Legislative study committee meetings are often listless affairs in which a small subset of the group gathers along with a handful of legislative staffers and lobbyists to talk about something that might be recommended to the General Assembly for possible action. Maybe.
Yesterday's meeting of the House Select Committee on Rising Home Foreclosures felt different. Not only was the room packed with consumer advocates, industry lobbyists, state officials and even a couple of reporters, every member of the committee showed.
And while the specifics of what the group might push during the '08 session were not immediately clear, there was a definite vibe that this would be an action group as much as it would be a study group. That the group was chaired by former House Speaker Dan Blue (the chief sponsor of some reform bills last year) helped even more.
Why the hubbub? Well, for one thing, mortgage foreclosures in the state are through the roof. Ten years ago, there were less than 20,000. This year, the number is expected to approach 60,000. This is bad news — bad for business, bad for communities, bad for local tax revenues and, most of all, bad for the families whose dreams have been destroyed.
How the heck did we get into this mess? There are a lot of reasons, but it mostly boils down to some toxic byproducts of Bushanomics – namely, a wildly under-regulated market of predatory corporations and a distressed middle class that's having a harder and harder time staying afloat. As Banking Commissioner Joe Smith said, we used to talk about the housing downturn as being only about the "subprime" market. Now we know its reach is much deeper.
So what do we do? We'll have more details on that in next week's Weekly Briefing on the main Policy Watch website, but the most obvious shorthand answers are:
1) Improved foreclosure processes. Right now in North Carolina, homes can be foreclosed upon with only the most basic findings by a clerk of court. To get a judge to look at your case in order to see if you've been ripped off is almost impossible. Some states are considering foreclosure moratoria in order to put a hold on things until the market can stabilize.
2) A dramatic increase in the quantity and availability of unbiased, nonprofit housing counselors. Far too many folks have been duped (and still get duped) into signing mortgages that they have no real prospect of keeping up with over time. Mortgages are the single most important financial transaction that most individuals ever enter into. It's absurd that most people don't really know what they're signing.
3) New crackdowns on so-called "rescue" scams in which vultures come in and steal the houses of people who are already confronting foreclosure.
The bottom line: North Carolina is actually not as bad off as some states. This is mostly attributable to the fact that our state legislators and regulators have done a much better than average job in defying the right wing's deregulatory push in recent years by passing anti-predatory lending and mortgage servicing legislation. Still, 60,000 foreclosures is a tremendous human tragedy that must be addressed and right away. Let's hope the Select Committee builds on its fast start.