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Washington Seems Eager To Create Another Housing Crisis

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Washington Seems Eager To Create Another Housing Crisis


Washington seems to be setting up the nation to relive the housing and financial crisis of 2008-2009. That last crisis, of course, had lots of moving parts and reflected many bad decisions, but behind it all was Washington’s long insistence prior to the collapse that banks and other lenders extend more and more mortgage credit to lower-income people, the so-called sub-prime borrower. As the government for years laid on this pressure, the proportion of risky, sub-prime loans in the system grew making the system increasingly vulnerable. In the end, when many of these precarious borrowers failed to meet their obligations, all these lenders and those financial players who were vulnerable to them – in other words all in the financial system – collapsed. Now, 15 years on, the Biden administration is again pushing for more lending to lower-income borrowers and accordingly inviting another such disaster.

On the surface, the new effort looks very different from what existed earlier in this century. The essentials, however, and the effect will be the same. Leading up to the last crisis, Washington used regulatory powers to guide lenders toward sub-prime borrowers, rewarding lenders that followed the government’s lead and punishing those who resisted. The new approach relies on what is called the Loan Level Price Adjustment (LLPA) rule. It would subsidize mortgage fees for lower-income borrowers, those with low credit scores who are unable to offer substantial down payments. Those subsidies would extend to the cost of mortgage insurance, which is typically required when a buyer puts relatively little cash down. The rule would raise the funds to offer this support by charging higher fees to those with better credit scores and who are willing to make higher down payments on properties.

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The aim is indisputably a worthy one – to bring more lower-income people into home ownership and thereby give them more of a stake in their community and an important leg up on the path to wealth creation. Worthy as the goal is, however, the new LLPA rule would fail to serve its intentions and bring other ills with it as well.

Fairness, or, to use a word much more common these days, equity, is one such consideration. It seems fundamentally unfair to press higher fees on borrowers who are more likely to repay their loan than on those who are less likely to repay it. It would further seem ill advised to effectively penalize (at least relatively) those who may have postponed their purchase for years in order to amass a larger down payment and who also imposed on themselves the financial discipline necessary to earn a high credit score.

There is a more important economic problem. The new rule, by increasing the proportion of borrowers that are more prone to default, would expose the country’s financial system to an ever-greater probability of widespread losses, in other words, the very same risks that led to the 2008-09 crisis.

To be sure, reduced fees will offer low-income borrowers some relief on their costs and to that extent, make it easier for them to meet their financial obligations. But these fees are only a small part of the cost of home ownership. The size of the mortgage and the interest rate on it constitute a greater portion of the burden. And then, of course, there are also the incidental repairs, a leaky roof, for instance, the failure of home appliances, accidents, and a long list of other expenses with which all home owners are familiar. These costs fall on all, but a low-income person, already only just able to meet even a subsidized payment structure, will, when faced with such expenses, more likely fail to meet the terms of the mortgage. If enough of these borrowers fail, the lenders will find themselves in the same kind of precarious financial position that developed in 2008.

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It will take time to develop the full amount of risk involved. Right now, there are relatively few such sub-prime loans on the books for mortgage lenders or elsewhere in the financial system. The bankers seem to have longer memories than the people in Washington. The problem may never develop. It seems that recently the Federal Housing finance Agency (FHFA) has put the effort on pause. If the rule change does go ahead, it will take time to develop a critical mass of risky loans. The risk, however, will growth with each passing week, and then the slightest economic setback, much less the recession that is highly likely to develop soon, could bring on the loan failures and a return to the mess that all, save Washington it sees, remember all too well.



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Washington

Deputy fatally shoots seven starving, abandoned dogs

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Deputy fatally shoots seven starving, abandoned dogs


Arriving at a rural property, an Arizona sheriff’s deputy approaches a group of starving dogs behind a chain-link fence. Some are sleeping, while others bark and wag their tails. The deputy lays out food and water to corral them, body-camera video shows.

“This is going to suck,” he says.

The deputy then pulls out a handgun and shoots the dogs one by one, killing seven, before dragging their bloodied bodies to his truck, according to the video. He later dumped the canines’ bodies near railroad tracks, an incident report says.

The Apache County Sheriff’s Office, which serves roughly 65,000 people, maintains that the deputy did nothing wrong that day in September. Chief Deputy Roscoe Herrera said that since the county has no animal control service, deputies have discretion to handle animal issues as they see fit. The deputy, Jarrod Toadecheenie, declined to comment.

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But the incident in Adamana, Ariz. — an unincorporated community about 100 miles east of Flagstaff — has outraged local animal advocates who say that shooting the dogs was the wrong solution and that the area desperately needs to address animal hoarding and abandonment. Some residents have launched Facebook groups to try to find homes for abandoned dogs and to expose people who illegally hoard animals.

“The Apache County Sheriff’s Office won’t do anything to fix the problem,” said Teresa Schumann, founder of the nonprofit Northern Arizona Animal Search and Rescue. “Animals are dying everywhere in the county.”

Molly Ottman, executive editor of the Mountain Daily Star, first obtained the body-camera footage of the incident and shared it with The Washington Post.

The dogs who were shot were owned by a divorcing couple who had abandoned the property, Toadecheenie wrote in the incident report. He wrote that he visited the home several times over a span of three weeks after neighbors called to complain about the canines.

On the first visit, he counted 10 dogs, “all of which seemed to be in good health.” A few days later, the deputy wrote, he responded to a call that the dogs had chased a neighbor’s donkey.

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Toadecheenie contacted Schumann, who said she was struggling to find new owners for the dogs when the deputy called and said he would “handle it.” Schumann said she told him the dogs may need to be euthanized if they were feral.

