Posted on 03/22/2008 12:18:52 PM PDT by oblomov
Driving into Slavic Village this week was a surreal experience. The clock appeared to have turned back to the years when this clapboard-built suburb of Cleveland, Ohio, was the proud preserve of migrant Polish and Czech steel-mill workers, and epitomised apple-pie American charm.
Through the haze of a winter blizzard, one could make out what appeared to be the brightly embroidered curtains and flowers on the windowsills. And from their porches, many of the home-owners seemed to be waving a neighbourly greeting at our passing car.
Pulling up at the kerbside, however, the reality came grimly into focus.
Behind the neat picket fences, the majority of these quaint, turn-of-the-century properties stood abandoned and dilapidated.
The curtains, flowers and smiling figures weren't real at all: they were simply murals that had been painted over slabs of hardboard nailed across their windows and doors.
"We've decorated more than 100 houses like this so far," explained my guide Marlane Weslian, a local development officer who has lived here for 38 years. "It's just something to help those few folks who still live here feel a little bit better about their street.
(Excerpt) Read more at dailymail.co.uk ...
According to Councillor Brancatelli, one young couple who became convinced they could reinvent themselves as a wealthy landlords, after meeting Kellogg three years ago, were Lakeisha Williams, 28, and her then-partner, Irving Johnson.
Loaded with credit card debt, Miss Williams was living in the U.S. equivalent of a council flat with her two children, and earned peanuts as a nursing home assistant. Johnson had no discernible job.
However, when Kellogg called to make his sales pitch, he spotted an old lawn-mower jutting from the boot of Johnson's car, and had a brainwave. "For the mortgage application he described Irving as a 'landscape gardener' on $70,000 a year," says the councillor.
Incredibly, though Johnson had a zero credit rating, this claim enabled the couple to buy 11 sizeable clapboard houses, financed with loans totalling $1million.
It seems the loan originators took leave of their senses. Who would ever think the loans would be repaid by such people?
The Brits still have the best succinct synoposis of the sub-prime crisis anywhere.
“Somehow this package of dodgy debts stops being a package of dodgy debts and starts being a Structured Investment Vehicle!”
http://youtube.com/watch?v=SJ_qK4g6ntM
Make that a synopsis.
Dennis KOOK-Sin-Itche’s home town.
One thing I know: You are either a Kerb, or a Crowat.
That's how it is, in Posnkneea, Hertzagovennyoo.
The originators didn't care if the loans were repaid or not. They just collected the origination fees and commissions, and sold the loans upstream. Collection was someone else's problem. If you can keep the paper moving fast enough, everyone makes money until the pyramid collapses. Then the taxpayers bail the big guys out.
If they make their first loan payment, you’re in the clear. However, if the loan company can prove that the loan originator (LO) knew he wasn’t making $70K, the LO can be charged.
People who buy the pitch of the hundreds of real estate informercials and seminars claiming you too can become a real estate millionaire mogul with no money down?
The loan originators would describe the question as "not my problem". They weren't paid based on loan performance, they were paid on amount and quantity.
Those buying the loans from the originating institutions failed to do due diligence.
All three parties - the borrowers, the loan originators, and the mortgage-buying institutions - collaborated to create this mess. They were also assisted by a misguided attempt by the Bush admin to create an "ownership society".
They created an "ownership society", all right... the members of that society being banks and other financial institutions who own lots of real estate that can't be sold for anywhere near the value on the books.
Sorry, I missed the last part of the malfeasance....
The buyers of the mortgages then took these worthless pieces of paper, bundled them up, and carved the bundle into mortgage-backed securities - which were then (fraudulently IMO) sold to the market with a credit rating that reflected the MBS sellers, which was much better than the credit of the original borrowers.
And that is how potentially trillions of toxic mortgages made it all the way up the ladder into investment-grade funds, with parties at every step of the way contributing in the misrepresentation of risk.
I dunno, but I do like the Brits’ writing style.
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A word to the wise: don't bother pointing out the obvious source of the problem here, or else you will be subject to all sorts of bile and opprobrium from a small legion of politically correct nazis who enforce doublespeak here at Free Republic.
If you notice the age ranges and the population drop, it coincides precisely with Roe v. Wade.
“proud preserve of migrant Polish and Czech steel-mill workers”
Oh, it was all that till 74 when the bottom fell out and the mills closed.
Gosh I miss those local taverns with the pirogies and pizza’s and every kind of ethnic yummy imaginable
Yep, and Griswold -v- Connecticut.
Right, the Poles & the Czechs have long since departed for greener pastures.
You have to read between the lines to see what is going on here.
They didn't care because they were selling the loans to somebody else who was bundling them up into CDOs that the rating agencies would certify as an excellent risk for investment.
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