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Solving the real estate crisis
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John E. Stone
Guest Columnist
Updated: May 20, 2008, 9:00 AM
Published: Apr 28, 2008, 5:15 PM

For the first time in U.S. history, the average home in America is worth less than is owed on it. That spells national economic disaster unless we take immediate action to stabilize the real estate market, coupled with long-term reform to address the root causes.

Last fall and early this winter, most homeowners, realtors, bankers, builders, and investors in Georgia’s 12th Congressional District had great concern for the real estate market, but an equally great concern that the federal government should not initiate an expensive bailout of the sub prime mortgage industry.

Most reasoned that there were countless bad loans made that should not have been, and that fiscally conservative lenders and borrowers should not be forced to pay the cost of those who were not.

That has changed for a simple reason. The more conservative lenders, borrowers, builders, and realtors are now also being dragged down by the worsening market. The choice is no longer whether they will pay, but how they will pay, and how to lessen what this crisis costs us all in the long run.  

Everyone recognizes a common goal — stopping the rash of foreclosures, and allowing homes to regain their lost market value. The quicker we stop more homes coming on the market in distress, and clear up the existing inventory of bank-owned properties, the better off we will all be.   

We need two plans — an emergency plan to stop the bleeding and stabilize the patient, and a long-term plan to cure the disease. The primary goal should be to protect homeowners.

The emergency plan
1. A 90-day national moratorium on foreclosures — Congress should enact an immediate nationwide ban on foreclosures for 90 days, allowing the mortgage industry and homeowners to restructure existing distressed loans.  

2. A 7 percent national mortgage rate cap on new and existing loans — A new 7 percent rate, while higher than that available for good credit customers, would keep many families in their homes, and those homes off the foreclosure market, restoring equity for all.  

3. Current homeowners keep their homes — Homeowners in arrears who restart their adjusted payments within 15 days of their lender notifying them of their new payment amount should be allowed to keep their home. Mortgage lenders therefore have a strong incentive to restructure loans and notify borrowers as rapidly as possibly, while homeowners in arrears have a strong incentive to immediately resume payments and stay in their home as their equity recovers along with the market.   

To this point, cost to the federal government would be virtually zero — an absolute necessity in light of the equally calamitous federal deficit we face.

Long term reform
1. Insuring a healthy and responsible mortgage industry
Congress should appoint a nonpartisan commission to determine precisely what effect the emergency plan has on the industry, and to make recommendations to Congress within 180 days of any steps necessary to preserve a healthy, vigorous, and more responsible mortgage industry.  We should not allow responsible lenders and borrowers to be driven from the market, and must be prepared to take reasonable and fiscally prudent steps to preserve consumers’ ability to obtain timely and affordable home loans. That may cost something in federal tax dollars; but we will probably all lose less this way than allowing the market to continue spiraling downward.  

2. A permanent 7 percent national cap on mortgages
If a lender cannot approve a borrower at 7 percent interest or less, the loan probably doesn’t need to be made. Future market conditions may require Congress to adjust this rate, but a reasonable mortgage interest cap is in the vital interest of the long-term health of the real estate market and consumer protection.  
And more importantly, it is the right thing to do.

The root cause of our current foreclosure crisis is usury, the charging of excessive interest on loans, and it flies in the face of the founding principles of our country.  

The Bible, upon which most of our founders based their governing principles, specifically prohibits usury. After the Declaration of Independence in 1776, most states passed usury laws that capped interest rates at 6 percent. Over the next two hundred years, states gradually raised interest rates allowed under their usury protections.  

But the big blow came in 1980 when Congress pre-empted all state usury laws on mortgages, allowing today’s adjustable rate and interest-only loans which created this crisis.

People who could not afford a reasonable home price and mortgage rate were pushed into homeownership anyway through these loans, which inflated real estate prices, leaving more families unable to afford a home under traditional mortgages, and the upward inflationary spiral continued until we face today’s crisis.

We can solve today’s foreclosure crisis by a return to historically-sound lending principles. By this time next year, we can have the majority of foreclosures off the market, and the equity of most homeowners back on the rise — not at the artificially inflated rates borne of the sub prime industry, but at reasonable and sustainable levels that build true equity and long-term financial stability for all Americans.
 
John E. Stone is a Republican candidate for Georgia’s 12th District seat in the U.S. House of Representatives.