On Sept. 22, Schumann told Toadecheenie that she hadn’t been able to find new homes for the dogs. After telling his supervisor that he planned to shoot the dogs, the deputy bought dog food and a tray, and collected water from a fire station.

Then he went to the couple’s property, corralled the dogs with the food and water, put on headphones and began to shoot the canines, the body-camera footage shows. Toadecheenie shot one dog two additional times as it continued to move.

Two dogs ran away uninjured and hid under a shed. They were later brought to a local animal shelter by Schumann. One died of parvovirus shortly after arriving, and the other was adopted, said Brandon Smigiel, a supervisor at Holbrook Animal Care and Control.

In the incident report, Toadecheenie recommended that the couple who allegedly abandoned the dogs be charged with animal cruelty. No charges had been filed as of Friday, according to county records.

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Herrera, the sheriff’s chief deputy, acknowledged that the situation had caused the community “distress.”

“This tragic decision was made under extremely difficult circumstances due to a combination of limited resources, the willful neglect and abandonment of the dogs by their original owners, and the considerable amount of time spent seeking assistance from outside resources,” he said in a statement to The Post.

In a separate statement provided to KPNX 12 News on June 6, the sheriff’s office seemed to blame a lack of funding.

“Apache County does not have an animal care and control department. In the unincorporated areas that responsibility is left up to the deputies and actions taken vary and are considered on a case-by-case basis. We do not have the infrastructure or budget to support such a department.”

Schumann, who runs the rescue nonprofit, said she never thought the deputy would shoot the animals.

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“It infuriates me when the sheriff’s office says they don’t have the resources” to handle animal situations differently, she said. “There are plenty of people who are trying to help.”

The Arizona Humane Society called the situation “entirely preventable” and lamented that the sheriff’s office had not asked it for help.

“This awful incident lacked all compassion and judgement,” Jennifer Armbruster, a spokeswoman for the humane society, said in a statement. “And what is most clear is that establishing an animal care and control service in Apache County is an absolute necessity to prevent something like this from happening in the future.”

Animal hoarding is at “epidemic levels” in Arizona, creating dangerous situations, said Terri Hoffman, founder of Animal Rights Champions of Arizona. Last summer, three mixed-breed pit bulls mauled a 2-year-old Apache County girl to death. Still, Hoffman said that she wants the deputy to be held accountable and that killing abandoned dogs is not an appropriate solution to hoarding.

“I’ve been to homes where there’s over 53 dogs,” Hoffman said. “Some people hoard horses and goats out here, too. I’ve seen dogs with open wounds, severe infections. Animals are dying.”

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Woman dies after dog attack, Baltimore police say

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Woman dies after dog attack, Baltimore police say


A woman reportedly died after being attacked by dogs in Baltimore on Friday night, the city’s police department said.

Preliminary information indicated that a 50-year-old woman died of injuries suffered in an attack by two stray pit bulls, according to an emailed statement from a police spokesman.

Officers went to the 2000 block of N. Pulaski Street about 9 p.m. in response to a report of a dog bite, the brief statement said.

On arriving, officers “were informed” that the stray pit bulls had attacked three victims and that one, the 50-year old woman, “succumbed to her injuries,” the statement said.

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No information was available about the condition of the other two victims.

Two officers fired shots, and one dog was hit, the police said.

Both dogs were seized by the police and by the city’s animal control department, the police said.

The site is a residential street, lined with many two-story rowhouses with the traditional white marble steps leading from the sidewalk to their front doors. It is in the Mondawmin neighborhood, five or six miles northwest of the Inner Harbor.



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Man sentenced to over 9 years in prison after robbing Washington Square Mall stores at knifepoint

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Man sentenced to over 9 years in prison after robbing Washington Square Mall stores at knifepoint


PORTLAND, Ore. (KOIN) — A man was sentenced to more than nine years in prison after being convicted of robbery and other charges when he stole from multiple stores at knifepoint inside the Washington Square Mall last year.

Jesus Esteban Flores was sentenced to 109 months in prison and three years of supervised release for the crimes, the Washington County District Attorney’s Office announced on Friday.

Officials said Flores began a spree of crimes in a short period of time after he entered the Southwest Portland mall on September 17, 2023. Placing a large kitchen knife on a shoe counter, he asked a department store clerk for a pair of shoes in his size. Flores took them without paying, shoplifted a hat from an adjacent store then went outside to slip the shoes on.

He re-entered the mall, went to a different store, tried to steal multiple shirts by hiding them under his clothes, and was confronted by an employee. The employee backed off after Flores showed the person a knife in his waistband and stepped toward them. Flores verbally threatened the victim and brandished the knife in hand as he exited the store.

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Soon, the security officers of the Washington Square Mall began to take action. One followed Flores throughout the mall. Noticing he was being trailed, Flores threatened the security officer, pointing his knife and making threats on their life outside a main mall entrance. The security officer backed off but other security officers watched from afar and alerted law enforcement.

What ensued was a confrontation between Flores on a bicycle and the Tigard Police Department that ultimately ended in his arrest. As the Washington County District Attorney’s Office explained in a release:

“Tigard police officers confronted the defendant as he attempted to leave the area on a bike. They identified themselves and ordered him to drop the knife. After the defendant refused multiple orders, they fired 40mm less lethal foam rounds at the defendant. Officers then seized the knife, returned the merchandise, and took the defendant to jail.”

Last week, a Washington County jury convicted Flores of two counts of first-degree robbery, two counts of unlawful use of a weapon and second-degree theft. He will serve his sentence at the Oregon Department of Corrections.

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