December 14, 2009

Cleveland’s Foreclosure Mess: PD Finds the Enemy, and Learns That It’s Their Government


If there’s a Ground Zero for America’s foreclosure mess outside of much of California and metro Las Vegas, it’s probably Cleveland, the Northeast Ohio city known in most of the rest of the state as the Mistake on the Lake.

The Cleveland Plain Dealer’s Mark Gillespie got out from behind his desk, committed some good old-fashioned journalism, and went looking for the mistakes that exacerbated the town’s breathtaking home foreclosure rate. Lo and behold, he found that city government itself contributed mightily and extraordinarily negligently to the debacle. Go far enough into Gillespie’s report, and you will also find an implicit admission that the Community Reinvestment Act (CRA) also played a pivotal role (bold is mine):

How Cleveland aggravated its foreclosure crisis

The city of Cleveland has aggravated its vexing foreclosure problems and has lost millions in tax dollars by helping people buy homes they could not afford, a Plain Dealer investigation has found.

The city provided mostly low-income buyers with down payment loans of up to $20,000 through the federally funded Afford-A-Home program, but did little to determine whether the people could actually afford to keep their homes.

That lack of oversight persisted for years, even as hundreds of loan recipients defaulted on mortgages, many within two years, the newspaper found by analyzing property and loan records covering the period between 2000 and 2007.

For example, nearly half of 584 homes sold by the top three for-profit companies that tapped into the program over the eight years have gone into foreclosure. More than one-third of those homes have sold at sheriff’s sale or sit abandoned because banks did not take them back.

….. The loss in Afford-A-Home dollars from failed purchases from Cresthaven Development Corp., Rysar Properties Inc. and Pebblebrook Properties Inc. thus far totals more than $2.3 million.

Presented with the newspaper’s findings, city officials acknowledged problems with the Afford-A-Home program and ordered tighter eligibility standards for buyers and sellers.

….. The program is primarily driven by companies that buy, renovate and resell houses. The companies typically seek city approval to sell properties using Afford-A-Home loans before renovations are completed. They are responsible for sending the buyers’ Afford-A-Home applications to the city.

A Plain Dealer review of more than 50 Afford-A-Home files found borrowers who, according to their applications, earned as little as $15,000 a year when the city — and mortgage lenders — gave them loans.

One woman, according to a letter in her file, was homeless and living in a car with her children when she got $10,000 from the city. Another couple received food stamps and were jobless when they got an Afford-A-Home loan.

Through 2004, the first-lien mortgages for Afford-A-Home buyers typically came from local banks fulfilling federal requirements to lend money in poorer neighborhoods. The loans carried low interest rates.

Read the whole sickening thing.

The final bolded sentence in the excerpt shows that the CRA was a key element in Cleveland’s catastrophe. CRA mandated that banks originating first-lien mortgages extend them to undeserving borrowers, or face brutal challenges to their ability to continue in business during regulators’ audits and to other business moves such as mergers and acquisitions. As would be expected, short-term survival instincts overcame sound underwriting. Now, according to leftists, it’s the banks’ fault for doing what they were intimidated into doing.

But then, proving again that the term “government oversight” is usually an oxymoron, the city agency, even with no similar level of threat looming in the background, doubled down. Even if the apps were submitted by development companies who should have known better or were lying about certain key information (that appears to be the case in two sidebar stories Gillespie relates), that doesn’t excuse the complete failure of oversight, and absolutely doesn’t justify the program’s continuance on auto-pilot for many years despite obvious early-stage problems.

Many in Cleveland still persist on blaming someone else for why the city’s foreclosure situation is much worse that the vast majority of other cities in the US. Look in the mirror, guys. Every city’s bankers faced similar CRA problems, and to the extent they did what first-lien lenders in Cleveland did, you can hang the blame on Uncle Sam and CRA. But it’s Cleveland’s residents who elected the people who created the agency that threw federal second-mortgage money at people with apparently little if any concern over whether it would be repaid, ultimately turning entire city blocks into barren wastelands. Though it’s a popular claim among lefty bloggers in and around Metro Cleveland (maybe “Metro Mistake” is a more appropriate term), George Bush and the evil Republicans sure as heck didn’t do this.

The establishment media-related question is this: How many other cities became similarly involved with this disastrous second-mortgage effort, with similarly disastrous results? I daresay Cleveland’s mistakes have been made elsewhere, and more than once. My early nominees for PD-like investigations are Detroit and Chicago. Journalists there ought to get to work.

Cross-posted at

Mayors’ Report Details Rise of Homelessness and New, Growing ‘Tent Cities’; Press Ignores or Glosses Over

In a Washington Post opinion piece published on December 6, longtime expansionary entitlement program apologists Peter Edelman and Barbara Ehrenreich ripped into the 1996 welfare reform law and its alleged effect on the poor during the struggling economy of the past two years.

In the course of their rant, Edelman and Ehrenreich told readers something that the rest of the press has largely ignored since Barack Obama took office in January: Homelessness is up, as in way, way up:

According to the National Law Center on Homelessness & Poverty (NLCHP), the number of homeless Americans is up by 61 percent since the recession began in December 2007.

