The following is an article I sent to my local paper, The Monroe Times, which they published in their “Letters to the Editor” Column on July 19, 2014 titled “Problem of Subprime Loans Continues” and I quote:
|“7/18/2014 5:39:00 PM
“Letter to the editor: Problem of subprime loans continues”
From LaVern F. Isely
To the editor:
AP wrote an excellent article titled “32 States Trail U.S. in Job Recovery” by Paul Wiseman, AP Economics writer, which was in The Monroe Times on July 3, concerning the Number One problem in our economy: the loss of jobs. While we are gradually regaining some of the jobs we lost in 2008, one of the main problems pointed out in the article was that construction is running at barely half of the early and mid-2000s.
In those days, they were making home loans that were called subprime, which meant that the home was appraised higher by the bank than the home was worth. Then after they completed the loan, many times the bank sold the loan to a bigger bank out of state for the commissions. The object of making a good loan is to get to where both the bank and the customer are benefiting and have the lowest amount of bankruptcies. While this has gotten better in some localities, others haven’t done as well. Some banks today are still selling with no money down and then selling the home loan, as well as the car loans, out of state.
What should be done, in other articles I’ve read, when buying, particularly a home, is to have 10 percent down and to keep the loan local. We heard a ridiculous story on CBS’ “60 Minutes” about robo-signing and how the investment banks used several different people all signing the same name of “Linda Green.”
While I think a lot of these practices have slowed down because of the Dodd -Frank bill, I don’t believe they have stopped. I read an article in Bloomberg Businessweek titled “Markets/Finance: Worst. Party. Ever.” in the June 30- July 6, issue by Nick Summers with Jacob Barach, Joseph Ciolli and Eric Lam. On page 39, I quote: “Trading volume continues to dwindle, part of a years long decline, and the VIX index, a measure of expected volatility, is near the lowest levels ever recorded.” I brought this article to Rep. Mark Pocan’s attention when he was in Monroe July 2 at the Monroe Public Library.
Anyone can look up the complete article for themselves. At the end of this well-attended meeting, Mayor Bill Ross said, “Isn’t this fun.” I agree. I thanked Rep. Pocan for coming to Monroe, as well as talking on Sly’s program on WEKZ-FM.”
(THE VERY REVEALING ARTICLE IN THE JUNE 30 – JULY 6, 2014 ISSUE OF BLOOMBERG BUSINESSWEEK, I HOPE THE FEDERAL GOVERNMENT LOOKS INTO THIS VERY SERIOUS PROBLEM, ALONG WITH ANOTHER ARTICLE IN THE JULY 21- JULY 27, 2014 ISSUE OF BLOOMBERG BUSINESSWEEK ON PAGE 10 TITLED “BLOOMBERG VIEW: THE BRICS DON’T NEED A BANK OF THEIR OWN,” THE BRICS (BRAZIL, RUSSIA, INDIA, CHINA, SOUTH AFRICA) ARE CONSIDERING STARTING THEIR OWN BANK TO COMPETE WITH THE IMF AND WORLD BANK AND THE REASON GIVEN IS AND I QUOTE:
“The five governments agree on something. They’ve been denied a proper say in running institutions such as the Work Bank and the International Monetary Fund, and in global economic governance more generally. They are correct to think so. Their mistake is to believe that the new bodies will put things right.”
THAT’S THE SAME SUSPICION I’VE HAD AND THAT’S WHY I’M TALKING TO MY LEGISLATORS. AFTER READING THE SHOCKING STATEMENT THAT NEIL BAROFSKY SAID IN AN INTERVIEW ON HERE AND NOW ON SEPTEMBER 9, 2013 TITLED “HERE AND NOW: FORMER TARP WATCHDOG: WE’RE HEADED TOWARD ANOTHER FINANCIAL CRISIS’” THROUGH THE WEBSITE:hereandnow.wbur.org I THINK THESE SERIOUS STATEMENTS SHOULD WAKE THEM UP. OR IS IT GOING TO TAKE A GROUP OF FARMERS ANGRY ABOUT MF GLOBAL’S MISMANAGEMENT TO FINALLY MOTIVATE THE GOVERNMENT TO DO SOMETHING ABOUT THESE CORRUPT INVESTMENT BANKS?
LaVern Isely, Overtaxed Independent Middle Class Taxpayer and Public Citizen and AARP Members