Monday, April 30, 2007

Spring time - reshaping the front entrance yard area

We figured it out! The front area of our front yard (entrance to the house) that has been elevated and rocked with bricks laid for pathway, concrete poured for a patio and three concrete steps to walk up to the elevated 'gardens'. Nice idea, but makes no sense to the lay of the land and we have been trying to figure out if PO intended it to be decorative or why it was installed the way it was.

Work in progress as Sweetie has dug out the 'elevated' bed (translated to big pile of dirt, lined by boulders, overgrown with ivy and other assorted unasked for and undesireable volunteer growth). It is hard to make out in this photo, but the wall he has lined with boulders is the heighth of the dirt mound (elevated bed). The neighbor's yard right behind is about level with the bottom layer of the boulder wall. Sweetie has begun digging away and in a matter of a couple of days will haul most of that dirt away. While we weren't able to do away with the 'elevated' beds, he was able to seriously dent it and push it back away from the front door entrance leaving enough room for us to do a bit of landscaping and comfortably walk around to the back (more literally, the side) of the house.

The brick path that leads from the elevated bed to the front door is so steep that surely anyone attempting to walk it would easily slip and fall so it's not useful as a footpath, in fact, flat out dangerous. Nixed that by blocking off the brick pathway to avoid having visitors use it at all. But that was a bandaid fix.

The Weeping Spruce that spreads out horizontally across the top of the brick wall is a 'Must Save' so unlikely we would tamper with this element and will leave it as it is...

As I once again try to figure out the minds of the PO with some of their modifications to this house that make no sense to me, like adding a lower turret/cupola to the main level as an extension of the top floor cupola but in so doing, opening the whole side of the house to what amounts to the air flow of a front porch without the barrier of housefront or front door. So, I wander around that area looking at the historic photos trying to figure out where the front door orignally was and what did they do to the architecture that caused removal of the porch, the front entry door and secured the house from winter seastorm winds.

I digress, (as I usually do). So oila, as we are reviewing the historic photos of the house, and realizing that second PO dug out the basement, since there was no basement and the house was post and pier (sat on pier blocks) ---- wait a minute ---- PO dug out basement and what did he do with all the dirt he dug out?

We think we know. Now we think we know. Historic photos of this house show the front yard to be flat and in countour lines with the neighboring proprety. These two elevated mounds of dirt that have been landscaped with boulders and rocks and plantings, and brick pathway and concrete patio and steps --- was this all just to disguise two huge mounds of dirt removed from under the house when the basement was added?

The elevated 'bed' is so close to the front of the downstairs cupola, that it makes no sense when looking at the contour of the land. Now, with this 'aha' moment, perhaps it makes sense. Surely, I think to myself, with the amount of labor to dig out the basement, install bricks and concrete floor, you'd think there were funds or labor to haul away the dirt??
Did PO think this would provide some kind of water table drainage barrier or .....

Sweetie is doing what amounts to construction type labor in disassembling the boulders, digging out the dirt and hauling it away as he carves into this hill of dirt that makes the 'elevated' garden bed. I respect him for doing the labor, and taking on the project.

posted by Lietta Ruger

Quarter Sawn and Petrified wood for floors in this house!

Part 1 of this story and phase;

Our neighbor, who grew up in this fishing village of Bay Center, stops by from time to time when we are working outside and shares some stories with us about the old days in this community. We know then, that he was a child growing up when the second PO of this house lived here and their son was growing up. So our neighbor knows the son who inherited this old place. Son wasn't able to keep it and it was sold out from under him (sounds more like almost 'stolen'). Son lived his entire life with his parents, and then his mother when the parents divorced late in life. Son was what would be called in this day and age perhaps somewhat developmentally challenged.

We invited neighbor in to take a look at the house and tell us what he remembers about it back in the day - in it's more original condition. Neighbor, btw, is rather shy, and it has taken a few years to build up a neighborly over the fence relationship with him, so we are happy to learn the bits and pieces he is willing to shareof the old history of this community. Remembering that he himself was a child when he visited PO son, and he tells us they were infrequent visits inside this house, he does remember some things about the layout. Neighbor has an interesting adult life history, and is a commercial oyster farmer, knows about boats, the Bay and the River and knows that PO was a barge/boat builder so knows a bit about construction back in that day.

All this is lead up to explain how we learned about the wood floors in our house. Well at least the stairs and upstairs flooring. Since I tore out the horrid decades old 70s era brown shag carpet that covered the stairs and upstairs hall flooring, we are left with some major clean up and I still haven't come up with a decision for how to go; try to restore via sand and stain; paint and forget it or some other variances on either of those plans. After giving our neighbor a tour, I have renewed respect for the wood flooring.

