The Observation Deck

I am just wondering what the defense or justification is for a couple of issues that the Republicans stand for:

1. Passing laws to protect predatory lenders;

2. Passing laws to protect companies that knowingly produced lead-based paint, even after they became aware that it was killing and disabling many children? Only poor children of course, as the rich paint company owners had their children in other homes.

In a state that has been hugely affected by both of these issues, issues that kill the economy and kill children, if there is any defense from the Republicans? Any rationalization there? Any reason why it is OK to spend our tax money on health-related issues for the impoverished children that still live with lead, over getting these companies to fork over some of their wealth to pay for removing lead and helping care for the innocent children whom are ill or having learning problems as a direct result from this?

And the homeless number due to Predatory Lending is a whole other book, but it has devastated this area. They are the terrorists of this area.

When you make money getting people home loans they can't pay back, you can afford a more impressive car. You can afford a more impressive condo, house, wine collection, suit, watch, appliances, etc. So, that is how you know the economy is in good shape. So, it is important to place candidates in office who will make such loans more possible.

Well thank God for Strickland. He is the best thing to happen to Ohio in a long time.

Maybe only the ultra rich should be allowed to own homes or rent in decent areas.

Doug

The problem with the Predatory Lenders is that they are blood suckers. They don't care if you can afford a home or not. They make people believe they can and then are gone when the mortgage can't be paid. These lenders just sell the loans off to other lenders so they don't care.

One of their target groups was inner city people who maybe owned a home for years. They went after them to refinance and get money out, not giving them the reality, and then hitting them hard with "hidden" loan costs at closing. Many of these people who were elderly lost their home!!!

The other target group is the people who want more than they can afford, whether they buy a house with no money into it, or refinance their house to 100% to pay for their toys. There is a reason that banks never lent 100% for a house. If you didn't have any money saved, chances are you can't afford a house. And if you don't have any equity in a house, you can walk away from it easier.

The biggest problem with these lenders and mortgage brokers has been that no license or schooling was required to do people's loans-the biggest asset we have. Accountants need college and licenses, attorneys need a lot of schooling and to pass a bar, pretty much everyone who deals with peoples money needs higher education and then some! And ethics! But along come along the brokers and lenders who need nothing! And most lacked ethics and let greed take over. Anyone with a couple bucks could open a mortgage company and anyone breathing could be a broker!

The bigger issue is why it took so long to get any legislation for the mortgage companies! And then to find out our elected Republicans let them slide??? Got paid off to let the blood suckers get off scott free while foreclosure rates jumped here higher than anywhere, killing the most important part of the economy!! And leaving people homeless.

As for the lead paint people? Same thing. They passed legislation to not make them responsible, even though proof was found that they knew about the harm of lead in paint, and continued to produce. At the cost of children!!

This is not about poor or rich because both issues affect everyone. And everyone should care about those issues! You want to keep Lakewood strong, foreclosure and lead paint won't help! For years we watched this state get run into the ground by greedy politicians who don't care about the people, so I am more than ready to see some change. And I hope that means Cleveland school kids getting toilet paper in schools and real school books! How anyone could go around on golf outings and take kick backs while the kids suffer is beyond anything my mind can ever comprehend!

The most interesting thing I read about Demro is that he is too young to owe anyone favors! It made me think! Maybe he is right! People are tired of politicians placating the people padding their pockets and not caring about what is real.

While there certainly were predatory lenders, there are also alot of people who simply were greedy and knowingly got in over their head. They thought they'd get a cheap interest-only mortgage and "flip" the house after a few years for more money.

Alot of people gambled and lost. I don't feel bad for them. The small number of people actually lied to and taken advantage of deserve our help, the rest don't.

If we go down the road of legislating to protect people from their own greed, selfishness, ignorance, etc, we'll have an awful lot of laws.

People that borrowed over 100% of their home value knew what they were doing and now they have to pay for it. It shouldn't be up to the government to legislate common sense.

