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July 2nd, 2010
09:12 AM ET

Letters to the President #529: 'Our house…is a very, very, very indebted house...'

Tom Foreman | BIO
AC360° Correspondent

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Reporter's Note: President Obama keeps talking about how much worse the economy might be right now; but as I note in my daily missive to Pennsylvania Avenue, plenty of homeowners and folks without jobs think it is still plenty bad.

Dear Mr. President,

Despite my overwhelming tendency to assume every pile of manure must be hiding a pony, the latest housing news stinks. The numbers are abysmal, wretched, horrifying, and putrid. Oceans of homes that are being sold are already in foreclosure, many more than that are being sold for much less than they would have fetched a couple of years ago, and all the promise of the home sales credit that everyone hoped would fuel a sustained surge is just a pleasant memory now…kind of like pension funds, and family vacations.

I’ve told you too many times before, but I will tell you again. If you do not find a way to stabilize this disastrous plunge into home ownership hell, nothing else you can do will get the economy firmly back on track.

I’m not necessarily talking about a wholesale bailout of those who are in trouble. I know that would require some firecracker hot legislative wrangling that you might not want to take on in the dog days of the DC summer. What I am saying is what we’ve known all along: The bad loans must be identified and so must the banks which are holding them.

Until that is done, they will continue to poison the economic well. Banks will keep playing it too close to the vest on loans that really ought to be readily approved. Homebuyers and businesses looking to expand will keep running into a lending market that is running like a scared rabbit from even the slightest, imaginary whiff of risk. And all of that will keep dragging down the construction sector, hurting manufacturers, eating jobs and the cycle gets worse and worse.

Look at it this way: Maybe you can count on having a roof over your head, but many of the rest of us remain genuinely worried about the quaking financial earth beneath homes.

Other than that, I hope all is well with you and yours. We are considering quick, throw-together barbeque on Saturday. Do you want to come over? If you could bring some potato salad, that would be great. And some extra ice; I’m pretty sure if you come up MacArthur Boulevard from your house to ours you’ll pass a 7-11.

Regards,
Tom

Follow Tom on Twitter @tomforemancnn.

Find more of the Foreman Letters here.

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