One Year After Bankruptcy Bill, It’s Well Past Time To Crack Down On Predatory Lenders
One Year After Bankruptcy Bill, It’s Well Past Time To Crack Down On Predatory Lenders
(Our guest blogger, John Edwards, is a former North Carolina Senator and candidate for Vice President)
There are happy anniversaries and sad ones. October 17th is one of the sad ones. It’s been a year since Congress put into effect a new bankruptcy law that makes it harder for people to declare bankruptcy and get a fresh start. It was easy for Congress to characterize bankrupt families as “deadbeats” and ignore the reality that more than 90 percent of all bankruptcies are due to medical emergencies, job loss, divorce or a death in the family.
This anniversary has got me thinking. Our middle class is built on shaky ground. The latest sign: a wave of new foreclosures driven by higher interest rates, lower housing prices, and predatory mortgage lending.
Middle and low-income families are under attack from predatory lenders who offer deceptive terms, charge unfair fees, and trap the unwary or the unlucky. According to Fannie Mae, about half of the subprime borrowers could qualify for regular interest rates, but didn’t get them. That means there are hundreds of thousands of people paying much more than they should for their home loans.
What’s especially outrageous is how predatory lenders go after African-American and other minority communities. If you are an upper-income African-American family, you are twice as likely to get a subprime loan as a lower-income white family. It’s incredible — even though you are doing better, you get a worse loan if you are African-American.
We didn’t see the full impact of these abuses during the housing boom, but now — with home prices sliding down and interest rates moving up — we are seeing the first signs of a big problem. Tens of thousands of families have gotten into unfair deals and are now in over their heads. Mortgage foreclosures are up 53 percent from last year, and they are expected to keep rising.
Rather than passing laws that punish consumers trying to make ends meet, we should be cracking down on the irresponsible lenders that prey upon them. Congress needs to start paying attention to the growing problem of predatory lenders.
Just like with the bankruptcy bill, we aren’t seeing action on Capitol Hill because financial companies are huge campaign contributors. In 2000, one of George Bush’s biggest donors was credit card giant MBNA. In 2004, it was the owner of Ameriquest’s turn.
We know how to solve this problem. We need strong legislation against predatory lending — preventing mortgage lenders from charging excessive fees, forbidding loan “flipping” where lenders rack up fees by refinancing mortgages without benefiting borrowers, and limiting pre-payment penalties.
Predatory lending isn’t the only problem for families that are working hard, paying their bills, and still struggling to get by. Short-term payday loans with excessive interest rates can quickly turn into a crushing long-term debt. Congress recently passed protections for our military men and women, but why not all families?
It’s well past time to install leaders who care about issues like predatory lending, rising mortgage foreclosure rates, increasing the minimum wage, and helping middle and low-income families. Americans deserve leaders that have the backbone to stand up and do something about their concerns. I’ve said it before, but I’ll say it again until it’s a reality — we need a government that works for all of its people, especially the most vulnerable among us.
– John Edwards
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October 14th, 2006 at 7:28 pmHey Edwards, nice of you to b!tch about the Bankruptcy Bill after being the second democratic nominated presidential and vice presidential candidate; to not follow through on your promises to fight for the presidency when they stole the election in florida in 2000 and then in 2004.
October 14th, 2006 at 7:36 pmYou both, Gore Liberman, Kerry Edwards; failed us…. so shut the hell up!
I’ve said it before, but I’ll say it again until it’s a reality — we need a government that works for all of its people, especially the most vulnerable among us.
Thanks for keeping the fight alive. Personally, I’d prefer if you were saying it as Vice President…
I know wondering ‘what if’ is a waste of valuable energy, but some moments, it’s impossible not to wonder. You and John Kerry were right about so many things. It was the first time in years I actually voted for, rather than against, candidates. Glad to see you’re still vocal and active. Thanks from those of us with no voice. You should know how much we appreciate that.
October 14th, 2006 at 7:37 pmNot nice, Ren.
October 14th, 2006 at 7:38 pmYou can use your big-boy words to express (politely) your frustration………..
Thank you Senator John Edwards for your eloquent words about the ongoing corporatization of America by the vicious vile Bush-GOP gang. It will probably take us many years to undo the massive damage wrought by this right-wing cabal in just six short years. We can start by flushing down the crooked and creepy GOP from their position of control in the House and the Senate in the November 7th election. They may try to hack and rig some of the election results with their Diebold, ES&S and Sequoia electionic computerized voting machines and vote tabulating machines, but if we have a massive enough Democratic landslides in fifty states, they won’t be able to stop us…
October 14th, 2006 at 7:40 pmCheers.
I saw Kerry’s concession speech and it looked to be a suprise to Mr. Edwards too.
On the other hand Mr. Edwards message has been consistant and for the working men and women of this nation and I think he should run again.
October 14th, 2006 at 7:46 pmYo Trueblue why are you giving me sh!t, “Big Boy” words come on…What do you mean? I need not to swear so much or I need larger more articulate words. Niche said,”anything that can be said, can and should be said simply and concisely” or something like that.
October 14th, 2006 at 7:47 pmAlso, I really like and admire John Edwards and John Kerry and Al Gore… John Edwards is a great man and I admire what he has been doing down south in the hurricane Katrina damaged areas but that doesn’t take away the fact that, EVERYBODY knew that there were the worst times in American history coming for the United States if Bush got reelected and we failed… and that is just a fact.
October 14th, 2006 at 7:54 pmMr. Edwards, please run for president. I’ll vote for you!
October 14th, 2006 at 7:54 pmWe need to crack down on predatory Republican politicians. Sigh on to the next war on terrorism.
The Second Declaration of Independence
October 14th, 2006 at 8:27 pmThe Bankruptcy bill changed the class of credit card debt from “unsecured” debt to “secured” debt by making them ineligigable for Bankruptcy protection.
The big question: Now that their credit card debt is not as eligable to default as before, why haven’t the banks charged a lower interest rate now that their risk of default is so much lower?
Banks are whores, and our current Republican Administration were their pimps in pushing this down the American publics throat. Banks live for the high interst rates, and more importantly, the fees that these credit card companies charge. They LIVE for late fees, overdraft fees, and any other fees they can charge and then collect another 29+% interest on.
And why are the Repugs their PIMPS? Republicans use to be for smaller government. People are good, and government regulations and interference are a hinderance to big business bt GOOD people. Think S&L deregulation( King George’s Daddy ran that farce). Now, the banks have convinced the Repugs that people are bad, and you can’t trust them not to run up credit card debt on purpose, with the eventual intent to stiff the banks. We need BK protection, they cried.
Thanmky your local Repug for bringing back Debtors Prison, only this prison is without bars or a financial future.
By the way, Holy Joe Lieberman voted for the BK bill; Joe is such a putz!
October 14th, 2006 at 8:31 pmThe Fish Rots from the Head Down…
October 14th, 2006 at 8:42 pmAnd we knew this before the election….
Point is also, We knew the Domino effect that would happen once we went into Iraq and again we didn’t stop it.
Point Being….Once it starts it’s to late….
Ren, no offense, but the swearing makes you look f-ckin’ ignorant, man! HAHA! Kidding. I think it’s dumb how they’ll delete perfectly legit posts if they contain an unfuzzied f-bomb.
October 14th, 2006 at 8:50 pmIt’s really disgusting what these lenders do. they are quite happy to loan money to people they know can’t afford it, take back the property, lend money to another family, take back the property…
It should against the law.
Thank you for your efforts Almost VP Edwards. Wish you were, because….damn.
October 14th, 2006 at 9:10 pm#14 yo,zoe.. In the military I was stationed at Ft. Knox Klantuckey 1st and 70th Task Force HQ Company and there was a strip in Radcliff that had predatory lenders as far as the Eye could see… and this is back in the early 90’s so I don’t know what all the fuss is about,,, this has been going on forever.
October 14th, 2006 at 9:41 pmI mean it’s hard to get below a 35% interest rate for taking out a loan as a military family with these guys, I mean come on, Where have they been?
Senator Edwards’ words are well measured and not unlike what he has been articulating throughout his public career. My only wish is that the comments posted here were as civil and pointed as his.
October 14th, 2006 at 9:45 pmWell said, as usual, ren, in #18. *ahem*
I just never knew predatory lending was this bad, until a few years ago. It seems as if it’s getting worse. It really doesn’t matter how long it’s been around, it just needs to stop.
Are you sick, ren?
October 14th, 2006 at 10:05 pm#15…
October 14th, 2006 at 10:09 pmMaybe the companies who make these food products are owned by Anheuser-Busch…
the saltier the snacks, the more beer needed to wash them down…………..
