[lbo-talk] Sub-prime crisis in Kansas City

[berber carpet bomb]

On 1/6/08, Charles Brown <charlesb at cncl.ci.detroit.mi.us> wrote:
>
>
> ^^^^^
> CB: I'm certainly willing to believe the poor areas were sold a bill of
> goods.  But I have one aspect I can't think through. Wouldn't it be
> highly likely at the time these loans were made that many of the poor
> people would default on their loans, and so the vultures would not
> collect the loans or interest ? It just seems like the vultures ( and
> I'm as willing as anybody to call them vultures) were , uhh, dare I say,
> doing sort of welfare work.  I'm thinking somebody had so much money,
> "extra" money, that they couldn't find any other investments for it, or
> what ? What am I missing ? Ok the interest rates are higher on subprime
> loans ,but the interest  doesn't get collected in a default , does it ?

that's assuming that the people who sold them a bill of goods are going to
pay the consequences. Jordan and Doug would know better I guess. is it
always the case that some out post of VultureLoanCo were staffed by people
who would find themselves sacked for targetting poor folks? I don't know
much about it, but I'd assume that the deal was, like that guy I used to
work with, more about getting money right then and there for signing up for
a loan -- and not paying any consequences right away.

Around here, the biggest problem isn't that poor people were more likely to
get loans. the issue was the way those communities were destroyed by the
vultures already. That is, what they did was buy up tons of property,
speculating. they would buy a house in a low income neightborhood. they
would sell it a few month or a year later. Before this blew out of the
water, the local paper tracked some 20 homes and IIRC they each went through
about 10 sales in the last 20 years, with the bulk of that activity in the
last ten. Each time, people made money hand over fist. They'd buy on auction
for 10k, sell for 50k. that person sold for 80k. Thenext for 120k.

Meanwhile, promises of how they were going to invest in the houses went
unmet. Instead, they turned into abandoned buildings, with the city having
to go through stupid processes to get them marked abandoned -- or whatever
it was they did. meanwhile, the homeless and drug addicts were using the
homes, and destroying them even more. The tenants who *did* live in houes
owned by the vultures were given the shaft by absentee landlords.

It's a big fucking mess, is what it is.