What I’d Be Talking About if I Were Still Running - Bill Richardson (NY Times)

[gateley]

(I'll be posting all of them)

Bring It Back to the Home

THE mortgage crisis has paralyzed the nation’s economy and threatens to force millions of Americans from homes they can no longer afford.

In New Mexico in 2003, I signed into law strict regulations on the use of high-cost, subprime loans. As a result, many of the subprime lenders either cleaned up their practices or pulled out of New Mexico altogether.

It’s true that some people do not have the income it takes to purchase and maintain a home. But with conventional fixed-rate mortgages, low-income buyers repay their loans nearly as well as higher-income buyers. The mortgage crisis was not caused by the people who purchased homes but by how homes were financed.

Congress should pass comprehensive reform of the mortgage industry. We should outlaw loans that don’t require borrowers to document their income.

We need a national campaign to promote financial education. Poor credit histories are the result of poor financial behavior, not income or ethnicity, and they can be changed by good financial behavior. A 2001 study showed that buyers who received individual financial counseling were 34 percent less likely to become delinquent on their mortgage.

With leadership from Washington, a dose of reform in the mortgage industry and a national initiative that educates homebuyers and rewards them for being prudent, homeownership can once again be the bedrock of financial security for America’s middle class.

Bill Richardson is the Democratic governor of New Mexico.

http://www.nytimes.com/2008/03/02/opinion/02richardson.html