John McCain’s Role in Loss of Housing

While making coffee this morning Friday morning I had the TV on listening to C-SPAN. (Apparently the cats were the last ones watching TV. ) I had to finally get up, grab the remote to turn the channel when Jeff Sessions (R-GA, I believe) started droning on and on. The cats were already sacked out in front of the TV. In fact, I had to make sure they were still breathing. 😉

Regardless of the condition of the cats, Bryan Dorgan (D-ND) had been talking about the housingmcmansion-cartoon.jpg collapse, subprime loans, mortgages , the tactics of lenders, etc. He put up large poster boards with the ‘messages from lenders to pull in people.

And just last week, too, while listening to NPR, I heard a news story in which the reporter, in interviewing lenders heard them speak about people seemingly unconcerned about losing their homes. Me – I’m terrified of losing my housing. I’ve been homeless and have lived in homeless shelters. I don’t ‘get’ how can anyone be nonchalant about losing their home.

Listening to Dorgan though, I was also reminded of something our CFO/controller told me some 15+ years ago. You know the adage, ‘You get nuthin’ for free.’ That ‘advice’ came around again as the result of discussing certain a particular business promotion wherein you wait a few months to make your first payment or – as I’ve heard lately -‘pay no interest until 2010 or get a “rebate”of $4250 for that Dodge Ram pickup complete with hemi – yadda ya. In fact, her exact words, “no truly capitalistic enterprise gives you a goddamn thing for free.” Oh.

In other words, that ‘great deal’ IS figured into the price at some point, tacked onto the end of the contract as “hidden fees” or balloon payments or . . . . . . . get the picture.

Thanks to Tom at Fort Boise, I read this: 29% of buyers put no money down. For the sake of argument in the likelihood that is close to being accurate, that means one-third, 1/3, one out of three home buyers have NOTHING to put forward into escrow to cover taxes and insurance, and towards building equity.

Last year the median down payment on home purchases was 9 percent, down from 20 percent in 1989, according to a survey by the National Association of Realtors. Twenty-nine percent of buyers put no money down. For first-time home buyers, the median was 2 percent. And many borrowed more than the price of the home in order to cover closing costs.

I think I could make a case that some borrowers were ‘renting’ (with risk), rather than owning,” Nicolas P. Retsinas, director of the Joint Center for Housing Studies at Harvard University, said in an e-mail message.

For some people, then, foreclosure becomes something akin to eviction — a traumatic event, and a blow to one’s credit record, but not one that involves loss of life savings or of years spent scrimping to buy the home.

“There certainly appears to be more willingness on the part of borrowers to walk away from mortgages,” said John Mechem, spokesman for the Mortgage Bankers Association, who noted that in the past, many would try to save their homes.

As for figuring that median of 9%, it’s just whatever is smack in the middle of an uneven amount of numbers, in this case, percentage points. An even number of a set of numbers, the two in the middle are summed and the average from that sum is the median. Further down in the article, there’s this:

The value of homeownership, then, has increasingly shifted to the home’s likelihood to rise in value, like any other investment. And when investments go bad, people tend to walk away.

Or to use it for collateral for other things, big-time toys, boats, 4-wheelers, trailers, etc.?

I also noticed while out this morning a number of those ‘Cash For Your Home’ signs, which I’ve been noting over the last few years really, maybe even longer.

I also ran across an article at the AFL-CIO blog regarding the picketing of a McCain appearance because he hasn’t apparently put out a plan to cope with ‘the housing crisis.’

As one commenter at the AFL-CIO blog pointed out:

The real shame in all this is that the foreclosures are impacting entire neighborhoods. When houses in your neighborhood go into foreclosure your house’s value declines. Not only are those who are losing their homes suffering but so are their neighbors. And a lot of this misfortune is the result of people throwing caution to the wind and buying homes they know deep down they can’t afford. . . . . . . . And I resent my tax dollars going to bail out people who chose to live way beyond their means and are now suffering the consequences. Perhaps if these folks eventually find themselves in a position to buy a new home they’ll consider one that’s a little more in their price range.

However, herein lies the story though. It’ s more about McCain’s ties to those who perpetuated this crisis – the lenders.

In the past two years, more than 14,000 Cleveland families have lost their homes to foreclosure, leaving entire city blocks abandoned. But this morning, McCain came to town peddling the same corporate-friendly, anti-worker agenda President Bush has been pushing for seven years.

I don’t know if this figure of 14,000 is Cleveland proper or includes the outlying working class neighborhoods in the townships of Newburg Heights (Slavic Village), Garfield Heights, Maple Heights, Brooklyn Heights, Bedford Heights or North Randall.

The Tremont are where I lived was being revitalized somewhat and when I moved up near Universitymt-sinai-cleveland.jpg Circle (Case Western Reserve University, the VA hospital, et.al), there were entire blocks that hadn’t been rebuilt, supposedly, from as long ago as the riots in the mid-60s. This, according to those who were my neighbors at 108th & Lee. I worked at Mt. Sinai Hospital situated at the edge of the Hough neighborhood and the ‘entrance’ to University Circle. Mt Sinai absolutely served some of the poorest in Cleveland and Cuyahoga County.

It was not only devastating for those in the neighborhoods around Mt. Sinai when the hospital was forced to closed, but for the employees as well, who knew many of those in the surrounding neighborhoods wouldn’t get health care anywhere else. As for The Hough riots of 1966 – when I left Cleveland, the Cleveland Clinic was buying up more property along Euclid Avenue and back off Euclid a few blocks for refurbishing of buildings and new construction. That was in 1998; I then moved to Bedford after taking a job with their hospital. The neighborhood was only ‘looking up’ for those with the means and the money to pay it and that was for those who were affiliated with Cleveland Clinic. It wasn’t to rebuild what had been lost in 1966, to revitalize the neighborhood for the sake of the neighborhood. If anything it delineated the gross line between the “haves” and the “have nots.”

The housing crisis is so bad in Cleveland, the city is suing 21 prominent financial institutions, including large groups such as Citigroup, Bank of America, Wells Fargo, Merrill Lynch and Countrywide Financial, accusing those corporate giants of knowingly plunging the city into a financial free fall.

McCain has taken hundreds of thousands of dollars in campaign contributions from many of the very same subprime lenders being sued by the city of Cleveland, including more than $100,000 from Citigroup and Citibank and nearly $52,000 from Wachovia. In all, he’s taken more than $6 million from the finance, insurance and real estate industries. McCain leads among presidential candidates for bundlers from the real estate and commercial banking industries.

Quite the interesting development.

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One Response

  1. This is an interesting pingback – your foreclosure dot.info Jezzus.

    […] wrote an interesting post today on….For some people, then, foreclosure becomes something akin to eviction — a traumatic event, and a blow to one’s credit record, but not one that involves loss of life savings or of years spent scrimping to buy the home.[…]

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