Russ Kanjorski's Frim Survives "Collateral Damage In Lending"

Jennifer Silverberg for The Wall Street Journal

Joseph Jackson, owner of Jackson Pianos in St. Louis has outgrown his workspace, yet is unable to get the loan he needs to expand.


Last week the Wall Street Journal published an article by Emily Maltby titled "Collateral Damage In Lending".

It highlighted the problem many small businesses are incurring when seeking financing. Their efforts are being thwarted by higher or alternative collateral requirements.

Behind the credit squeeze on small business lies the collateral gap.

Many small businesses, thwarted in efforts to get loans, are saying it takes money to get money. That's because property and equipment assets have fallen in value, so businesses seeking loans are being asked for alternative collateral, often in the form of cash so that the loan is backed in case the borrower defaults.

The catch for most business owners is that if they had money sitting in reserve they wouldn't need a loan.

According to Kathie Sowa, a commercial banking executive at Bank of America Corp., one of the nation's largest small-business lenders, basic underwriting standards haven't changed: Cash flow must be sufficient to support the loan, and there must be a secondary source of repayment. That collateral was typically a combination of accounts receivables, inventory, real estate, equipment, and other business or personal assets.

But since real-estate and equipment values have plummeted, she says, business owners who may have landed loans in the past are now falling short of having sufficient assets. Cash can make up the difference.

Tony Corso, owner of Mi-Box Moving & Storage, has been tripped up by the collateral gap. He wants to buy more trucks and storage containers to meet brisk customer demand, which will increase cash flow at his two-year old business, he says. But the banks that have entertained the loan applications from Mr. Corso's West Haverstraw, N.Y., firm are willing to help finance those purchases only under conditions Mr. Corso can't afford, he says.

Three banks have asked that Mr. Corso use all the assets of his business as collateral—including his accounts receivables, containers, trucks and forklifts—and sign a personal guarantee, he says. Plus, he says he would have to deposit cash into a bank account, equal to the amount of the loan, which Mr. Corso had hoped would be at least $250,000.

"The loan requirements are so onerous," says Mr. Corso, who says Mi-Box pulled in $150,000 in revenue last year and hopes to break even this year.

Abound Solar which employs Russell Kanjorski, Congressman Paul Kanjorski's nephew, had no problem securing a $400 million FEDERAL LOAN GUARANTEE by the Department of Energy.

The same company, formerly called AVA Solar and now known as Abound Solar Manufacturing, received a $3 million federal grant in 2008.

Kanjorski said the loan guarantee was just "coincidental".

I guess Kanjorski's "Too Big To Fail" Amendment included parachute provisions for Abound Solar.

Small business owners are not included in the "too big to fail" category despite the immediate impact on their families, their employees, and their employee's families. If you are a Kanjorski possibilities "ABOUND" to minimize your consequences from bankruptcy, not once but twice, after all its the "CORNERSTONE" of their philosophical trademark.

Monroe and Pike County Bankruptcies Up Over 20 and 30% Respectively

Howard Frank over at the Pocono Record details how dire the economies are in Monroe and Pike counties.

Bankruptcy filings have jumped 21 percent in Monroe County so far this year as the harsh economy, falling home prices and predatory loans have ripped into the financial health of Pocono residents.

It was worse in Pike County, where bankruptcies rose 30 percent.

Bankruptcy filings (PDF File)Monroe County saw 360 new bankruptcy filings during the first four months of 2010, compared to 297 during the same period last year. Pike's new filings totaled 136 through April 30, versus 105 last year.

"I've never seen the economy this bad," said Philip Stock, a Stroudsburg attorney whose sole practice for the past 16 years has been bankruptcy law. "The mortgage foreclosures are higher than they've ever been."

Paul Kanjorski made this statement back in 2004 about predatory lending practices.

"In my ongoing and extensive examinations, I have concluded that it is just as bad to place families in overvalued homes as it is to finance their homes either with excessive interest rates, points, fees, and charges or without considering their ability to make timely payments. All have the effect of potentially setting up a homeowner to fail," observed Congressman Kanjorski. "We therefore need to work in Washington to address appraisal matters, among other things, in any legislation to combat predatory lending that we consider next year."

In 2008 he issued this press release captured in another article by Howard Frank.

