A national coalition of community groups, including two Cincinnati organizations, are urging President Obama to push big Wall Street banks into writing down all “underwater mortgages” to market value. The groups said the action would pump up to $1.6 billion into Ohio's economy and create more than 24,000 jobs statewide.
The two local groups, Communities United for Action (CUFA) and Working in Neighborhoods (WIN), said such a move could add about $256 million annually to Cincinnati's economy.
In many cities including Cincinnati, about one-third of all mortgages are underwater, meaning homeowners owe more on their mortgages than their homes are actually worth, according to a report compiled by the coalition, known as The New Bottom Line. If Obama required the banks to reduce the principal on all underwater mortgages to current market value, he could inject a direct cash stimulus into Ohio’s economy at no cost to taxpayers, the coalition added.
The action would save the average Ohio family about $3,406 annually on mortgage payments, the coalition said.
Also, it wants Obama to conduct a full investigation into the fraudulent activities of the Wall Street banks that caused the foreclosure crisis and economic meltdown; require a minimum of $200 billion from the big banks in principal reduction for underwater homeowners and restitution for foreclosed-on families; and target principal reduction and restitution to the families hardest hit by the banks’ predatory lending, including communities of color and regions of the nation with the highest percentage of foreclosures.
Instead of overpaying more than $280 each month on their mortgages, Cincinnati homeowners could spend that money on groceries, household necessities and other items, the groups said. As consumer demand increases, businesses would begin hiring, creating an estimated 3,783 jobs in the Cincinnati area and over 24,000 jobs in Ohio, they added.
The figures are based on a report compiled by The New Bottom Line, entitled, “Ohio Underwater: How President Obama Can Fix the Housing Crisis and Create Jobs.”
In a Dec. 6 speech in Osawatomie, Kan., Obama said the “breathtaking greed of a few” was responsible for plunging the U.S. economy into crisis, adding now is a “make-or-break moment for the middle class.”
“Will President Obama back up his election year rhetoric with real action?,” asked Marilyn Evans, CUFA's director. “Cincinnati area families from all walks of life think it’s time for this administration to hold Wall Street accountable for crashing the economy, and for overcharging homeowners.”
The New Bottom Line is a national campaign consisting of community groups, church congregations, labor unions, and individuals working to counter the political influence of big Wall Street banks.