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Posted: Sat Nov 10, 2007 11:54 am
by Richard Cole
Stephen Eisel wrote:Justine Cooper wrote:Stephen Eisel wrote:
The root of this problem begins with the borrower. It is responsibility of the borrower to understand the terms of their mortgage / contract. If I am not mistaken the House Financial Services Committee has jurisdiction over financial institutions and consumer credit. It is this committee that has dropped the ball for the government.
That is the most bizarre statement I have read on all the research on predatory lending. The root of the problem DOES NOT begin with the borrower and if you read some of the stories of people who actually worked in that industry, they are trying to tell you that. There was so much deception you would not believe it could exist. That is not to say, that some borrowers also committed fraud with their loans!! But the ROOT of the problem lies with the companies held responsible for the biggest investment people make, and the ROOT of the problem lies with those companies that did commit fraud. There are banks that are ethical and honorable, and mortgage brokers who also are and now will have a bad name because of the rotten apples. And trust me, there are enough rotten apples to go around. It is too single minded to say the ROOT of this enormous and devastating crisis is "the borrower".
There were a lot of hard-working and honest people who did make money during the height of this housing boom where anyone could get into a home, some real estate agents, some title cos., some appraiser, builders, companies such as Tim's, contractors, etc. Many of these people are also displaced now or have dropped tremendously in income, which also hurts the economy as a whole. Furthermore, some of these people who could once afford their home, may not have the income to afford it now. The domino effect is so far beyond a single homeowner's mistake or fraud. There would not be the legislation going on now Stephen, if the root belonged soley to the borrower. Many borrowers were duped, taken advantage of, lied to, for the mighty buck. To ignore that is a crisis within itself.
Maybe you are not objectively looking at this situation? The terms, fees and repayment schedule are spelled out in the mortgage. Am I missing something?
Yes.
Posted: Sat Nov 10, 2007 11:59 am
by Richard Cole
Debates/discussions on cause, fault etc. are fine. I'm interested in effects of the situation on the Cleveland, Cuyahoga County, or even Ohio economy and housing market.
Given the apparent severity of the situation in Cleveland, is it something the Lakewood needs to be proactive about? Is it something that Lakewood can control? What are the likely impacts on Lakewood in the next year, 5 years?
Posted: Sat Nov 10, 2007 11:59 am
by Justine Cooper
Stephen,
If you read the posts from people who have been in the business and have seen what really went on, you would know that you are missing a lot. Beating the dead horse is not worth it. It is what it is and there is so much more to it that you don't know, so single mindely saying "it is all on the borrower" is not only a narrow view, it just not the truth of what has occurred over the last several years and resulted in a crisis across the county.
Posted: Sat Nov 10, 2007 12:20 pm
by sharon kinsella
Richard -
This whole thing is going to be a huge problem here.
These companies are not negotiating lower payment options. The result is foreclosure. Overload of foreclosed homes - lower real estate value so people who want to sell their homes and get out from under, or want to move etc. will be losing a lot of money.
Glut of foreclosed, vacated properties leads to vandalism and destroys neighborhoods.
Displaced homeowners wind up having to move and pull their kids out of school, Lakewood loses taxpayers and consumers.
Their is an enormous snowball effect.
There are organizations in Cleveland trying to work on this, we can support them and volunteer.
Strickland has tried to work with the lenders, but they won't cooperate. We need to help the administration in their efforts to stem the calamity.
It's a shame - and it won't go away without help.
Posted: Sat Nov 10, 2007 12:30 pm
by Stephen Eisel
Justine Cooper wrote:Stephen,
If you read the posts from people who have been in the business and have seen what really went on, you would know that you are missing a lot. Beating the dead horse is not worth it. It is what it is and there is so much more to it that you don't know, so single mindely saying "it is all on the borrower" is not only a narrow view, it just not the truth of what has occurred over the last several years and resulted in a crisis across the county.
I worked with subprime mortgages for over 3 years. In the those 3 years, I talked to over 2,000 different subprime customers. I never once heard a customer say that they were a victim of predatory lending.
I am not blaming the borrower.
Sharon, did some subprime lenders take advantage of consumers? Yes.. Did the House Financial Services Committee drop the ball on protecting consumers from unscrupulous subprime lenders? Yes.. Did some subprime borrowers fail themselves by not taking the time to understand the terms of their mortgage? Yes... Ultimately, the consumer who signs a contract is responsible for their own actions. But, the government could have done a better job of policing these subprime mortgage companies. Yes, some of these subprime mortgage companies knowingly ripped off an uneducated borrower. It is really hard for me to place 100% of the blame on anyone.
Posted: Sat Nov 10, 2007 12:44 pm
by Stephen Eisel
Richard Cole wrote:Debates/discussions on cause, fault etc. are fine. I'm interested in effects of the situation on the Cleveland, Cuyahoga County, or even Ohio economy and housing market.
