Monday, February 18, 2008

Chase Bank Pays Acorn to Help Reach Borrowers in Default

Mish's Global Economic Analysis, a blog devoted to economic and financial issues, posted an article today about methods now being resorted to by banks in order to reach hard-to-contact buyers in default on their payments.

Many borrowers don't trust their lenders and don't respond to efforts to contact them. In order to reach cagey borrowers, banks are now looking for creative ways to package their written communications to borrowers, packaging them to look like wedding invitations or other innocent material. Wells Fargo even offered $250 gift cards to borrowers in order to induce them to contact the institution, which bespeaks the level of desperation of lenders with hundreds of millions to billions of dollars worth of non-performing mortgages on their books.

Some banks are using grassroots community groups such as Acorn and its subsidiary Acorn Housing, to reach recalcitrant borrowers. Chase Bank now sends letters on Acorn letterhead and pays Acorn to leave its door hangers at the homes of unresponsive borrowers. Chase pays Acorn $50-$70 dollars for every person found, according to Mish's article.

Is Acorn also receiving money from Countrywide Financial,too? The organization has announced an agreement with Countrywide, billed prominently on Acorn's home page, to help borrowers avoid foreclosure.

I thought Acorn was here to help our most disadvantaged citizens find minimal decent housing and afford heat and power, but now it looks like Acorn is given to helping greedy lenders recover their losses and to helping borrowers stay in houses that go pretty far beyond the minimum.

Note to poster "Dave", who commented on my previous post on this matter: Acorn and Acorn housing are essentially the same organization. Go to the Acorn home page, and you will see that the parent organization is advertising its efforts on behalf of borrowers being foreclosed.

Sunday, February 17, 2008

The Great Green Augustus Part 2

Well, it looks like Chicago has managed to make it onto the list of the nation's "greenest" cities (see title link), and I suppose our "Great Green Augustus", Da Mare, is swelling with pride from all the accolades he and the city are receiving from various environmental organizations, for Daley has vowed to make Chicago the Greenest City in the country.

Which, given the condition of the United States, the world's most wasteful country, shouldn't be too difficult. Chicago has made the Top Ten only because most towns and cities in this country were built to waste fuel, water, and land, and guarantee a massive and disproportionate investment in road and pipe infrastructure far into the future. However, making the list by default somehow doesn't count. Sadly, it isn't hard to be "green" compared to most of this country's sprawling, suburbanized, and totally car-dependent towns and cities, inasmuch as at about 90% of the population in this country lives in such places, with almost no access to public transportation, in energy-guzzling houses with an average of 2500 sq ft. of space, eating food that has traveled 2000 miles, and buying and using goods that have traveled 12,000 miles from a distant Asian nation.

After Daley gets finished patting himself on the back for our decrepit and inadequate public transportation and excessive car dependence; our ill-conceived recycling program that most householders aren't compelled to participate in; the relative handful of buildings equipped for alternative energy and that are built with green materials, and our abysmal lack of emergency preparedness, he needs to consider the following:

Our public transportation is inadequate. Most city residents cannot rely upon public transit to even get to work, because they live in low-density outer neighborhoods that are steeply under-served by public transit, or, thanks to the massive exodus of jobs and businesses to the suburbs in the past 25 years, work in remote suburban locations. Two thirds of the area's jobs are now located in the suburbs, often in remote outer suburbs inaccessible by public transit.

Worse, residents of the city's outer neighborhoods are likely to be less well-off than lake front residents, yet are much more dependent upon their cars to access jobs and services. There needs to be comprehensive regional planning that addresses the future needs of an area whose 7.5 million people might, in just a few years, be largely unable to afford to own cars, or at least drive them anything like the distances they commonly do these days, and Daley's administration needs to open the discussion, for at this time a substantial number of impoverished city residents have no access to jobs in remote suburbs, and the larger portion of the middle-class must drive to their jobs.

