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Foreclosure Follies

We got hundreds of responses to "Home Wreckers" (Cover Story, Feb. 23), a look at the banking industry's campaign to delay, dilute, or obstruct proposals to stem home foreclosures. Some readers argued that "delusional" buyers who took out mortgages they couldn't afford don't deserve help. Others lambasted lenders for throwing their weight around on Capitol Hill even as they get billions in bailout funds. We also heard from the Hope Now Alliance, a mortgage industry anti-foreclosure group, which objected to our analysis. The question now: How will bankers respond to the Administration's new $75 billion foreclosure-prevention program? It offers incentives for modifying mortgage loans, aiming to keep more than 4 million people in their homes. —Brian Grow

It's disconcerting to see media reports of the foreclosure fiasco that read as if a natural disaster had befallen the innocents. Taxpayer funds would be better spent on free credit counseling for these folks. "All we want is a mortgage we can afford." Please. Don't we all.

Michael Harrington

LOS ANGELES

Two things helped me when I lost my job: My student loan was deferred for six months and my credit union allowed me to miss two payments on my car loan. I am current on both of those bills to date. The institutions that would not work with me: my credit-card lenders and my mortgage lender. Turns out we all lost. I lost my house. I defaulted on my credit cards.... If only [those lenders] figured out what the credit union and student loan people knew.

Screen name: Kari

Your article is really about the power of lobbyists. Companies taking TARP money should be forbidden to lobby the federal government.

Screen name: Jim in DC

It's time for those who profited from questionable mortgage lending to accept the risks they created and take their losses. To insist that the principal of a loan cannot be altered is to ignore the risk that underlies all lending. A loan is an investment. Investments grow or shrink. Why should one class of investors insist on being made whole?

Laurie Gorton

OVERLAND PARK, KAN.

The title of the article should be, "I want free stuff, courtesy of the banks."

Screen name: RT

I don't understand why our government cannot make it a condition for the banks that receive the bailout money to first reduce the loan balance to [a home's] market value so homeowners will not walk away.

Stephen Ng

TIBURON, CALIF.

Your article underplayed the effectiveness of the Hope Now Alliance, a mortgage industry and nonprofit anti-foreclosure group. In December 2008, Hope Now reported a record 239,000 foreclosure-prevention workouts by its members and the larger mortgage industry. Almost 2.3 million workouts were completed by the industry in 2008.

Hope Now has helped millions of homeowners avoid foreclosure. It has also helped homeowners who otherwise would not be able or willing to get help with their mortgage problems obtain assistance from counselors and servicers.

We at Hope Now agree that, with growing economic challenges and rising unemployment, more needs to be done to keep families in their homes. We support the Obama Administration's new foreclosure-prevention plan. But the fact that more needs to be done doesn't change the reality that Hope Now—with help from its respected partners Fannie Mae (FNM), Freddie Mac (FRE), and the Federal Reserve Banks—has had a strongly positive impact on homeowners.

Faith Schwartz

Executive Director

Hope Now

WASHINGTON

A Tax on Junk Food Isn't the Answer

"Taxing the Rich—Foods, That Is" (What's Next, Feb. 23), about legislation to tax high-calorie foods, raised this reader's blood pressure. Why should manufacturers be liable for consumers' failure to use common sense? How about cutting portion sizes and exercising more? If those who blame companies for consumer decisions have their way, this approach has unlimited potential for litigation.

Richard Teremi

MATTAWAN, MICH.

The Long Road to Paying for a Lithium Battery

Regarding "The Electric Car Battery War" (What's Next, Feb. 23): There is much hype surrounding vehicles powered by lithium-ion batteries. But the price is not justified for most buyers.

In 2007, I bought a 44- mpg Prius for $5,000 more than what it cost to buy a similar-size car that gets 31 mpg. To cover that difference, it will take me 19 years, driving 10,000 miles a year with $2.75-a-gallon gas. The battery warranty ends at eight years. Unless there's a five-year gasoline payback for buying a hybrid vehicle, there is no economic value.

Joseph Neff

CORNING, CALIF.

ExxonMobil's Health: The Oil Giant Responds

"Exxon Is Weaker Than You Think" (In Depth, Feb. 16) exemplifies the old adage, "Never let the facts get in the way of a good story."

The facts show that ExxonMobil (XOM) is well positioned for the future as a result of the strength of our business portfolio, our disciplined investment process, and our strong technology focus.

Over the past five years, we distributed $150 billion to our shareholders—an economic stimulus package in its own right. And ExxonMobil's resource base is the largest in the industry, the equivalent of about 72 billion barrels of oil. The company has replaced more than 100% of its production with new reserves for each of the past 15 years.

We are investing at record levels—$26 billion in 2008—to find and develop new energy supplies. Our portfolio of over 100 projects is expected to yield the energy equivalent of more than 24 billion barrels of oil in the years ahead. Meeting future generations' energy needs while minimizing the environmental impact is our most important sustainability challenge. We are proud of the discipline and focus we bring to our business.

Kenneth Cohen

Vice-President for Public Affairs

ExxonMobil

IRVING, TEX.

What's true of Exxon is true of all of the largest companies in every industry. The post-World War II pattern is breaking down. Smaller companies can shift direction faster than large companies, and will be the leaders of tomorrow.

Screen name: Sam

Exxon stock may be toast, but it is Texas Toast, still outperforming this market of losers. If ExxonMobil goes to 40, you can be sure that the Dow Jones industrial average will be 40.

Screen name: Keith

Annuities Run a Risk of Default

"Can This New 401(k) Save Retirement?" (Personal Business, Feb. 16) did not address the issue of counterparty risk—the risk that a company will default on a contract when it's time for the payout.

Investing a large portion of your retirement savings in annuities instead of the stock market is still risky if you can't count on the insurer underwriting the annuity to be in business when it's time to retire.

What happens if a large insurer like AIG goes under?

Tom Russell

WARSAW, IND.


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