Credit counselors overwhelmed by U.S. mortgage crisis

[wicket]

LINK

Until last year, financial counselors at the Home Ownership Center of Greater Cincinnati spent most of their time teaching Americans how to buy a first home. Now, they're deluged by broken and bereft homeowners facing foreclosure.

"Oh Lord, there is no way we can keep up with these calls," said Kaye Britton, a foreclosure counselor at the downtown nonprofit group that promotes home ownership to minority Americans, among others. Britton has been helping clients reach the American dream of owning a home since 2002. Handmade wall signs urge would-be buyers to "sweat the small stuff" and note the lender's golden rule: "They have the gold, they make the rules."

Foreclosures were formerly rare, caused mostly by the loss of job, divorce or medical bills. But when rising interest rates began driving up mortgage payments last year, homeowners started to feel the pain. Phones at credit counselors across the country are now ringing off the hook.

The industrial heartland has been particularly hard-hit. Ohio had the highest number of home foreclosures in 2006, while neighboring Michigan and Indiana -- all sideswiped by the faltering U.S. auto industry -- were close behind.

Housing analysts predict between 1 million and 3 million U.S. homes will be foreclosed upon in 2007. Already a wave of defaults on subprime mortgages held by those with poor credit have caused a crisis in parts of the industry, and some economists believe a recession could result.

:scared:

[Tandalayo_Scheisskopf]

1. Within 6 months...

You will see the return of real bankruptcy laws that protect the little guy. You will also see repukes voting for it. A lot of repukes.

[ThomCat]

2. I hope you're right.

And hopefully there will be real laws against predatory lending following closely behind.
x(

[jmowreader]

6. The first law that needs to pass

is outlawing the Universal Default thing that allows a credit card company to impose the Default Rate (the interest rate you're charged if your account goes into default status) on your account if you are late in making a payment to a different creditor.

They also need to pass a law overturning Marquette National Bank v. First of Omaha Service Corp., the 1978 Supreme Court decision that allows issuers to set their interest rates based on the laws of the state the card company is chartered in, not the state the cardholder lives in.

And then we need a national usury rate. Right now, there are five states that don't have usury rates (South Dakota, Utah, Virginia, Delaware and New Hampshire), which explains why Citibank is chartered in South Dakota, American Express in Utah, Capital One in Virginia, Providian in New Hampshire and JP Morgan Chase, MBNA, Morgan Stanley and HSBC are all in Delaware. (Source: http://www.pbs.org/wgbh/pages/frontline/shows/credit/more/map.html) If they can't make money at 15 percent interest, they need to tighten up on their lending practices. I know it's hard, but I think people will survive without instant credit.

[Nikki Stone1]

3. I hope so too, but am not as sanguine

These bastards knew it was coming.

[wicket]

4. God I hope you are right

n/t

[wicket]

5. kick

:kick: