a different, more positive fashion? Will bosses and managers who didn't perceive potential in the brother that worked for them take a second look with a new eye? Might their not occur a major shift for the better in perceptions of black men, fueled by the success of Obama, that lifts all boats as it were. Will his success become the standard for what society assumes black men are capable of? I wonder.

I've thought a time or two that I'm glad to have a president who has some "cool" factor. I'm glad to have a president (at least for now) who's election was greeted with joy and thanksgiving and good will around the planet. I'm glad to have a president that makes the world think that America is still on the path of perfection in the pursuit of its ideals.

Lastly, I wondered about life in the White House for the next four years.

As the Obama's prepare for their installation as the First Family of the United States, I wondered about the feelings of the White House residence staff. Many of them are African American, some who's family's have had a long association in the service of the presidency. After so many years, to serve an African American First Family in the White House must seem a thing to marvel at. With what feeling of pride and earnest, sober bonhomie will they greet their arrival?