..predatory purveyors of pulpy party poop..
U know, how about a law punishing lawyers who push BS…. Oh, then you would be in trouble….
October 14th, 2006 at 10:10 pmSenator Edwards;I,and I know many others are very concerned that the voting machines will be comprimised this coming election,if you will address this matter I would apprediate it.Thanks for your continuing work for the middle and working classes.You have my full support for 2008.
October 14th, 2006 at 10:14 pmBravo Sen. Edwards! I work in the real estate industry and see terrible deals and downright frauds with folks getting into the wrong loan programs for their situations and 80/20 financing with hidden buyer credits. In Illinois, the only thing they came up with was a terrible, racist bill (the infamous HB4050–now law but everyone calls it by the bill name). It provides absolutely no protection against predatory lending, but puts a chill on lending in low income neighborhoods, even for people able to pay and who want to invest in the neighborhood. There was a real predatory lending bill pending in the IL Senate, but it was crushed by the house bill.
October 14th, 2006 at 10:29 pmWhat a freakin joke. The democrats mantra (sp?) continues. Vote for me and I’ll get the government to fix all of your problems, even if you are too stupid to read the terms of the loan, I’ll punish someone else, ya know, it’s not your fault. And the funny thing is, this Bankruptcy Law was written to keep rich CEOs of defunct companies (read ENRON) from just declaring bankrupcty and then walking away from their debts and leaving a lot of people out to dry (They buy homes in Florida where homestead exemptions protects their assets).
Whatever happened personal responsiblity.
October 14th, 2006 at 11:19 pmThe corporatization of America has been taking place for quite some time, and though I am sure we would love to throw stones, I don’t think the blame can be placed solely on the shoulders of the Bush junta.
The Clinton administration was pretty gung-ho on neoliberalism and privatization. And remember NAFTA??
Bush and Reagan before Clinton – I need not go into detail of their love of corporations.
October 15th, 2006 at 12:05 amHaving worked in the mortgage industry for the past five and a half years, I feel it’s safe to say two things: 1. Banks always, always, always, always make their money; and 2. Mortgage lenders link higher sales commissions to higher interest rates and/or riskier loans, meaning that their loan officers MUST convince borrowers to go for costlier rates and/or loans so that the loan officers can earn the best commissions. Lenders train their loan officers to language their sales pitches to convince borrowers they’re getting the BEST loan available to them–and the least expensive. Most loan officers are snake oil salesmen. If you believe otherwise, you are probably paying MUCH more for your mortgage than you should. I had to get out of the business, because I could not compromise my ethics in this manner, thus I couldn’t even earn enough to cover my basic expenses.
October 15th, 2006 at 12:20 amIt isn’t predatory when the terms are clearly spelled out and you sign the contract anyway even though you didn’t read it. That is the person who didn’t read the documents fault, not the lender. It is also not the lenders fault the mortgagee chose an adjustable rate loan which could easily double in payment in a short period. It is the uneducated person fault who did not read the document and did not understand it in the first place. They should consult a repubale lawyer to explain the loan to them if they do not understand it.
This is america, you can’t blame someone’s stupidity on others. Take responsibility for your own actions, and quit scapegoating lenders who are only following the law. How much bigger do you want the mortgage rate and terms printed? It already takes up half the damn page, so you can see it even if your legally blind and cannot read small text.
October 15th, 2006 at 12:56 amI wonder why there are so many people to sympathize with loan sharks, who are basically the lowest scum of the earth, rather than with their victims.
October 15th, 2006 at 1:08 am#36 – Dave,
October 15th, 2006 at 1:25 amNot everyone has an MBA and a LLB degree in financial law. My wife works daily with people who can barely read, but are fiscally assaulted by the lowest form of scum on this Earth. She is a volunteer, but earns about $600,000 a year in behalf of her clients, not herself. Her degree is in speech and hearing (Masters). These scum prey on those least able to understand.
I should say that she gets none of that money, it is her clients who profirt.
October 15th, 2006 at 1:27 am“uneducated person”
which, most likely, is who goes to these places. they can’t go anywhere else for a loan. they will never get ahead. our job is to educate these people properly. it starts by properly supporting our public school system. in the meantime, maybe helping out our needy with sound, honest advice, or loan companies that are HONEST and UPFRONT with their practices.
but some big businesses seem to have a one-track mind: do whatever it takes to make money.
the greed is simply astonishing.
