Junk Economy

Newsday:
Crisis looms for entire economy
Congress must focus on rising mortgage defaults to prevent a slip in confidence leading to collapse
BY PETER MORRIS
Peter Morris is chairman of the PRM Realty Group, with offices in New York and Chicago.

March 20, 2007

If Washington doesn't address the rapidly building multi-trillion-dollar crisis in residential mortgage defaults, its paralysis will help trigger a national economic recession that could touch every homeowner.

The crisis has been building for months - if not years. Experts agree it is a result of banks and other lenders' granting home loans to people who were not truly able to afford the payments. Now, with the national economy in a slide, the number of mortgage defaults is rising at an alarming rate.

On Long Island the situation is especially critical. A recent study reflected that the number of mortgage foreclosures in Nassau and Suffolk rose by 75 percent in the past two years.

Before we engage in the usual finger-pointing over how we got into this mess, let's agree on an aggressive course of action to mitigate it. Our nation must recognize there will be economic pain if the problem goes unaddressed; there will be residential foreclosures and billions of dollars in write-offs as auditors discover that many of these mortgages can never be fully paid down. Many families will find that they may have to consolidate their living space if they hope to hold on to at least one viable residential dwelling.

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Let me engage, Mr. Morris: a President and Congress more concerned about Iraq's borders than ours, pumping trillions into the middle east,ignoring a soaring trade deficet, letting Chinese lobby groups bribe officials, and then, prop up the economy by flooding the mortgage market with cheap, easy to get money, making real estate prices soar, while also allowing mass immigration (over one million legal immigrants a year and an untold number of illegal who can and do own homes here) then wonder why our standard of living is declining. Will they do anything serious about it? Probably not. It involved conviction and courage.

On the Brooklyn front, with mortgage defaults up 75% why exactly is the state ready to not only let but fund Ratner to raze historic buildings and build parking lots and luxury condos...oh I know why, the arena...as students of history are aware, failing empires need 'bread and circuses " to keep the plebes preoccupied.