Published 1:12 am Sunday, February 12, 2012
This is good news: North Carolina will receive $338 million from a settlement involving the state, the federal government and major lending institutions.
The money is likely to help some homeowners avoid foreclosure, and could reduce mortgage fraud and irresponsible borrowing.
We hope the settlement money will be used wisely, in accordance with the terms outlined by the government, not to increase or sustain a bureaucracy.
We question whether some of these funds could be eaten up in administrative costs. We wonder if a portion of the cash will be diverted into local programs to help ease the housing crisis.
Still, it’s encouraging that $179.51 million of the settlement will go toward reducing principal payments and otherwise aid homeowners facing default.
Housing is one of the most important cogs in the nation’s economic engine, and the last thing North Carolina needs is more empty homes or deferred investments in its communities.
If the settlement money is managed carefully and distributed evenly across the state, it will have the effect of easing some financial burdens and jumpstarting the Old North State’s economy.
But the settlement isn’t a panacea for the state’s housing ills. The reasons for the foreclosure epidemic deserve more attention, with a particular focus on educating prospective homeowners in housing and financial literacy.
If the settlement means homeowners will be better informed about their options, people won’t need the government to holds banks’ feet to the fire when buying a home or refinancing a home loan — they’ll be able to take care of themselves.