Around Colorado: 2/9/09

Subprime Suit

Tim Hoover writes for the Denver Post, “Countrywide Financial Corp. will pay $6 million as part of a settlement with the state stemming from litigation over its home-loan practices. … The complaint against Countrywide alleged that it deceived borrowers by placing them in loans that had high risks of delinquency or default. The lawsuit alleged the lender used lax underwriting standards to give loans that borrowers soon found they could not repay as introductory rates expired and their mortgage payments skyrocketed.”

If there was actual, demonstrated fraud in play, then a settlement may have been appropriate. However, surely the borrowers deserve some of the blame as well. Were not all the loan details available to the borrowers before they signed? Were they not aware of the “lax underwriting standards?” Were they not capable of figuring out a responsible mortgage load? A snake-oil salesman who commits fraud should be shut down. But the people who buy the snake oil are still idiots who deserve their share of the blame.

If the underwriting practices were fraudulent, then wasn’t Countrywide victimizing itself by putting homes at risk of foreclosure?

I checked the Attorney General’s web page and found a media release on the matter. “…Countrywide will make nearly $6 million available to eligible Colorado borrowers and to the State, including $500,000 for the Colorado Department of Local Affairs Division of Housing to support the continued operation and expansion of the Colorado Foreclosure Hotline.” Well, the state was not a victim of any fraud, so the state should not get any of the funds. Unfortunately, the release does not demonstrate that Countrywide’s practices were fraudulent. Instead, the release complains about “marketing of subprime and other high-risk mortgage products in Colorado.” But selling risky things is not a crime, nor is it fraudulent, provided the risks are not intentionally hidden. It’s a pity that neither the newspaper article nor the media release shed much light on the matter.

Hoover also reports that Governor Ritter is promoting a bill to “allow a homeowner to contact a foreclosure counselor within 20 days of foreclosure. If the counselor determines the borrower is eligible, the homeowner would get an extra 90 days to work with a lender in order to keep the house.” But government has no legitimate role in such negotiations. If banks understandably want to stem foreclosures, they have every right and ability to negotiate with mortgage holders free from political “help.”

Bard David Balmer

Remember how House Speaker Terrence Carroll wanted legislators to be properly addressed? Here’s what Representative Balmer had to say: “Mr. Speaker, Your excellency, the most high speaker, protector of thee, this chamber, protector of our most sovereign state of Colorado and defender of the faith. My lords and my ladies, I pray, lend me thine ears.”

If only legislators were always so funny…

Legislative Updates

Here’s a twist on the beer battle: it turns out that, while grocery stores may only sell low-alcohol beer, liquor stores cannot legally sell it. You know, it would be easier for people to respect the law if the law weren’t so often completely ridiculous.

The Daily Sentinel also has a story about the fight over beer controls. I’ve already made my case for liberty.

The House wants to forcibly interfere with employment contracts.

Wow, this is news: the legislature is actually considering phasing out the business personal property tax.

The Gazette editorializes, “The bill [1012], co-sponsored by Rep. Amy Stephens, a Republican from Monument, would allow insurance companies to offer discounts to customers who enroll in programs that help lower cholesterol, relieve stress and reduce other behaviors detrimental to their health.” However, this bill is just trying to fix a problem caused by existing controls that force insurance providers to take all comers at similar rates in many cases.

Bailout Humor

When something is as horrible as the so-called bailout, sometimes all you can do is laugh. Here’s one by Ed Quillen:

My bartender daughter Columbine told me last week that she had come up with a joke. She posted a sign that read: “Try our new drink, the Bailout. You don’t know what’s in it, and it’s very expensive.”

She figured it would be good for a few chuckles, and it was. But to her surprise, some people wanted to order a Bailout. Now she’s trying to figure out the price and the ingredients — sort of like Congress.

Here’s a Bailout Application Form.

And here’s an idea for a new national symbol, perfect for the bailout.

Voices for Reason

Okay, this isn’t about Colorado, but the Ayn Rand Center has a new blog that promises a steady stream of interesting commentary. For example, Alex Epstein summarizes his defense of Standard Oil.