Sorry I missed this thread earlier. Justine could you cite the cases (or specific legislation) that have lead to this post? I'm not defending anyone in particular, but I am curious as to how this is just the fault of "Republicans". Yes, in general Republicans do tend to side with industry over the individual. However, I would suggest that the problem is with most all politicians not just one side of the aisle.

One of the culprits is in how bills are assembled. the Pork and Puff that invariably get inserted make it very difficult to say with any clarity who stands for and against what. Case in point, the latest emergency funding bill that was supposed to be about the war in Iraq included millions for spinach growers in California. So if someone votes "NO" on that are they against the war or are they against health food?

The whole system is messed up.

It is ironic. Before World War II most people rented homes or apartments.

In this present era of Turbo Capitalism, we are expected to both change "careers" every five years, and also to own a home or mortgage on a home.

Not long ago, I was planning to buy a new car. With my tip-top credit rating, I expected, and thought, that I received the best quote on interest rates from the dealer's finance manager.

Before signing however, I told the dealer that I was going to call my bank for a comparative quote.

Then a funny thing happened. The bank call resulted in a much better monthly payment quote.

See, it's not just the interest. There are fees sometimes buried in those forms. While this may not be technically illegal in Ohio, it certainly would appear to be a concern, at least in my opinion.

I would suggest that you shop for your money before you shop for a car. Be sure that you get what you are supposed to. Don't look at interest alone. Check for fees and other hidden charges.

I decided to keep the old car for now.

When it comes to your money, you need to watch it like a hawk.

Case in point, the latest emergency funding bill that was supposed to be about the war in Iraq included millions for spinach growers in California

Bret:

Surely you don't fault inclusion of spinach into the Iraqi adventure funding. I mean, the nexus is clear. Our armed forces, bolstered by the consumption of spinach, will taken on Herculean characteristics, ala Popeye, making them a much more formidable force!

Outlandish? Perhaps, but it makes as much sense as anything else we're fed as the ongoing plan to "complete the mission" (whatever THAT happens to be on any given day).

Bryan,
This is not about legislation for the people and their common sense. Good lord if we tried to legislate common sense this country would be a bit worse off than the millions in debt we are now. I understand what you are saying about people being greedy. My sympathies do not lie there. I have seen that myself with a few people, buying and buying and mortgaging their souls. That is not my concern. But until recently, mortgage companies required NO licensure at all! No one from above looking down at them and no schooling to deal with people's money!! This is about legislating the companies, not the people with no common sense. You have no idea how many people living in the inner city lost their homes, that they could afford, before these leeches were allowed to solicit them and swindle them.

When I was living in Philadelphia and working as a social worker in the inner city, I decided to take a break from the stress of chasing drug-addicted women to teach them to care of their children. This break came in the form of a job offer for a non-conforming lender based out of NY. I knew nothing of the industry and took the job because it was in a safe environment with a substantial pay raise. As I learned the business, I saw guys in their young twenties driving around in BMW's, smoking the best cigars, and eating at the finest restaurants ($they would laugh about the $800 dinner check from Mortons). They were getting rich off of pushing through loans from primarily inner city home owners. They were chargins thousands for closing costs that were not properly revealed, with the promise of money back, without giving them the realization of the how high their mortgage would soar with interest rates up the ying yang. The stress in that office and watching the slime and the arrogance of these people made me run back to working with the same population that these people targeted. That business is now out of business since most of their loans that they sold went in the toilet. Along with their souls and the lives of all they affected. I hope those steak dinners were worth it.

So to find out that Blackwell pushed through legislation to NOT prosecute these lendors or hold them responsible is beyond disgusting. Other states were way ahead of the game to protect their people. Our politicians were on golf outings and having steak dinners with these lenders. I may not be a historian, but I am sure that the founders of this country NEVER intended the policies to be governed by LOBBYISTS for the rich and harmful industries!

And now to read that Strickland has to "undo" damage from legislation that was passed before he got there to NOT hold the companies that sold lead paint knowing that children would be sick, disabled, or dead??? That is worse than what the tobacco companies did because those children had NO choice.