Congressman Paul E. Kanjorski (D-11) will hold a press conference next week in the Monroe County Commissioners meeting room to address the growing home mortgage crisis.

Congressman Kanjorski has been a vocal critic of the current mortgage system, and said it does not effectively protect borrowers from abuses that can occur in the system. As the Chairman of the House Financial Services Capital Markets, Insurance, and Government Sponsored Enterprises Subcommittee, he has introduced legislation to reform lending practices and fight predatory lending.

The date and time of the press conference is expected to be announced shortly. So in four years Kanjorski is "still working on it".

Then he tries to spoon feed us with his rhetoric. George Campell once wrote [Rhetoric] is that art or talent by which discourse is adapted to its
end. The four ends of discourse are to enlighten the understanding, please the imagination, move the passion, and influence the will. Kanjorski's inaction given the present bankruptcy situation in those two counties should enlist more than enough passion to influence the will against his retention in office.

"We are helluva alot better off as a country and as an economy than we have ever been in the history of mankind."

Do You Feel Like You Are About To Be Robbed?

If you listen to Paul Kanjorski he is trying to tell the public that he will stay in Washington as long as it takes to solve this out of control financal crisis. Did anyone let Paul know that Charlie Rangel, an admitted tax evader although he trying to say it was a simple error that went on for over 20 years, is the host and featured guest speaker at a $5,000.00 per head fundraiser for Paul Kanjorski this evening in WASHINGTON, D.C.? To the savy political observer the money from the fundraiser,not the financial crisis would be the movtivation for Paul Kanjorski to remain in Washington.

Rangel owned a villa at the Punta Cana Yacht Club in the Dominican Republic, sporadically reported the rental income to Congress, and never declared it on his federal or state tax returns. Again, that is twenty years, not one or two or three. But he would have us believe it was an "error."

According to published reports Paul Kanjorski has accepted $21,000.00 from PACs controlled by Rangel. Chris Carney received the same amount since 2006. What was the payback? Both voted to table a Republican resolution that called for a House ethics investigation of Rangel. That's what $42,000.00 will get you.

Chris Carney is quoted as saying "Charlie Rangel has not been charged with anything." Way to go Chris. A person robs a bank but the police didn't get there yet. Is he innocent? Rangel essentially admitted to evading taxes. Ask Wesley Snipes about tax evasion.

Given the fact that Paul Kanjorski received $2.7 million from the financial services industry it sends off alarms among average Americans. How can a resolution to the financial crisis of the century be resolved satisfactorily for Mom and Pop when their voice has been drowned out in a sea of green faces of more Presidents than Kanjorski has seen in his 12 terms?

There is a saying “Paper money eventually returns to its intrinsic value ---- zero.” Fortunately all of the PAC money won't put Kanjodumpty back together again. If Paul Kanjorski was a pool player I am sure he would be saying to the PACs "I am going to place that money in my side pocket."

The sad part in this whole financial meltdown will be every politician in Washington including Paul Kanjorski will be taking credit for their efforts to resolve this crisis caused by Gramm-Leachy-Bliley Act, a bill passed with bipartisan support. If you really think about everyone reading this post, stop, and pat yourself on the back. It's not Dudley Do Right but "Taxpayers To The Rescue."

Thomas Jefferson wrote in 1816 “I sincerely believe ... that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.” Those prophetic words describe today's crisis to a tee-student credit card debt, junk mortgages, no down payment mortgages, inflated apprasials demanded by loan officers,etc.

Daniel Webster wrote in the Senate “We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.” Washington needs to make sure that taxpayers are rewarded for their loans. The term bailout should be eliminated. It should be replaced with corporate words like line of credit, newly issued shares, quarterly dividends, pledged assets, and personal guarantees.

The corporate pirates that took the risk and brought to bear upon the American people a financial crisis of epic proportions should be made to solemnly swear " I will never expose the American taxpayer to the type of risk created from corporate greed and stupidity. I pledge to treat the American taxpayers' money as if it were,not my own, but a symbol of the utmost honesty and trust. Without trust in any relationship there is none. And to this point Paul & Co. haven't earn anyone's trust except the PACs to do the right thing for them, not you and me.