We need much more thorough rail coverage, with lines that connect the city's radial rail lines, and most of all, crosstown (east to west) lines over congested streets like Belmont Ave, Chicago Ave, Touhy, and Lawrence, which are all currently hellish to travel by bus or auto during peak hours. A more comprehensive rail system that connected the lines and connected with underused bus lines in outer neighborhoods would make life without a car possible for many tens of thousands of city residents who are now completely car-dependent, and vastly enhance the livability of these areas in an era of scarce, expensive fuel.

However, instead of planning comprehensive transit improvements that would make the entire city more accessible, our mayor is concentrating his efforts, and our tax dollars on promoting high-cost express lines for air travelers and extravagant frills like the Block 37 el station, the cost of which has already run far past the $250 million already budgeted.

We have too many overly large buildings. This is not meant as a criticism of high-density housing. The city needs more high-density housing, and more of the outer neighborhoods should be zoned for high-density mixed used buildings with four to seven stories, especially in retail-transit hubs.

However, we may be permitting too many really huge buildings to be built. Really tall buildings of 50 stories or more tend to consume much more energy per square foot than buildings under 10 stories, and are extremely dependent upon a reliable grid to deliver essential services to residents, such as elevators, heating and cooling, and water, which requires pumps to maintain the water at necessary pressures throughout the building. Additionally, really high buildings multiply the problems for first responders in the event of emergencies such as fires and power outages.The Chicago Spire, though it is lovely, and the Trump monstrosity should be the last buildings of their kind, considering the difficulties of, say, evacuating an 85-year-old from the 123rd floor in the event of grid failure, or a fire.

Now is the time to impose a permanent moratorium on residential structures higher than 20 stories, in consideration of our future energy situation, and the probable impact of a permanent energy shortage on the livability and future value of mega-buildings with their massive internal loads and total dependence on really excessive energy usage for minimal livability and access to basic services like running water.

Updating and improvement of electronic communications. The tabling of the city's plan to install wireless communications available to all residents at low cost is a massive setback. As matters stand at the moment, all plans to install wireless transmitters throughout the city have been shelved because the city cannot reach an agreement with a service provider on the cost. Like those other large cities that had planned to install city-wide wireless networks that would offer low-cost wireless internet to all businesses and residents, Chicago's budding plans floundered on the inability or unwillingness of private providers to offer the services at prices competitive with cable and DSL services currently available.

Could we consider wireless internet to be another essential public utility, like potable water, road and sewer infrastructure, and trash collection? Wireless may be crucial to maintaining essential electronic communications for emergency services as well as businesses and residents in the future, and a citywide wireless network would vastly enhance Chicago's disaster preparedness and make the city a better place to do business in the present. Many smaller cities have decided not to rely on private carriers and are installing their own city-wide network connections, in order to retain their competitiveness, and Chicago might benefit enormously from being the first large city to install a city-owned wireless network available to all citizens and businesses at a cost competitive with cable and DSL, as such a utility would make the city more attractive to business. Some cities that have installed a network have realized a ROI in three years.

Urban agriculture and farmer's markets. Can anyone in this city claim to adhere to the "100 mile diet" at this time? Or even a "200 hundred mile" diet? Somehow, I feel sure that most of the food I eat traveled at least 1000 miles, with attendant high fuel costs. Relocalization of our food supply might be one of the most provident and life-saving things we can do by way of greening Chicago.