October 15th, 2006 at 1:30 am#37 – Yeti_Steve,
October 15th, 2006 at 1:31 amI did not see your post until after I posted mine. It is interesting that we both used the word ’scum’.
And in #39 profirt should be profit.
October 15th, 2006 at 1:35 amwow, mr. edwards, you sounds really sincere. this is an effort that you and other democrats can confidently back, knowing that there couldn’t possibly be any backfire (most people would sooner believe that democrats are looking out for the poor than that republicans are keeping CEO’s in line). well let’s just break out the champagne and the impassioned rhetoric! GIMME THAT OLD TIME LIBERALISM!
October 15th, 2006 at 2:41 ami voted for you, jonny. i wanted you to be vice president. and if you’re the name on the ballot in 08, you can count me in. but, honestly, i do not like or trust you yet. you seem to hold your tongue until an issue comes along that will resonate with the american voter, you know, the voter who’s concerned about rampant and systemic income inequality. this issue and issues like it are sure winners, but you seem to have been convinced that others are not. i am sure (wink wink) that you and i have at least similar viewpoints on what the role of american troops should be in iraq. but you, along with every other congressional democrat, have fallen silent on the war, choosing instead to watch the republicans devour their own future, while you fight only the battles you know you cannot loose. pray for scandals, wait for elections.
let me be clear, i know you care about this issue. i am not doubting your sincerity, only saying that offering selective, occasional passion is the political model that republicans established, and i don’t like seeing guys i voted for participating in it. you are a man of your political beliefs, and i think that you want to do good in the world. that makes you a very rare commodity in washington, so don’t listen to anyone who tells you that voicing your honest convictions could ever do you harm. americans would be so surprised by an honest and intelligent man, that they wouldn’t know what to do but vote for him.
Lord almighty. The Bush administration is badly flawed, but I’m always a bit happier about it when I read through comments like those above. So, so, so much stupidity.
The basic facts of finance are not that difficult. What is a little more difficult to understand is that banks and other lenders are placing money in their trust in YOUR trust. It is a dangerous transaction to give hundreds of thousands of dollars to so-and-so off the street.
Would you like to borrow money from me personally? (I am an ordinary person, you know.) Fine…I’ll charge you 500 percent interest, because, frankly, I don’t trust you. Individuals rarely trust individuals the way the lending industry does.
You would be better off with a bank. Don’t like it? Fine…do it the old fashioned way: Save up your pennies and buy the house outright. That’s how freedom works. Sorry.
October 15th, 2006 at 5:08 amonetwothree
By the looks of it you are the one who doesn’t understand banking.
Banks lend you money but secure it against your assets, so what you end up with is “If you don’t pay up we will take your house, your car, your business etc…” Surprisingly this is the side of the business which historically has always been the most reliable. (The unreliable bit is the stockmarket, banks are shit at investing money.)
Now some banks are predatory, they advertise things like debt consolodation (Which means taking all of your short term debt, putting it all in one place, making it longterm, giving you a worse interest rate for the bulk of it, and pretending to be doing you a favour) and advertising the low rate at which you have to pay it back, rather then just how much it would come to if you did that.
Another example is micro-lending. When they lend you a small amount for the sake of your continued survival, and then charge you the maximum legal interest rate on it. Generally what the person will do is tell you how much you have to pay in monthly installments, rather then how much it will come to if you pay the minimum monthly installments.
A third example is most common in vehicle finance. You go to the show room, you see a car and the salesman is very keen to sell the car to you so he mentions how much you have to pay per month to finance it, and it comes out to a nice low figure. What the salesman fails to mention is the fact that there is a residual, and after 3 years of making very low payments you are suddenly going to get hit with a huge one at the end.
Now realise I am speaking as a South African on this, in America things might be a bit different because in South Africa there is relatively little consumer protection with our banking sector. In South Africa our banks are even worse then the ones you have in America, as an example consider this: In South Africa if you have an auditor the auditor has to send for confirmation of your accounts, loans, and suchlike to do with the bank, to the bank. The bank both insists on this, and charges for it. Now the bank confirmation comes, and it is inevitably wrong, so you send for another one. In South Africa the bank charges you for each one that they sent, whether it was right or wrong. Be glad as an American you don’t have to live with South Africa’s parasitic banking system.
October 15th, 2006 at 5:48 amBanks lose money when they take your assets.
