Don't be sold on the very first one
--Shop Around, Smokey Robinson
Corneille! Put an end to this farce!
Which one, your lordship?
--The Rules of the Game, (1939)
Ranger Question of the Day:
Why is it not criminal behavior to accept sweetheart financial
deals when you chair a banking and a budget committee?
It was reported this week that Christopher J. Dodd [D-CT] and Sen. Kent Conrad [D-ND] received VIP treatment when scoring mortgages from CEO Angelo Mozilo of Countrywide Financial Corp., a leader in the subprime mortgage fiasco (Sens. Dodd, Conrad Tied to Special Mortgage Deals.)
As Sen. Dodd chairs the Senate Banking Committee and has been a leader of Congress's efforts to help homeowners ensnared in the subprime mortgage meltdown, you would think he would be aware of what constitutes fair lending practices. Since their fall, Dodd has called Countrywide's lending practices "abusive."But apparently not so abusive to him and Sen. Conrad, each of whom enjoyed a shaving of their loan interest rates due to Mozilo's preferential treatment of those who qualified for his VIP program. Dodd saved about $2,700 per year; Conrad saved $10,000/yr.
"Both senators say they weren't aware they were getting special deals." Dodd says he was just a savvy consumer and "shopped around." As Jackie Gleason's Ralph Kramden would say -- that's rich.
More likely, Sens. Dodd and Conrad know the rules of the game, and thought they could get by with a bit of the fat of the land, too. Both parties are complicit in enabling the sub prime mortgage lenders to lead the country into this financial quagmire. The behavior of "getting by" knows no party affiliation.
In the same edition of the paper, "Government Suspends Property-Flipping Rule," FHA commissioner Brian Montgomery said the new policy will suspend the 90-day waiting period before foreclosed properties can be sold and receive government-backed loans
An attempt to address the urban blight brought on by the glut of foreclosed properties, Montgomery said this policy"will allow home buyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes." Nationwide, "261,255 homes received at least one foreclosure-related filing in May, up 48 percent from the same month last year."
So we are back to rewarding property-flippers with government-backed loans to facilitate these flips. Is this not the reason we are suffering the foreclosure problem in the first place?
Back to Dodd and Conrad: it is easy to see what guides their behavior, and it is not the public welfare.