Predatory Lending History and Issues Discussed by Professor Kathleen Engel at 'Meet The Bloggers' Coffee House Discussion

Gypsy Coffee House in Cleveland's West Side was the scene of a fascinating and lively discussion and was a 'Meet the Bloggers Event'. I had another meeting and left before I was able to get all the blog info from participants but people like Jeff of YellowDogSammy and George of BrewedFreshDaily were there among others. A shout out to the organizers of this event. Manager Mark and I were very pleased to be at this informative session.

The focus was on predatory lending and Kathleen Engel, esteemed Professor at Cleveland's Marshall Law School was our guest. We've heard a lot about predatory lending and like all of you, the practice makes my blood boil. Kathleen Engel and a colleague, Patricia McCoy (Law Professor at University of Connecticut) have written a wonderful paper called Turning a Blind Eye. It's well worth the read. Professor Engel was instrumental in working and initiating the predatory lending laws proposed for Cuyahoga County.

Why are we in this mess and what does it all mean? Synopsis according to Professor Engel: Once upon a time, if you wanted a loan, you provided proof that you could make loan payments. You were given a loan based on what you could afford to pay each month on the loan.

These loans were 'prime' loans or standard loans. There were FHA and VA loans which could be considered sub prime because people can get those loans with no money down, but what happened (I think in the 80s) was the rise of a private, conventional sub prime loan market.

This was a 'make money for Wall Street' idea, to put it in simple terms. Entrepreneurial (to be kind) financial types decided loans could be sold on the open market so that the original loan holders no longer had a stake in the outcomes. Ms. homeowner gets a loan from one company and before you know it, her loan payment forms are changing names faster than you can say 'sold on the open market'. I remember loans like that, as a homeowner in Maryland.

Anyway, Kathleen Engel focused on fiduciary responsibility, or in other terms, the loan providers legal and moral responsibility and to whom. When you get a prime loan that stays in house, or with the person you bought the loan from, they have a responsibility to you AND their own lending institution. Once the loan is sold, that loan just becomes a commodity in a sub prime market and their responsibility is only to their shareholders. Can you see why we got into this mess?

Now we have people with 125% loans (PLEASE do not ever get a loan like that) in a market where your home is not worth 125% of it's original sale price.

And when the loan payment becomes too high - because really you should have waited a year or two to save money and not GET a 125% loan - you want to sell your house and then don't understand why it can't be listed and sold at a price that matches your mortgage.

To me it's almost like a bait and switch program. But those in the field are much more adept at explaining this than I am. So read Turning a Blind Eye.

Interestingly enough, Brian Brady, one of my pals and fellow bloggers, is a mortgage lender and an insightful one at that. He has a fantastic post explaining this scenario in detail. It's called Bad Loans Buried in the Back of the Breadbox and also explains how we got into this mess.

What's the answer? Save your money and buy a home the old fashioned way: when you can afford it? Or at least keep in the back of your head: if it seems to good to be true, it probably is.

Peace Out - 3C

Governor Strickland Begins Laying Out a Plan for Ohio

"The Federal Government’s Workforce Investment Act helps states provide job training. We’re 51st in making use of those funds." (quote from Governor's speech ....it has frustrated me that Ohio seemed to miss out on too much available Federal money which to me has to have been related largely in bad State management)

Governor Strickland gave his State of the State speech the other day. You can read She Writes Like She Talks for some information about it. I'm impressed with one quote from the speech (from Crains Cleveland):
"We will live within our means and invest in what matters," [Strickland told legislators].

Ohio has tobacco company money coming our way and the Governor plans on spending $5 billion of it on our schools as well as revamping some tax loopholes to get us more money for the schools. You can read the entire Crain's article here. And an ONN Ohio article about it as well. Personally, a little fiscal responsibility and a needed budget increase to aid public schools seems like a breath of fresh air to me. How do you feel?

Other quotes from his speech:
"I am seeking permission from the federal government to use Medicaid funds for private health insurance premium assistance. This would help as many as 300,000 Ohioans – those earning up to 150 percent of the poverty level – pay for coverage that is otherwise beyond their means."

"First, I will establish a higher education compact between the state and our public colleges and universities which will result in lower tuition costs for our students. This compact will increase funding for the basic instructional subsidy by 5 percent next year. And by 2 percent more the following year."

Not being a fan of, or seeing the use of, 'talking heads' on television, I'm not going to become one here lol. So my suggestion? Read his entire speech on his official website here.

Going to close with one more quote since it's about energy and alternative fuels and such:
"Next-generation energies – biofuels, fuel cells, clean coal, and renewable sources such as wind – offer us the opportunity to create jobs, support our farmers, reduce our dependence on foreign oil producers, and be responsible stewards of our environment. " Again I ask, what do you think? Peace Out - 3C

Connecting Cleveland Includes Makeovers for The Variety and Capital Theatres

The majestic blue and white mosaic tiling announced Gunning Recreation Center, the last in a series of Connecting Cleveland meetings held by the City of Cleveland's Planning Commission. These were public meetings to 'dog and pony' the Commissions suggested changes to Cleveland's Master Plan. Some good stuff here and a seemingly aggressive series of ideas to help revitalize our neighborhoods.

