Lenders, Meet the Law of Unintended Consequences

Leave a reply

Remember when the banks were so hot to trot on toughening the bankruptcy laws?  This BusinessWeek article looks at why they might now be regretting those tougher rules.

The latest lesson for lenders from the housing crisis: Be careful what
you wish for. Banks and other financial outfits spent eight years and
$40 million lobbying for sweeping new bankruptcy rules that would limit
their losses from deadbeat debtors. But it turns out those changes,
enacted in 2005, are forcing more troubled borrowers to walk away from
their homes—even those who didn’t take on risky mortgages in the first
place. And that’s bad news for lenders, which suffer financially every
time they have to take a troubled property on their books.

Before the new rules kicked in, many consumers could find debt
relief—and keep their homes—by filing for bankruptcy protection. Now
the process is much more onerous and expensive and the benefits more
limited, making foreclosure seem appealing by comparison. A July paper
by David Bernstein, a researcher at the U.S. Treasury, found that
800,000 fewer homeowners have filed for bankruptcy since the rules
kicked in. A quarter of those people, says the report, have likely had
to give up their homes as a result—boosting foreclosures nationwide at
least 4%. "[The rules] are directly responsible for the rising
foreclosure rate," notes another report by investment bank Credit
Suisse (CSR). Counters Philip Corwin, counsel at the trade group American Bankers Assn.: "These studies don’t stand up to scrutiny."

The article doesn’t make clear how the studies might not stand up to scrutiny, so I don’t know if the ABA shill offered any details of their scrutiny, but I tend to believe that the tougher qualifications for bankruptcy had to increase the rate of foreclosures over what they would have been had the laws remained the same.  I don’t believe for a second that the tougher standards are solely responsible for the increase in foreclosures, but they certainly contributed.

Spammer Cleared

Leave a reply

Most of us hate spammers.  Let’s be honest, the only people who love spammers are spammers and their mothers, and in some cases even that might be stretching it.  That’s why today’s Virginia Supreme Court ruling that Virginia’s spam law is unconstitutional and that overturned the conviction of North Carolina-based spammer Jeremy Jaynes’ is sure to cause great gnashing of teeth.

Not that spammers have really been hindered by the various anti-spam laws out there.  They just moved their operations overseas and pumped up the volume.  Still, Jaynes’ case seemed to be one small instance where we would see justice done to one of those purveyors of penile enhancements we all love to hate, but even these roaches appear to have First Amendment rights.  Well, so do I and I’m going to use it to say that in my humble opinion Mr. Jaynes is still a little troll who deserves to be someone’s playmate in one of Virginia’s correctional facilities.

Track Your Family Name Around the World

3 Replies

Here’s a site called World Names Profiler that lets you track your surname (family name, last name, etc.) around the world.  I plugged in the name "Lowder" and found that the epicenter for Lowders is here in North Carolina.  Interestingly, though North Carolina is the top region for Lowders the top two cities are in the UK, with the very top being Dinas Powys & Penarth, Wales.  I don’t even know how to pronounce that.

More Proof That Size Doesn’t Always Matter

Leave a reply

You sly little devil, you thought my headline was about, uh, you know.  Sorry to disappoint.  Size, in this case, refers to paychecks.  According to this story over 20% of people that make more than $100,000 a year report living paycheck to paycheck.  For those of you who are math challenged that’s more than one out of every five.

Of course the story features the predictable advice from personal finance "gurus" and you can skip that.  I mean who doesn’t know that you should track all your expenses, eliminate unnecessary expenses, stop trying to keep up with the neighbors, forego that daily double mint mocha latte frappacino swirl and have your 401-K contributions automatically taken from your paycheck?  Apparently a bunch of people who make enough money that they should know better.

For my kids I offer this advice: your mother is a genius at managing money, your dad’s the idiot who spends it.  Listen to your mother, always.

Oh, and if you run a small biz or are a big earner and need a money managing guru to put your finances in order then give me a shout.  I know just the person to help you out. 

links for 2008-09-11

Leave a reply

Where Plants Go To Die

1 Reply

deadplants

If you want to kill a plant the surest way to do it is to send it to us for safekeeping.  In what must be a textbook example of God’s sense of humor anything that is classified as a plant worth keeping will suffer a slow agonizing death on our property.  On the other hand if it’s classified as a nuisance plant, a.k.a. a weed,
it will prosper here.  To the left I give you evidence of our decidedly brown thumbs.  Since the weatherman is calling for rain the next few days Celeste figured she might as well see if the plants could be saved by putting them on the deck for a good soaking.  Personally I think it’s a vain attempt, but it can’t be any worse than leaving them in the house which is what got them to that state of decay in the first place.

links for 2008-09-10

Leave a reply

Not the Sharpest Knife in the Drawer, Part Whatever

Leave a reply

One contributing factor to newspapers’ current problems might be that some of their management might not be too bright.  A former Raleigh N&O writer blogs about a memo sent out by one of the editors at the paper with his/her evaluation of that day’s issue:

A few comments on some good work in today’s paper:
–A lively front page that gave our readers plenty to talk about.
Has the political right truly turned the corner and will cease to
demonize opponents on so-called moral issues, or are we witnessing the
boldest, most cynical, most hypocritical political spin in modern
history? What is one to make of John McCain’s greeting at the Twin
Cities airport yesterday of America’s most famous baby mama with a warm
hug, and the apparent attaboy pat on the shoulder for the
self-described “f***ing redneck” baby daddy? Are we now celebrating
teenagers’ raging hormones?
The claims department feature (see 8a) is a great reader service. I
would like to see more scrutiny of the “facts” in Sarah Palin’s speech
last night.

Now to our local politicians….Is Kenn Gardner just an inept liar
or a man so greedy that he doesn’t care whether we think he’s an inept
liar as long as he gets paid?

–A newsy and entertaining Triangle&Co. front.
I’d bet that Barry Saunders is hearing a lot of amens this morning as
well as feeling a lot of hate. Good. A columnist should stir ‘em up.
Much of America may have forgotten, but the black community has a very
long memory of Republicans demonizing black unwed moms. The black
wire–radio and a growing black blogesphere–is crackling this morning
with wicked “Juno” jokes. In general, black bloggers (wearerespectablenegroes.blogspot.com. A warning to the easily offended, the name is a big clue)  are having a great time with the GOP show in Minneapolis.

–Lots of interesting people stories in the sports section about
college athletes and the pros. For those following tennis’ sibling
rivalry, Serena has gained a slight lead by beating older sister Venus
in the U.S. Open quarterfinals.

–Good, timely story–and an inviting headline (Life over breasts)– on the Life, etc. cover.

Given that the cardinal sin that newspapers and other news outlets are accused of committing is "bias" you would think that a manager at a prominent news outlet would avoid putting his/her biases in writing.  Everyone has biases, but when you’re in a business that lives off of its reputation for objectivity, well you just might want to keep those biases to yourself.  If you put it in writing it will find its way to someone you don’t want to see it.  We’ve had email and the web for, oh, 15 years or more and to think that someone in the media wouldn’t realize this would go public is just too dense for words.