Eric Pusey explains at MNBlue about how the Star Tribune can't analyze Sen Norm Coleman's proposed Home Ownership Mortgage Emergency (HOME) Act, which would allow low and middle income borrowers to tap their retirement funds without penalty in order to avoid foreclosure on now-unaffordable mortgages.
The Strib is not alone.
The Washington Post's housing columnist Kevin Harney, who's syndicated in the Strib, also mentions Coleman's bill without noting a key issue Pusey describes more fully — that if the borrowers declare bankruptcy, their retirement accounts are off-limits to lenders. The HOME Act makes up to $100k of additional money available to the bankers who own these at-risk mortgages.
The homeowners are being encouraged by Coleman's bill to drain their retirement savings to keep paying for overpriced loans on assets that are falling in value. Some help.
No wonder, as Harney says, "Coleman's proposal drew immediate support from the lending industry." He also notes another bill co-sponsored by Sen. Chris Dodd seems to have go nowhere fast.
In other words, Coleman is not alone, either.
Politicians of both parties will be busy showing deep concern for financially strapped homeowners about to get nailed as adjustable rate mortgages adjust upward over the next year. But the bills, if they go anywhere, will show deeper concern for the lending industry. Just watch.
Especially if the media cover politics, housing and finance as separate beats.
