It was with great dismay, and even horror, that I read page after page of foreclosure notices in the Times-Enterprise regularly with ever increasing numbers. Such notices go far beyond what we Americans expect from simple legal notices in our newspapers. This massive number of foreclosure notices represents the destruction of the American dream to own our own home; a dream that often represents the greatest financial equity that most citizens will ever have in their lifetimes. These foreclosures represent the destruction of families and their futures, neighborhoods and communities.

This American disaster can and must be stopped now! The disaster our great nation now faces is not to be laid at the feet of our banking system. The roots of this national calamity began under the Carter Administration with its Community Banking Act, which required banks to issue home loans to a percentage of families completely unqualified to assume the burden of debt placed upon them by home ownership. The problem was then made worse by “creative” loans, including balloon loans, zero down-payment loans and a multitude of other schemes designed to sell homes to many people who were truly unaware of the actual loan packages to which they were obligating themselves and their families.

Nevertheless, while this home foreclosure fiasco is destroying the very fabric of our nation, there is a reasonable and workable solution. Banks could, with the stroke of a pen, reduce these impossible loans to principle-only home payment loans. This radical change would certainly reduce bank earnings, since interest would no longer be paid to the banks by the home owners. However, the plus side of such a revolutionary act would be to keep the banks from becoming the unwilling owners of a great many homes, which, when they are finally sold, most often cause banks to lose capital. In order for this principal-only payment plan to succeed, a home owner must legally agree to return to the bank a fair percentage of the profit or sale price of the house, once it is sold or transferred to family heirs. Thus, banks would regain at least some, but most likely not all, of the interest lost through such a financial agreement.

Rampant foreclosures breed such ferociously strong feelings of resentment, distrust and a multitude of other negative feelings towards banks, bankers, law enforcement officers, governmental officials and anyone else who is involved in these acts that it begins to affect our country as a whole. Is it not better for everyone – and our nation – to avoid the continuation of these acts of foreclosure of people’s homes?

It is high time to stop expecting the government to solve all of our problems. It is now time for our financial system, and specifically, our community banks to step forward and keep the American dream alive.



Homer R. Pankey, Ed. D.

Thomasville