But right up until she hit the wall financially, Ms. McLeod was a dream customer for lenders. She juggled not one but two mortgages, both with interest rates that rose over time, and a car loan and high-cost credit card debt. Separated and living with her 20-year-old son, she worked two jobs so she could afford her small, two-bedroom ranch house in suburban Philadelphia, the Kia she drove to work, and the handbags and knickknacks she liked.
Then last year, back-to-back medical emergencies helped push her over the edge. She could no longer afford either her home payments or her credit card bills. Then she lost her job. Now her home is in foreclosure and her credit profile in ruins.
She worked two jobs. She wasn't a deadbeat.
Then, as Jack London so succinctly and aptly put it in The People of the Abyss (free ebook link -- but best read with the photographs or downloaded as a free PDF with them), "The thing happens."
Ms. McLeod, who is 47, readily admits her money problems are largely of her own making. But as surely as it takes two to tango, she had partners in her financial demise. In recent years, those partners, including the financial giants Citigroup, Capital One and GE Capital, were collecting interest payments totaling more than 40 percent of her pretax income and thousands more in fees.
Years of spending more than they earn have left a record number of Americans like Ms. McLeod standing at the financial precipice. They have amassed a mountain of debt that grows ever bigger because of high interest rates and fees.
While the circumstances surrounding these downfalls vary, one element is identical: the lucrative lending practices of America’s merchants of debt have led millions of Americans — young and old, native and immigrant, affluent and poor — to the brink. More and more, Americans can identify with miners of old: in debt to the company store with little chance of paying up.
It is not just individuals but the entire economy that is now suffering. Practices that produced record profits for many banks have shaken the nation’s financial system to its foundation. As a growing number of Americans default, banks are recording hundreds of billions in losses, devastating their shareholders.
Emphasis added by me.
CitiGroup, the largest of the large. How could they not know the repayment ability of the people to whom they were extending these loans? Where was their legally-mandated due diligence?
As for those shareholders: Look in the mirror, sucker! It's probably you and all the victims too! What's your money -- and retirement money -- invested in that you don't know of? They've screwed you both ways -- coming and going! Right here right now and in your future retirement years!
In short: Your life has been stolen.
You are now a slave!
More:
But behind the big increase in consumer debt is a major shift in the way lenders approach their business. In earlier years, actually being repaid by borrowers was crucial to lenders. Now, because so much consumer debt is packaged into securities and sold to investors, repayment of the loans takes on less importance to those lenders than the fees and charges generated when loans are made.
Emphasis added by me.
Where the hell are the RICO statutes to prosecute these bastards?! This is racketeering! This is outright fraud up-front!
More:
“Today the focus for lenders is not so much on consumer loans being repaid, but on the loan as a perpetual earning asset,” said Julie L. Williams, chief counsel of the Comptroller of the Currency, in a March 2005 speech that received little notice at the time.
Emphasis added by me.
If you can't see that as slavery, you're blind!
Just look at this:
Tallying what the lenders have made off Ms. McLeod over the years is revealing. In 2007, when she earned $48,000 before taxes, she was charged more than $20,000 in interest on her various loans.
Emphasis added by me.
Slavery!
Even more damning:
Her first mortgage, originated by the EquiFirst Corporation, charged her $14,136 a year, and her second, held by CitiFinancial, added $4,000. Capital One, a credit card company that charged her 28 percent interest on her balances, billed $1,400 in annual interest. GE Money Bank levied 27 percent on the $1,500 or so that Ms. McLeod owed on an account she had with a local jewelry store, adding more than $400.
Emphasis added by me.
These rates used to be the province of loansharking operations! Now it's legal!
Can you believe this? --
The Federal Reserve Board, for instance, recently put into effect rules barring a lender from making a loan without regard to the borrower’s ability to repay it.
Emphasis added by me.
Once Upon A Time In America, there were these people called Loan Officers. They were specialists in calculating a loan applicant's ability to repay. Where the hell did that occupation in finance go?!
As the profits in this indebtedness grew, financial companies moved aggressively to protect them, spending millions of dollars to lobby against any moves lawmakers might take to rein in questionable lending.
But consumers are voicing anger over lending practices. A recent proposal by the Federal Reserve Board to limit some abusive practices has drawn more than 11,000 letters since May. Most are from irate borrowers.
Emphasis added by me.
And all of you wonder why I'm voting for Ralph Nader? Do you think he would have let any of that pass in Congress without a huge, huge bloody fight? All you Obama fanatics, what's his voting record on all of this? Did he help sell you down the river?
Read the entire article, especially the plight of Diane McLeod at the end. They shook her down like champion con artists!
Finally: All you people who've squawked over the years that I "never buy anything" -- be sure to drop me a line when they're coming to collect all the toys you splurged on with your credit cards! That's one thing that will never happen to me, baby! Enjoy your misery.
Where's your money today?
You damn well better educate yourself!
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