CNN Money: “Where Cleveland went wrong”

(c/p CCD)

Another long foreclosure crisis article. No new insights, but here’s some neglected recent history:

Cleveland tried to enact local anti-predatory lending ordinances in 2002, but national lenders then abandoned the market, according to Mark Wiseman, who heads the Cuyahoga County Foreclosure Prevention Program, which is part of the county treasurer’s office.

One bank representative, speaking under condition of anonymity, said the ordinances would have put local lending criteria well above and beyond the national standards. The lenders wanted no part of that.

Wiseman said banking lobbyists got the state legislature to nullify the local ordinances. Until this year, Ohio was one of only two states that did not include mortgage borrowers in their consumer protection statutes. And when the state passed anti-predatory lending laws in 2006, the punitive damages part of the law was gutted during the lame duck legislative session at the end the year.

“Under condition of anonymity.” I’ll bet. This is not a good moment for a banker to admit he thinks the “national standards” for mortgage lending in 2002 were just fine.


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