Pity the banks, blame the homeowners

That’s what Jack Harper, the Republican Representative from Surprise and chair of the House Ways and Means Committee, wants you to do.

Mr. Harper believes the current law, one that allows homeowners who are underwater in their mortgages to walk away from their loans, is hurting banks and should be repealed. He’s quoted as saying, “the banks are taking all the risk and the buyer is taking none, other than what their down payment is.”

Mr. Harper is obviously unfamiliar with the vast majority of Arizonans who, if they walked away from their loans, would lose much more than a down payment. Nor does he understand that many homeowners who hand over their keys do so not to spite the bank but rather because they have no other choice.

Like 40% of Arizonans, I, too, am underwater in my mortgage. And I don’t feel as if I am at fault for the situation.

When I bought my house, I did all the things you’re supposed to do as a responsible homeowner. I put 20% down. I only borrowed what I could afford.

A year later I decided to do some extensive repairs to the “bones” of my home. Many of the improvements were paid for out of pocket, the rest with a home improvement loan.

At the end of my remodel, I had thousands upon thousands of dollars of equity in my home. Today, I’m thousands upon thousands of dollars underwater.

If I were to walk away from my house, I wouldn’t simply lose the 20% I put down (which was a big chunk of money for me), I would lose all of the money I put in to repair and refurbish my home. And that’s not all. I would also lose the opportunity to buy another home or a car or any other large purchase requiring a loan because my credit would be ruined.

But I’m one of the lucky ones because I’m able to pay my mortgage. For the thousands of Arizonans who lost their jobs in the recession, they have no such luck. And if they cannot afford to make monthly mortgage payments, how are they expected to pay for the difference between what they owe and what the house is now worth?

To be clear I’m not suggesting that all homeowners are blameless for the housing crisis. Zero down payments and equity loans used to pay off other debts certainly helped contribute to the mess we are now stuck with.

But again, these were not the types of loans banks were supposed to approve. Buying a home isn’t supposed to be as easy as buying a laptop.

Mr. Harper, however, fails to see how the banks played any role in the housing crisis and instead puts the blame squarely on the shoulders of homeowners. In a recent article by the Arizona Republic, Mr. Harper actually said the banks do not bear any responsibility for the bad loans nor should they have to absorb any of the losses when borrowers default.

That’s a pretty incredulous statement, even for an Arizona legislator.

Perhaps Mr. Harper has been bamboozled by the banks. Maybe he doesn’t know about the bundling of risky loans, the predatory lending, the bankers who encouraged homeowners to borrow much more than they could reasonably afford.

Or perhaps Mr. Harper is unaware of the reasons people are forced to leave their homes, or about the high unemployment rate in this state or the sky-high poverty rates.

Or maybe Mr. Harper didn’t hear about the millions in taxpayer dollars used to bail out commercial banks… bailouts that have everyone from the Tea Party to the Occupy Wall Street protesters up in arms.

Whatever the reason, Mr. Harper has decided to champion the banks while leaving homeowners stuck with the bills, both the bill to bail out the banks and the bill to cover the cost of depreciated houses.

I think it’s time homeowners in this state champion a cause as well… the ending of the careers of legislators more in tune with big banks than constituents.