He explains that it is 'quarter sawn' wood. What's that we ask. Wellllll, he says.... and explains that back in those days they cut the hardwood trees, sank them in the mud to let them cure (harden - petrify) and then took them to be sawed for use in building homes, boats, floors, etc.. This process of 'quarter sawn', he explains was considered wasteful since a quarter sawn strip of lumber has no knotholes and is cut in a particular way with the grain of the wood. The process then leaves behind waste pieces of wood. After the wood is given it's mud bath, it has become so hardened that it broke too many saws and in time sawmills refused to cut this kind of wood.

Wow! So guess this wood ain't going anywhere and will probably last another lifetime. Neighbor showed us how to look down the wood planks and notice the grain and no knotholes of any kind the entire length. We did and we noticed what he was pointing out, which we wouldn't have noticed or appreciated if he hadn't shared (with almost a reverence) the nature of the quarter sawn wood process.

He also explained how the nails had to be driven in a most certain way on an angle so as not to split the wood down it's length. Well, guess if they could get nails hammered in, the wood can't be too petrified, or perhaps so petrified, it splits? I don't know, just trying to understand based on neighbor's explanation. He said, btw, that to this day he knows where some of those trees are still sunk in mud, but he's not telling where. Guess he'll go to his grave knowing where they are and not telling.

Part 2 of this story and phase;

Recently, we were invited to give a presentation at a conference in the Eastern part of our state, so we made the 7 hour drive and met up with a colleague who had rented a B&B place to stay for couple of nights. Okay - sounds sweet, eh? The Eastern part of our state is primarily agriculture so it is miles and miles of scenery that can be plateaus of the Columbia Basin, rolling hills of the Palouse, the fruit orchards of the Yakima area, and flat scrub brush in areas located in the neighborhood of Hanford Nuclear Plant. Thus, there are a lot of generational family farmers (and I'd guess a fair amount of new 'corporate' farms).

As it turns out, we got a bit lost trying to locate the B & B. Not lost as in lost in the city, but lost on an old country lane that went from pavement to gravel to no outlet, with only a few fairly run down and delapidated houses along the way. I was feeling fairly insecure that if one of these houses wasto be the B & B, I was going to have a shaky night and we might need to look for a hotel in town. Sweetie made a call to the owners, got directions and then got us on the right road to the B & B. It was still a country road, that went from pavement to gravel, and there were few and far between old farmhouses. But we found 'our' farmhouse, rented out at B & B by the owners, who were Professors at the University and also 'worked' the land, so it was called a working farmhouse B & B. The owners, btw, don't live at the farmhouse, and have a place in town, or maybe they stay in town when the house is rented out, I'm not sure how that works.

But, here is what does work. It is an old farmhouse - and I like what the owners have done with it, partly restored, partly rehabbed and the decor is pretty much strictly antiques and collectibles so it retains a feel of a farmhouse in the late 1800s, early 1900s. Except for the kitchen which retains it's 1970s upgrade....too bad, but it was a big kitchen and with a few restorations or reworking it, could quickly lose it's 1970s identity.

One of the magazines on the coffee table was a big hardback book with lots of great photos about Architecture of Old Farmhouses. I was fascinated and gobbling up the information. It seems that back in the day, what could have started as a humble one or two room dwelling would be added onto as family demands (and family prosperity) grew. So architecturally the style of the day might be added to the style of yesteryear, thereby compromising the definitiveness of architectural style. And 'saltbox' style became quite popular but is not in itself a 'style' as much as it points to an add on to the existing structure thereby altering the roof line.

Well, there you go - our house then, doesn't really don't have any kind of singular architectural style, could be in the classification of a farmhouse, but not exactly, and I tend to call it more the style of the homes of the martimers who lived and fished here. Mr. Bachau, who added elegance to the straightforward style, sheaved the sharp ends at each corner of the roof, added a turret/cupola to the upstairs level, and added bump out bay windows to the street side of the house and the back kitchen. It appears the kitchen is a bump out from the house (an added bump out kitchen was not uncommon, per our neighbor, to the houses built here way back when).

Sheaving the ends of the roof line, our neighbor explained was done to reduce the rotting of the corner ends from the moisture, rains and sea storms that roll in off the Bay, off the Pacific Ocean. I had shown him the photos I have of the original house and the roof line is pitched at both ends. Which is why he explained what he explained about shearing the roofline corners.

After the Bachau's lived their lives in this house, and she died, and Son inherited the house and wound up 'selling' it to the next owner. The house was what is called pier and block, and had no basement. Next PO dug out a basement under the house, bricked up the basement and poured a concrete floor, and added a carport where once were the two beautiful bay windows Mr. Bachau added to the house. We learned that owner lived about 20 years in the house (or less but much longer than we had been given to understand). He sold it and now the next PO added a bump out to the bumped out kitchen, and a bump out on pier and block (no basement) to create a downstairs bathroom. Incidentally, the original house had no bathroom, had an outhouse, and the downstairs bathroom had to be plumbed, there was no upstairs bathroom and the last PO created a room and had plumbing done for upstairs bathroom.

Definitely then, this house fits the definitions of what constitutes an old farmhouse to the degree that the book I was reading defined architecture styles passing along through the generations. But our great old house no longer has it's front porch. A situation I hope to remedy and have a front porch built and added, because I want the old rocking chairs and to be able to sit out on the porch.

What else I learned from reading the book (and looking at the photos) was that some homeowners prefer to restore elements of their house to it's original architecture, ie, primitive stairways with high risers, architectural columns, beadboarded walls, heavy wood paneling (no, not the 70s stuff), panel doors, ah, memory fails me here, but the list is lengthy. And glory be, I found a photo of an exact staircase bannister as is in our house. It seems that is a deliberate design, how it curves at the top of the stairs. Also that the newel post at the bottom of the stairs is by design Greek Gothic and all I've ever thought was that is was primitive in look.

Enough of a post, and some of our next projects I'm considering are to remove the plasterboard that was put up on the walls as part of second owners 'rehab' to get back to original plank walls -- maybe, as I need to do a bit more research before we start tearing out plasterboard. I can see from some of the original closets that were not rehabbed or upgraded the wallpaper (which is linen btw) and a tear shows the plank walls behind the wallpaper.

Our trip to the Eastern part of the state then brought me home with fresh ideas, renewed love for our old house, and while we went to give a presentation on an entirely different matter, I came home with renewed mental energy to look at this house with fresh eyes or new perspective of it's valued old history.

posted by Lietta Ruger

Tulip Fields

Spring Time Tulips; my small bed at home and the grand fields and fields of beautiful tulips

First year for the tulips in my yard that I planted last Fall. I'm so pleased!

I have to toss in a photo of the Money Tree plants growing at the side of the house. I mention, because I planted the seeds last spring and they grew all winter and really sprouted flowers by early spring this year. I'm astonished since I planted seeds, didn't see harvest and thought it was a lost cause. Apparantly not! I was also astonished to still be pulling up turnips in December in my garden. I say astonished because I'm not a knowledgeable gardener and so I'm thrilled when anything I plant works - in other words, lives, flourishes and yields produce, flowers or just lives at all.

When we took our recent trip from our digs on the shoreline edge of Western WA to Eastern WA, we didn't get very far East when we encountered these tulip fields belonging to a Nursery in Mossypoint. These give Mount Vernon in Skagit County a bit of a run for the money. Mount Vernon is known for the amazing daffodil and tulip fields the farmers grow there and in approximately April every year people travel to Skagit County to see the daffodil and tulip displays.

Mesmerizing Image - How a bobbin works

How a bobbin catches thread in sewing machines from Candace at Crafty Daisies

Project; For Ashley - Make Emo Kid gloves from socks

My Emo Kid granddaughter spent a couple weeks with us and taught me a bit about the nuances of dressing Emo which is apparantly a distinction among many styles of fashion, not to be confused with Gothic.
Tutorial to show how to step by step is here at Cut Out + Keep

Find a pair of socks

Cut a straight line across where the foot part of the sock begins.

Fold inside out and place on your hand. Spread out your thumb and pin out where the edge of your index finger and thumb begin.

Sew along this v-shaped line, removing the pins as you go.

Place this on your hand again and cut a line down the middle of the v-shape.

Fold over, about 1cm, at the top of the glove and thumb hole.

Take a needle and thread and sew around the glove and thumb holes. To sew it correctly start with a hemming stitch, turn this in to a running stitch for 1cm and then make another hemming sitch and so on.

Make a Succulent Ball for your garden

Check this out! Make a succulent ball to hang on your porch or veranda.

see instructions at Burke's Backyard

How much per week on food according to Dept of Labor stats?

