PhillyTablet Inquirer Daily News
Mobile
Home Delivery
philly.com
email
font size
comments
4
options
 
Friday, October 16, 2009

Vernon Hill: Anti-foreclosure scheme 'impossible'

It won't work, says Commerce Bank founder and Metro Bank backer Vernon Hill.

Hill's responding, at my request, to US Rep. Joe Sestak (D,Pa.)'s proposal to allow unlucky homeowners who bought houses in 2003-07 to get new mortgages at lower prices, with the government eating the difference.  

The plan looks "impossible to execute," and marks "another destruction of contracts and the rule of law," Hill told me when I sent him a joint press release summarizing and backing the plan, from Sestak and economist Mark Zandi of Moody's Economy.com in West Chester.

Sestak and Zandi say the subsidy would pay off in the form of fewer wasteful foreclosures and less value loss for other U.S. homeowners.

Veteran Chester County bank director and lawyer Jim McErlane told me the plan "sounds good," though he added in a note later that the program could "get complicated," especially for marginal buyers who haven't put much money down. And Gerry Cuddy, who runs Beneficial Bank, now Philadelphia's largest, said he'd rather see banks agree to cut rates, in some cases where that could prevent foreclosure, than tear up existing loan agreements.

More in today's PhillyDeals print column here.
Posted by Joseph N. DiStefano @ 11:10 AM  Permalink | 4 comments
Comments   
  • Comment removed.
  • 0 like this / 0 don't   •   Posted 11:47 AM, 10/16/2009
    We gotta get the libs out of office... Hopefully by 2010 so go.. Disgusting what taxes get used for.
    — manly
  • 0 like this / 0 don't   •   Posted 11:48 AM, 10/16/2009
    We have to draw a line. Somehow, every mortgage that the owner can't afford is now "predatory" and the owner must be given some kind of sweetheart deal by the government. I think the original foreclosure slowdown program was fair -- people with good credit got rate decreases and foreclosure was halted if when they caught up on their mortgage payments. But just letting people live for free while they sue banks is a prescription for bank failure. In Philly, mortgages are allowed to have similar renegotiation including reps from the bank and the owner, and it follows a similar pattern. Rates are reduced, a promise to pay up the arrears is signed, the new terms clarified in a contract, and if the owner falls out of the payment plan, foreclosure picks up where it left off last time. There's no restart of the clock. The city has to use the same method on paying overdue property taxes. Payment plans must be enforced or the foreclosure clock starts where it left off. Right now the city has transferred years-overdue accounts to a new private collector, and that collector is ordered to start foreclosure anew as though no notification has occurred in every case. This cheats the city and schools. We can't bankrupt banks or the city to try let people own on any term they want.
    — CleanupPhilly
  • 0 like this / 0 don't   •   Posted 11:58 AM, 10/16/2009
    I'm not sure why the press has shied away from the issues of foreclosure in Philly, but seem to subscribe to an editorial policy that all foreclosure is evil and must be stopped. In fact, the city is owed an enormous amount of overdue property taxes, and the only way for business to argue for less wage and high business taxes to to advocate for normal, regular, objective collection of the overdue property taxes in Philly. Philly is owed $425 million in overdue property taxes per an Ink article, and some has been collected at foreclosure since that article was published, but only about $38 million. The city still has some $387 million in overdue property taxes owed it that it won't collect in a regularized, professional way. Of course City Council can't cope with the need for foreclosure, they use it as a political tool to get cheap votes regarding property taxes. The banks can expect the same treatment. If the business community and journalists are lazy, then you'll have a climate where schools are horrible and loans are not available to anyone who isn't platinum credit level. Sort of like we have now.
    — CleanupPhilly


4 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
Advertise Here