Archive for October 7, 2008

SUBPRIME- CRISIS TIME- OHIO


by Loraine Ritchey thatwb@yahoo.com

There have been hundreds of thousands of words written about this mess. How it started and where – the writers are all more knowlegeable than myself and I defer to their expertise. However, my mind has wandered back to a beginning .

Source
http://news.bbc.co.uk/2/hi/business/7073131.stm

My husband and I came to Lorain literally because the bus broke down and he found a job whilst waiting for the next bus. We didn’t come because of the school system, the house prices, the lake but because of a job.

The house we chose for our starter home was through the VA- O % down BUT we had to meet a stiff set of standards and so did the house. It was inspected, we couldn’t finance more than a certain percentage over his yearly “base salary”- overtime and or the wife’s wages were not counted. Still even knowing the house was worthy and the price was on par with resale and that the VA felt we could afford the mortgage -the responsibility of home ownership kept us awake for many nights .

The starter home is ending up to be our finishing home. There were times through the decades of our mortgage (Ever notice that mort and morte – the French for death have the same root- might be an omen) that we looked in Amherst and Avon etc. for a larger home as the children grew, but I always felt that I may be getting newer and bigger ( as well as a much larger payment) but to me the way this old house wrapped her protective ivy covered walls around us the other houses just didn’t feel like home. So we stayed, made do and tried to give back to this neighborhood, watched with sadness as many of our neighbors gave up and left for other parts of Lorain and area.

The discovery of my new neighborhood being Lorain’s oldest ( Charleston Village) led to further ties to these old streets and a sense of staying where I was beginning to feel “at home” .

I started to talk about this “village” and was a guest speaker on the historical aspect of Lorain 6 or so years ago at a Board of Realtors seminar. I remember the occasion vividly as the speaker before me went into great detail about the creative financing of putting anyone into a home. Specifically mentioned was Fannie Mae and how she had put people in 100 , 200 to 300 thousand dollar homes for as little as 50 to 150 or 300 a month with no money down.

Now I am not terribly bright financially and I thought I must be mistaken so afterwards I asked some pointed questions ( which did not make me very popular) as to HOW when I had had only a $22,000 dollar mortgage and my payment was $119.00 you could put people with a lower income into these homes at that price.

I was told there were any number of deals available through Countrywide and Fannie Mae and others, interest only etc different ways of calculating the mortgages all a bit beyond me (it just didn’t seem feasible to this non math brain) but I was effectively put down.

I came home rather upset, as I remember, as to “

what were they thinking- if mortgages are being given to people who cannot afford that price of house just to get them in the door- what is going to happen when they have to pay the insurances, the taxes ,the upkeep, the heat and utilities what happens in 5 or 10 years when the principle becomes due?”

but I guess it isn’t my concern -thought I – or my business- it is after all the American Dream.

Countrywide financed the house next door but one to a family who could ill afford it and they borrowed even more to add a sun room and buy a new truck. You guessed it they foreclosed within three years but not before the house was destroyed. It became my concern and NOW thanks “to get them in a house and get your commission” thinking it is the world’s concern……. and it started where?????
http://news.bbc.co.uk/2/hi/business/7521250.stm

AND MY QUESTION TO THE CANDIDATES FOR OFFICE IS NOT WHAT ARE YOU GOING TO DO NOW BUT WHERE WERE YOU WHEN THESE MATH GENIUSES DECIDED TO PLAY ‘SUBPRIME-PAY DAY’ and the AMERICAN DREAM BECAME THE WORLD’S NIGHTMARE ?

October 7, 2008 at 11:48 pm 5 comments

Paula’s Perspective- October 6th- Council

Everything passed that was in second reading….
Paula Tobias by Paula Tobias

Disclaimer:
I try very hard to listen, think about what they’re saying, and write key points down. If I’ve missed something please let me know.

LEGISLATION – SECOND READING:
1.___Ord. amend Ord. 114-01, Section 11 of Exh “A” to add position of Supervisor of Operations A7.
This is a management position in the Water Department

2.___Reso adopt policies to estab & implement a Green Team Lorain Initiative.

Good Point brought up about who’s going to spear head the Green Program for the City, as Mr.Given mentioned, a lot of good ideas, often nothing happens, no follow through. Tony said Mr. Challender would be the go to.
ED Note Mike Challender is the Executive Director of Lorain Growth Corporation

3.___Ord. auth advertising for bids for construction of a west side water tower.
Mr. Edwards asked for a guarantee from the Engineers that designed/decided on this, http://www.cityoflorain.org/documents/council/packet_10-6-08_IV1-IX4_799.pdf Pages 7-10 had Malcolm Pirnie’s response and the Law Director’s opinion.

Also another, “Did you know?” If you put your leaves in the street you can be cited?
 New resolution Council passed within the last year
 Better let your family and friends know about that one

The LCCAA item is going to Committee.

ED NOTE: The Morning Journal has an article on this this morning
http://www.morningjournal.com/articles/2008/10/07/news/mj102085.txt

The legislation before council is different than what the Community Development Department originally proposed to the administration, Krasienko said. Under that plan, the city would assume the mortgages, move LCCAA into the larger of County Commissioner Ted Kalo’s two downtown floor covering shops, move Kalo’s business into the smaller of his shops, and then sell the LCCAA building. The mayor said that deal didn’t appear correct and left too many issues up in the air.

Also Attorney Giardini has a letter to the editor in response to the Editorials and Blogs – for the sake of fair and equal time on Blogs of Lorain 🙂 I have printed his letter in its entirety
– the letter can be found here in the Morning Journal
http://www.morningjournal.com/articles/2008/10/07/opinion/doc48eb43a756e28034752761.txt
No ‘bailout’ in Lorain

To the Editor: Your “Editor’s Column” in yesterday’s newspaper titled “Government bailouts, Lorain style, afoot” may have been well-intended, but it was unfair and inaccurate.

First, the City of Lorain is not “bailing out” the Lorain County Community Action Agency, but it is trying to keep the agency and its 40 plus employees in downtown Lorain by assisting the LCCAA with a move to a building which is far more suitable to its needs.

Second, the City of Lorain is not “bailing out” Ted Kalo because he already has a buyer for his building. Ted agreed to hold off closing on the sale of his building to give the city a chance to work out a deal with the LCCAA because it needs a building like Mr. Kalo’s to more efficiently provide service to the community.

Finally, there is no deal for my law firm to move into the LCCAA building because that building has no elevator; it has a crumbling foundation and is too big for my small firm. I have not asked the city for anything. I merely said to the city I would consider buying the building if it could be fixed at a reasonable cost.

My partners and I made a large investment in our current building 20 years ago when it and most buildings downtown were vacant, and when interest rates were around 18 percent. Back then, The Morning Journal praised our willingness to invest in downtown Lorain when everyone else was moving out.

Since then, the only “bail outs” have been by businesses and the then two largest law firms in the city. They have all “bailed out” of downtown Lorain or worse, they have “bailed out” of Lorain altogether. Meanwhile, guys like Ted and myself and my partners have kept this part of downtown occupied and thriving. Our thanks for sticking it out and making large investments is your column comparing us to the likes of those criminals on Wall Street. To say the least, it was disappointing and disheartening. I have come to expect that sort of thing from certain political people and certain “bloggers” but not from responsible journalists.

Anthony B. Giardini, Lorain

October 7, 2008 at 12:59 pm 3 comments


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