The Department of Labor, Bureau of Labor Statistics puts out some very detailed statistics about how much Americans spend on different parts of their budget. Part of that, obviously, focuses on food. The most recent data that they have published is from 2005.

1 person in the family, one wage earner: $68 a week
2+ persons in the family, one wage earner: $121 a week
2+ persons in the family, 2 wage earners: $144 a week
2+ persons in the family, 3+ wage earners: $184 a week

Project; diy Duct Tape Dress Form

Found at ReadyMade blog
Custom dress forms be damned. Why spend an arm and a leg on one of the limbless de Milos when, in less than two hours, you can make one from duct tape for about $15 (instead of the $300—or more—a custom form would cost you)? The folks behind Threads magazine have put together a great primer on how to make a duct tape double.

Perhaps because of its irresistible body armor allure, the duct tape doppelg√§nger is also oddly popular among Lord of the Rings costume makers, and historical reenactors. The process requires a partner (who will mummify your t-shirted torso with tape), so invite your stitch-savvy friends over for drinks and a duct-tape dummy-making party √† la The Bookish Girl. Spilling wine on your shirt isn’t a problem when you’re wrapped in duct tape!

A duct-tape dress form is quick, cheap, and simple. You'll need a couple of 60-ft. rolls of duct tape, a long tee shirt, and a little plastic wrap. Oh, yes, and someone to wrap you in tape.

Wednesday, April 18, 2007

Epsom Salt as Plant Food

entry from the Tacoma News Tribune 'Get Growing' blog

Alert! This just in from the Epsom Salt Council. Could it possibly be true?

Just as “Milk does a body good,” Epsom Salt may be one of the most perfect nutrients for flowers and plants. And mid-to-late spring is the ideal time to nourish the soils and roots of your favorite foliage and flowers with this inexpensive and easy-to-use compound. According to the Epsom Salt Council, research indicates Epsom Salt can help seeds germinate; make plants grow bushier; produce more flowers; increase chlorophyll production; improve phosphorus and nitrogen uptake; and deter pests, including slugs and voles.

Anyone used Epsom salt? What did you think? If you haven't tried it, but want to, the Epsom Salt Council recommends these amounts:

Shrubs (evergreens, azaleas, rhododendron): 1 tablespoon per 9 square feet. Apply over root zone every 2-4 weeks.

Lawns: Apply 3 pounds for every 1,250 square feet with a spreader, or dilute in water and apply with a sprayer.

Trees: Apply 2 tablespoons per 9 square feet. Apply over the root zone 3 times annually.

Garden Startup: Sprinkle 1 cup per 100 square feet. Mix into soil before planting.

Roses & Tomatoes: Use 1 tablespoon per foot of plant height per plant; apply every two weeks.

For more details, click here.

UPDATE: WSU professor Linda Chalker-Scott has written an interesting article that takes a skeptical look at using Epsom salt in the garden. Click here to read.

Monday, April 9, 2007

Law & Order, South Bend, Mexico, Patience and Extradition

blogged by my husband, Arthur Ruger to Willapa Magazine

from an article published in Seattle PI
Fugitive's capture turned into mission.

For 13 years, accused drug kingpin eluded the law -- until last week

I took this picture last year from out the back door at the office where I work in South Bend.

About 50 yards from that door the Willapa River flows from my right westward to Willapa Bay, less than 3 miles away.

Almost in the center of the photo on the river's left bank you can see the large bright roof of what is now South Bend Packers, a seafood processor.

That's the "fishhouse with no ice" mentioned in the story.

[Excerpts] and my comments.

Friday, April 6, 2007

He was the most prolific hashish smuggler the Northwest has ever seen, say U.S. marshals and federal investigators.

For years, they say, Jeffery Jay Warren orchestrated the rapid movement of the drug from Southeast Asia by ocean freighters, a fleet of Willapa Bay "fishing" boats and trucks. Tons of the illicit cargo were hauled through Washington en route to East Coast and Canadian markets.

... A coast-to-coast bust in 1994 nailed most of Warren's operatives -- but he managed to elude capture. Since then, a copy of Warren's wanted poster slowly yellowed on the bulletin board in the Marshals Service's Seattle office.

... His pursuers chased down tantalizing rumors of the kingpin's whereabouts: his favorite haunts, the luxury resort towns in coastal Mexico where he was reputed to be taking residence. The trail led investigators across the globe. There was evidence that Warren had been traveling extensively in South America and Europe. He apparently liked being near the ocean and in warm climates.

... He's now sitting in a jail cell in Mexico City facing extradition to the U.S. -- and a possible life sentence.