I suppose part of the problem is that people don’t realize that the money market is pretty much free and open. You don’t have to let your car dealer finance your car. You can shop around for a mortgage. If certain lenders give bad rates and sneaky contracts, well, treat them like you’d treat a grocer that sells rotten meat. They’ll go out of business.
October 15th, 2006 at 6:47 amonetwothree
A grocer selling rotten meat or food stuffs can be closed down by health inspectors.
Anyway, a bank doesn’t want your assets, but you do. Taking your assets is generally what a lender does to cut its losses, but it does want you to pay it that interest, that is after all its traditional means of generating income. Most people do, and a lot of people who shoudn’t have taken on the debt in the first place find themselves in a bad position because of it, taking “Survival Loans” and getting into a worse one, until finally they do go broke somewhere down the line.
Now I feel education is part of the solution to the problem with lenders, teach people what is going on, teach it in schools, heck teach it in math classes and make sure that people know what questions to ask (You would be surprised at how few do.)
You must also treat Lending the same way you treat any other business, make sure it operates honestly, make sure that people know what they are signing when they agree to take a loan, and make sure that there isn’t a case of misrepresentation going on. I personally feel that any advert where they say X Amount per month for a car, if it isn’t a rental, should be banned as a kind of false advertising, they should advertise the full price.
October 15th, 2006 at 7:32 am“What’s especially outrageous is how predatory lenders go after African-American and other minority communities. If you are an upper-income African-American family, you are twice as likely to get a subprime loan as a lower-income white family. It’s incredible — even though you are doing better, you get a worse loan if you are African-American.”
And yet conservatives never cease to doggedly insist that racism is for the most part dead and buried in this country…guess they’re just not looking very hard. Why might that be, I wonder? Could it be that at least some of them are engaged in precisely these sorts of activities? That their claims are a way of saying “nothing to see here, folks” — an attempt to keep people from looking too closely at what they’re doing? Racism isn’t always entirely conscious, after all…
October 15th, 2006 at 8:57 amHere a site that is fighting the predatory lenders called acorn.org. Notice the names of some of their targets: Ameriquest, Citigroup, Household etc. Ever see the Ameriquest blimp at an event? Kind of like the mafia, good pulic face to an ugly underside.
October 15th, 2006 at 9:04 amNow I feel education is part of the solution to the problem with lenders, teach people what is going on, teach it in schools, heck teach it in math classes and make sure that people know what questions to ask (You would be surprised at how few do.)
Comment by Bruce+Gorton — October 15, 2006 @ 7:32 am
I couldn’t agree more. I’ve been in the public school system – out of the corporate world – for a little more than a year now. I can tell you – the public school system – past elementary school – is failing our country.We force naturally active children to sit in uncomfortable plastic desks all day while being told by people who’ve never actually applied their education a lot of meaningless facts and figures that have little to no relevance or interest.
As an adult, I look back on my middle school and high school years with anger. Anger that they wasted my time making me memorize a lot of nonsense I could simply look up in a book – if I ever needed it.
I’ve tried very hard with my students to make sure there is a valuable lesson in every assignment I give them. I’m sure more teachers would do the same if they could. I’m fortunate that I teach an elective class at a charter school.
Most teachers are stuck with No Child Left Behind which gives each core subject a standardized test based on a forced curiculum from which the teacher may not deviate. It’s what I was required to do last year as a Science teacher. Teach them asinine and useless trivia about things that have no value to them in the ‘real world’ .
I agree with you Bruce, we should be teaching them how to balance a checking account, how to do their taxes, basic common sense survival skills, and so on. Believe me, they want to learn these things (they’ve told me), and are frustrated that they aren’t.
I agree that you can only hold people accountable if you’ve first empowered them. We haven’t. We’ve created generations of people who were taught to be obedient and trust authority figures. Not very useful in a world of predatory authority figures…
The system is broken. And anyone who says otherwise, is simply an accomplice to the predation of the defenseless public we’ve created. How terribly American of them…
October 15th, 2006 at 9:31 amNotice the names of some of their targets: Ameriquest, Citigroup, Household etc.
Comment by Blue in a red state — October 15, 2006 @ 9:04 am
I cancelled my credit cards with Citibank and another one of the big name banks that had bought and taken over the small bank I had been doing business with. When they asked me why I was leaving, I told them that it was because I was too ethical to do business with greedy predators that make a disgusting profit off the poor.
