Cover Story

Fighting poverty and leveraging greed

"Fighting poverty and leveraging greed" Continued...

Issue: "Clutching two, dropping four," April 23, 2011

Felton became a hero not by being nice to homeowners but by being truthful. Here's some of what he says directly to those who come to his nonprofit with their homes underwater:

"You don't have income. You can't afford this home. You have to consider moving out, and moving in with someone."

"I won't sugarcoat it for you. You can't afford to be in this house. You've got to find an inexpensive rental."

"For one whole week, get a receipt for everything you buy. Put in a paper bag. At the end of the week go through every receipt: Ask yourself, 'Did I buy this because I needed it or because I wanted it?'"

"Can you increase your income by renting out one of your rooms?"

"Let's make sure you can afford to make these payments."

"Don't use money for that Xbox."

"Prioritize home and food. Remember, an auto is not a necessity. If you have to, learn to take the bus."

Felton also delivers good news. When a homeowner has reasonable hope of being able to make his monthly payments, but may not be able to keep up in the short term, Felton will contact lending agencies and urge them to be flexible. He helps homeowners access government help when they can appropriately use it. Sometimes owners abashedly realize that they can economize and stay in their homes: "Do you need to ride around in this fancy car? You're driving a Mercedes-Benz and you have no money to make your house payments?"

But Felton does not believe his task is to keep people in their homes. The goal is match houses with the ability to pay for them. He's critical both of those who bought homes they couldn't afford and the lending institutions that far too easily gave them credit and adjustable rate mortgages: "A few years ago, if you could talk and breathe, you could get a house. These people had no reason being in those houses."

We drove around Lehigh Acres and Cape Coral, two of the hardest-hit communities, as we did the year before. I saw some 2,500-square-foot homes with two-story entries situated on quarter-acre lots now filled with weeds, some as high as an elephant's eye. I also saw a house that was desolate last year now with mown grass and a child's bicycle in front.

Felton himself lives in a single-story Cape Coral house that is underwater: Originally marketed by the builder at close to $200,000, Felton bought it for $120,000 in 2007 and thought it a bargain; now it's worth $80,000. Still, it's an immaculate three-bedroom with a swimming pool, a two-car garage, and an American flag in front, and he and his wife enjoy it. The problem is the mismatch, particularly with homes owned by people now among the long-term unemployed.

Felton sees problems in both individual beliefs and government actions. First, the personal: "People say we've learned from the housing bubble. I don't think so. . . . We say we're not going to eat out, but we do. If my pocketbook says 'nope,' maybe I won't. If it says 'maybe,' I will. . . . We're not going to change unless we have to." Most people, he says, were not frugal during good times so they had no cushion when joblessness struck.

The heart of the problem, he believes, is, "We are not a God-fearing people anymore. If people were going to church and being taught the necessities, we wouldn't be in this mess." A churchgoer, Felton says, "We have lots of churches without much teaching. . . . We have to go back to the basics: family, church, education. . . . For many men the trinity is women, alcohol, sports."

The second problem, he says, is government: raising taxes and embarking on grand projects instead of also emphasizing basics. Cape Coral is laying off police officers and firefighters, but the Lee County Board of Commissioners has now agreed to spend probably $80 million to build a new spring training complex for the Boston Red Sox. Felton asks, "How can you go out and build a stadium in this economy?" He also notes, "The old community is devastated."

The old community is a poor part of Fort Myers, one mile from downtown, with many one-bedroom, wood-frame, 1,000-square-foot houses. The old community in 1993 welcomed the Boston Red Sox to a beautiful new ballyard, City of Palms Park. The Fort Myers City Council had grabbed the Red Sox from their previous spring training home in Winter Haven, Fla., by taking 26 acres from Fort Myers owners via eminent domain, and razing more than 100 buildings. Taxpayers footed a $24 million bill, with $2 million in interest payments every year.

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