In cased you missed it, Chris Shays was named the Eschaton Wanker of the Day™ on Monday for his asinine comments blaming predatory lending victims for their own predicament in the subprime crisis that is hitting towns in his district to the tune of a 500% increase in foreclosures from last year.
"As an affordable housing professional, I know that many first-time homeowners, guilty of nothing but reaching for the American dream, found themselves besieged by unregulated mortgage brokers selling highly complex mortgages with low initial rates and other bells and whistles that made them seem irresistible. These brokers rarely bothered to make the disclosures that would have raised concerns and caution among their customers. Some brokers were openly deceptive and predatory.
"That's why I was astounded by Chris Shays' statement early this week regarding the looming housing foreclosure crisis. He told the Connecticut Post, 'I can't imagine helping people who should not have gotten a loan in the first place.'
"Maybe Chris Shays can't imagine it, but all Americans have an interest in assisting those whose best shot at the American dream was ruined by deception. And we have a common interest in avoiding the contagious decay that can plague foreclosure-prone neighborhoods.
"There is much we can do, working with banks, municipalities, and community organizations, to encourage stressed homeowners to talk to their lenders, encourage loan restructuring, and provide temporary relief. In addition, Congress must act now to address this crisis by enacting legislation to stop predatory lending practices, require more clear disclosures on loans, and increase funding for community-based housing advocates to educate consumers about the mortgage market. Doing nothing makes no sense.
"Chris Shays' statement shows that he is far more interested in protecting the financial industry which amply funds his campaigns than he is in stabilizing threatened communities and supporting hardworking homeowners who thought they had a shot at the middle class. As a matter of ethics and plain good business sense, Chris Shays is far, far from home."
Himes' background in this area - and his diligence on the issue - will serve him and his constituents very well come January 2009.
The subprime mortgage market crisis has been hitting Connecticut hard, as it has the entire country, and it seems like its about to hit harder:
California-based RealtyTrac said the number of foreclosures increased 547 percent in the New Haven-Milford area, 522 percent in the Bridgeport-Norwalk-Stamford region and 446 percent in the Hartford area in the first half of this year, compared with the same period in 2006.
State Attorney General Richard Blumenthal told the Connecticut Post that his office has been inundated with calls from homeowners seeking help.
"We may be on the cusp of a huge wave breaking over Connecticut. People are very understandably upset," Blumenthal said.
In Chris Shays' hometown of Bridgeport and the surrounding big towns in the fourth district, forclosure rates have skyrocketed over 500% in a year. So what was Shays' response to these numbers? To announce his support for actions to prevent predatory lending and help homeowners? Nope. It was to blame the victims:
Still, not everyone is convinced foreclosures attributed to the subprime market are the fault of predatory or deceptive lending. Some say consumers simply bought houses they could not afford....
[Chris Shays] said many buyers in the subprime market put no money down. Although they now face losing their home, Shays said those buyers "never really owned a home in the first place. I'm interested in the extent to which individuals with viable credit were induced to get into the subprime rate."
Shays said he's concerned Democrats want to use taxpayer money to bail out homeowners who should not have bought a house. "I can't imagine helping people who should not have gotten a loan in the first place."
But before lawmakers direct all their opprobrium at the subprime recipients, they should remember that there's a reason it's known as "predatory" lending. Unscrupulous lenders take advantage of people's lack of expertise to rope them into damaging arrangements that look agreeable in the short term, but spin out of control thereafter. Most recipients are guilty only of believing the hype that everyone in America deserves, and has the ability, to own a home.
So when Rep. Christopher Shays says, "I can't imagine helping people who should not have gotten a loan in the first place," it's worth wondering who he's taking out his anger on. Is it the people who were defrauded, or the ones who did the defrauding?
No doubt there were people who gamed the system and applied for subprime loans when they were well aware they had no business playing the mortgage game. But to assume anyone caught up in this was willing to take a chance on losing their home, and putting families at risk, is a leap too far.
...Buying a home is challenging and stressful, and almost no one understands all the fine print. Don't put the onus on every homeowner to need a law degree to do what's right for their families.
Chris Shays can't seem to step near a microphone or reporter these days without saying something either inappropriate, incomprehensible, or inexcusable (often, he hits the hat trick). Whether it's his recent comments on Blackwater, Broadwater, Democrats and the Iraq war, his own political career, or attacking a resolution he himself is co-sponsoring, the common thread is a dismissal of all fact and logic, a disrespect for interlocutors and audiences, and a disregard for the responsibilities of his office.
The pattern is clear: he instinctually defends entrenched and powerful interests and players at the expense of his constituents, often while making zero sense, and almost always at high volume, leaving them and everyone else watching his descent scratching their heads and wondering what happened to this once-reasonable public servant.
(This sounds like it could be big... - promoted by tparty)
Yesterday, Attorney General Richard Blumenthal filed suit against several subprime lenders in Connecticut who had conspired to defraud consumers with predatory lending practices. You can read the press release here.
As subprime lending practices continue to grab headlines, one has to wonder how far this will go.
One obvious person of interest is none other than State Senator David Cappiello, the GOP's candidate for Congress in Chris Murphy's 5th Congressional District.
David Cappiello, a star GOP recruit who is trying to take on Freshman Dem. Rep. Chris Murphy, lists his full-time occupation as a Mortgage Loan Officer for Danbury-based "Charter Funding." Charter Funding has, so-far, not been sued by Blumenthal.
But after a close look, things get very murky very quick.
Charter Funding, it turns out, is a business name of a secretive Tuscon, Arizona-based subprime lendor, First Magnus Corp. First Magnus is a privately-held lendor that operates around the country under literally dozens of different names, often within the same state. It is a registered foreign-owned corporation, but I'm not sure who its shareholders are.
In any event, First Magnus mortgage shops are franchised out to people like Cappiello (who can apply for franchises and broker licenses online), who then market mortgages (again, mainly subprime) typically to people who have no business getting mortgages.
A number of franchisees have been prosecuted for fraud.
On August 21, First Magnus filed for Chapter 11 bankruptcy protection and posted the following on its website (http://www.firstmagn...)
In light of the collapse of the secondary mortgage market, First Magnus will not fund any future mortgage loans, and is no longer accepting any mortgage loan applications or funding any mortgage loans previously originated and not yet funded. We explored all options before taking this action but were left with no viable alternative.
First Magnus values the relationships we have formed with all of our broker partners over the years and appreciate the trust you have shown in us. We are saddened that we will no longer have the opportunity to work with you.
For information about loans already submitted to First Magnus, please contact us at 520.618.9000 or call our toll-free hotline number: 1.866.901.7655.
My question: how many of these bad loans were written by Sen. Cappiello?
How many people have lost their homes because of shady ARMs he handed out?
More importantly... were any of the loans issued under predatory or fraudulent circumstances?
Is Blumenthal's office investigating Chater / First Magnus? Is Cappiello out of work?
It's not every day that a major mortgage lender collapses, and it's not every day that a major mortgage lender employing a major congressional candidate collapses.
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