Bankrupt tactics

One of the people in your story about foreclosures ("Foreclosure fight," Oct. 15) has already lost her home. A moratorium on foreclosures won't help her. Everything proposed in Washington, D.C., and Lansing (including a moratorium) relates to helping those who are still in their homes. No one is suggesting anything to help those who have already been foreclosed. "Let them eat cake."

When I was in law school, bankruptcy was a last-ditch effort to avoid becoming homeless. Now bankruptcy is merely a step along the way to homelessness. Previously, bankruptcy allowed you to keep your home. Now you get a percentage of the equity if there is any. The idea used to be that the bank could afford a loss better than the unfortunate debtor. Now the idea is that the consumer should be punished regardless of unemployment, illness or other changes.

The bankruptcy courts now act as little more than a federal collection agency, designed to make sure that creditors get as much as possible. The congressional leaders who voted for this "bankruptcy reform" should be ashamed. It didn't help the banks. It certainly did not decrease homelessness in America. Previously, interest rates were regulated. Now, deregulation allows finance companies to rape consumers with impunity. No one is even suggesting changing credit card and other interest-rate laws.

As a judge, I warned that we were creating a new wave of homeless people. Now the media reports new "tent cities" across the nation. Millions of people (like your story's Sandra Hines) have become tenants, or are living with relatives and roommates because their other option is to get a tent. The Wall Street bailout again proposes to give billions to banks. Why not give the help to the consumers so they can pay their mortgage (which, in turn, helps the bank that holds the mortgage)? Why not use the money to create jobs?

Many Americans got mortgages with local banks. Everything was fine until the bank sold their mortgage to a non-local investor like Countrywide. Their payment to the local bank was returned. When they tried to pay Countrywide, they could not do so because they had not yet been given a new account number. For many new renters, the first communication they ever got from Countrywide was a letter telling them that they were now 90 days past due and that Countrywide demanded the full amount. Contrary to public relations claims that they want to work with homeowners, Countrywide failed to take calls, refused to answer letters, and did nothing except demand that debtors pay the arrearage in full. Of course, if you could pay the arrearage, you wouldn't have fallen behind in the first place.

A moratorium on foreclosure would help some, but it is not enough. Full employment is the real answer. —Rudy Serra, Ferndale

Misdirected energy

Re: Jack Lessenberry's "Stoking the fury" (Oct. 15), I found it a well-stated analysis of the state of the union. Scary, isn't it?

Perusing AOL's news bits on the election and reading the comments on blogs, it is scary to see the ugliness creeping up from below. Imagine if we Americans could correctly focus that passion at the real issues, such as mass ignorance of epidemic proportions that has allowed predator money-mongers to prosper, feeding on every last penny. We might even find peace in the equation. —Timothy Elam, Southfield

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