Posted on 09/11/2007 8:10:24 AM PDT by 2ndDivisionVet
A subprime lender with ties to Democratic presidential hopeful John Edwards has moved to foreclose on more than 130 homes in South Carolina since the S.C. native went to work for its parent company, an analysis of courthouse records shows.
The lender, Green Tree Financial, also was once the subject of a $30 million class-action verdict involving thousands of South Carolinians.
Edwards’ ties to the company are disquieting to some supporters of the North Carolinian. On the campaign trail, Edwards has insisted he is the champion of lower-income families.
Edwards’ ties to Green Tree also could hurt him with voters in South Carolina, a state he must win if he hopes to win the 2008 Democratic nomination.
“I hate to hear that,” Sue Berkowitz, an Edwards supporter, said of his relationship to Green Tree. “I just hate to hear that.
“They’re horrible, disgusting, slimy,” Berkowitz said of Green Tree, which says it is the nation’s largest lender for manufactured housing purchases.
Berkowitz is a Columbia attorney who has spent much of her professional career fighting for lower-income South Carolinians as director of the S.C. Appleseed Legal Justice Center. Because the center is a 501(c)3 nonprofit, Berkowitz said she could only speak as a private citizen, not as the center’s director.
Edwards, a native of Seneca, represented North Carolina in the U.S. Senate and won the 2004 S.C. presidential primary.
Edwards has built his second campaign for president around his argument that he is the one candidate with the interests of the struggling American family at heart. He has railed against predatory lenders who, he said, were causing Americans to lose their homes.
From October 2005 through 2006, Edwards worked for Fortress Investment Group, a hedge fund. Its subprime lending subsidiaries, Green Tree Financial and Nationstar, foreclosed on 34 homes owned by victims of Hurricane Katrina, The Wall Street Journal reported in August.
In response, Edwards promised to personally provide financial assistance to the New Orleans residents who faced foreclosure or had lost their homes.
In South Carolina, Green Tree has foreclosed on or is in the process of foreclosing on at least 132 homes since Edwards first went to work for Fortress. Edwards was paid nearly $500,000 for part-time work for the company, according to The Wall Street Journal.
In 2004, Green Tree also paid about $30 million to settle a class-action lawsuit by more than 3,000 South Carolinians over claims the company violated state consumer protection laws. The suit claimed Green Tree failed to inform customers they could have their attorney draw up mortgage documents and be present at closing.
Efforts to reach Green Tree officials at its St. Paul, Minn., headquarters were unsuccessful last week, as were efforts to reach several S.C. attorneys who have represented the company in the past or are representing it currently.
Edwards’ campaign spokeswoman Teresa Wells told The State last week any lender that uses deceptive practices, hidden fees and abusive terms “are predatory, and (Edwards) opposes these shameful lending practices that compromise our economic security as a nation and hurt working families.”
She said Edwards never “invested a dime with Green Tree, never worked for Green Tree and had nothing to do with its operation.”
WARRIOR FOR THE POOR
Supporter Berkowitz said Edwards “has been one of the few to strongly attack payday lending.” Still, his former association with Fortress “bothers me,” she added.
Berkowitz’s comments echo those of other Edwards supporters. They say Edwards has a genuine concern for the plight of the less fortunate and has dedicated much of his life to helping them — as a trial lawyer in North Carolina, as a U.S. senator and in his first bid for the White House in 2004.
Since then, his campaign said, Edwards has worked to increase the minimum wage in six states, started a college-for-everyone program for poor communities, helped organize thousands of workers into unions and done humanitarian work in Africa.
“John Edwards was born in rural South Carolina and has committed his life to helping working families get ahead,” campaign spokeswoman Wells said. “He has offered a comprehensive policy for protecting homeowners and fighting predatory lending practices.”
Edwards has said that, while he worked at Fortress as a consultant, he had no direct dealings with Green Tree or Nationstar or any other subprime lending firm.
He told The Wall Street Journal he joined Fortress “primarily to learn” about finance and capital markets. An Edwards spokesman told BusinessWeek magazine in 2005 that Edwards “would provide support in developing investment opportunities worldwide and strategic advice on global economic issues” to Fortress.
In addition to being paid by Fortress, Edwards invested his personal money in the company.
When he first joined Fortress, Edwards told the Journal last month, “I made clear that I didn’t want to have anything I was investing in to be anti-labor or involved in predatory lending practices.”
After the revelations of the Katrina-related foreclosures, Edwards said he made sure he pulled his money out of subprime lending units and promised to help those affected.
“LOOKING RIGHT”
Edwards has been dogged by criticism that he talks about poverty but gets $400 haircuts and, with his wife, built a multimillion-dollar, 20,000-square-foot home and recreation complex outside Chapel Hill, N.C.