The guy at Citibank who is supposed to talk me out of cancelling my account tried to reassure me that he was not like that. Guess he still had an ounce of conscious left. I told him that by working for them, he was validating what they do – feeding off those who are struggling to get by in a world of increasing costs and decreasing wages. Seemed he had never really considered it before, and now that it had been pointed out to him, he didn’t like it very much. Good.
October 15th, 2006 at 9:37 am“you, along with every other congressional democrat, have fallen silent on the war.”
Haditha: I’m not sure what you talking about. For one thing, he’s not in Congress. For another, he’s been loudly calling for the United States to begin withdrawing troops from Iraq immediately.
October 15th, 2006 at 9:38 amNo one has mentioned much about the government’s predatory lending programs such as low income housing loans and student loans that end up costing the borrower twice as much or more than they originally financed. These types of loans should be LOW interest since the lender is in effect loaning tax dollars back to the tax-payer. The entire government loan system needs a complete overhaul.
October 15th, 2006 at 10:51 amPredatory lending is a serious issue for lower and middle class people, particularly minorities. I conducted a policy study on payday loans in Milwaukee for a course on local politics, and these lending facilities are spiraliing out of control. Wisconsin passed a law on interest disclosure at Rent-A-Centers, because those centers weren’t disclosing 400-1000 percent interest rates to customers. Payday loans are even worse. But it’s hard for state legislatures to pass laws regulating these facilities because there are loopholes for national banks, and the disgusting fact of these tiny payday centers is that they are discreetly financed by CitiBank and other major bankers. Our geographic study of Milwaukee payday loan centers revealed that nearly 100 percent were placed in 3 working- and lower-class areas of the metropolitan area, one area being a Black neighborhood, another a Hispanic neighborhood, and the last a working-class white neighborhood. (Remember that Milwaukee is the #1 city in the country for its segregation of neighborhoods by race.) The centers target the vulnerable, those struggling to get by without many options when the need for a loan arises. It is the government’s job to protect such people by imposing interest rate caps and clear full disclosure of lending policies.
October 15th, 2006 at 10:56 amAs a former Bankruptcy Attorney I know Mr. Edwards is absolutely correct in his assessment of the Bankruptcy Bill. All the law has really done is to stigmatize Americans who are in trouble. It has caused these people to pay much more in attorney’s fees to get the help they need.
Usually a Bankruptcy Attorney is the last person people come to see. People file Bankruptcy as a last resort. I have counseled over tten thousand people over the years and have had many cry in my office. Most are eztrmely embarassed to talk to me.
I find it interesting that Congress limited the rights of the poorest in our society and protect the richesy. Most predetory lenders are subsidiaries of the very same financial instituitions that lobbied for the Bankruptcy Bill.
October 15th, 2006 at 11:44 amWe need to put a stop to predatory capitalism, and return to “regular” capitalism, whatever that means.
October 15th, 2006 at 11:46 amhttp://www.poodlecrap.com/Hateliars/HL_Video1.asp?Part=0
October 15th, 2006 at 12:27 pmAfter a lot of research on this issue I have decided a lot of people have posted what they THINK the new laws means, or what they HEARD the new laws mean, instead of looking into it themselves.
1. You need to first go to an approved credit counselour to see if an informal payment plan will work out, or do you really need to file for bankruptcy.
2. The law provides for more chapter 13’s instead of 7’s, because assets are now based on cost to replace instead of garage sale pricing. This means you get put on a repayment plan that may or may not pay all debts off totally, but after 5 years I believe, all debts are cleared as long as repayment schedule is kept. This means that any leftover debt, is still wiped clean.
3. You have less of a chance of declaring bankruptcy if you income is a percentage above the median income for your area. (Read into this, if you are making more money that other people, you have less chance of declaring a bankruptcy). – The new law will prohibit some filers with higher incomes from using Chapter 7.
4. The law provides that you MUST have a certain amount of disposable income after paying on your debts that cover, a place to live, transportation, food, etc, as well as secured debts. So all of your money is NOT going to paying debts, but some is still available to you for things OTHER than specific necessities.
I am not a big supporter of the changes, but I can understand the need. A lot of time it’s not the little people, but the BIG ones that cause problems..
