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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHow banks are legally stealing homes of poor in Baltimore
BY ALICE OLLSTEIN AUG 27, 2015 4:58PM
The death of Freddie Gray in police custody in Baltimore and the ensuing protests brought the nations attention to the economic devastation that continues to grip the city. Now, new data shows powerful hedge funds are profiting off of struggling families in Baltimore by buying up debts as small as $250, charging high interest rates, and taking their homes when they fail to pay. A report just released by the research and advocacy group HedgeClippers documents how the Wall Street hedge fund Fortress Investment Group and the Los Angeles-based Imperial Capital bought up hundreds of these small liens this year on everything from an unpaid water bills to delinquent property taxes and could take property worth tens of millions of dollars if the families cant pay.
Once the hedge funds buy up these small debts, they reap an 18 percent interest, according to the Baltimore-based research group The Abell Foundation. More fees pile up after four months, and if the families cant pay, they lose their homes. An analysis of those impacted in 2014 found the families had been living in their homes an average of 21 years. Half were elderly, more than a third were disabled, and the majority were African American.
State Delegate Cory McCray, a Democrat who grew up in and represents Baltimore, told ThinkProgress he has gotten a handful of phone calls this year from constituents on the cusp of losing their home over an unpaid water bill.
The city needs a way to recoup its money, but they shouldnt take someones home for that small amount, he said. Your house is your wealth that you pass on to the next generation. We have to protect that.
McCray and other lawmakers recently passed a bill to raise the amount that would trigger a lien from $250 to $500, which he emphasized is still an unfairly low amount over ...
LittleBlue
(10,362 posts)The governments within Maryland need those payments to provide services, so they sell to hedge funds.
The alternative is cutting services. You can't make money out of thin air (unless you're the Treasury lol)
Gotta pay your bills or you end up beholden to hedge funds. Or end up like Detroit.
kristopher
(29,798 posts)According to the mindset of those holding certain (to me repugnant) values.
LittleBlue
(10,362 posts)Who else is lining up to buy near-worthless liens in Baltimore of all places?
kristopher
(29,798 posts)and see if you can't come up with a couple of ideas. You might try stretching a few of those ethical muscles you've allowed to atrophy.
LittleBlue
(10,362 posts)If it's so easy to stretch your mind, you should do it and save Baltimore. Since, you know, the people who run Baltimore are just too dumb to fully use their minds.
kristopher
(29,798 posts)...it is hidden from you by how you've set your 'values'.
It might be worth pointing out that "values" are established by the relationship between things we believe to be true and the relative ranking we give those beliefs.
Rex
(65,616 posts)Assuming you are still not making payments on that car (double yikes) America sure has become one hell of a country. If your house is your families measure of health, then trying to find a way to keep that family in that home makes more sense than killing them off for a few 100s.
Then again, I did just suggest common sense. Something America seems to be in short supply of, specially these funny banksters and their funny policies written by our funny Congress.
LittleBlue
(10,362 posts)But that's a federal issue.
If you were mayor, and your choice was to sell these liens to provide services, or become an insolvent ruin like Detroit, it isn't an easy decision. We can sit back and shoot the breeze with full knowledge that we aren't responsible for a single life in Maryland.
Without federal intervention, these cities are operating on a shoestring.
Rex
(65,616 posts)of government. What you are describing is a microcosm of what is happening on the federal level and it is as wrong too. You cannot punish home owners for the local city council running the city into the ground. Not unless the home owners are on the council making the horrible choices.
I know the mayor of my town and the city treasurer, neither of which have to depend on the two banks in town to keep local services running. And we are considered an 80% economically disadvantaged town. So what you say...I don't buy it, the responsibility falls on the government. If they have to raise property taxes or school taxes, so be it.
Why is it I never hear raising taxes as an argument from people like you? It is always the corporations are right, the people suffer and end of story.
LittleBlue
(10,362 posts)Why is it I never hear raising taxes as an argument from people like you?
I have advocated countless times for increasing taxes on the wealthy and banks, forcing corporations to repatriate profits and pay taxes, AND a tax on H1b visas and other outsourced jobs. You are 100% thinking of someone else.
The whole concept of government is to have a mixed tax base. You must have the rich to offset the services needed for the poor. Unfortunately the people with money moved out of these cities long ago and all that's left are people who receive benefits. That doesn't work.
Whether today or 10 years from now, Baltimore has to pay their debts. It will be pain now or extreme pain tomorrow. Unfortunately that is the nature of our layers of government.
Force people out of their homes or lose teachers, schools, welfare and other services. This was always going to be painful. The money may not exist to keep these people in their homes unfortunately.
Rex
(65,616 posts)Just seen enough advocating for the Establishment and they really don't need any. They are the ones that own all the property and jets and boats and private islands.
And they NEVER talk about taxes. Would rather jump into the sea.
Baltimore needs to find a better way to keep people in their houses, without losing them and that key amount of annual revenue that is no longer coming in...all over a few hundred dollars.
Humans are shortsighted, I think we both agree on that.
LittleBlue
(10,362 posts)Maybe a Kickstartr for people to pay small liens. It's sad that in a country with so much money the only solution I can imagine is internet contributions.
I hate to say it but cities like these are likely doomed over the long run. They were built in different times and look likely to go the way of the ghost towns in the west. That is, unless they can find some way to attract a tax base who can pay. The fedgov intervening is the only other way, and unfortunately that looks impossible.
Rex
(65,616 posts)I agree, Detriot was just the first in a long line of mega cities that will be gutted due to the standing plutocracy run by inept city management. And of course it cannot be easy, but it can be done. From tiny towns like mine, to huge towns like Detriot.
Detriot is really one of the scariest and under reported signs of our times imo.
kristopher
(29,798 posts)Pleading pragmatism isn't a justification - especially when it is based on a premise that excuses the situation be blaming the situation.
(As long as it isn't your home that some gimmick is used to steal, then) it is, unfortunately, just the system, right?
PoliticAverse
(26,366 posts)Hedge funds aren't banks and anyone can buy these liens.
kristopher
(29,798 posts)You've clearly keyed on the most relevant aspect of the story.
Thinkingabout
(30,058 posts)The property, that lien is then purchased and then the lien holder owns the property.
think
(11,641 posts)More info on the hedge fund involved:
https://en.wikipedia.org/wiki/Fortress_Investment_Group
Faux pas
(14,687 posts)Disgusting Predatory A**holes.
Angry Dragon
(36,693 posts)I call it 'The Bush Disease'