When, early last month, some members of Congress suggested President Bush name a "mortgage czar" to coordinate a federal response to the accelerating wave of home foreclosures, White House spokesperson, Tony Fratto, responded tartly:  "We have a housing czar. His name is Alphonso Jackson. He's the secretary of Housing and Urban Development."

If Jackson is doing any czaring to protect the interests of as many as 2 million, mostly working class homeowners facing possible eviction over coming months, he must be doing it in secret.

Jackson seems to be missing in action. In fact, about the only time he’s been seen in the media this fall has been when he’s standing next to Treasury Secretary, Henry M. Paulson Jr., at a press conference.

One exception was back on Sept. 14th, when he was back home in Texas, addressing the Dallas Group of business people and acknowledging that the mortgage crisis was serious. Many people “find themselves saddled with debt and bad credit,” he said. “However it happened, it has led to bad choices for some. Such as following the siren song of exotic, subprime mortgages.” He went on to say the Bush Administration had taken steps that “will help an estimated quarter of a million Americans over the next two years keep their homes.” He touting a “new product,” something called FHA Secure, which he said “insures low-cost, low-risk home mortgages” by allowing those facing loan default to refinance their existing mortgage, “even if they are delinquent.” Jackson said the new scheme “will also bring much-needed stability to the housing marketplace.”

Jackson then listed caveats: “Only families with a history of on-time mortgage payments under the initial interest rates would qualify. They must have a good debt-to-income ratio, and a stable employment history. Finally, their delinquency must be the result of the reset rate, not bad investments.”

“The reaction to our plans has been positive,” Jackson told the Dallas bosses. “Wall Street rallied.”

The rally didn’t last long. Two months later, Wall Street was in continual turmoil, resulting almost entirely from the troubles in the housing market that was anything but stable. Further, no knowledgeable observer could conclude that the bromides Jackson tried to sell that Texas audience have done much – or are likely to do much – to head off the continuing onslaught of foreclosures.  It was all spin. This is probably why Jackson’s reassuring September message was delivered to a small sympathetic audience of Dallas homies rather than the general public.

Mortgage delinquencies continue to rise. It is now estimated that 1.6 million homes will go into foreclosure before the end of next year. The research department at Credit Suisse estimates that the foreclosure rate will likely stay high until 2010.

Still, over past weeks, we have heard very little from the mortgage czar. It has been Paulson who has taken the public lead in making most Administration statements on the housing and mortgage crisis. On Oct. 31st, he called it “the most significant current risk to our economy.” 

The problem is that the Administration’s policies amount to little more than reliance upon vague promises by the mortgage industry to aid borrowers and next to nothing in real terms to arrest the tide of anticipated foreclosures. Critics have stepped up demands that the federal government move with greater speed to confront the crisis. While most of the voices in Washington urging greater action have come from Democrats in Congress like Christopher Dodd (D-Conn) and Barney Frank (D-Mass), the party’s response has been feeble at best. Somehow the crisis facing millions of working class people – disproportionately African America, Latino and Asian - and their communities don’t figure much in the Presidential campaigns.

Last month, the Joint Economic Committee of Congress predicted that by the end of 2008, roughly 2 million homes with subprime mortgages will go on the block. The crisis is hitting California, Nevada and Florida particularly hard. According to RealtyTrac, foreclosures in Nevada last quarter increased 23 percent from the second quarter and up more than three times over the same period in 2006 - one in every 61 households. Florida's foreclosures rose more than 50 percent from the second quarter, more than double the number a year earlier. In California, 148,147 foreclosure filings represented a 36 percent rise from the previous quarter and were nearly four times that of a year ago. One estimate is that as many as 400,000 Californians may lose their homes over the next two years.

According to James Parks, writing on the AFL-CIO Blog, a poll recently conducted by the labor federation showed that about half the people with adjustable rate mortgages “expect they will be forced to cut back on everyday expenses like groceries, clothing and gasoline when their payments increase. For families earning $50,000 or less, that proportion is 80 percent.”

Black families are facing foreclosure or losing their houses disproportionately, wrote Parks. “Nearly half of all African American family mortgages are subprime mortgages. As a result, some experts predict that one in three African American homeowners could lose their homes.”

From New York, the Financial Times reported last weekend: “At the lower end of the residential market, there are some troubling signs: the number of home foreclosure filings are rising in working class areas of the Bronx, Queens and Brooklyn.”

Speed is important," said Sen. Frank. "Time is of the essence." Joint Economic Committee Chair Sen. Charles Schumer (D-NY) said the committee’s report underscored quick action to guarantee government assistance to help homeowners faced with foreclosure. Rep. Gwen Moore (D-Wis) charged mortgage lenders with moving too slowly to reach out to borrowers to start the process of refinancing mortgages. "What are you doing to use the bully pulpit to get institutions more on board to stop these foreclosures," she asked a government official.