Take Air America for example. They are filing for chapter 13, re-organization of debts. This means, that some of their creditors are going to get screwed out of the money they owe them. This is in the MILLIONS of dollars. Who do you think makes up for that? That’s right, you and I, in the form of higher interest on our loans, higher prices on tangible goods and services. Someone needs to make up for the money they lost, so the liitle people, you and I get to pay it. Most of the bankruptcies you are talking about, low/middle income people, are a drop in the bucket compared to businesses and individuals who borrow millions, and then file bankruptcy.
No matter how it happens, or why, it’s going to be US, that bears the expense of making up the lost money that the creditors lose.
One way or another. Doesn’t matter if you are yellow, red, black, white, dem, or republican, or libertarian. Quite frankly, I am a constitutionalist.
October 15th, 2006 at 1:10 pm[...] One Year After Bankruptcy Bill, It s Well Past Time To Crack …Think Progress, DC - 18 hours ago… contributors. In 2000, one of George Bush s biggest donors was credit card giant MBNA. In 2004, it was the owner of Ameriquest s turn. … [...]
October 15th, 2006 at 2:22 pm[...] One Year After Bankruptcy Bill, It s Well Past Time To Crack Think Progress, DC – 6 hours ago It s been a year since Congress put into effect a new bankruptcy law that makes it harder for people to declare bankruptcy and get a fresh start. [...]
October 15th, 2006 at 2:25 pmI have a brother-in-law who suffers from MS. MS is a horrible desease – first you lose your mobility and then your mental abilities. He is into the second stage. When he had saved so many backup files from Quicken (The sole application that he runs on his PC.) onto his, I suggested that he clean out the files from 2001 to 2003 and recover the space. He was aghast. Hoping to minimize the effect on sister-in-law’s inheritance, I suggested that he go to a discount store and buy a system package for 4 to 500 dollars. He went to an office supply store and was convinced that he needed a twelve hundred dollar system with Multi-media, Windows XP and Quicken 2007. He left the store with a credit debit of 2100 dollars – I remind you that the only application that he was using or would use on his machine was Quicken.
October 15th, 2006 at 6:25 pmI spent about twelve hours at his house transferring all his old data through a USB hub that I happened to have in my junk box.
Next, we brought up the numbers and he said that the numbers from his old machine did not match his paper records. He3 next requested that I erase all records we had acquired from his old machine and update them with paper records that he had in a notebook containing statements from his financial institutions.
He is exactly the kind of person that businesses are trying to victimize.
Mr. Edwards, Thanks for focusing on this issue. There are many, (some commenting above), who would gleefully let Darwinian economics take it’s course. People get into debt for a range of reasons that don’t have anything to do with friviolous spending. Business crunches, family and personal health issues, family stability problems, (divorce and unexpected emergencies), and timing difficulties synchronizing payroll and financial obligations.
I see the state of debt in America as sort of a Roman Colosseum where the privileged and fortunate can sit back and watch, self satisfied, while debtors fight losing battles and go down in humiliated defeat. Whatever reason that they are down there, they must have bought it on themselves and thus deserve their fate.
The credit industry is ravenous and utterly obsessed with it’s own profit. Including looking the other way while a large and growing cross-section of American society struggles to pay debts. And at the same time their constant mailings and marketing efforts strive to convince people that their every hope and need can be almost painlessly attained with borrowed money.
Thanks for your public work Mr. Edwards and thanks for your willingness to place yourself in the path of invective and verbal abuse for the potential betterment of this country. I think it’s called walking the walk vs. talking trash or just talking the talk. Something like that.
Right on. Good luck.
October 15th, 2006 at 8:52 pmIt’s good to see Mr. Edwards haviong the courage to speak out at long last about this draconian bill. If (and When) the Democrats take back the House (and/or) Senate, they need to scrap this bill.
October 15th, 2006 at 9:59 pmDamn straight. That bill was written by the Credit Card companies and for the Credit Card companies.
Thank god Mr. Edwards will speak out on issues like this and his Two Americas.
John Edwards & Wesley Clark in 2008!!
October 16th, 2006 at 2:33 amSo this problem only gets worse with the “U.S. government encouraged” influx of Mexican Labor – Which is why you can’t find an ATM in America without Spanish language support for over 2yrs now (looks like the Government knew they were coming).
Intel, Ford, Chevrolet, Maytag …. etc. have all bought out there employee’s to pave the way for the re-staffing with cheap Mexican labor at American’s exspense – Will congress give them amnesty or create a special class not eligible for minimum wage or health insurance?.