In Effingham County, Progress Starts With a Plan
Guest Editorial by Susan Kraut, President/CEO of Effingham County Chamber of Commerce
Susan Kraut column
A sold-out crowd of more than 150 business and community leaders gathered at Effingham’s New Ebenezer Retreat Center Sept. 24 for the Chamber of Commerce’s annual State of the County Luncheon, hearing updates on economic growth, education, and infrastructure across Effingham County. (Submitted photo)
Susan Kraut
Updated: Oct 1, 2025, 2:41 PM
Published: Oct 1, 2025, 2:36 PM

At last Wednesday’s sold-out State of the County luncheon, more than 150 business and community leaders heard a message that resonated throughout the program: We have a plan, and we’re sticking to it.

Effingham County City Manager Tim Callanan opened his remarks with that thought. It was simple, but powerful. In an era when news feeds churn with controversy and change, it served as a reminder that behind the scenes, steady planning is happening – and those plans are beginning to bear fruit.

Businesses and residents often express frustration about roads, zoning, parks, schools or economic development, feeling that growth is outpacing action. The truth, as Callanan underscored, is that many of those actions are already underway, rooted in master plans that cover everything from transportation and stormwater to parks, communications and public safety.

The challenge is that plans only matter if people know they exist. Too often, businesses and citizens forget these plans are in place, don’t know where to find them or don’t realize how to weigh in at the right moments. When that happens, the community loses the chance to shape its own future and to express the value of those plans – why they matter and why they’re worth supporting.

Planning delivers progress

Last week’s luncheon highlighted how “plans” translate into progress. Mayor Kevin Exley shared Rincon’s ranking as one of Georgia’s safest cities and the city’s launch of the Citizen Central app – a small but meaningful step toward accessible local government. Springfield’s new city manager, Lauren Eargle, outlined a capital improvement plan that includes sidewalks, drainage and playgrounds, along with the less glamorous but vital work of a $35 million wastewater plant upgrade. Guyton’s city manager, Bill Lindsey, discussed contracting with planning consultants, winning grants for sidewalks, and reinvesting in Bazemore Park and downtown revitalization. These aren’t random acts; they’re evidence of intentional planning.

The school district provided another example when Superintendent Yancy Ford noted that Effingham now serves nearly 14,500 students speaking 33 languages. That diversity is an asset – but it also requires careful, proactive investment to maintain the high standards families expect. His most powerful point concerned ESPLOST, the 1-cent Education Special Purpose Local Option Sales Tax. Thanks to community support over the years, ESPLOST has built classrooms, purchased buses, enhanced safety measures, provided Chromebooks to all students, added security cameras and access-control systems, created inclusive playgrounds and athletic facilities open to the community, supported hands-on learning spaces like Honey Ridge, and established the College & Career Academy – a facility credited by Ford as helping lift the district’s graduation rate above 90% and expanding career pathways for a rapidly diversifying student body. And it has done so without incurring long-term debt.

Why ESPLOST matters

Among these examples of planning, none is clearer than ESPLOST — a long-term, voter-approved blueprint for funding education, renewed every five years to stay ahead of growth. The November ballot will again include the ESPLOST renewal, giving voters the opportunity to continue this proven approach to funding school facilities, technology, safety, transportation, inclusive playgrounds and community-accessible athletic fields. Renewing ESPLOST does not create a new tax; it simply extends the existing 1-cent sales tax, allowing residents, visitors and businesses to contribute to improvements that benefit every student. Without it, many of the projects parents and community members count on – such as new buses, safer schools, modern classrooms, career pathways and accessible playgrounds – would stall or require long-term debt.

Renewing ESPLOST is about more than bricks and mortar. It is not a reactionary measure but part of an intentional, ongoing plan to manage growth and maintain education – reinforcing the theme that plans become progress. As the district’s population becomes increasingly diverse and enrollment continues to rise, sustained ESPLOST funding is crucial to scaling programs, expanding facilities and maintaining the high graduation rates and opportunities that families expect. It is about protecting Effingham County’s tradition of educational excellence, maintaining property values and ensuring the workforce being prepared in our schools is ready to meet the needs of local employers. It is an investment in students, families and the future of our communities.

A call to the community

Effingham County is growing. Growth brings challenges, but it also brings opportunities. As the luncheon demonstrated, leaders at every level are working to guide that growth thoughtfully. The next step belongs to business owners, parents and neighbors – to lean in, stay informed and participate.

When hearing about a master plan, a referendum or a public meeting, don’t assume it is someone else’s job. Look up the plan, attend the forum, ask questions and cast a vote. That is how plans become progress – and how a yes vote on ESPLOST reaffirms and continues the community’s long-term plan for educational excellence, reinvesting in Effingham County’s future.