Sunday, December 11, 2005

Will the market save New Orleans?

The Observer : "They are victims too of a reconstruction effort that, while its funding remains stalled in Congress, and lacking proper leadership, has been left to the care of the private sector with little interest in the city's poor. As a rapacious free market has come to dominate the rebuilding of the Louisiana city, it has seen spiralling prices and the influx of property speculators keen to cash in on the disaster. The result is one of the most shocking pieces of urban planning that black and poor America has seen: reconstruction as survival of the wealthiest"

More bad news at a bad time: "While many mortgage lenders are giving flooded-out homeowners as much as 18 months to resume payments, others -- especially subprime lenders who serve low-income and minority borrowers -- are turning up the pressure to get their money. Instead of getting extra time, these borrowers are getting strongly worded letters and phone calls saying their loans are in default and it is time to pay up.
'These are empty threats to scare less-sophisticated borrowers into thinking their credit will be ruined into making payments they can't afford to make right now,' said Travis Plunkett of the Consumer Federation of America."

It looks like the Observer is right. No grace will be found in the free market.

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