Wednesday, September 28, 2005

Insurance Coverage, Conveniently After the Fact

What a great deal. Auto insurance only if you wreck your car, life insurance only after you’re dead, fire insurance after the fire and flood insurance . . . you guessed it, after Katrina has swept you off the map.


I’d buy that.  Certainly you’d buy that.  Who would bother with expensive insurance, if they knew they could get covered anyway? 


So, that’s what is about to be proposed in the United States Congress (where anything is possible) and it has the feel-good badge of help for mostly poor victims of the horrendous hurricane damage.  You’d have to be pretty hard-hearted not to support that. 


Or would you?  A little closer look tells you the recipient of all this largesse are not who you think they are. 


The money goes directly into the pockets of mortgage holders, without bothering to pass GO, and certainly without anybody but them collecting $200.  Some $15 billion into the pockets of this or that bank, savings and loan, union savings bank or other holder of paper.  $15 bil is the starting number, the entry fee, the one they run up the flagpole to see if anyone salutes.  Then the serious business begins, the shearing of that sheep called the federal government.


Last time I had a home mortgage, my lender required natural disaster insurance that included every possibility short of war, and a life-insurance policy in his name as well.  Lots of Gulf lenders apparently overlooked that because it was costly and occasionally impossible. Now they stand to get back title to tens of thousands of properties that are either gone entirely or so badly damaged as to be beyond repair.  They want the Fed (you and me) to pick up the bill. Not only pick up the bill, they want you to think it's helping a victim. 


Time to check your pockets to see if your watch is missing.


I’m happy to lend a hand to a neighbor in need, even if his neighborhood is a thousand miles from mine.  But a business? A business in the risk industry?  A business that ignored its own risk assessment policy and now wants me to pick up their check, so they can have a free lunch? 


My old daddy used to say that the bank would loan you an umbrella if it wasn’t raining.  The Consumer Mortgage Coalition has gone old daddy one better. They loaned you an umbrella with no fabric on it (which they knew at the time) and now want your neighbors to pay for the new suit you ruined in the rain.


That’s what’s called chutzpah, which is Yiddish for unbelievable gall, insolence and/or audacity. This Consumer Mortgage Coalition that's sponsoring the crocodile-tears, doesn’t represent a single consumer.  Nary a flooded out victim do they speak for.  Not a single poor, black mom with four kids and no home left do they stand up to defend. 


Who they do stand for is a full range of large companies that originate, service and guarantee home mortgages.  There’s a whole bunch of money in the originating and servicing departments and there was a bundle as well in the guaranteeing, until Katrina.


Now, misrepresenting their proposed legislation as being in the interests of Katrina victims, they are looking to get well at your and my expense.  Googling “cmc membership” I was unable to get a listing of their members.  They're kinda cagey about that.  But I did get Cassidys Massage Clinic, where a three month minimum membership is required.


At least Cassidy’s promises some hope of satisfaction for their charges.
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There are lots more things that make me nuts, all of them on my personal web site.