Chicago currently has 70,000-80,000 vacant lots, many in districts of the city that are hardly inhabited at all. There are thousands of vacant buildings as well, that currently are magnets for crime and vandalism. Could some of these lots be converted to community gardens and even small farms? While many individual citizens and local groups are making heroic efforts to start projects along these lines- kudos to the Rogers Park Garden Group and its sister organizations across the area- there is no official impetus for projects that could provide food and work to poorer citizens while converting weed-choked lots to a higher use.At this point, the issue does not seem urgent, because fuel is still cheap enough for us to be able to depend on highly productive mechanized agriculture for most of our foodstuffs. However, no one will argue that factory farming is ecological or that the food produced by it is the best food we could eat, and there is a burgeoning market for food produced by organic agriculture. While the demand for "organic" foods exists only among the relatively well-educated and affluent, the future might require a wholesale return to traditional, non-mechanized agriculture in order for most of our population to be able to eat on a regular basis, as supplies of natural gas necessary to produce the vast quantities of nitrogen fertilizers are further depleted. In such a context, local agriculture won't be just a Green fad but a life-saving necessity. As it is, food prices are escalating rapidly because of the competition from ethanol, and the rising costs of farming and transportation due to the steeply higher fuel costs of recent years.

Many hundreds of Chicago residents can think of many more ways to make the city more sustainable and improve the quality of life therein, and these people need to be included in the process. Most of all, though, our officials need to take their stated dedication to environmental and sustainability issues beyond lip service and "green" gestures, and start to turn the ship that is Chicago from its current extreme dependence on high energy imputs to real sustainability.

Green Workshop at Loyola Park Monday Night

49th Ward Alderman Joe Moore's 49th Ward Green Corps will be sponsoring a series of workshops, beginning this coming Monday evening, entitled "Why Green Matters". This will be the first of seven workshops in total that "examine how our daily activities affect the environment."

Time: 6:30 PM, Monday, February 18, and the next 6 consecutive Mondays at the same time.
1230 W. Greenleaf, 2nd Floor
Chicago, IL 60626

Smoking Ban in Parks, Beaches, and Playgrounds Still Stands

According to the linked CBS news article of October 17, 2007, the Chicago Park District has banned smoking at all public parks, beaches, and playgrounds, invoking the usual "protecting the children" argument.

Notice that any time any nanny-stater wants to ban something, he invokes the chillins'.

As far as I can tell, or read, this ban has not been rescinded. If anyone out there can tell me otherwise, please write.

I was not long ago considering this as I walked down Sheridan Road, wondering if the next drunken driver to jump the curb in his carbon-belching land yacht was going to pin me to the wall and leave me dead, or as good as dead and with $498,000 worth of hospital bills to pay.

Since second-hand smoke in a large, outdoor space is so deleterious to the health of children and other living things, might I ask when we will ban automobiles in the city? Will we forbid transporting children in cars?

Also, what about barbeque fuel? How about natural gas piped into homes to light stoves? These are all potent sources of pollution, as well as being general safety and fire hazards, yet I have heard no one propose banning gas stoves in homes containing children, or banning grilling in our parks, even though I personally find the smell of the fuel obnoxious.

After all, if we are going to ban one hazard, why shouldn't we ban anything that might be hazardous, especially to children. That would mean getting rid of liquor, bars, cars, buses (diesel fumes), outdoor grilling, all appliances powered by natural gas, all household paints and solvents containing any substance that produces toxic fumes, many household cleaners, and multitudes of other substances in daily use.

I'm not going to defend smoking and I'm not claiming it's not unhealthy. I still do it, unfortunately. However, I grew up with one smoker and one heavy drinker, not the same person, in the 50s, an era in which there was an ash tray in every medical office and you could even smoke in most college classrooms. I took little harm from my mother's cigarettes,. but my father's drinking destroyed our lives in every way.

Even before the ban of 2006, there were hundreds of restaurants and bars in Chicago that banned smoking, which a business should be free to do. A business also ought to be free to permit it, and if a person finds the smoke offensive, s/he can surely go elsewhere.

Tuesday, February 12, 2008

Acorn Housing: Housing Assistance For the Poor or Bailouts For the Affluent Greedy?

As many of you readers who know me are probably aware, Acorn is a non-profit that I richly love to hate.

Let me count the ways.