... When the indictment was handed down in 1994, 16 people -- including Warren -- were charged in connection with the drug-smuggling ring.

Two years earlier, federal agents had estimated the ring had moved 40 tons of hashish through the fishing port of South Bend in southwest Washington. The estimated wholesale value: $120 million.

... "These guys had been dumping big loads for at least four years," Lanier said.

He called them "old hippies," now in their mid- to late-50s, who had been smuggling marijuana and hashish into the country since the 1970s.

But the smugglers had their act together. Using fishing boats and an old fishing dock and warehouse at the head of Willapa Bay as a false front, Warren's team of ship captains, deckhands, truck drivers and radio operators moved the drugs from ocean freighters sitting hundreds of miles off the coast to waiting semis. Within a week, the drugs would be in New York.

Everyone I spoke to who lived in the area at that time remembers this big drug bust. Several chuckled when they said that the local police had no clue what was going on because the tight-lipped Feds weren't telling nobody nothing.

Others however thought that locally there was some other problem where the county knew what was up but didn't tell the city of South Bend or something like that. Either way, it doesn't seem to have been much the local's show.

Locals thought the fishhouse with no ice was odd but didn't ask many questions. The strangers paid for the equipment and service with crisp $100 bills.

That fishhouse is not much more than 1/4 mile from my office and I've been walking to it as part of the exercise regimen I use during my breaks now for a couple of months.

A co-worker said that as a teenage she went walking in the evening with her mother and sister past that ice-less fishhouse every night and they thought it was not only strange with no ice, but also strangely mysterious in that lighting was either absence or seriously restricted for a warehouse doing late-night and early-morning fishing operations.

She also remembered learning that there was a house up on the hill above the riverbank that was always dark but from which the crooks had been keeping lookout with with binoculars while watching for Coast Guard vessels and law enforcement.

"The (fishing) market was bad and anyone who came in and wanted to make a go of it got treated real good," said Jerry Benning, retired Pacific County sheriff. In 1994, Benning was the local law enforcement contact for the federal agents who raided the warehouse.

"By the time we got there, there was nothing but empty sacks," Benning recalled.

Which makes more sense than a city police department totally kept in the dark about something like this. My own impression is that the locals had the more difficult local job in keeping a lid on the whole activity long enough for the Feds to make their move.

...Cash-filled suitcases

Speed and deception was at the core of Warren's operation.

His group could unload 45 tons of drugs in an evening and have it in and out of Washington in less then 12 hours, authorities say.

U.S. Highway 101 runs right through South Bend North-to-South. As it has always been, day or night, it is not surprising to see semi-trucks backing refrigerated trailers into one of several fishhouse docks or pulling out with them and heading off up the road.

The group would send out decoy fishing boats so the Coast Guard wouldn't know which boat to track, said Fran Dyer, a retired agent from the Organized Crime Drug Enforcement Task Force, who started working on the Warren case in the early 1990s.

"They were very good fishermen, but there is a hell of a lot more money to be made in moving 50,000 pounds of hashish in one night than fishing," Dyer said.

There wasn't anything in the article that indicated how many, if any, of those originally arrested in the raid were locals to Pacific County. But as an alternative to the shrinking seafood markets that have continually gotten smaller and smaller, I can see a few easy recruits responding to another more lucrative way to put food on the table, keep the roof overhead and include perhaps some genuine excitement.

40 tons of hashish?

May it would have been like Pacific County's West Coast version of moonshine.

Maybe the feds should have used this to help out:

Grampus or Pike on the Willapa River, at Raymond, Washington, circa 1912.
The A class subs were fitted with a bow fairing to improve sea keeping, this can be seen by the dark shadow area forward of the conning tower.
Both submarines were placed in reserve in 1912 at Bremerton. This photo was probably taken on the trip up the coast to Bremerton. The stern of the USS Chattanooga can be seen in front of the sub.

Photo provided by Steve Hubbard of the Pacific County Historical Society , Washington State

From Through the looking glass: a photo essay of submarines 1900-1940

Saturday, April 7, 2007

Subprime Lending Crisis: Millions of Families Face Losing Their Homes to Foreclosure

Subprime loans have led to one million American families losing their homes in the past decade, a new study by the Center for Responsible Lending has found. In the last ten years, the subprime loan industry has emerged as a major, and controversial, player in the housing market. We speak with an attorney at the Center for Responsible Lending.

