February 2012
4 posts
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The Importance of a Homeowner Bill of Rights →
by Peter Swire and Jordan Eizenga
The recent housing downturn revealed how homeowners are systematically disadvantaged by the current system of mortgage finance and are in need of additional rights to be protected from abuses in the servicing of mortgages. This is why President Barack Obama’s call last month for a “homeowner bill of rights” is so important.
For more, see here.
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Manufacturing Bonds Presenting a Bond Guarantee... →
by Jordan Eizenga and James Hairston
Manufacturing remains an integral part of our economy. Manufacturing companies provide well-paying, middle-income jobs. U.S. manufacturing wages are, on average, 19.3 percent higher than the private-sector average even though the sector employs an above-average share of those without a college education. Manufacturing also drives innovation. Manufacturing...
The Ramp Begins for “Rehab-to-Rent”: Turning... →
by John Griffith, Alon Cohen, and Jordan Eizenga
The new pilot program by housing finance giant Fannie Mae to convert foreclosed homes into rentals is a promising first step toward revitalizing neighborhoods and stabilizing local housing markets—providing homeowners and renters alike with much-needed help. That said, details are scarce about the new program, which President Barack Obama unveiled...
January 2012
4 posts
3 tags
Getting to the Bottom of the Housing Crisis →
by Janneke Ratcliffe, Alon Cohen and Jordan Eizenga
Talk about critical timing. President Barack Obama’s newly formed mortgage crisis working group within the Department of Justice is charged with investigating fraud in the home mortgage market that led to the housing and financial crises and the Great Recession. The new group will begin its work just as state attorneys general from around the...
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Rehab-to-Rent Can Help Hard-Hit Communities and... →
by Alon Cohen, Jordan Eizenga, Bracken Hendricks, John Griffith, and Adam James
Half a million houses, many of them vacant and deteriorating, are languishing in a bloated U.S. real estate market, threatening to turn some cities into ghost towns, undermining the stability of working families, and proving to be an anchor on a shaky economy. Many of these vacant homes, nearly a quarter-million,...
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WatchCouncil of Economic Advisor’s Chairman Alan Krueger gives a lengthy presentation on income inequality in the US.
Enjoy.
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A Small Change to the Saver’s Credit Can Go a Long... →
by Camille Busette and Jordan Eizenga
Homeownership has long helped low- and moderate-income families build wealth that allows them to start businesses, educate their children, and retire with dignity. As a result of the recent housing and financial crises, American families will not have the same opportunity to build wealth through homeownership anytime soon. While sustainable homeownership...
December 2011
4 posts
6 tags
WatchScott Pelley of 60 Minutes investigates the issue of foreclosed and vacant homes.
In good times, the housing industry comprises about 5-6 percent of our nation’s GDP and is historically what leads the economy out of recession. The Federal Reserve lowers interest rates, mortgages become cheaper, and housing starts increase.
Yet, we have long since emerged from recession and the housing market...
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Big Ideas for Small Business: The CDFI Bond... →
by Jordan Eizenga
The federal government has not yet implemented a program, authorized in legislation passed in September 2010, which, once up and running, will help so-called Community Development Financial Institutions invest in small businesses and communities hardest hit by the financial crisis.
The 2010 CDFI Bond Guarantee Program will expand access to low-cost capital for Community...
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Consumers Matter in Mortgage-Servicing... →
by Peter Swire and Jordan Eizenga
The current structure of the mortgage-servicing industry is such that servicers are responsible to investors and “owe no duty at all to consider the needs and interests of consumers.” That is, the clients of mortgage-servicing companies are investors in mortgage-backed securities for whom the servicers collect monthly mortgage payments from homeowners and, as...
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AUSTERITY!: Britain's run with predictably bad...
by Jordan Eizenga
In the summer of 2010, I wrote repeatedly (see here and here, for example ) about the negative consequences of implementing austerity measures when there is very weak demand and high unemployment. Cutting spending, under these conditions, means removing demand from the economy when there is already a big hole in the combined demand of households, businesses and the government...
November 2011
3 posts
4 tags
WatchThe Wall Street Journal outlines why it is that our most recent economic downturn has produced such a severe level of unemployment.
Enjoy.
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Housing Refinancing Reforms Still Needed →
by Sarah Rosen Wartell and Jordan Eizenga
The changes to the Obama administration’s Home Affordable Refinance Program announced last week by Fannie Mae and Freddie Mac are welcome, but more can be done to expand access to the program and allow additional struggling homeowners to refinance their mortgage at today’s historically low interest rates.
In October the two taxpayer-backed mortgage...
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Why Treasury Should Extend the New Issue Bond... →
by Jordan Eizenga
Our still-ailing housing markets need all the first-time homebuyers and affordable rental housing investors we can find. The New Issue Bond Program, which the Department of the Treasury launched in 2009 to help state and local housing finance agencies continue financing housing for working families during the housing crisis, is set to expire at the end of 2011. The...
