[Now that I am myself retired and feeling some of the aches and pains of aging, I am particularly conscious of the suffering which so many elderly people must now be feeling as their very homes are threatened with the mortgage and money crunches that are facing millions of Americans.

We do what we can to help out those facing such things with whom we have direct contact.  A fine middle aged friend recently died after several years of great pain caused by the final stages of multiple sclerosis.  Her husband had died young, leaving her the small pension of a deputy sheriff and only disability payments from Social Security, as she was not yet old enough to receive full benefits.  She was suffering hunger with reductions in food stamps along with pain.  She was struggling to maintain the mortgage on her home.  Her death was a blessing.  She should not have spent her last years experiencing such terrible anxiety!

Near by live two older women also struggling to survive.  One suffers from debilitating emphysema now requiring oxygen.  A son, recently, separated from his wife, has moved in to care for her.  Next door in their two family house a woman nearing the end of her work life also struggles to survive on a low income (nursing home) job with her disabled husband now institutionalized.

The temperature in this North East Kingdom town is 18 degrees today and will not go above freezing where it will remain for the foreseeable future.  Each party must maintain increased heating costs.  They are both renters who need all the help that they can get.  But their community is not wealthy and most residents of it are struggling to survive themselves.  Children find it hard to find employment during or after high school and, thus, are often in trouble with drugs as a stimulus to petty crimes.

One can understand why people turn to religious organizations for assistance.  All too often the American system makes no effective provision for those in need and non-profits, religious or otherwise, can no way pick up the slack.

I studied back when in Britain for two separate years and saw there a totally different pattern.  Affordable housing was state constructed and funded (as it used to be in this country). Medical care was universal and free.  There are now job problems for some and tensions between ethnic and class groups, but not the deep anxiety that so many American face as to whether they may be cast tomorrow onto the streets in this bitter weather which is currently 26 degrees in Manhattan where I live.Ed Kent]

…………………….

http://www.nytimes.com/2007/11/24/opinion/24herbert.html?th&emc=th

Op-Ed Columnist
Lost in a Flood of Debt

By BOB HERBERT
Published: November 24, 2007

CHICAGO

I’ve been visiting some of the people who have been most affected by the subprime mortgage debacle. It’s a largely bewildered, frightened group that includes people like Dorothy Levey, a 79-year-old widow who sits alone inside the small house she has lived in for 41 years, afraid to answer the telephone or the door.

She has every reason to be worried. The monthly note on her house in the city of Markham, just outside Chicago, is approximately 100 percent of her meager monthly income. Broke and behind in her payments, Ms. Levey expects a foreclosure notice to show up any day, followed by a visit from “the sheriff, or whoever they send to tell you to get out of your own home.”

While the media coverage has focused on the high rollers who created the subprime frenzy (“If you can breathe, we’ll give you a loan”), the hapless victims have remained in the shadows, condemned to economic ruin.

After faithfully making mortgage payments for decades, Ms. Levey and her husband, Dan, were persuaded to take out a new loan, ostensibly for debt consolidation, in 2002. It was like plunging into quicksand. Dan was seriously ill at the time and he died two years later.

To this day Ms. Levey does not understand what she and her husband of more than half a century had agreed to. The terms might as well have been written in Sanskrit.

But she kept trying to meet her obligation. She exhausted her savings. She lost her car. She stopped buying clothes and cut back on food. But there was no way to keep up with the payments.

“I had to go to the state and tell them I was hungry,” she said.

I heard the same story again and again — decent people enticed, sometimes fraudulently, into loans they never understood and couldn’t afford.

For years redlining and other discriminatory practices served as roadblocks to homeownership in neighborhoods with significant numbers of poor and working-class residents, many of them black and brown. Making affordable loans available to such residents was important.

But we have since moved to the opposite extreme. Over the past several years mortgage lenders recognized that there were big bucks to be made in those neighborhoods, and they pounced.

They weren’t satisfied to offer reasonable loans at reasonable rates to customers who could handle them. They went far beyond that. They took advantage of a poorly regulated landscape to exploit unsophisticated home buyers and homeowners with mortgages and refinancing schemes that were all but guaranteed to result in a tragic explosion of foreclosures.

Thousands of poor people like Dorothy Levey, who worked for years to build modest amounts of equity in their homes, have been hammered — wiped out. The most unscrupulous of the mortgage lenders, and there were many of them, swooped in and sweet-talked their targets into signing contracts designed to squeeze them for everything they had in the world.

The fact that this is often legal doesn’t make it right. As insane as it sounds, Ms. Levey is still getting offers to refinance her mortgage.

There is some truth to the assertion that a lot of buyers signed up for deals they should have known they couldn’t afford. But it won’t do for the fat cats to fall back on empty phrases like “buyer beware.”

The subprime mortgage frenzy was a shameful, highly-charged phenomenon, motivated by greed and played out on a field of rampant exploitation. The victims deserved more protection than they got. As Paul Leonard, director of the California office of the Center for Responsible Lending, told me this week: “You shouldn’t have a marketplace that’s a ‘buyer beware’ marketplace for the most important financial transaction of most people’s lives.”

It’s not too much to ask that when Americans of modest means put their economic futures on the line, we have regulations in place to see that they are not ripped off.

If you think this is a small matter, consider that the center reported a year ago that subprime loans represented roughly a quarter of all home loans in the U.S., and that an estimated 2.2 million households in the subprime market would ultimately face foreclosure.

We ignored the subprime frenzy and its predictable consequences until it was too late. Now we are ignoring the plight of families caught in the tidal wave of foreclosures, and the long-term consequences that will flow from that.

There is a desperate need for government and corporate leaders to step in with a broad plan to modify existing loans and stave off foreclosure wherever possible. It is both the humane and the economically responsible thing to do.

Don’t hold your breath.

“A war is just if there is no alternative, and the resort to arms is legitimate if they represent your last hope.” (Livy cited by Machiavelli)

Ed Kent  212-665-8535 (voice mail only) [blind copies]
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