You say “La Russa,” I say “Rzepczynski” — ah, let’s call the whole thing off.
Was that a wild scene in the 8th inning of last night’s Texas Rangers -St. Louis Cardinals World Series Game 5? First, Cardinals’ uber-managerTony La Russa was shocked — shocked — when a routine groundball richocheted off a relief pitcher’s leg and led to a bases loaded situation where the … wrong relief pitcher was on the mound to face the Rangers’ hottest hitter in, oh, just the biggest game of the year. The blunder ostensibly came because La Russa’s phone instructions to the area where relief pitchers warm up either wasn’t heard in the Dallas din or was somehow mangled by the bullpen coach. In any case, as Current TV’s Keith Olbermann put it (and believe me, I don’t like quoting Keith Olbermann, but it was a great observation):
“With all this technology here, they can’t get a phone call completed from one part of the building to another part of the building? You go to an Apple store, the communications device the salesman is carrying is capable of launching a nuclear device. It’s mind-boggling.”
Ah, mistakes were made. Speaking of mistakes, has there ever been a corporate blunder on the scale of Netflix’s disastrous price hike and forced death camp march to online streaming for DVD customers. OK — there have been much worse. But Netflix founder and CEO Reed Hastings felt far, far worse than Tony La Russa again today after the company’s stock dropped another 35 percent. What we have here is yet another Uncool Hand Luke “failure to communicate.”
Meanwhile, the erstwhile Great Communicator II, President Obama, this week unveiled the federal government’s latest plan to help drowning homeowners. Which just happens to be the topic of the Wednesday, Oct. 26, Sentinel Editorial: Warning: Sentinel poll at bottom)
Is it enough?
Is the federal government’s mortgage plan unveiled this week by President Barack Obama going to make a difference to the startling numbers of local homeowners who are slipping beneath the financial waterline?
The plan could, could, help one in five Californians who are in over their heads with higher-interest mortgages.
It’s similar to what we called for here two weeks ago, after members of Congress, Democrats and Republicans, called for the president to do something about a foreclosure crisis that is continuing to keep the country from any lasting economic recovery.
Obama’s previous try at stabilizing the housing market was a dismal failure. Credit was too tight, appraisals too low and historically low interest rates did little or no good for the vast majority of struggling homeowners.
Santa Cruz County, where the median price of housing has dropped dramatically since the crisis began in 2008, is particularly hard hit, with 20 percent of residential properties saddled with a mortgage that is more than the property is worth in today’s recessed market.
For these “underwater” homeowners, the new plan is a move forward. For those who take advantage, it could lower monthly payments and give them more disposable monthly income. That would mean more spending — although Americans are still using extra cash to pay down debt — and help economic recovery.
At least that’s how it theoretically will work.
The hope also is that by relaxing the qualifications for refinancing, fewer homeowners will default on mortgages. That means the market wouldn’t be flooded with foreclosures, further depressing resale prices and putting more and more homeowners underwater.
Under the new rules, there would be no longer be a cap on how far underwater a homeowner can be to qualify for a refinance; new appraisals wouldn’t be required; and some fees would be waived. The main requirements are that the mortgage has to have been issued before May 31, 2009; guaranteed by the two federally sponsored housing agencies, Freddie Mac and Fannie Mae; and that the homeowner has to be current on mortgage payments.
Analysts estimate it could help up to a million homeowners nationwide.
While that sounds impressive, the figure pales in the face of 2 million underwater homeowners in California alone. Of these, the analysts say the new plan, which takes effect Dec. 1, could help perhaps 20 percent.
With an estimated 10,730 properties in Santa Cruz County in negative equity as of June 30, according to CoreLogic, which tracks mortgage data, that means the new plan could help about 2,145 underwater homeowners.
The biggest caveat for the new program is that it’s voluntary — banks can reject a refinancing application even if the homeowner meets all the qualifications.
Banks should not have to take on risky loans — and the new mortgage plan does not reduce principal, but just allows homeowners an opportunity to lower interest rates.
We highly doubt that banks want to take on more foreclosed properties.
Meanwhile, for many homeowners the tantalizing prospect of getting lower interest rates on their mortgages has proved maddeningly impossible to obtain.
The net result is that the water just gets deeper.
Getting responsible homeowners back on their feet can help lead the economy back to dry land. The government and lenders need to work together to make this happen.