Market Meltdown: How Modesto-area leaders think crisis can be fixed

Outlook from ground zero

By J.N. SBRANTI
jnsbranti@modbee.com

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The foreclosure mess may have started in the Northern San Joaquin Valley, but it's turned into a national crisis.

Federal leaders now are fighting a financial catastrophe, proposing massive bailouts and taking charge of failed financial systems.

Opinions are mixed about whether government officials are doing what's necessary.

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Market Meltdown: View from streets of Modesto

Here is a sampling of what valley business and real estate leaders think Washington should do to ease America's fiscal woes. More of what they had to say is posted on modbee.com :

Mark Wilbur, owner, McRoy-Wilbur Communities Inc.

"As a builder it is very painful to deal with this foreclosure problem, but a hands-off approach will ultimately be best for everybody.

"Many of the people 'losing' their homes have simply chosen to walk away because of declining values. Making victims for political gain seems to be rampant in both parties.

"A major reason many loans have not been modified or rewritten is that the owners cannot show economic hardship. The current mentality is to ignore your debt if it is not financially beneficial."

RaeLene Brown, financial secretary-treasurer, Stanislaus & Tuolumne Counties Central Labor Council

"Laws should be put in place to never let this disaster in home mortgages happen again. Mortgage lenders were allowed to create loans to homeowners that they knew could never be repaid and would most likely have adverse financial affect if the market took a downturn.

"Taxpayer dollars should not be used to reward the irresponsible Wall Street executive who created this disaster. A bailout plan must include a payback strategy for taxpayers who are footing the bill and aid to innocent homeowners who are facing foreclosure."

David Hosley, president, Great Valley Center

"I think the federal response is generally appropriate. We need to stabilize the financial system, and the government stepping in to assume some of the loans is one step in doing that.

"It should be a limited response, and we should combine this short-term action with steps that will ensure we have a good mix of housing in the future."

Niniv Tamimi, real estate broker and developer

"Although the consequences of no action are dire, rushing to establish a trillion dollar bailout outlined on three pages without full disclosure of all the elements is foolhardy.

"Additionally, the relinquishment of a spending authority of this magnitude to anyone, including the president, appears to be unprecedented. The fact is, private equity firms are standing ready to acquire these assets from the government 'if attractively priced' and reap windfall profits such as those generated by the last bailout.

"Will this help or hurt the Central Valley? Perhaps it would be wiser and more productive to invest a trillion on our ailing domestic infrastructure, resulting in a tangible stimulus to the economy."

John A. Hillas, Appraisal Institute Board of Directors chairman

"The whole system needs to be changed in my opinion, whereby lenders receive fees as loan payments are made, rather than all at once when the loan is booked.

"It would cause them to be a whole lot more concerned about whether the borrower really can make those payments two, three or five years from now.

"Loan originators need to be certified or licensed just like appraisers, there needs to be meaningful requirements for those licenses, and consequences for those who do not comply with ethical and professional standards."

Rodney Lowe, owner, Rodney K. Lowe Development Inc.