Wednesday, Dec. 17, 2008 | 2 a.m.
- Their dreams shattered, investors left to wonder (11-28-2008)
- City works to prevent foreclosures (11-13-2008)
- Those empty homes for sale are harming communities (10-28-2008)
- State plan could ease pressure of ‘tsunami’ (10-23-2008)
- Reid, Goodman tour foreclosed homes, present remedy (10-22-2008)
- Bill to protect renters in foreclosure cases (10-20-2008)
Damon Silvers was incredulous.
“We’ve given them $45 billion, and we can’t get them to the table?” he said.
Silvers is a member of a group appointed by Congress to oversee the $700 billion bailout of financial institutions, and he was expressing his disbelief Tuesday to Kenneth LoBene, a federal housing official based in Las Vegas.
LoBene told Silvers that a financial giant back East isn’t being cooperative as the Housing and Urban Development Department tries to get loans for homeowners and restructure existing loans to prevent more foreclosures.
Silvers, who’s also the associate general counsel of the AFL-CIO, was standing on a tiny, sandy lawn at a house on Fay Boulevard, near Western High School.
He and two other members of the bailout oversight panel were milling around the yard, a long way from Washington, D.C., because it was a perfect place to see the foreclosure and credit crisis that is crushing economic activity.
This little green brick house is owned by a bank, one of nearly 6,000 with similar ownership in the Las Vegas Valley, according to Francis & Associates, which tracks the numbers.
Committee members were walking the neighborhood, trying to size up the real-world damage caused by years of a lax regulatory environment, as well as greed and folly on Wall Street, in Washington and right here in Vegas.
With billions filtering from the bailout, known as the Troubled Asset Relief Program, down to the banks, the panel is asking: Where’s the relief in places like Las Vegas, the biggest city in the state with the nation’s highest foreclosure rate?
Elizabeth Warren, a Harvard Law School professor who heads the oversight committee, said it would try to draw attention — it doesn’t have the power to do much else — to how the bailout is working, or more precisely, not working in communities that need it.
Earlier Tuesday, the panel made Las Vegas the first stop in its national road show with a public hearing at UNLV.
Rep. Shelley Berkley and Rep.-elect Dina Titus, as well as Sen. Harry Reid, all Democrats, offered pleas for help.
Reid said that of the $335 billion injected directly into banks, much had gone to healthy banks that still aren’t lending. Reid also complained that the program, being administered by the Treasury Department, had offered no help to homeowners facing foreclosure.
Policymakers want banks to restructure loans to give people fixed, 30-year mortgages, rather than the adjustable rates loans that have driven millions into foreclosure.
After the hearing, Warren said that if Treasury fails to devise a program to inject bailout money into the economy, it will have failed to meet its statutory obligation. The fear: Healthy banks are stockpiling cash to eat up sick banks now nearing death.
Warren said the neighborhood on Fay, with its simple, one-story, flat-roofed homes, reminded her of the one where she grew up in Oklahoma.
She said there is plenty of blame to go around. But she contends many people thought they were buying their piece of the American dream — a house in a neighborhood with a decent school — without knowing the details of their complicated and unsustainable loans.
Warren has a long history as a consumer advocate and critic of our debt-laden culture.
“There’s a lot of money to be made selling debt,” she said. “There’s no money to be made selling savings.”
The group had seen enough and had to catch a plane back East. Richard Neiman, a third member of the panel and the superintendent of banks in New York, said he would return to Wall Street with a message to bankers about restructuring loans and getting the money moving: “If it’s not done voluntarily, it will be mandated.”
After they left, a neighbor, Robert Maldonado, walked up. He works at Anderson Dairy and has lived in the valley six years.
Maldonado and his wife want to buy a house, but they can’t get a loan, he said. His wife finished school to be a paralegal, but can’t find a job.
If things don’t change, they’re headed back home, to the New York City area.