Well, for starters, ACORN didn't help its case with me by launching a vicious and extremely personal attack on me during the the campaigns for 49th Ward Alderman. Acorn was supporting our incumbent, while I supported Don Gordon, and their people seized upon a very barbed comment I posted on Craig Gernhart's blog, in which I was critical of parents of the six hapless children killed in a NOH apartment fire, on the grounds of their lack of personal responsibility. ACORN distributed a flier with my comments, with my name, around the ward as evidence of my "racism", even though my comment completely lacked any racial references whatsoever, and was merely critical of parents who were irresponsible enough to breed prolifically on an income that barely supports one person.

Now Acorn is offering assistance to middle-class borrowers who got in over their heads in Monkeyshine Mortgages on overpriced houses. In this election year, every pandering politician, including Dubya as well as our Dem candidates, is at work concocting schemes to support the unsupportable: millions of deeply underwater borrowers buried in trickster mortgages that are now resetting en masse, on houses that never were worth what they paid for them, that they never could afford to begin with, and are now rapidly losing value.

The stated purpose of the organization is to assist low-income borrowers in finding suitable, decent housing, and to work to combat unjustified utility rate hikes and to help poor people in obtaining services and assistance in paying for their utilities.

However, it now appears that ACORN is devoting most of its efforts to assisting a particularly undeserving class of "victims", namely middle-income borrowers who bought much larger and more expensive homes than were necessary to house them decently, with trickbag mortgages with terms that pretty much guaranteed, almost in so many words, that they would not be able to afford the payments too far into the future, for houses that were never within the borrower's means to begin with and were obscenely overpriced to boot, thanks mainly to the flood of E-Z money made available to anyone who could sign an application.

Today's The New York Times, in its article, MORTGAGE CRISIS GOES BEYOND SUBPRIME LOANS, detailed the cases of a couple of people who are seeking assistance in hanging on to their overpriced houses. One is Brenda Harris, 53, a Las Vegas casino analyst, whose $2400 a month payment on her $392,000 suburban home is about to reset to (at least) $3400, and whom ACORN has agreed to work with in her campaign to get her lender to ease the terms of her mortgage:

Home prices in the North Las Vegas neighborhood of Brenda Harris, a technology analyst at a casino company , have fallen 20% to 30%. The builder who sold her a new three-bedroom home on Pink Flamingoes Place for $392,000 in 2006 is now listing similar properties for $314,000.

But Ms. Harris does not want to leave her home.She estimates that she has spent $40,000 on her property, about half for a down payment and much of the rest on a deck and landscaping (my emphasis).

It gets better. Read on.....

"I'm not behind in my payments, but I'm trying to prevent getting behind," Ms. Harris said. "I don't want to ruin my credit".

To which I say, well, sell the house, take the hit, move into a $1,000 a month apartment, and get a loan to pay off your deficiency while you still have good credit. In two more years, you'll have recovered and you can buy a nice place for $200,000 or so.

However, Ms. Harris doesn't feel that she should have to make these types of adjustments, for she is a member of Amerika's Entitled Middle Class, and should get assistance to live in a house she can't afford because that's what she "wants", and ACORN thinks so, too.

The article goes on:

In addition to the declining value of her home, Ms. Harris will soon be hit with a sharply higher house payment. She has an option adjustable rate mortgage, a loan that allows borrowers to pay less than the interest and principal due every month. The unpaid interest gets added to the principal balance. She is making the minimum payments due on her loan, about $2,400.

But she knows that she will not be able to pay the $3,400 needed to cover her interest and principal, which she will be required to pay once her loan balance hits 115% of her starting balance. And under the terms of her loan, which was made by Countrywide Financial, she would have to pay a prepayment penalty of about $40,000 if she chose to refinance or sell her home before May 2009 .

What can we figure out about this woman's situation from the facts stated in the article I've quoted?