Subprime loans have led to one million American families losing their homes in the past decade. This according to a new study by the Center for Responsible Lending. In the last ten years, the subprime loan industry has emerged as a major, and controversial, player in the housing market. Under a subprime loan, customers with low credit ratings are offered mortgages in return for high interest rates. Proponents have advocated subprime financing as a way for low-income residents to own their first home. But new figures suggest the subprime industry is having the opposite effect.

The Center for Responsible Lending estimates that between 1998 and 2006, about 1.4 million first-time home buyers purchased their homes using subprime loans. But the study also finds that the number of projected subprime foreclosures in that same period to be a whopping 2.4 million. This means subprime lending results in a net loss of home ownership for almost one million families.

Here in New York, the Neighborhood Economic Development Advocacy Project put out a report showing foreclosures rose fifty percent last year -- with more than 9,000 homeowners facing the loss of their homes. By the end of this year, foreclosures are now on track to rise to fifteen thousand.


This transcript is available free of charge. However, donations help us provide closed captioning for the deaf and hard of hearing on our TV broadcast. Thank you for your generous contribution.

JUAN GONZALEZ: Subprime loans have led to one million American families losing their homes in the past decade. This according to a new study by the Center for Responsible Lending. In the last ten years, the subprime loan industry has emerged as a major, and controversial, player in the housing market. Under a subprime loan, customers with low credit ratings are offered mortgages in return for high interest rates. Proponents have advocated subprime financing as a way for low-income residents to own their first home. But new figures suggest the subprime industry is having the opposite effect.

The Center for Responsible Lending estimates that between 1998 and 2006, about 1.4 million first-time home buyers purchased their homes using subprime loans. But the study also finds that the number of projected subprime foreclosures in that same period was a whopping 2.4 million. This means subprime lending resulted in a net loss of home ownership for almost one million families.

Here in New York, the Neighborhood Economic Development Advocacy Project put out a report showing foreclosures rose 50% last year, with more than 9,000 homeowners facing the loss of their homes. And in this year, foreclosures are on track to hit 15,000.

We now go to Durham, North Carolina, where we’re joined by senior policy counsel for the Center for Responsible Lending, Keith Ernst. Welcome to Democracy Now!

KEITH ERNST: Good morning. Thanks for having me.

JUAN GONZALEZ: Well, in the last few months, we have seen many news articles basically about the lending companies and the financial crisis among some of these subprime lenders, and we’ve seen some coverage of the impact on homeowners around the country, but could you put this crisis in context, from your perspective, what is happening around the country?

KEITH ERNST: Of course. You know, for years, the subprime market has been this just burgeoning industry, and the lenders have been making loans to millions of families. And for a while, it looked like things would go on smoothly, but as housing prices softened and weakened, what we saw was the weakness in these mortgages they were making exposed to the light of day. And essentially, now the sad ramifications of this is an uptick in foreclosures, sometimes in places that haven't really seen a spike in foreclosures in years, places like New York and California and Northern Virginia, where, you know, for all intents and purposes, we’ve been in a boom for the first half of this decade.

JUAN GONZALEZ: And in terms of the -- your group issued a report at the end of last year projecting what the potential impact would be over the next few years in terms of foreclosures. Could you talk about that?

KEITH ERNST: Sure, that's right. So we projected that more than 2.2 million -- now 2.4 million families -- will lose their homes ultimately to foreclosure as these mortgages come to a halt, or at least as these mortgages play out. And that's deeply concerning. These are families who, in many instances, this house is their primary asset. It’s how they’re holding their wealth. It’s their nest egg for retirement. And those homes are a just tremendous jeopardy right now, and largely this is because of the shoddy underwriting that's taken place in the subprime market in recent years and these so-called mortgage resets, where a borrower’s interest rate could go from 8% to as high as 12% just two years into their mortgage. And this results in a payment increase of 30% to 40% on their mortgage. Families who are just sort of struggling to get by day to day are faced with this just insurmountable hurdle two years into the mortgage. And, you know, what they’re finding now is that foreclosure may be the only option for them.

AMY GOODMAN: Keith Ernst, can you explain the difference between a prime and a subprime loan?

KEITH ERNST: Of course. You know, for years, borrowers in this country could only get a mortgage if they met fairly narrow underwriting criteria. You know, they had to put 20% down on their home. They had to have stable incomes. And, you know, they had to have a relatively blemish-free credit record.

Over the last ten or so years, what's happened in this nation is that lenders have gotten more flexible in who they're willing to lend to. And in principle, this is a good thing, because it means that families who need to tap into their wealth, whether it's to send a child to college, to pay for a medical procedure, or, you know, for other purposes, can do that. And that, in principle, is a good thing. But what's happened in the subprime market is that lenders have gotten overly aggressive, made loans that borrowers simply can’t afford, and that’s sort of the story today.