Bret,
Do you really need clear examples of legislation to believe what this is? From the Williamsmullen.com website:

"Simply, predatory lending is a hot topic and the industry should be extremely concerned about the resulting legislation and regulation that will govern this area. Whether and how lenders and brokers will be affected will depend on the details of the legislation and regulations that ensue. It is clear on the federal level that the present administration and the democrats are strongly behind anti-predatory lending legislation. The republicans have a more "wait and see approach" and most are looking to see if existing legislation is sufficient. The republicans, however, will not find it popular to oppose legislation in this area. Moreover, there is a practical reason to have federal legislation that preempts state laws so that compliance will be simplified. Stay tuned, there is more to come in this area.

So when consumer groups and civil liberty groups have to become involved, I would say something is wrong! And the fact that this has to go to federal, because states aren't taking care of their own state? Thank God we have Strickland now.

Bret Callentine wrote:One of the culprits is in how bills are assembled. the Pork and Puff that invariably get inserted make it very difficult to say with any clarity who stands for and against what. Case in point, the latest emergency funding bill that was supposed to be about the war in Iraq included millions for spinach growers in California. So if someone votes "NO" on that are they against the war or are they against health food?

The whole system is messed up.

Bret

It warms my heart as you come out of your shell and finally admit the whole thing is a nightmare.

Many of the laws I believe Justine is referring to is the tighten of most ways that normal people file bankruptcy, making it nearly impossible, with a loosening of the lending with no credit checks, but the ability for lenders and credit cards company to charge 30% or more. All of this legislated by both the State and the Feds.

I can go back here or other places when both Mr. Warren, Dan Slife, the Ferris, myself and other talked about this during each legislation process. If we look closely we see the exact same pattern now as was evident before the Depression. Loosening of money supple, followed by the immediate tightening, catch millions in a bad place.

While we could all say that it is a person's own fault. We really need to look at how the government, and the Federal Reserve laid the groundwork for what will soon be record foreclosures for the next 5-10 years.

A person in the market would chuckle and say we are merely shaking out the gamblers. The 80 year old that took a second mortgage at a variable rate to fix the roof, might not feel the same.

The whole system is broke.


.

Jim wrote:

"A person in the market would chuckle and say we are merely shaking out the gamblers. The 80 year old that took a second mortgage at a variable rate to fix the roof, might not feel the same.

The whole system is broke"


Truly, I feel that we are living with a sage in our midst!

Nice post, Jim!

A good article on the whole subprime mess:

http://finance.yahoo.com/loans/article/ ... HdiKUJo9IF

Bryan,

I thought that was interesting. They did identify the many people responsible, and appraisers are definitely one of them! Before the influx of mortgage companies, and thus title companies and appraisers, people could trust their bank. The interest rates were about the same anywhere you went. But when these mortgage companies and lenders sprouted up, because no higher education or license was needed, so did a ton more title companies and appraisers! Appraisers used to be there to protect the bank too, but I saw them wined and dined and many knew how to push the appraisal value enough above the real value to make the loan work.

In California where property values continue to skyrocket, the end result might not be so bad. But here, and other places, obviously it is not the case. I do know someone who managed money horribly and mortgaged his house beyond the value. When he moved he owed $25,000!!!!

But all home buyers are not responsible as the article indicated, because some really were swindled into refinancing and were not told they were being charged thousands of dollars in fees (that nobody regulated) and often charged a much higher interest rate than they deserved. You should see how much these brokers make off of higher interest rates!!!

As far as the Federal Reserve doing nothing, the site should have pointed the finger at politicians who could have made changes in their own state, protecting the people, NOT these unscrupulous businesses!

How this affects everybody is the high rate of foreclosure brings all our property value down. Way down. And because so many mortgages are in foreclosure, people trying to get them that can afford them, will now have a harder time, thus slowing down the housing market even more.

It is imperative to continue to vote for politicians who really care about the people, the state, and the country. And not their greasy palms.