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September 18, 2013 4:52 AM Age: 4 yrs

Capitalism vs Cannibalism

Category: Larry Checco
Source:  Larry Checco

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We are eating our own—and it’s all perfectly legal.

Millions of Americans are still reeling from the aftermath of predatory mortgage lenders who would do or say anything to make a commission. 

Some preyed on first-time homebuyers by convincing them that they could afford way more house than their salaries warranted.

Others cajoled homeowners to cash out the equity in their homes only to refinance them into high-cost, bad subprime mortgage products that would reset to rates the homeowners could not afford.  

No money-down loans.  "Liar" loans.  The schemes were endless.

And it was all perfectly legal.  Or at least, as far as I know, no one has gone to jail for selling these trash financial products.

Yea, yea, I know the pat rebuttal that there’s lots of blame to spread around with respect to the housing bubble and subsequent Great Recession, from greedy homeowners to Wall Street investors who couldn’t get enough of what turned out to be sure-to-fail mortgages. 

But are there no limits!

Now, thanks to a recent series by The Washington Post, we’ve been made aware of yet another form of predator—debt collectors who are destroying people’s lives by inflating relatively insignificant delinquent property taxes, then foreclosing on and flipping these homes in the market.

Through an open bidding process, in this case run by the government of the District of Columbia, these legitimate business folks purchase the liens on people who owe back taxes on their homes.  Many of these homes are owned free and clear, and the delinquent tax bills are often just a few hundreds dollars, or less.

But after the debt collectors start charging homeowners exorbitant legal fees and other costs, many homeowners end up without their homes. 

“This is an opportunity to make some money, but it is also an opportunity for the city to get paid and to help its citizens,” one big-hearted veteran tax-lien bidder told the Post.

Really?!

Just ask 76-year-old Bennie Coleman, profiled in the series, how this system of tax collection has helped him. 

Coleman’s original delinquent tax bill was $134.  But after the debt collector tacked on legal and other fees Coleman’s debt soared to $4,999 -- which, of course, he could not afford to pay.

As a result, Coleman lost his $197,000 home and was stripped of any equity he had in it because, as reported by the Post, tax lien purchasers are entitled to everything, trumping even mortgage companies. 

There are hundreds, if not thousands like Coleman, who have experienced the same legal scam, most of them poor minority citizens.

“I have nothing,” said Coleman, who bought the brick duplex he had lived in for two decades for $57,500 with life insurance money that he received when his wife died of breast cancer in 1988.

Oh, did I mention that Coleman is a former US Marine Corps sergeant and Viet Nam war vet who suffers from dementia. 

Ironically, Coleman, who served his country in wartime, had his home taken from him by someone whose freedom to do so he, Coleman, had defended and was prepared to give his life.

What kind of nation are we becoming?

Have blind ambition and making money, ethics be damned, become such imbedded core cultural values of these United States that we’ve given up on decency and ethical behavior.

There’s nothing illegal about me selling you a mortgage I know you can’t afford or running up your tax lien to a point where it becomes unpayable by you or your family, and I abscond with your home. 

But is it the right thing to do?  Is it the ethical thing to do?

Perhaps the better question is what does it say about us as a society when we ignore or turn our backs on this kind of cannibalistic capitalism, where otherwise respectable friends, neighbors and fellow citizens—many of whom may even attend religious services and be PTA members—can legally loot and plunder the rest of us like drunken pirates? 

The good news is that shortly after The Washington Post ran its series, and after much public scrutiny, the District of Columbia stated that it was going to cancel dozens of tax liens and place caps on the fees debt collectors can charge homeowners. 

But why must it take an investigation by the media for things to change?  Why can’t governments, the business world and we, as good citizens, police our own behavior?

Devouring others in the pursuit of personal gain is not a good social value. 

Rather, the true test of integrity is doing what’s right when no one is looking, and how we treat each other as companions on life’s journey

These are lessons many of us still need to learn.

Larry Checco

Contents © 2013 by Larry Checco - All Rights Reserved

Larry Checco is president of Checco Communications.  His latest book is entitled Aha! Moments in Brand Management: Commonsense Insights to a Stronger, Healthier Brand.  Checco Communications is a consulting firm that specializes in branding.  It helps organizations clearly define who they are, what they do, how they do it and, most importantly, why anyone should care enough to support them. Where most branding professionals focus on making sure an organization has an attractive logo, catchy tagline and perhaps a marketing plan, Larry’s take is different.  His message is that good branding is far less about marketing, advertising and public relations and far more about quality leadership and staff, appropriate and ethical behavior, and an organization’s willingness, ability and commitment to live up to the promises, or covenant, its brand represents. His first book, Branding for Success: A Roadmap for Raising the Visibility and Value of Your Nonprofit Organization, has sold thousands of copies worldwide. Click here for full bio.

 

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