In fact, a new report from a source normally favored by the press tells us that new “tent cities” have sprung up, and that others in existence a year ago have grown. Does anyone think these facts would remain so well-hidden if Bush 43 were still in office?

Interestingly, it seems that Edeleman and Ehrenreich appear to have misinterpreted their information source. An NLCHP report that appears to have been released on December 4, 2008 is where I found a stat matching the pair’s claimed increase. But it was very differently phrased (bold is mine):

Reuters has reported that local and state homeless groups have seen a 61 percent rise in homelessness since the foreclosure crisis began in 2007.

What the media has described as “the foreclosure crisis” actually began in late 2006 or early 2007.

Edelman and Ehrenreich erroneously presented their stat as if it’s a 2007-2009 figure. So their stat doesn’t contribute to proving that homelessness has increased significantly this year. Oh well, that’s okay, because the U.S. Conference of Mayors just did so, even if you have to dig a bit to get to the confirming info.

Perhaps in a bid to protect their Dear Leader in Washington, the headline in the mayors’ press release (PDF; “U.S. Cities See Sharp Increases in the Need for Food Assistance; Decreases in Individual Homelessness”) makes it appear as if homelessness might be less of a problem than it was a year ago.

Uh, not exactly, as this detailed look at the 27 cities described in the actual report (PDF) shows:


As you can see, 15 of the 27 reporting cities showed increases. Some were slight, but more than a few were quite significant. Only five cities had clearly reported or determinable decreases. The situations in two other cities seemed to indicate an overall increase, while the situations in five others were unclear (a couple of the unclear ones seem to indicate increases, but I’m being conservative in my evaluations).

Of course, the above list does not include many of the country’s largest cities, including 17 of the top 30 in population. But in short order, I was able to determine that homeless during the past year has gone up significantly in at least these four other cities based on articles I found relating to the situations in New York City, Baltimore, and (anecdotal) Houston. An interactive map produced by another advocacy organization shows that family homelessness in Indianapolis increased by 78%.

Enough already. That homelessness is up significantly in the past year should at this point be beyond reasonable dispute.

That press coverage of the phenomenon has been weak is also pretty obvious, but in case there is need for reinforcement, consider the following:

  • A search on the word “homeless” at the Associated Press’s raw feed page comes back with nothing relating to the overall homelessness situation in the nation or individual cities. The AP thus appears to have totally ignored the mayors’ report released last Tuesday.
  • The same search at the AP’s home page comes back with the same non-results.
  • Even when noticed, the reporting seems grudging. Reuters’s coverage of the mayors’ report is a case in point. Though the headline is strong (“Hunger, family homelessness on rise in U.S. cities”) it’s less than 300 words, and contains this amazing statement: “Only 10 cities reported having so-called tent cities or other concentrations of the homeless.”

“Only” 10 “tent cities”? “ONLY” 10?

Though “only” is a word the mayors’ report used (more Dear Leader protection, it would appear), that doesn’t excuse the wire service from missing this “little” tidbit in that same report:

Detroit, Los Angeles, Nashville, Charleston, and Providence all reported that new tent cities or other large homeless encampments have arisen over the past year. Des Moines, Phoenix, Sacramento, and Seattle all report that their existing tent cities or homeless encampments have increased in size over the past year.

Wow. Five new Obamavilles, and four others getting bigger, and it’s not news. Imagine that.

Meanwhile, I publicly thank welfare nostalgics Edelman and Ehrenreich for inadvertently nudging me to look into all of this.

Cross-posted at

Positivity: Woman interprets for the deaf in parishes

Filed under: Positivity — Tom @ 6:10 am

From Cincinnati:

Thursday, December 10, 2009

Angela Dornbach didn’t hear her full name spoken until she was in first grade, but she understood a spiritual message loud and clear at a very young age.

Born on Christmas Day 1937, Dornbach was called “Angel” by family and friends as a child. Raised by deaf parents, she became familiar with seeing an angel performed in sign language to identify her.

Dornbach’s late parents, Edmund and Stephanie Brooks, weren’t able to speak, so she and her three siblings — all of whom can hear — learned to sign at an early age.

As a youngster, Dornbach was immersed in the deaf culture, once believing that every family had a deaf person. Now, she believes her parents taught her the primary form of family communication — American Sign Language — probably when she was seven or eight months old.

“I loved the language,” Dornbach said.

That admiration continues today for the Milan, Ind., resident. Dornbach, 72, can often be found interpreting for the deaf at several area Catholic parishes, including St. Jude in Bridgetown, Good Shepherd in Symmes Township and St. Teresa Benedicta in Bright, Ind.

Greg Williams, music director at St. Jude for the past 10 years, said Dornbach provides an important service for up to five deaf parishioners at the church. He said the parishioners enjoy the fellowship and often communicate with Dornbach after Mass.

“The clients really appreciate her,” said Williams, who has worked with Dornbach for about seven years. “She is absolutely what the clients need.”

Go here for the rest of the story.