Gloria Ferris

 I commented at George Nemeth’s Brewed Fresh Daily in response to comments made by others concerning the recent Policy Matters Ohio study that was recently released concerning foreclosure rates in Ohio.  I decided I wanted to post it here as well because whatever the reasons for the alarming increase in foreclosures we should all be concerned.  

Predatory lending has become a catch-all term to explain away the foreclosure problem in our state. It allows everyone to avoid the issue of the refinancing and the home equity loan frenzy that punctuated the 90’s and then, when the economy became weakened and their was massive job loss–LTV Steel comes to mind–borrowers could not keep up with the payments. It was at the same time that many established banks began to outsource their loan servicing departments to other lenders and/or companies. Borrowers would contact attorneys who would tell them the bank doesn’t want your property, call them make arrangements. Then, the endless loop begins. The servicing agent tells you the client will not accept the arrangement. If the borrower can get through to someone at the bank, the bank will say we have turned that over to our servicing agent. And on, and on. The borrower becomes frustrated, often gives up, ends up in foreclosure. Hires an attorney, tries to explain to the court that they have tried to work out a repayment plan. The court magistrate finds in favor of the lender. And then, the foreclosure loop begins.

Predatory lending has become the scapegoat term to explain away a very complex problem. There are no easy answers. Banks, servicing agents, the courts, consumers and more play a part in the problem and finding a solution is going to take everyone. County Treasurer Jim Rokakis and a committee of others have been working on this problem and have put some safeguards in place to try to alleviate the problem, but it is only the beginning.

Credit card debt has been growing by leaps and bounds but is it all overspending or are there excessive fees involved? Look at how the finance charges are calculated, look at the fees attached that have nothing to do with purchases. I do know this it would be wise to pay cash whenever possible, leave the credit cards at home, and do not borrow. Pay down debt as quickly as you can. Every day you are in debt is another day deeper in debt. Hmmm, reminds me of a song “another day older and deeper in debt”. Listen to that song, and take heed.

This entry was posted on Tuesday, August 1st, 2006 at 8:52 am and is filed under Cleveland, Ohio, developing community, growing an economy, quality of life. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.