Three government abuses

Dear Editor:
James Madison,
a founder of our government, declared that legislation is difficult since it must both govern and place limits on government. Quite often, one or both of these demands are not met.

Here are three examples:

First, medical practice told legislatures that it could effectively govern itself. The result has not been as altruistic as we might have hoped. Too often, ethical or efficient physicians are disciplined while the patient killers are allowed to keep practicing. This evidence of corruption exists in patient care as well. Corrupt medical associations proclaim practices that do not promote health, but promote a pharmaceutical.

Second, the West Virginia Legislature, in its zoning enabling legislation, has not imposed standards or limitations on county government.
Comprehensive plans are neither comprehensive nor plans. They don’t show the hard work of “a detailed formulation of a program of action exhibiting a wide mental grasp.” Mature zoning ordinances, which grow from “zoning-light,” show no limits to the abuse of citizens.

Finally, a very contemporary example is the abuse of mortgaged home owners by mortgage service companies. The Federal Deposit Insurance Company offers a “Shared-Loss Agreement” which produces profits for foreclosures. Loans can be purchased for a fraction of the amount owed. But in a foreclosure, the FDIC covers over 80% of the losses using the original loan amount.

The mathematics for this are simple. Consider a million-dollar existing balance plus $50,000 in missed payments and forced placed fees. Then FDIC sells this security at 70% or $735,000. After foreclosure the house is sold at a loss for $370,000.

So FDIC pays only 80% of the ($1 million-$370,000) “loss” or $504,000. The company has received $874,000 for a payment of $735,000 or a gross profit of $139,000. We, the taxpayers, are liable for this profit.

The use of $1 million for the purchase price, instead of the real purchase price of $735,000, gives a gigantic incentive to drive the home owner into foreclosure with impossible-to-pay, fraudulent forced-placements of fees. The illicit profits on 200,000 foreclosures in California are billions. Government “help” is abusing us.

Unfortunately, legislative and bureaucratic laziness enable these abuses. We’re taxed enough already. Don’t tread on us.

Eric Pritchard
Berkeley Springs