JUAN GONZALEZ: Could you talk about the role of major banks in this whole process? I did a story in the New York Daily News last week about the role of Credit Suisse First Boston in repackaging these loans in the securities industry, and they actually had a whole division called their NINA department -- “No Income, No Asset” loans that they were repackaging.

KEITH ERNST: Right. One of the interesting stories here underneath all of this is how these mortgages came about in the first place. You know, we like to think, or I think most Americans think, that mortgages are made by banks and depository institutions, but especially in the subprime market that's not the case. They're largely made through state-chartered finance companies that don’t have any bank deposits, and so they don’t have any bank regulators.

Where do they go for their money? They go to Wall Street. So Wall Street will supply them the money to make the loans, will buy the loans from these lenders, and then will repackage them into securities and sell them to investors. Now, again, in principle, that's fine. It can make low-cost capital available to families who need mortgages. The problem comes when the insatiable appetite builds for more and more mortgages and lenders get reckless with regard to the quality of the mortgages they’re originating.

AMY GOODMAN: Keith Ernst, what kind of regulation, federal regulation, is there of this, and also local regulation?

KEITH ERNST: Right. You know, Amy, the regulators are really -- they’re just scrambling to catch up now. What we’ve seen is the federal regulators just this spring have come out with proposed subprime lending guidance that would require lenders to insure that borrowers can afford their mortgage when those payments jump up, so not at the initial introductory rate, which is only going to be in effect for two short years, but at the fully indexed rate, the rate that’s going to apply after the introductory period is over. And we think that's a tremendous step forward.

But it's coming too late for many families. Many families are finding that their mortgages are resetting and are in trouble now. You know, that's at the federal level. We’ve got that regulatory action. Congress is looking into bills to protect borrowers from these sorts of practices and also from other sorts of predatory lending practices, like putting borrowers in loans with abusive back-end prepayment penalties that can cost thousands of dollars if they try to refinance, you know, the month before these payments reset, while they can still -- while they’re still current and can afford their mortgage, and other similar abuses. And in the states, they're starting to take a look and ask, “How can we really help protect the borrowers in our backyard?”

AMY GOODMAN: Juan, you’ve been doing a series of pieces in the New York Daily News, and you’ve been profiling families. Tell us about some of them.

JUAN GONZALEZ: Yeah, and I’d like to ask Keith Ernst about that. For instance, there was one woman that I profiled, Sandra Barkley, who's part of a whole lawsuit now against a big developer in Brooklyn. Here was a woman who was working for the New York City Housing Authority, was barely making about $24,000 a year, and these predatory lenders got her into a home where her mortgage payments, monthly mortgage payments, were higher than her total gross income. There was a lawyer that they supplied to her, who sat at the closing for this home and actually told her to sign these papers, and because -- what I’m finding is that the appraisers, to some degree, are involved in over-appraising these houses. There are crooked lawyers that are in cahoots with some of these lenders that are allowing their “clients” to sign these mortgages that they could not possibly pay.

And you were mentioning the interest rates. Well, I have a story in today's Daily News about an elderly couple who was basically forced out of their home -- they weren't even in the market for a home -- and put into two mortgages totaling about $600,000. One of them, the interest rate can go up to 18% on one of the mortgages, and the other is an interest-only mortgage. They are guaranteed not to be able to pay the $4,000 payment that they had, when before they were paying $1,200 a month.

So where are the regulators in this situation, where these lawyers, the appraisers and the brokers are being able to manipulate and bamboozle folks into these kinds of loans?

KEITH ERNST: Right, well, first let me just say that, you know, those family stories you’re recounting are not at all unusual. And it goes back largely to what are the incentives in place to originate these mortgages. If we think, you know -- I think we should recognize that there are powerful incentives, that brokers and loan originators make thousands of dollars on each mortgage and, in fact, make more on larger mortgages, and so there's incredible incentives to provide borrowers with the largest mortgage they’re willing to take out.

Now, as that demand has grown in recent years, we have seen skyrocketing rates in mortgages with less than full income documentation. Some are these so-called liar loans, where the income is just put down on the application. Many times, borrowers have told us, when we showed them their paperwork, that they had no idea that income was reported. Now, their signature was on the bottom of the paper, but that signature was put on there at the blizzard of closing, where they were told to initial here, sign here, sign there, initial here, about 1,500 times. And so, you know, what's happened is these mortgages -- there are tremendous incentives to originate them. Borrowers are looking to the person opposite the table from them as an expert who can help provide them with some guidance, and the person on the other side of the table just doesn't have their best interest at heart.

