Counseling organization offers Home Sweet Home initiative to address consumer concerns as recession deepens.
Over the last several months, the Bush administration has focused its efforts on thawing the nation's frozen credit markets. So far, banks and insurance companies have been the primary beneficiaries of the government's bailout plan, and little has been done to provide relief at the consumer level. This omission is not without its consequences, particularly when one considers the trillion-dollar credit card debt currently shouldered by consumers and the 20,000 foreclosures occurring each week across the country.
With the recent announcement by the National Bureau of Economic Research that the country's economy is officially in recession, consumers will undoubtedly look to reduce their spending, uncertain whether they'll have access to credit again in the foreseeable future. "Many of the people we've talked to lately have lost confidence in the credit system. They see the nation's reliance on credit as one of the catalysts in our economic meltdown," notes Christopher Viale, President of Cambridge Credit Counseling Corp.
Perhaps that's a good thing. "Simply increasing the availability of credit to certain consumers is the equivalent of giving a drowning man a glass of water," according to Viale. "Any solution to resolve our current problems would have a much better chance of succeeding, and would help restore consumer confidence, if it included a mechanism to modify home loans. That's where this crisis began, and remedies that address this root cause will help end it."
In fact, Viale has assembled such a plan, the Home Sweet Home Initiative, which is intended to stabilize the economy by providing immediate mortgage relief to struggling homeowners. The plan is dependant on a coordinated effort by legislators and the private sector. In Viale's opinion there is little point to allowing millions of Americans to be turned out of their homes. "Many consumers wound up in bad home loans due to questionable lending practices and haven't been able to create a workout plan because their mortgages can't easily be rewritten. Home Sweet Home addresses this fact by mandating the availability of workout options for most consumers, thereby increasing the amount of monthly discretionary income at their disposal." The goal of Viale's plan is to help families become productive and responsible consumers, able to save, spend and use credit appropriately.