Well, for one thing, she isn't anywhere near being poor. She stated that she can afford (though barely) her current monthly payment of $2,400 a month. That means she earns at least $75,000 a year, and most likely more. Last I heard, $75,000, which is almost twice what I earn, was not only pretty far above the poverty level, but is pretty far past the median income of most Chicago, and Las Vegas, earners. This lady is not a hardship case, folks.

She also stated that she has spent about $40,000 on the place for her downstroke and frivolous improvements. Half went for the down payment, or about $20,000. That means she put less than 10% down for the home, leaving her with a $372,000 mortgage, which a woman with professional employment and assumed numerical competence ought to be able to figure is well beyond her means, as it is nearly five times her annual income.

We can deduct, also, that if she could buy a new, single-family 3-bed home, that she could easily, with no financial strain, have bought an absolutely fantastic two-bed condo for, say, $200,000, or even less, in Vegas, even at the fantasy prices of 2006.

Oh, but I forget, she didn't want a condo. She wanted a single family house. Shouldn't she be able to get what she wants because that's what she wants, without reference to her ability to pay for it?

We can also readily see that Ms. Harris assumed a Negative Amortization loan, and walked into it with her eyes wide open. This woman has no excuse for ignorance of the terms of her mortgage, and her statements prove that she had full knowledge of what she was entering into.Why did she not just back away and settle on a cheaper place? After all, we are not talking about an 82-year-old sharecropper's daughter who never had the opportunity for education. We are talking about a well-paid woman with professional status and the financial wherewithal to afford to pay $2,400 a month, and who could drop many notches down on the housing ladder and still live comfortably and well. A $392,000 house goes way beyond basic necessity.

Yet ACORN is stepping to the plate to assist this greedy,spoiled, self-indulgent pig, along with our federal government.

I work in an office in the Uptown neighborhood, and when I walk the streets in those parts, I see tragedy everywhere. The streets are teeming with people suffering from crippling mental illness, including combat veterans, who are living in the streets, being assaulted, digging for food in dumpsters, begging for change, and becoming victims of violent crimes.

I don't see ACORN reaching out to these hapless people, though the need is extremely visible. ACORN is nowhere in evidence in Uptown, at least not that I can see, and I also have not heard of the organization making any effort to lobby for lower utility rates or for the removal of utility taxes, which are especially brutal for the poor.

Do the ACORN people grasp that their efforts on behalf of people like this woman means that they have less help to offer the truly needy and deserving?

This worthless organization now seems to exist solely to dispense undeserved services to self-made middle-class victims, and, of course, to attack local bloggers. Those of us who really want to assist the poor, ill, and truly victimized might just want to withdraw their support from this group, and dedicate their funds and energies to one of the many charities that actually assist the people who need it the most.

Friday, February 1, 2008

Anita Alvarez for Cook County State's Attorney

This election, we are being offered a choice between a couple of professional pols, one a thoroughly entrenched machine Democrat, and a professional prosecutor, for the office of Cook County State's Attorney.

Citizens are often baffled as to how the same passels of crooks and parasites retain their posts through numerous election cycles, and maybe it's because the voters don't know the alternatives. We are hearing about only one well-known candidate,and one little-known opponent, with the third, and most qualified contender hardly being mentioned: Anita Alvarez, the Chief Deputy of the Cook County State's Attorney's Office.

Ms. Alvarez became prominent as the state's attorney who successfully prosecuted Patrick Sykes, the attacker of 9-year-old "Girl X", leaving her paralyzed, blind, and without speech. Ms. Alvarez won a prison term of 120 years for Sykes. She has prosecuted hundreds of felony cases during her 20-year career, and has steadily climbed in rank and responsibility while garnering wide recognition and admiration for her work in prosecuting Cook County's most vile crimes.

Let's elect a professional prosecutor, instead of a professional pol and career back-scratcher. Anita Alvarez stands on her impressive record and credentials, while her opposition stands on his credentials as a cog in the local Democratic machine.