Communities The Only Level of Government That Can Combat Foreclosure Crisis

Posted April 17th, 2008 by gestroud • 17 views • Print • Email

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Most of the debate about the government “doing something” to help homeowners in foreclosure has focused on what it should do. What kind of program should be passed, what the role of the FHA should be, how the Fed can manipulate interest rates lower, and so on. But none of these arguments gets to the heart of the matter, which is what authority the federal government is acting under to help people save their homes.

In fact, the question should be, does the federal government even have any authority to help homeowners stop foreclosure? The answer is absolutely not. Where would the government get the authority to becoming involved in foreclosure proceedings and mortgage contracts? There is simply nothing in the US Constitution, the supposed supreme law of the land, that allows the federal government to be meddling in such affairs. Not surprisingly, the programs offered so far have done a terrible job helping homeowners.

But just because the federal government has no authority to get in the middle of voluntary mortgage contracts, that does not mean the individual states and local governments can not get involved in creating various creative help programs. As long as the states have such authority in their own constitutions, they can create legislation to offer relief to homeowners. How well their own programs will function is obviously debatable, and more community-based solutions would more likely be able to address local situations better than centrally-planned state efforts.

Because of the extra costs and lost efficiency of state and federal government involvement in the foreclosure crisis, it should up to local governments to get involved in the housing mess, if any level is involved at all. Of course, with the stunningly low quality of public schooling, both housing and education failures are related. This is reflected in the fact that so few Americans have any basic financial education, and do not understand how to balance a checkbook or make sure they can afford their mortgage in 3 years, not just in 3 months. Thus, more private and voluntary efforts may prove to be more effective than government intervention to alleviate foreclosures.

But, if one is to follow conventional wisdom, the people of the country granted only limited powers to the federal government through the US Constitution. Other powers they granted to their states through state constitutions. And any powers not given to the states or feds are retained by the people. Of course, any rights that an individual does not have can not be transferred to an authoritarian government, which will inevitably infringe on the rights of private individuals.

That means that homeowners and concerned community members should not wait for the federal government to “do something” about the foreclosure crisis. In the first place, they do not have any authority to do anything anyway, and in the second, homeowners and their neighbors have much more power to affect the foreclosure crisis than the feds have. Foreclosures will be most effectively dealt with at local levels, since all real estate is local, in the end.

Homeowners can stand up for their 10th Amendment rights and declare that the federal government has only a few powers, and all other rights are with them and their state and private institutions. Only by reclaiming some of the powers of the individual can communities can together their own plans to deal with issues such as schooling and housing crises. This will produce much longer-term solutions than waiting months or years for the federal government to reward banks and corporations and then call it helping the people.

Author’s note: The ForeclosureFish website has been created to provide homeowners in danger of losing their houses with relevant and important foreclosure help and advice. The site describes various methods that may be used to save a home, such as mortgage modification, short sales, foreclosure refinancing, and more. Visit the site to read more articles about how foreclosure works and how the process may be avoided before it is too late: http://www.foreclosurefish.com/

Source: EzineArticles