CAG - PRESS RELEASE - 12-11-09

Despite reports that homeowners are increasingly "walking away" from their mortgages, most homeowners continue to make their payments even when they are significantly underwater.

Most homeowners choose not to strategically default as a result of two emotional forces:
1) the desire to avoid the shame and guilt of foreclosure; and
2) exaggerated anxiety over foreclosure's perceived consequences.

Moreover, these emotional constraints are actively cultivated by the government and other social control agents in order to encourage homeowners to follow social and moral norms related to the honoring of financial obligations - and to ignore market and legal norms under which strategic default might be both viable and the wisest financial decision.

Norms governing homeowner behavior stand in sharp contrast to norms governing lenders, who seek to maximize profits or minimize losses irrespective of concerns of morality or social responsibility.
This norm asymmetry leads to distributional inequalities in which individual homeowners shoulder a disproportionate burden from the housing collapse.

ABOUT OUR COMPANY

The Consumer Advocacy Group was created as a way to help consumers become educated on issues that affect them. Due to the housing crisis in Clark County, we're directing a lot of our energy right now into helping homeowners who are on the precipice of foreclosure, or those who need to be educated on their mortgage options when facing financial crises.

About 70% of our work is 100% nonprofit. We are currently in the process of becoming a 100% nonprofit corporation. Currently, there are no nonprofit companies with any proven track record for being able to assist homeowners in crisis. The Consumer Advocacy Group has already assisted hundreds of homeowners in the Clark County area save their homes from foreclosure. A list of our "thank you letters" from previous clients can be seen here by clicking on "Community Testimony". We are not a "mod" company. We are a consumer advocate group that helps consumers through our education and lobbying efforts.

We believe that the lenders have proven that they can NOT be trusted with the Troubled Asset Relief Funds set aside by the Obama Administration. The point of TARP was to "stimulate the economy" by giving money to "big businesses". The lenders (Bank of America especially) have proven that they will only use the money for their own personal gain and have absolutely no individual homeowners' needs in mind. These lenders have essentially been given a blank check by our government that we as tax payers must pay for.

Perhaps you as a homeowner wouldn't otherwise have an argument for the need for "help" or a bailout BUT TARP changed everything. There are specific guidelines that must be met by each participant of the TARP program and these guidelines are NOT being adhered to.

If every homeowner in a subprime loan was automatically given a conventional loan and all underwater principal was readjusted to the current fair market value, it would have stimulated our economy on an individual basis and allowed US the power to have access to more finances and the freedom to stimulate the economy on our own.

Instead, the government gave the money to banks like Bank of America who used it to purchase and bailout companies like Countrywide and Meryl Lynch. With this bailout money they gave MILLIONS in "exit" bonuses to several HUNDRED executives at both companies.

Bank of America used MILLIONS of dollars from government funding (that WE are all paying for) and gave it directly to the "chosen few" they selected to receive "bailout" funds. And now, if you as a homeowner call them for help, they will tell you why they "can't" help you. They will offer you a litany of excuses as to why it is that they will not be able to "modify" your loan and are now, once again, not being held accountable for their actions. All the while, hundreds of thousands of homes across our country are going into foreclosure.

Our government cannot be trusted to hold these lenders and big businesses accountable for their actions. Big businesses and lenders have proven they cannot be trusted to "stimulate" anything other than their own profits. The Troubled Asset Relief Program MUST BE STOPPED!

Homes are getting lost. Millions are getting displaced. Unemployment and homelessness are at an all time high. Big businesses keep getting richer and the poor keep getting poorer. We're not looking for bailouts as much as we're demanding equality in the help being allocated.

Join us. Fight with us.