October 2011
5 posts
4 tags
Refinancing At-Risk Homeowners →
by Sarah Rosen Wartell, David Min, and Jordan Eizenga
Our nation’s slowing economic recovery prompted policymakers to consider ways to shore up consumer demand and get our economy moving again. One central focus of these efforts was to find ways to improve the weak housing markets, where hundreds of thousands of foreclosed homes are keeping home values down and depressing household wealth,...
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Getting the Ball Rolling on the CDFI Bond... →
by Jordan Eizenga and James Hairston
Starting November 1, Starbucks Corp. will begin collecting donations to provide capital for Community Development Financial Institutions as part of its “Create Jobs for USA” initiative. While Starbucks should be lauded for its efforts, Congress has already authorized a program that aims to expand the capacity of Community Development Financial...
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September 2011
6 posts
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WatchDavid Wessel of the Wall Street Journal talks about how lax monetary policy (low rates) has not resulted in lower rates for mortgage borrowers. The reason: there are barriers that prevent many borrowers from refinancing their mortgages.
More to come on this topic next week!
Enjoy.
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Renting Our Way Out of the Foreclosure Glut →
by Sarah Rosen Wartell, David M. Abromowitz, Bracken Hendricks, Alon Cohen, Jordan Eizenga, and John Griffiths
The Federal Housing Finance Agency, in consultation with the Departments of Treasury and Housing and Urban Development, last month issued a “request for information” to solicit ideas for selling or otherwise disposing of foreclosed properties owned by the Federal Housing...
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Research Provides More Evidence That Benefits For... →
by Heather Boushey, Jordan Eizenga and Matt Separa
A new paper by Jesse Rothstein, a professor of public policy and economics from the University of California Berkeley and former chief economist at the Department of Labor, throws cold water on the notion — touted by many conservatives — that extending unemployment insurance benefits provides a strong disincentive for the unemployed to look...
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WatchHousing and Urban Development Secretary Shaun Donovan talks about ways to restructure the Home Affordable Refinance Program (HARP), which was created shortly after President Obama took office. The idea behind HARP is to allow borrowers with mortgages that are greater than the value of the home that secures the loan - underwater borrowers - to refinance at today’s historically low rates.
In...
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WatchPoverty rates are at their highest since 1983, an alarming outcome of the worst recession since the Great Depression. This is yet another reason to ensure that we maintain emergency unemployment benefits and a strong SNAP (food stamp) program, both of which are key to keeping people out of poverty. It is also another reason why the President’s jobs package is so important - getting people...
August 2011
11 posts
3 tags
Republicans Loved Stimulus When Bush Was in the... →
by Michael Linden, John Griffith, and Jordan Eizenga
Stimulus is now a dirty word, especially among Republicans in Congress. But it wasn’t always so. In January 2008 when the economic picture was far less dire and the unemployment rate was only 4.8 percent, 165 Republicans in the House of Representatives and 33 Republican senators voted to pass a stimulus package with an estimated cost of $152...
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Spurring Job Creation in the Private Sector: Three... →
The following is a great article calling on the Obama administration to be bold in its job creation agenda. Enjoy.
by Michael Ettlinger, Donna Cooper, Sarah Rosen Wartell, and Bracken Hendricks
When President Barack Obama announces his jobs plan in September, it should be a plan that matches the scale of the problem. With millions unemployed and job creation sluggish, this is not the time to...
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The National Payroll Contest: A Proposal to Create... →
by Michael Ettlinger and Jordan Eizenga
Job creation isn’t going to get moving to the extent we need until there’s sufficient demand in the economy to get businesses believing that there will be good returns to investing and hiring. In short, they need customers. That said, at the margin there is something to be said for providing other forms of motivation to hire.
One way to do that is to...
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Some Civility...Please? →
by Michael Eizenga and Jordan Eizenga
Why a more polite political community would be a more productive one.
The strange metaphor “Washington is broken” became more firmly embedded in common wisdom during the recent debt-ceiling debate. But the debate revealed that Washington isn’t simply broken; it’s also rude. As some renew calls for reform to address government dysfunction, perhaps the best...
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WatchNouriel Roubini, NYU economist and founder of Roubini Global Economics, talks about the general state of the global financial system, the US economy, and economic theory.
“Marx said it right that at some point, capitalism can self-destroy itself” and “that markets are not working,” says Roubini, who is by no means an orthodox Marxist.
This is a very interesting interview...
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Renting Our Way Past the Home Foreclosure Crisis →
by David Min, Jordan Eizenga and John Griffith
The announcement yesterday that the Obama administration will consider proposals to sell off large numbers of government-owned foreclosed homes is an important step toward a new system of U.S. housing finance. If designed well, this initiative could generate much-needed revenue for the government, expand the quantity of energy efficient,...
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We're in for a Rough Ride →
by Jordan Eizenga
Congress’s 11th-hour decision to raise the debt limit after agreeing to a $2.4-trillion deficit-reduction package may have averted economic calamity, but the United States is not out of the woods yet. The long-term effects of the protracted and fractious debt-limit negotiations, coupled with a deficit-reduction package that does nothing to put people back to work, tells me that...
