| Property tax loans rise despite risks
But consumer advocates and mortgage lenders say there are better ways to pay the taxes, including unsecured credit card loans, creation of escrow accounts or refinancing. Most counties offer payment plans to help homeowners. An indication of the growth of property tax loans is reflected in the increase in the number of tax lien transfers from a local government to a loan company in the state's largest counties, according to a recent report by the Center for Public Policy Priorities. The jump was most remarkable in Travis County, where tax lien transfers went from about 50 in 2005 to an estimated 1,250 in 2007, after lending companies increased their marketing in the state capital. In Harris County, loans jumped from about 650 in 2005 to an estimated 1,500 last year.
Bank stocks: Are they safe yet?
In the savings and loan crisis, where mortgage lenders had made large numbers of irresponsible loans, financial stocks dropped almost 50 percent over a period of 12 months. That compares with a drop of only 20 percent for the S&P 500. The second decline has its roots in the 1997 East Asian financial crisis. Long- Term Capital Management, a hedge fund that used computers to profit from small price discrepancies between U.S. and foreign bonds, collapsed when the debt crisis disrupted bond-price patterns. The stock market turmoil that resulted lasted for seven months. During that time financial stocks dropped 34 percent; other major market sectors lost 20 percent to 30 percent. .
Subprime Borrowers: Not Innocents
A simple look at the blunt reality reveals that borrowers themselves should assume primary responsibility for the current subprime crisis. Millions of borrowers, all over the country, knowingly signed mortgage contracts they cannot now afford to honor. Provided that lenders did not engage in force or fraud—and there's no particular evidence they did so on a large scale—borrowers should do whatever they can to live up to the contracts they signed. The policies of lenders and government certainly helped the current crisis develop—but ultimately, do not absolve borrowers of responsibility for their debts. And in most cases, the mortgage lenders not only are innocent of the predatory practices borrowers complain about but also are feeling the pain right along with them.
Thomas D. Elias: Making hay off the misery of others
There's a case to be made for a governor flitting about from one disaster scene to another, as Gov. Arnold Schwarzenegger did constantly during the fall fire season, in the interests of building morale.
But there's a point where it becomes grandstanding, trying to make hay and boost a political image by taking advantage of the misery of others.
Schwarzenegger appeared last fall to have little idea of the boundaries between the two phenomena. And he did it again just as this month began, trumpeting through press releases picked up in all major California media that he had "worked with loan services from (four major mortgage lenders) to streamline 'fast-track' procedures to keep...subprime borrowers in their homes."
A week or so later, President Bush did much the same thing, plumping for an interest rate freeze.
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