Plain Dealer reporter Henry Gomez did not reply to the following email, asking him if he asked Mayor Jackson the obvious (but unasked) question: Why didn’t Jackson include any Cleveland banks in his predatory lending lawsuit? So it falls to you to find out and publish the answer. You might as well include the fact that the Plain Dealer and Gomez ignored that prime (and very sensitive) question. Cover-up !
Dear Mr. Henry Gomez,
In your front page January 11 Friday (today) Plain Dealer news story headlined “Mayor takes on banks inb lawsuit” you named several major national banks that Cleveland Mayor Frank Jackson says he is suing regarding mortgage loans. Did you ask Jackson why he is not also suing any Cleveland-based bank, such as big National City Bank or big KeyBank? Is it because he or other Democrat politicians in town and/or the Cuyahoga County Democratic Party get campaign funding from major Cleveland banks? There must be a reason. Did you ask Jackson why? If you did, what was his answer?
— Mike Hoffer
This article appears in Jan 9-15, 2008.
Check into what Frank and the city are actually doing. The reason Cleveland banks aren’t being sued, is because the city is after the ROOT of the problem. The banks that are being sued, created the predatory lending market by creating a market on Wall Street for mortgage based securities. What happens is, you go to a local bank for a mortgage, and the bank then sells it to one of the banks named in the lawsuit, who then uses it as collateral to make their investors more money. The practice got wildly popular, as it seems it was wildly lucrative. The major national banks then put huge pressure on local lenders to sell them more mortgages. The more the merrier. What do you do when you have a huge demand for something you can’t really supply? You find a way to get it by giving loans to people who do not qualify for them, and should never have had them. The major institutions named in lawsuit did not, and do not care where the mortgages are coming from, as long as they keep coming.
I agree that the local banks should be held responsible as well, but these practices will never stop unless the root cause is taken away. Without this precedent being set, they could sue all the local banks they wanted to until the end of days. It wouldn’t change a damn thing. When that much money is pouring in from Wall Street, a suit will not deter local lenders, because they can afford it.