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A Potential Downgrade from S&P
by Jordan Eizenga
News outlets are reporting that government officials expect Standard and Poors - a major credit rating agency - to downgrade the United States sovereign credit rating. S&P’s decision to downgrade the United States is being reported by ABC News’ Jake Tapper as follows:
Officials reasons given will be the political confusion surrounding the process of raising...
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Putting People Back to Work Through ‘Scattered... →
by Alon Cohen and Jordan Eizenga
The federal government is holding a significant number of foreclosed properties from mortgages it guaranteed before the housing bubble burst. The weak housing market would surely yield depressed prices if the government were to sell off these properties en masse. So what should we do with our growing stock of foreclosed homes? And can we put Americans back to...
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Increasing the Impact of Federal and State Funds... →
by Donna Cooper and Jordan Eizenga
The Environmental Protection Agency estimates that over the next 20 years, more than $600 billion in water system infrastructure improvements will be necessary. Much of the cost of these improvements will be borne by consumers. But state drinking and clean water revolving loan funds do subsidize a portion of the project costs by offering low-interest loans...
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Let It Flow: Innovative Investment Strategies Can... →
by Donna Cooper and Jordan Eizenga
We will need to invest at least $636 billion over the next two decades to keep our water systems in safe working, according to EPA estimates. That could mean Americans will pay higher water bills in the coming years. But we can curb that increase if clean water and drinking water state revolving funds—the vehicles through which most water infrastructure...
July 2011
12 posts
1 tag
WatchMy colleague Michael Linden outlines why we need to increase the debt limit, why a short increase to the limit won’t work, and what will happen if we don’t raise the limit.
Enjoy!
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Nerviosismo en mercados internacionales por... →
For all you Spanish speakers, I talk about the debt limit on NTN, a Latin American cable outlet.
Enjoy!
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Failing to Raise the Debt Limit Would Harm the... →
by Jordan Eizenga
If Congress fails to raise the debt limit before August 2 the United States’s credit rating will almost certainly be downgraded and interest rates will jump. Without the ability to borrow, the federal government will have no choice but to immediately cut the payments it is obligated to make by 40 percent. This will threaten Social Security benefits, active-duty military pay,...
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Watchby Michael Linden and Jordan Eizenga
(For a link to the original article, see here).
On August 2, if Congress fails to raise the debt limit, the United States will have its credit rating downgraded, interest rates will likely rise dramatically, and the federal government will be forced to immediately cut nearly 40 percent from its budget, which could plunge the American economy back into a deep...
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The Debt Limit Ought to Worry Canadians, Too →
by Jordan Eizenga
There is a lot at stake for Canadians in the faltering U.S. debt-limit negotiations.
If you have been following the U.S. debt-limit negotiations, you will undoubtedly have heard U.S. Treasury Secretary Timothy Geithner’s repeated warnings that failure to raise the debt limit would have catastrophic consequences for the U.S. economy: The credit rating of the United States...
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WatchMy colleague, Michael Linden, takes on Grover Norquist, the no-tax fanatic.
Enjoy.
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Let's Get the Record Straight
by Jordan Eizenga
The White House-Congress debt limit negotiations are getting down to the wire and the consequences of failing to reach an agreement in time to raise the debt limit by August 2nd are dire. Given these facts, you might ask, “Why can’t the White House and Republican leaders in Congress get their act together and come to an agreement?” Well, let me set the record...
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WatchWarren Buffett discusses the debt limit negotiations on CNBC. The most notable comment from this segment: Failure to raise the debt limit would be “the most asinine act in our nation’s history.”
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WatchBruce Bartlett, a former senior economic official in the George H.W. Bush administration, is the newest person to argue that the 14th amendment makes the debt limit unconstitutional.
It is interesting to note that even Treasury Secretary Tim Geithner has suggested that failure to pay our debt obligations is unconstitutional. As a political device, publicly floating the idea that the debt limit...
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WatchSince some Congressional lawmakers seem up in arms about including the elimination of oil and gas subsidies in the debt limit negotiations, I thought I’d post a quick clip by my colleague (a tax expert) Seth Hanlon on that very topic.
Enjoy.
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Flat Tax, Fair Tax, and Tax Reform →
I speak with Vicki Childs about different tax reform options. The other guests included proponents of the flat tax and the fair tax, both of which (fortunately) are not likely to become law.
Enjoy and don’t mind the beginning story.
June 2011
11 posts
5 tags
A Balanced Budget Amendment: What Was Once a Bad...
by Jordan Eizenga
In March, all 47 of the Republican Senators joined in introducing legislation that would constitutionally bind the federal government to balancing its budget annually. And this week, Republican Senate Majority leader Mitch McConnell called once again for a balanced budget amendment, a constitutional rule requiring the federal government to spend no more than it takes in as...