Given the apparent severity of the situation in Cleveland, is it something the Lakewood needs to be proactive about? Is it something that Lakewood can control? What are the likely impacts on Lakewood in the next year, 5 years?
http://www.clevelandfed.org/research/tr ... 040307.cfm
For the mortgage market as a whole, the delinquency rate rose year-over-year from 4.70 percent to 4.95 percent, and the foreclosure rate increased from 0.42 percent to 0.54 percent.
While delinquency rates in the subprime market have risen as of late, they are still below those of 2001-2002. However, the market share of subprime loans has grown, and subprime loans currently make up 13.7 percent of all loans, according to the MBA.
Posted: Sat Nov 10, 2007 12:44 pm
by Richard Cole
sharon kinsella wrote:Richard -
This whole thing is going to be a huge problem here.
In an earlier post, I referenced the interconnectedness of a number of issues.
Poverty is a real concern; the changing NE Ohio economic structure; the continued suburban sprawl, all have major impacts on Lakewood. Oil getting close to $100 a barrel - will it draw people in to inner-ring suburbs, or pull people out to energy efficient new housing in the outer 'burbs?
After the recent elections where the focus was very limited in time-frame, I would hope that the current administration/future administration/LO and any other civic group Library etc. could focus on the longer range future of the City.
Posted: Sat Nov 10, 2007 12:47 pm
by sharon kinsella
Me too Richard.
Sustainability is a major issue.
And you're right. The economy stinks, we are in a major trickle up situation. Energy costs are through the moon and none of it will go away by itself.
Posted: Sat Nov 10, 2007 12:51 pm
by Stephen Eisel
Wow, I may have to start agreeing with JOB on the economy. How long can we survive with oil at $100 a barrel?
Posted: Sat Nov 10, 2007 12:59 pm
by Richard Cole
From the same article
The recent data also reveal stronger increases in the foreclosures of adjustable-rate mortgages (ARMs) relative to fixed-rate mortgages (FRMs), in both the prime and subprime markets.
After bottoming out in 2004, delinquency and foreclosures rates for subprime loans and have been on the rise since the middle of 2005.
It wasn't clear in the article if the numbers were national or local. What is occuring in Cleveland/Cuyahoga County, I'm assuming, is of a different magnitude than the national picture. While we might not agree on the severity of the situation at hand, I still think a discussion on how Lakewood will cope short/mid/long-term would be useful.
http://www.clevelandfed.org/Research/Tr ... 051107.cfm
Ohio, with 3.38 percent of all loans in foreclosure, has the highest percentage of foreclosures of any state in the nation. In addition, Ohio’s percentage of loans in foreclosure is almost three times as high as the national average
Posted: Sat Nov 10, 2007 1:10 pm
by Stephen Eisel
Richard Cole wrote:
From the same article
The recent data also reveal stronger increases in the foreclosures of adjustable-rate mortgages (ARMs) relative to fixed-rate mortgages (FRMs), in both the prime and subprime markets.
After bottoming out in 2004, delinquency and foreclosures rates for subprime loans and have been on the rise since the middle of 2005.
It wasn't clear in the article if the numbers were national or local. What is occuring in Cleveland/Cuyahoga County, I'm assuming, is of a different magnitude than the national picture. While we might not agree on the severity of the situation at hand, I still think a discussion on how Lakewood will cope short/mid/long-term would be useful.
Being proactive is an excellent move!
nice
Posted: Sat Nov 10, 2007 1:21 pm
by ryan costa
most of the gains in energy efficiency available to new outer-burb homes are overtaken by a few things:
the house is already pretty expensive and oversized.
There are only going to be two or three people living in it.
Nearly all the retail and post offices and daily commutes are much longer.
If you do end up having kids there, they are going to have to be driven nearly everywhere to do anything. People even end up driving their dogs five miles just to take them for walks.
It is applying modern amenities and civic infrastructure "necessities" over a much wider geographic area.
Ohio is ahead of the curve in that de-industrialization has hit us harder, because we had been more industrialized. We don't get hit by the collapsing curve so hard because our real estate wasn't speculated up so astonishingly to begin with.
Posted: Sat Nov 10, 2007 1:49 pm
by sharon kinsella
Ryan -
I think I like the real you a lot.
Posted: Sat Nov 10, 2007 4:02 pm
by Justine Cooper
Stephen Eisel wrote:
The root of this problem begins with the borrower. It is responsibility of the borrower to understand the terms of their mortgage / contract. If I am not mistaken the House Financial Services Committee has jurisdiction over financial institutions and consumer credit. It is this committee that has dropped the ball for the government.
Posted: Sat Nov 10, 2007 4:04 pm
by Justine Cooper
Stephen Eisel wrote: It is really hard for me to place 100% of the blame on anyone.[/color]
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In a controversy the instant we feel anger we have already ceased striving for the truth, and have begun striving for ourselves.