Perhaps it is too much to expect a Bush Administration HUD, harged as it is with helping people secure decent affordable housing and dedicated - as it says it is - to fostering home ownership, would respond vigorously to the dire circumstances of working people faced with the loss of their homes and their accumulated assets. But it would be an understatement to say that the steps taken so far pale when compared with the efforts for Paulson’s Treasury Department to come to the aid of the big banks affected by the crisis.

The recent decision to promote a special fund to rescue banks in trouble – which seems largely designed to keep giants like Citibank from collapsing – has an urgency totally missing when it comes to a single block, in Antioch, Ca. where the San Francisco Chronicle reports, nine out of forty properties have been repossessed by the lender and another four are in default, where almost one-third of the homes are in or facing foreclosure, and where “you wouldn't know it if not for the dead lawns and for-sale signs that line the street.”

Meanwhile, the curtain is steadily being pulled back on the housing picture, revealing more and more of the seamy side of the run-up to the housing “bubble” and the mortgage crisis.  On Nov. 1st, New York attorney general, Andrew Cuomo, accused an appraisal company of inflating the value of homes, under pressure from a major mortgage lender, Washington Mutual. The case accuses the firm of defrauding homeowners and investors who bought securities backed by loans that were underwritten by its appraisals. Higher appraisals allow lenders to make bigger loans and earn more money when selling the mortgages to investors.

“This is the opening chapter of the story, and we have some other points that we are going to make in the coming weeks,” Cuomo said, adding that he expects other cases to touch on the secondary market where mortgages are bundled and sold to banks. He said it indicates “a systemic flaw in the industry.”

“This is another case where the federal government has been asleep at the switch,” he said. “I don’t believe that this case is an isolated example.”

"The independence of the appraiser is essential to maintaining the integrity of the mortgage industry," Cuomo said. "First American and eAppraiseIT violated that independence when Washington Mutual strong-armed them into a system designed to rip off homeowners and investors alike. ... By allowing Washington Mutual to hand-pick appraisers who inflated home values, First American helped set the current mortgage crisis in motion."

Then there’s the little matter of Angelo Mozilo, the CEO of Countrywide Financial Corp, the biggest U.S. mortgage firm, unloading a big hunk of his option-acquired company stock ($280 million) while the crisis loomed, a matter now under investigation by the feds. A pension fund advisory group affiliated with seven labor unions has called for his resignation.

With much fanfare, Countrywide recently announced a program that would refinance or modify up to $16 billion in adjustable-rate loans for more than 80,000 borrowers. However, despite much-publicized reports of various loan company offers to aid trouble borrowers, such activity is turning up as more show than substance. A Credit Suisse analyst called such efforts thus far “anemic.”

The budding appraisal scandal and the reputed assistance offers from lenders may well be linked. A blogger, sageworks, wrote recently:

All this has been going on under Alfonso Jackson’s watch.

There’s good reason to think Jackson’s absence from the public arena may be Administration policy, linked to another, wider White House scandal. The Feds are looking at the relationship between him and a friend of his who, according to the Associated Press “was paid at least $392,000 in federal money after Jackson passed along the man's name for a job as post-Katrina construction manager at the Housing Authority of New Orleans.”

Jackson, 62, the first black leader of the housing authority in Dallas, has spent most of his working life at urban housing agencies. His tie to President Bush goes back to the 1980s when they were neighbors in Dallas. From January, 1989, until July, 1996, Jackson was President and CEO of the Dallas Housing Authority. He later became President of American Electric Power-TEXAS, a large utility company. In 1995, then Governor George W. Bush appointed Jackson to the Board of Regents at Texas Southern University.

Jackson’s biggest problem now is another speech delivered back in the familiar confines of Dallas. Addressing a group of group of minority commercial real estate executives, he told a story about a contractor seeking a contract who remarked to him, “'I have a problem with your president.” Jackson told the audience, "I thought to myself: 'Brother, you have a disconnect — the president is elected, I was selected. You wouldn't be getting the contract unless I was sitting here.' ... He didn't get the contract."

Jackson later told investigators he made the story up.

During his September speech to Dallas businesspeople, Jackson quoted only one individual by name, citing him as a “wise man.” It was Roger Staubach, Heisman Trophy winner and quarterback for the Dallas Cowboys for most of the 1970s, when it referred to itself as “America’s Team.”  Staubach supposedly once said:  "If you have the right people in the right places doing the right things, you can be successful at whatever you do." That might describe what George W. Bush thought he had assembled in Washington. But now, with economic crisis, disastrous foreign wars and financial scandals plaguing Washington and the nation, former Administration heavies Harriet Miers, Donald Rumsfeld, Colin Powell, Karl Rove and Karen Hughes have vanished and a cloud hangs heavily over Alfonso Jackson’s head. He could possibly rise to the occasion and redeem his career by forcefully taking up the cause of the millions of homeowners facing homelessness. Don’t hold your breath.

BlackCommentator.com Editorial Board member Carl Bloice is a writer in San Francisco, a member of the National Coordinating Committee of the Committees of Correspondence for Democracy and Socialism and formerly worked for a healthcare union. Click here to contact Mr. Bloice.

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