Project Hope, Project Nope

Project Hope, Project Nope
By David Glenn Cox


Years ago before Real Estate laws were changed developers would pave roads into a new development and drive prospective customers through the property. “Here,” they would point out "is going to be the 40,000 square foot club house and banquet facilities and behind it will be an Olympic size swimming pool!” All the customer would see was a billboard with a picture of the completed facility. Continuing on, the salesman would describe the 36-hole golf course that would be constructed on the site of the present woods and wasteland.

Eventually, after they had signed enough suckers er, ah, customers the business would fail under the weight of fat executive salaries and salesman’s commissions leaving the purchasers as the proud owners of swamp land and billboards, covered with promises of great things to come. The Federal government stepped in and required developments to build first and advertise later, so then they moved off shore. Promising the same gambits in the Bahamas, they would fly the suckers by air and circle over colorfully staked off lots. The same promises, club houses, pools, golf courses etc. They would forget to mention that the property had no road access by which to reach it or water service or sewer service.

The same scam, the promises going in never match what you get coming out. Their only interest is in making the sale not in satisfying the customer. I’ve wondered what ever happened to those flim flam men, where have they gone on to, what do they do to make a living? Why they’ve gone into politics of course! Time after time I’ve seen this Bush administration pull this same flim flam scam on the American public. The promises never match what is delivered but by the time the citizen finds out the media has moved on to newer tragedies.

George Bush was going to build Senate majority leader and fellow Republican Trent Lott a new house after hurricane Katrina. Well, as it turned out, no he’s not, Lott is suing his insurance company. Like tens of thousands on the gulf coast, insurance companies claim it was flood damage that destroyed Lott’s home not the hurricane that caused the flood in the first place. And the Bush administration? Why it would be wrong for government to interfere in private industry now wouldn’t it?

Remember the President standing on that rubble pile of the world trade center? Promising help to the fire fighters and healthcare providers. Well, the funds run dry and they are on their own and dropping like flies abandoned by the government that promised to help them. Nothing more than con men, when a tragedy strikes the American people the Bush administration quickly develops a plan. How can we look good, grab headlines and then not do anything at all? The sub prime mortgage market meltdown is only the latest flim flam.

The President has oscillated between castigating the mortgage borrowers as being poor consumers and praising Project Hope. Time after time the President has referred to Project Hope as a shining example of what government and industry can do by join together and then allowing industry to do what they would have done any way. The President puts up billboards showing us that his administration is concerned about Americans losing their homes. But the President is nothing more than a pitchman for the private mortgage industry.

The program is administered by the lenders, the lender decides who gets to keep their homes. There is no independent arbiter; this isn’t Bailey Bros. Savings and Loan you’re in Mr. Potter’s hands now. For the borrower to keep their homes they must first jump through hoops. The first and the most ridiculous hoop, the borrower must not be delinquent in their payments, anyone more than thirty days behind is disqualified. Number two, the borrower must have a credit score of below 660 and cannot be more than 10% higher than at loan origination. Third, loan to value must be greater than 97%. Fourth, a first lien of an owner occupied residential adjustable rate loans (ARMS) with initial fixed rate for 36 months or less. Fifth, Must be originated between 1/1/05 and 7/31/07 and included in securitized pools with reset date between 1/1/08 and 7/31/10.

Remember the movie, “The Jerk” with Steve Martin as a weight guesser? The rube asks, “What do I win?” Martin goes into a ridiculous explanation, “Anything from this shelf right here from the cupie doll but not including the watch or the shot glasses,” finally ending up narrowing down to a one inch wide section of prize shelf with a comb. Same program, in the end after the borrower has jumped through all the hoops and met all the criteria and guessed that their name was Rumplestiltskin to find his or her fate is in the hands of a mortgage company that’s only looking to turn a profit.

The program is fatally flawed from the start; it requires borrowers to ask for help almost before they need it. But hey, that’s show biz and that’s what Project Hope is, show biz. Industry insider’s project the program will at most help only 7% of sub prime mortgage holders. But gee, it sounds great on television and isn’t that what counts really? Your government cares about you! Ask anyone in Louisiana or Mississippi they’ll tell you. The political party that believes that less government is better are now trying to make their point with no government help at all.

But the days of sunshine and summer days are over; the economy faces challenges, as they like to say euphemistically. But the challenges now face us all, rich and poor black and white across the board. Not just Joe Six pack and Mary Office worker but Billy Boardroom and Tippy Heiress as well. Our economy faces a loss of capital and outsourcing of wealth only exacerbated by an over inflated currency. Just as President Bush once praised the sub prime borrowers in 2004 he’s praised the free movement of capital in world markets. So as our economy declines, why should capital stay home? Why not go to Asia where the prospects of profit are so much brighter? Why when the economy needs investment should investors take the hard road? The long road? It defies the capitalist model, what slogan can the Bush administration come up with now? What program can they come up with to convince us the President’s not just throwing back shots Jack Daniels and flying off on foreign junkets.

We face a problem that requires government intervention, the bills for lazi fare capitalism and deregulation have come due. The party of less government is now hoisted on their own petards, there is no siren song or slight of hand that will save them now. It is incumbent on the other party to throw off their role as understudy and to reach down inside themselves and find the testicles and intestinal fortitude to rescue us. The days of looking good are gone; the days of doing good are upon us. Either we come together as a nation or we continue on as an economic entity towards failure.

That is the Project Hope that we need, a government that works towards the betterment of its own people. That the value of a nation is in its people not in its balance sheet. That a government that cannot supply health care to its people is sick and not well. A government that exports its jobs and its wealth is treason not good business. Or as President Kennedy so eloquently put it, If a free society cannot help the many who are poor, it cannot save the few who are rich.