Senator Carter Class, author of theEmergecy Banking Act of 1933 said "Is there any reason why the American people should be taxed to guarantee the debts of banks, any more than they should be taxed to guarantee the debts of other institutions, including merchants, the industries, and the mills of the country?" The Emergency Banking Act of 1933 allowed a plan that would close down insolvent banks and reorganize and reopen those banks strong enough to survive. I wonder how many of the corporate executives would balk at any rescue plan offered by you and me if we threatened to eliminate them, not let them remain to have rescue become a bad habit.

Paul Kanjorski supported Predatory Lending

The Hazleton Standard Speaker features an article in its Sunday edition- Barletta calls Kanjorski’s role into question . Paul Kanjorski's congressional office issued an eight page timeline of the congressman's record "to regulate Fannie Mae and Freddie Mac, curb predatory lending, improve the quality of real estate appraisals and otherwise help consumers seeking to buy homes." Did the rooster come home to roost or what?

Let's look at what this article states at the time Kanjorski proposed his main bill- Feds Propose Gutting State Protections Against Predatory Lending dated February 28, 2006. Quote- "But a proposed federal law sponsored by Reps. Bob Ney, an Ohio Republican, and Paul Kanjorski, a Pennsylvania Democrat, would override those state laws and gut consumer protections. Perhaps unsurprisingly, their campaign reports show close connections to the financial industry. Rep. Ney, of course, is infamous for his connections to Jack Abramoff and took just short of $570,000 from financial companies in 2003 and 2004. Rep. Kanjorski took almost $450,000 from the financial services industry in the 2004 election cycle, over half of the money he raised."

It is reported in the Standard Speaker article that Kanjorski took $2.7 million overall since 1989. That means he received 16% of his money in one election cycle out of 10 election cycles.

The Progessive States article goes on to state "Consumer rights advocates have come out in support of an alternative federal bill introduced last year by Rep. Brad Miller, a North Carolina Democrat, which would protect existing state predatory lending laws."

How did the latest mortgage crisis happen? Read this article 1.2 million home foreclosures: how did it happen? In part the writer states "Some crucial answers lie in a new report by Common Cause, titled, "Ask Yourself Why... Mortgage Foreclosure Rates Are So High." Several experts testified before Congress in 2000 to warn of lending abuses, persuasion of families to take out loans beyond their means, steering minority homeowners into subprime loans unnecessarily, and more. Yet Congress didn't act.

Over the next seven years, the mortgage lending industry spent $210 million in Washington lobbying and in campaign contributions as they worked to stave off regulation."

The Standard Speaker article tries to paint a rosy picture of Paul Kanjorski's efforts ignoring the information about the Ney-Kanjorski bill. There is one fact that can't be denied. Those that are singing his praise gave him millions in donations, something he claims did not influence him. Geez Paul, can you explain why the National Association of Realtors is running ads against Lou Barletta to the tune of over $234,000.00 for your benefit? No influence, complete balderdash.

The National Low Income Housing Coaltion has this appraisal of Ney-Kanjorski "Representatives Robert Ney (R-OH) and Paul Kanjorski (D-PA) introduced the Responsible Lending Act (H.R. 1295) on March 19, 2005. While at first glance the Ney-Kanjorski bill appears to offer useful consumer protections, its language is riddled with loopholes, making most of its provisions meaningless to borrowers. For example, while it also sets the points and fees trigger at 5%, the bill excludes prepayment penalties, yield spread premiums, discount points, SPCI and other fees in its calculation, significantly limiting the number of loans it covers. Ney-Kanjorski also prohibits prepayment penalties, but only after three years of the loan origination and even though most high cost loans have prepayment penalties two-three years after loan origination. Furthermore, loopholes in the bill would allow for flipping when a single reasonable tangible benefit is provided, even if the tangible net benefit would leave the borrower worse off. Ney-Kanjorski also does not ban mandatory arbitration on all home loans and would preempt state or local laws, including those that provided stronger consumer protections."

If my bddy Foghorn Leghorn were real and read Paul Kanjorski and Ed Mitchell's propaganda he would say "This is gonna cause more confusion than a mouse in a burlesque show!"

Of the money received by Paul Kanjorski from the financial and real estate industry-"They have plenty of Congressmen protecting them. Isn't it time we had someone who is protecting us? We cannot change Washington unless we change the people we send there. This November Lou Barletta will represent, in this election, the definition of change asked for by the voters, not the big corporations.