A subprime swing: Politicians seek answers to the US housing crisis
By Stephanie Kirchgaessner
When Sister Barbara Busch began a community outreach programme in 1978 that taught financial literacy, it was aimed at helping families and increasing home ownership among residents in her working-class Cincinnati community. Now, the nun says, that work has been transformed into home “preservation” - the difficult task of trying to keep people in their homes following a sharp spike in foreclosures in the suburbs of the Ohio city.
“We can easily see 40 new families a week [seeking help],” Sister Busch says. Today she is playing host to a public hearing devoted to another symptom of the hard economic times plaguing citizens here: “payday lending”. The predatory cash loans, which are generally marketed as short-term advances on borrowers’ pay cheques, are not unlike subprime loans. Lenders charge exorbitant fees for the funds, which, Sister Busch says, are being used to pay for everything from mortgage bills to medical costs. The loans create their own debt spiral, with some lenders charging interest rates of 391 per cent.
To read full article, click on the link below:
Filed under: Uncategorized