Now, “Where have the regulators been through all this?” is a good question. I think the federal regulators are scrambling to catch up now. State regulators are likewise following suit. And Congress is taking a look. You know, unfortunately, I think the reality is that it often takes a crisis like this to provoke us to take action to protect people.

AMY GOODMAN: Keith, we have to break, but we’re going to come back to this discussion. Keith Ernst is an attorney, senior policy counsel for the Center for Responsible Lending, speaking to us from Durham, North Carolina. And when we come back, we'll also be joined by Danny Schechter, “the News Dissector.” His latest documentary that's opening tonight in New York is called In Debt We Trust.


AMY GOODMAN: We're talking to Keith Ernst, senior policy counsel for the Center for Responsible Lending in Durham, North Carolina. We're also joined in studio by filmmaker and journalist Danny Schechter, who has a new film called In Debt We Trust. Your response to the subprime lending and this unprecedented number of foreclosures in the country?

DANNY SCHECHTER: You know, Amy, when we talk about this, I think of a phrase we used to use back at ABC when I worked there, it’s called “MEGO,” and that refers to “my eyes glaze over.” Whenever people hear about economic issues, they sort of tune out, because it sounds very complicated. What this reduces itself to is a crime. We're talking about a crime -- CSI, crime scene -- and we're part of this crime scene. We're talking about a cesspool of corruption implicating some of the biggest banks and financial institutions in the country, inattention by the regulators. 52% of the agencies making these loans are not even regulatable, because they're not federally regulated organizations. We're talking about millions of Americans who can't make their bills, who are squeezed beyond belief.

And this is not just an issue for regulators. This is an issue for progressives to respond to. We need a movement here to try to take up these issues of economic justice in America, because we're not paying attention to it. And this cuts across racial lines. It cuts across ethnic lines. It cuts across also political lines. We’ve set up Americans for Debt Relief Now, an organization like Bono does in Africa for debt relief. We need it in America. We have a website, as a way to fight back, as a way for people who are in debt to stop being demonized by the media, which is what’s happening now, and to be recognized as the victims they are.

AMY GOODMAN: Danny, we're going to lose our satellite in Durham, North Carolina, and I just wanted to ask our guest there, Keith Ernst, about the federal laws -- for example, the possibility of a reintroduction of the Prohibit Predatory Lending Act that was introduced, I think, two years ago.

KEITH ERNST: I think it's clear that legislation will be introduced in Congress, and we're hopeful that it will move forward this time. You know, it’s been talked about for years now. And we're hopeful that this year can be the year that legislation can move forward and help borrowers, because, you know, as your guest there is saying, it's sorely needed now.

JUAN GONZALEZ: And, Keith, could you talk -- because one of the things -- those of us who have a little bit of a historical memory on the housing crises in America recall that this country goes through periodic crises on speculation and abuse in housing from the HUD crises of the 1960s, the savings and loans crisis of the ’80s, and now we're confronted now in this decade with this huge crisis, and it seems like many of these characters just reappear with new companies and new banks or new lending procedures, but the same kind of scams. What can be done on a more consistent level, as Danny is raising, to be able to protect people who do not necessarily know all of their rights in terms of lending, especially when it comes to homes?

KEITH ERNST: Right, well, I think you're right that, you know, we’ve seen many episodes in, you know, not-too-distant memory, where mortgage lenders have essentially been betting people's houses, you know, so that they can make profits. And that’s what ties all of these cycles together, is the mortgage lender says, “Hey! You know, take a loan from me. Don't worry about it. In two years, if you need to refinance, we'll be able to get you out of this loan.” And, you know, eventually that house of cards comes crashing down.

Now, moving forward, what can be done? I think, you know, the law should recognize the reality. Borrowers look to the person sitting opposite them at the table -- most, usually nowadays, in subprime market, a mortgage broker -- as an expert, as someone who’s helping them pick out their best mortgage. Sadly, this often could be -- you know, could not be further from the truth. And so, what the law should do is recognize what borrowers expect and need, which is that the person who's helping provide them a mortgage actually do just that: help provide them a mortgage that meets their needs.

AMY GOODMAN: Keith Ernst, we're going to leave it there. I want to thank you for being with us. We'll link to your website at the Center for Responsible Lending, speaking to us from Durham, North Carolina.

Related Posts with Thumbnails