With rich millionaire industrialist’s ruling the government whom are owned by the corporations that they in turn own – this is the ultimate in collusion and conflict of interest.
I don’t see Democrats or Republicans anymore – just a bunch of rich politicians … Living on the sweet side of the Gini coefficient , extremely relieved there is a Pareto principle – and your one too.
Sir, I give you Real America:
http://www.cnn.com/2006/US/10/10/Dobbs.Oct11/index.html
October 16th, 2006 at 3:08 amhttp://www.thenation.com/doc/20060213/faux
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=39333
http://www.prisonplanet.com/archive_bilderberg.html
http://www.aclu.org/safefree/spyfiles/27050prs20061012.html
http://acsmustbestopped.blogspot.com/
http://bellaciao.org/en/article.php3?id_article=4458
http://www.enquirer.com/editions/2004/11/05/loc_warrenvote05.html
http://www.angus-reid.com/polls/index.cfm/fuseaction/viewItem/itemID/13469
http://www.firstcoastnews.com/news/usworld/news-article.aspx?storyid=64704
Mr. Edwards-
Predatory lending is rampant. Please try not to frame it as a minority issue. That will only muddy the waters.
White friends went to the bank intending to get a 30 year fixed and spent a half hour arguing with these bozos who insisted he’d be better off with a toxic loan.
Lenders have been pushing toxic loans for the past several years now on EVERYONE. Indeed, didn’t our own dear Alan Greenspan suggest that the public might find ARM loans advantageous – a few years back when rates were at historical lows?!
Anyway, they were pushed by all and sundry. Nobody in power began addressing the issue until the market began falling apart recently (hmmm… why IS that?!).
Toxic lending has blown the price of homes sky high to the point where Americans are now in debt up to their eyeballs.
Here’s the solution:
-20% (at a minimum) downpayments for a home, 15 or 30 FIXED
- get rid of the 250K capitol gains exclusion
- get rid of the mortgage interest deduction
- get the government OUT of the housing market. All Fannie/Freddie have ever done is drive the price of homes UP. FNM is on the verge of collapsing AND EVERYONE KNOWS IT. Let them collapse. Good riddance.
If you REALLY want to help the American middle class, bringing the price of homes back in line with incomes would go a very long way.
The 4 points above would do a LOT to drive down the price of homes to where people could once again affford to buy without the “help” of toxic loans.
And please, no bailouts for anyone who got caught in the toxic loan trap. A dose of reality is needed to turn people off of these for once and for all.
We have created a monster with this ridiculous housing market. Pray for a swift return to the mean. It’ll be brutal but we’re going to have to deal with it.
October 16th, 2006 at 4:00 am[...] One Year After Bankruptcy Bill, It s Well Past Time To Crack …Think Progress, DC - Oct 14, 2006… It s been a year since Congress put into effect a new bankruptcy law that makes it harder for people to declare bankruptcy and get a fresh start. … [...]
October 16th, 2006 at 5:17 ammaybe stop borrowing money to make yourself look like a wanna be hip hop star or rapper? maybe not take out that home equity loan to buy a set of $20,000 24″ chrome wheels for your escalade (also financed)? stupid people will always be taken advantage of, as the saying go’s, “a fool is quickly separated from him money (or credit)”. if you don’t understand the loan then you should consult a lawyer who does understand it so they can explain it. don’t blame your own stupidity because there is no law to protect morons.
October 16th, 2006 at 5:30 amThank you, John Edwards, for not forgetting us, for continuing to work for the good of the people. Please have a word with Mary Landrieu. She is the Democratic Senator from Louisiana, but she votes with the Republicans. She voted for that awful Bankruptcy Bill just before the hurricances hit Louisiana.
October 16th, 2006 at 8:32 pmWorking heavily in the Newark NJ area as a foreclosure advisor, I can personally attest to the horrors of predatory lending. I have seen scores of first time homeowners who are naive and easy targets for abusive mortgage brokers. Mr. Edwards, thank you for this post – its great to see a man of your stature stand up for those who are being taken advantage of.
October 16th, 2006 at 10:46 pm[...] One Year After Bankruptcy Bill, It s Well Past Time To Crack Think Progress, DC – Oct 14, 2006 It s been a year since Congress put into effect a new bankruptcy law that makes it harder for people to declare bankruptcy and get a fresh start. [...]
October 17th, 2006 at 11:36 pm