When you make your neighbor a loan of any kind, … If the person is poor, you shall not sleep in the garment given you as the pledge. You shall give the pledge back by sunset, so that your neighbor may sleep in the cloak and bless you; and it will be to your credit before the Lord your God.
- Deuteronomy 24:10-13

On Mortgage/Lending/Wall Street/Foreclosure CRISIS:

280 was the number yesterday. The market fell 280 points after a negative housing report was released. An analyst at Deutche Bank said that many, many more defaults are expected and this crisis is just getting started.

WP: Biggest Drop in Consumer Confidence Since Katrina

State and federal lawmakers are calling for a crackdown on unscrupulous mortgage firms, saying that “predatory” lending practices have fed a growing national wave of foreclosures affecting millions of people with subprime home mortgages.
Sen. Charles Schumer, D-N.Y., issued a study showing foreclosures in New York City’s five boroughs are up by 80 percent since February, indicating, he said, that the city “is now in the full throes of the subprime foreclosure meltdown.”

Despite that credit crisis, some mortgage companies continue advertising that entices homebuyers with misleading loan offers, Schumer told a news conference…”

IGNORING THE LESSSONS OF l929

ECONOMIST MAX FRAAD’S LATEST
SUBPRIME FORECLOSURES STATE BY STATE–A VERY INTERESTING MAP

CREDIT CARD DEFAULTS KEEP RISING

GOOD QUESTIONS

Douglass Cunningham of Record On Line asks:

How many mortgage brokers knew exactly what they were doing, putting people into loans with confiscatory terms that they could never hope to repay? More than a few, I bet.

How many of these lending companies knew it? To judge from how rapidly they tried to get these subprime loans off their own books and onto somebody else’s, quite a few. How many Wall Street firms knew it, filled as they are with whiz kids?

It’s a long way from the Bailey Building and Loan Association and “It’s a Wonderful Life.”

SCHOLARS ASSESS WALL STREET ROLE IN DELIBERATELY ENCOURAGING SUB PROME LOANS; STUDY SHOWS HOW PREDATORY LENDERS EXPLOITED BORROWERS

MortageInsider Blog: The big retail mortgage banks are the most expensive and deceptive companies in the market…period!

With the subprime meltdown exposing the banking side of the mortgage industry, this common “insider” industry knowledge of banking misdeeds hopefully will become common consumer knowledge. Prior to this both Wells Fargo and Countrywide as the top two mortgage originating banks profited from the perception they are decent corporate citizens.

Nothing could be further from the truth!

ACORN at their website www.wellsfargoproblems.org outlines the abusive practices at Wells Fargo including:

Financing Excessive Fees into Loans
Charging Higher Interest Rates Than A Borrower’s Credit Warrants
Prepayment
Penalties
Making Loans Without Regard to the Borrower’s Ability to Pay
Yield Spread Premiums

Unnecessary Single Premium
Credit Insurance
Loan
Flipping or What I Call Serial Refinancing

Home Loans Also Secured by Cars

Hidden Variable Interest Rates
Loans for over 100% Loan-to-Value
Ratio
Live Checks In the Mail To Entice Desperate Homeowners

Call Provision or Balloon Payments
Disguising Actual Monthly Payment Amounts by Hiding Costs of Taxes and Insurance

Crediting Payments Late & Damaging Credit Scores
Reporting Drastically Larger Loan Sizes and Balances to the Credit Bureaus

Open-End Home Loans or What I Call a “Credit Card on Your House”
Adding Fees for Home and Auto Security Plans
All the mortgage banks - including your bank on the corner - all take their lead from these 2 Industry Giants!

http://themortgageinsider.net/mortgage-banking-behemoths-charged-with-predatory-lending-practices/

HOW THIS ALL LINKS BACK TO NEO-LIBERAL ECONOMIC THEORY

George Monbiot writes in the Guardian:

Neoliberalism claims that we are best served by maximum market freedom and minimum intervention by the state. The role of government should be confined to creating and defending markets, protecting private property and defending the realm. All other functions are better discharged by private enterprise, which will be prompted by the profit motive to supply essential services. By this means, enterprise is liberated, rational decisions are made and citizens are freed from the dehumanising hand of the state.

This, at any rate, is the theory. But as David Harvey proposes in his book A Brief History of Neoliberalism, wherever the neoliberal programme has been implemented, it has caused a massive shift of wealth not just to the top one percent, but to the top tenth of the top one per cent. In the United States, for example, the upper 0.1% has already regained the position it held at the beginning of the 1920s. The conditions that neoliberalism demands in order to free human beings from the slavery of state - minimal taxes, the dismantling of public services and social security, deregulation, the breaking of the unions – just happen to be the conditions required to make the elite even richer, while leaving everyone else to sink or swim.

So the question is this. Given that the crises I have listed are predictable effects of the dismantling of public services and the deregulation of business and financial markets, given that it damages the interests of nearly everyone, how has neoliberalism come to dominate public life?