Some of the highlights:
1. Encourage mixed use development (shops, housing, offices)
2. Sustain our industrial parkways
3. Look into a specialized high school dedicated to industrial design
4. Continue to foster public/private/non profit cooperation

You have heard our Metropark system referred to as the Emerald Necklace? Well the City is now calling their bike/tow path system the Emerald Bracelet. The idea is to finish connecting the 'trail' dots so that a circle of bicycle trails exists.
The Commission feels we should focus on 'pockets' of retail, because our population is down and trying to sustain, for example, the entire length of Lorain Avenue as a thriving retail district is not as feasible anymore. So they want to foster 'retail clusters.' Already in the works an example of two of these retail clusters:

Kamms Corner - whose 'Streetscaping' project is set to begin next month
Gordon Square - W. 65th and Detroit - most definitely already in the works

One highlight would be the tale of two theatres: The Variety and The Capital. Both exist as shells of their former selves but they are about to get the equivalent of Ty Pennington's Extreme Makeover.

The Capital will now be the West Side version of the Cedar Lee in Cleveland Heights, hosting Independent and Art films (I for one am extremely excited about this!)

The Variety near W. 117th on Lorain will show off her makeover in a different kind of mixed use: everything from children's shows, second run movies and a dinner theatre! I can't wait to see the marquee working on the Variety! The exterior work will be completed in 2007
Of course there was a lot of discussion as well about TODs, population shifts, etc. Check out the Planning Commission Website to get all the details for each district and your own neighborhoods. Peace Out - 3C

50th Anniversary of Buzzard Day This Weekend in Hinckley Ohio

Have you ever 'done' Buzzard Day' in Hinckley? It's coming up in 48 hours, March 15th. I thought of this annual event as I drove from Brecksville back to Cleveland today and saw three (yes three!) buzzards flying overhead on Rockside Road. I guess someone forgot to tell them to hide out in the hotel until the 15th; of course I wasn't in Hinckley so I guess it's okay if they were in Independence!

Buzzard Day lore goes back a lot farther than this but sometime in the 50s a policeman reported following the birds for several years and that they indeed always return on March 15th. Can't argue with a policeman! Then the media became interested and voila - Buzzard Day was born.

The first event is March 15th: Buzzards Roost in the Hinckley Metroparks. (you might want to bring your binoculars).

The second event is: Sunday March 18th: The Chamber of Commerce Sponsored Pancake Breakfast ($6 for adults and $3 for kids). The Hinckley Chamber raises a lot of money at this event each year for children's charities. The time? 7AM until 4PM at the Hinckley Elementary School - 1586 Center Road.

And by the way, it's the 50th Anniversary of Buzzard Day. When you click on the Chamber pdf link, you get this which I love:

"....Hinckley, the most famous township in the Midwest, welcomes it's road-kill eating, mammoth winged,hissing, spitting mascot back home!" :-) Peace Out - 3C

Grandmaster Flash, Aretha Franklin, Keith Richards and Eddie Vedder are in NYC ....Why Oh Why are They NOT In Cleveland!

I know New York City is the mecca; I know rock stars expect glitz. But come on, the Rock and Roll Hall of Fame is in Cleveland everybody! The annual ceremony needs to be here. They want good acoustics? Hold it at Severance Hall! I'm not loving the fact that Grandmaster Flash and Aretha Franklin and Eddie Vedder are in NYC inducting people and we don't reap the full benefit. Van Halen can stay in NYC for all I care (sorry to all their fans but they suck!) I know Cleveland is lobbying, but step it up guys....if Cleveland was good enough to house the Rock and Roll 'stuff,' then it's the place to have the ceremony! Okay, I'm off my soapbox...for now. (Image courtesy of Cleveland.com) Peace Out - 3C

The Ronettes are being inducted tonight - enjoy the music video!

Cleveland Should Do What Lorain Is Doing: Email Pothole Reports to the City

Check this out: If you live in Lorain - or presumably, driving in Lorain to work, etc., you can now email locations of potholes to the City and they will get on it! I like this high tech, grassroots idea! Check it out on the Lorain Home Page too. Here is the email address: streetdepartment@cityoflorain.org

I hope the City of Cleveland (and Lakewood for that matter, they have some SERIOUS potholes in Lakewood!) gets on the bandwagon.

Peace Out - 3C

The City of Cleveland and the Practice of Sustainability

Did you know that the City of Cleveland has a Sustainability Department now? As of 2005. The City's website lays out a mission statement. It includes things like developing green building and high performance standards for City built and operated buildings; clean fuels for their car fleets; and they claim to be working on incentives to encourage private developers to focus on sustainability as well. I still believe we are better off with tax abatements for the neighborhoods most in need AND developments that meet transportation and sustainability needs. Just my humble opinion. (photo from City of Cleveland website, depicts wind turbine at the Science Center) Peace Out - 3C