cloudboy
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Here's an example of why OWS garned such popular support. Georgia's Governor in 2002 enacted the nation's toughest predatory lending law. (See below.)
“While predatory lending violates all notions of decency and ethics, it has been largely legal due to preciously loose consumer protection laws. This is not only wrong – it is tragic. And it must end.” – Roy E. Barnes, Governor of Georgia, October 25, 2002
Bankers accused him of socialism, undermining the "free market," meddling in the mortgage industry, destroying the construction industry, and erecting unfair and burdensome barriers on borrowers in the loan applications. (This all happened in Georgia.) The industry, which had spread into a huge credit default swap business that was packing together bundles of subprime loans and selling them world wide was afraid that the Georgia law might spread to other states. So, the banking industry backed an opposition candidate to Roy Barnes who was ousted from office in 2003. Three weeks later the predatory lending law was gutted.
Georgia now ranks third in the nation for mortgage loan delinquencies and 10th for foreclosures.
During the period Ameriquest lead campaign against the law and announced that it wouldn't do business in Georgia until law was changed. Standard & Poor's refused to rate Georgia mortgage securities, choking credit supply to state's home buyers; the law gutted within a year.
http://groups.yahoo.com/group/urban-ecology/message/5645
http://www.thedailybeast.com/newsweek/2008/08/09/the-predators-ball.html
Here is a video stating many of the reasons behind the OWS movement:
http://dandelionsalad.wordpress.com/2007/08/27/bush-is-turning-the-usa-into-a-subprime-borrower-by-heather-wokusch-video/
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Predatory lending law below:
http://www.cga.ct.gov/2002/rpt/2002-r-0855.htm
Georgia
Georgia's Fair Lending Act (GFLA), which took effect on October 1, 2002, applies to three types of loans: "home loans," "covered home loans," and "high-cost home loans. " A home loan is an open-end or closed-end consumer loan, secured by the borrower's principal dwelling, in which the principal loan amount is up to the Federal National Mortgage Association's ("Fannie Mae") conforming loan size (currently $ 300,700). A covered home loan is a home loan (1) with an interest rate exceeding certain prescribed limits, which vary depending on whether the loan is a first mortgage or a junior mortgage; (2) with total loan points or fees greater than 3% of the total loan amount; or (3) that is a high-cost home loan. A high-cost home loan is a home loan (1) whose interest rate exceeds the level set in the federal Home Ownership and Equity Protection Act of 1994 and its regulations, with the triggering rate dependent on whether the loan is a first mortgage or a junior mortgage and (2) with loan points and fees in excess of certain prescribed amounts based on the loan amount.
The following provisions apply to all home loans:
1. credit insurance may not be financed;
2. lenders may not encourage default in connection with a refinancing of an existing debt;
3. late charges are limited to 5% and require a grace period of at least 10 days;
4. lenders cannot charge a fee for providing the loan payoff balance, except a $ 10 processing fee; and
5. mandatory arbitration clauses are prohibited.
Loan flipping is prohibited in covered and high-cost home loans. The law imposes additional limitations on high-cost home loans by:
1. limiting prepayment penalties to 2% of the amount prepaid in the first year after the loan closing and 1% of the amount prepaid in the second year;
2. prohibiting balloon payments;
3. prohibiting negative amortization;
4. prohibiting increasing the interest rate after default, with one exception;
5. limiting advance payments;
6. requiring certification that the borrower received counseling on the loan's advisability;
7. requiring proof of the borrower's ability to repay the loan;
8. prohibiting charging to modify, renew, extend, or amend a high-cost home loan or to defer payment due;
9. requiring notice of intent to foreclose at least 14 days before publishing legal advertisement;
10. giving the borrower the right to cure a loan default and reinstate the loan;
11. limiting fees charged to a borrower for exercising the right to cure a default;
12. prohibiting loan provisions allowing the lender to unilaterally decide to accelerate the loan; and
13. requiring high-cost home loan documents to contain references to the GFLA.
< Message edited by cloudboy -- 5/3/2012 7:17:13 AM >
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