University of South Carolina political scientist Blease Graham said Edwards is hurt by the appearance of inconsistency.
“There’s a famous old South Carolina saying: ‘You have to be right as well as look right,’” Graham said. “Edwards looks right, no doubt about that. His message is passionate, and I’m sure well-intended and comes straight from the heart.
“(But) ... he may have raised some real questions again about the compatibility of that message.”
In the information and technology age, public figures are held to high public standards and high personal standards, Graham said.
“The argument — that it’s at arm’s length, it’s just a business decision, it’s not something I participated in — is a difficult sell, and it may hurt him by deflating potential momentum.”
Most polls have Edwards in third place in South Carolina, behind U.S. Sen. Hillary Clinton of New York and U.S. Sen. Barack Obama of Illinois.
However, Clemson University political scientist Bruce Ransom is not sure Edwards should be held accountable for the activities of Fortress’ subsidiaries.
“Let’s face it, he’s a wealthy guy, and he’s got investments, and he works with the hedge fund which owned Green Tree,” Ransom said. “Where do you draw the line in terms of how involved and how knowledgeable he should be about firms he may have some financial relationship with that might also own other firms that might be called into question?”
Berkowitz takes solace in the belief Edwards is sincere in his desire to help the nation’s poor.
“What I really do admire about him is he’s been one of the few to get out there and talk about poverty,” she said.
SUBPRIME VS. PREDATORY
Edwards’ campaign says that while he firmly opposes predatory lending, the candidate does not object to subprime lending in general.
What’s the difference?
Experts say it can be difficult to tell.
Subprime lenders typically provide loans to individuals with low credit scores. Because those borrowers pose a higher risk to the lender, they typically pay higher interest rates and fees.
But subprime loans often are the only way some consumers can qualify for a home loan, defenders of the industry say.
Predatory lenders, experts said, mislead customers, include hidden fees and target low-income consumers who may not understand what they’re getting into.
Mary Leigh Arnold, a Mount Pleasant attorney, agrees not all subprime lenders are predatory.
Arnold was one of the lead attorneys in the case that eventually forced Green Tree to pay $30 million in damages and fees.
Green Tree, she said, targeted lower-income people and tried to get them to agree to pay for home improvements.
The company, she said, did not inform the homeowners that they actually were taking out a second mortgage to pay for the improvements, and never informed them of their right to an attorney.
“I think they’re a bad lender,” Arnold said.
For Edwards, whose populist-esque campaign has emphasized his commitment to helping lower-income Americans, the impact of the Fortress-Green Tree relationship could be great.
As his supporter, Berkowitz said, if Edwards invested “out of ignorance, that’s not quite excusable. I just hate that.”
Edwards is such a feckless elitist tool that his campaign should be billed as a comedy tour.
EDENS, WESLEY R
NEW YORK, NY 10024
FORTRESS
DEMOCRATIC SENATORIAL CAMPAIGN COMMITTEE
06/20/2007 28500.00 27020281952
EDENS, WESLEY R MR.
NEW YORK, NY 10024
FORTRESS INVESTMENTS GROUP/CHAIRM
MCCAIN, JOHN S
VIA JOHN MCCAIN 2008 INC.
03/16/2007 2300.00 27990297325
John Edwards has anything to lose in terms of credibility?
I thought he was already at zero on that.
These revelations probably did not hurt that standing in the least.
But darn, he has nice hair.
Hmm, are you sure this article wasn’t put out by the Clinton machine?
Gee, a mortgage lender versus a Chinese spy, let me think about it...
And even more so is the stupidity of their flock.
They still haven't figured out that liberals live off of the misery and enslavement of others.
It's what they do..
reminds me of a Star Trek episode.
A handful of Fortress employees gave to both Edwards and another candidate: Elam Ali also gave to to former New York mayor Rudy Giuliani; Sara Sprung, to U.S. Sen. Hillary Clinton; and Jonathan Atkeson, to former Massachusetts Gov. Mitt Romney.
Just hedging his bets.
Well, what’s interesting to me are the folks they picked to hedge their bets :)
To quote the little bratty kid on The Simpsons....HAH-HAH!!
To quote the little bratty kid on The Simpsons....HAH-HAH!!
To quote John Edwards about a recent departing Republican “Goodbye and good riddence.” Buh bye, John. Came back to bite you didn’t it?
Re: He told The Wall Street Journal he joined Fortress “primarily to learn” about finance and capital markets.
So then you took no paychecks from them Johnny?
LOL! Amen to THAT!
Kook-sin-itch may as well quit too...except he’s too dense to know when to hose down the campfire and call in the dogs.
That little foray of his to Syria was infuriating,to say the least.
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