Broke, USA

included mortgage brokers who put borrowers in loans they could not afford and unscrupulous appraisers inflating the worth of a property. The series also included a chart of Ohio’s ten largest subprime lenders, a roster that included Countrywide, H&R Block, Citigroup, and Wells Fargo. “I think a lot of Columbus was in shock while that series was running,” Ron Bridges said.

People inside the Dispatch weren’t the only ones to notice this creeping menace, of course. Almost as soon as she took office in 2004, Joy Padgett, a state senator representing a predominantly rural district in central Ohio, began to hear from residents worried they were going to lose their home after refinancing with an unscrupulous lender. “At first, I thought they might just be isolated incidents,” Padgett said, but the consistency of the calls and the volume convinced her otherwise. Researching the law, she discovered the same loopholes that others had spotted years earlier. At the start of 2006, she introduced the Homebuyers Protection Act, which would broaden the state’s consumer protections laws so that they covered mortgage brokers, loan officers, and nonbank lending institutions. The bill also empowered the attorney general’s office to prosecute appraisal inflation and other practices that are often part of mortgage fraud. Padgett was a Republican representing a conservative district, but Faith, the left-leaning homeless advocate, finally had his champion. “She ended up becoming a good friend,” Faith said.

As 2005 was turning into 2006, Bill Faith was missing a key component in the narrative he was trying to construct. Martin Eakes and his allies had Freddie Rogers, the widower and single parent who drove a bus for the Durham public schools. Bill Brennan and Howard Rothbloom put forward several older women whose plight came to serve as the public face of predatory lending in Atlanta at the start of the 1990s. Bill Faith had a raft of sobering statistics on his side and an ominous sense of a pending crisis, but it wasn’t until a lawyer named Rachel Robinson at the Equal Justice Foundation told him about Martha and Larry Clay that he found those Faith dubbed “predatory lending’s poster couple.”

The Clays, who lived in a white working-class neighborhood in Columbus that locals call the Bottoms, were both blind. Their home had cost $15,000 when they purchased it in the mid-1980s. Larry Clay had worked as an X- ray technician at a nearby hospital for thirty-nine years but that facility closed its doors in 2002 when he was in his mid-sixties. After that the couple lived on a monthly $1,700 disability check. They attended services at a nearby church, where Larry Clay sang several times a week and volunteered at its soup kitchen. Martha Clay had recently survived ovarian cancer. By the time Bill Faith learned these and other facts about the Clays, they had been talked into so many refinancings that the couple owed $80,000 on a home the county assessor claimed was worth only $37,000, and they were facing eviction. The closing costs and broker’s fees on the last four refinancings alone added up to $20,000. As Martha Clay described it, they had been paying 7 percent interest on a $72,000 home loan but then the same mortgage broker who had put them in that loan only eight months earlier told them he could get them a better rate. But then the Clays ended up signing papers on an $80,000 loan carrying a 10 percent interest rate. So whereas the couple had been paying $480 a month on their home prior to that final refinancing, their new monthly bill was $702. For his troubles, the mortgage broker paid himself a $3,200 fee.

“Both blind, from a poor white neighborhood in Columbus, scammed into mortgages six different times,” Faith said. “Good religious people. He sings in the choir. I mean, she’s got cancer and they’re doing this to her.” Faith couldn’t suppress the sly grin tugging at the corner of his lips. Despite the great sympathy he felt for the Clays, he’s a political pragmatist who recognizes an opportunity when it is presented to him. “A legislator can argue with me,” he said. “But what are they going to say to the Clays? ‘You should have known better?’ ‘You should’ve read the documents closer?’” The Dispatch told the Clays’ story in a page-one article that appeared on a Sunday in February 2005, and Faith arranged it so the couple testified in both the Ohio House and Senate when it came time for the appropriate committees to debate Joy Padgett’s bill.

The Republican leadership proved critical to its passage. It helped that Faith had a good working relationship with both Bill Harris, the president of the senate, and his top lieutenant, Jeff Jacobson. Both Harris and Jacobson had sided with the industry in 2002 (the Ohio Association of Mortgage Bankers gave Harris its “Legislator of the Year” award that year) yet both joined the reform side in 2006. “I think they recognized that what they were hearing from all these mortgage guys was a bunch of crock,” Faith said. Perhaps, but Ron Bridges was inclined to give Faith some credit for helping to nudge them along. Bridges joined Faith when he visited Jacobson, who represented the Dayton suburbs, to talk about Padgett’s bill. “Do you want your mother, because she walks into the wrong door on High Street, you want her to lose her home?” Faith asked him. Not for a moment did Bridges think this powerful senator’s mom might find herself in that predicament, but it didn’t matter. “He got that this was about protecting people’s mothers from falling prey to these people,” he said of Jacobson. So strongly did Harris and Jacobson back Faith on this bill that when their Republican counterparts in the House tried to water it down, the pair bullied them into backing off.

At Faith’s suggestion, the signing ceremony, held in June 2006, took place in the Clays’ backyard. “That was a great day in our lives,” Martha Clay said. For the occasion she wore a turquoise pantsuit with a green top and a gold heart necklace and Larry Clay donned a sport jacket and tie. Several of the Clay grandchildren also attended. During the signing itself, Governor Taft, as he had done in 2002, congratulated himself for a job well done. With Faith standing behind him, the governor said, “It shouldn’t take a miracle to allow our homeowners to stay in their homes and enjoy the American dream.”

The bill, which took effect on January 1, 2007, would do some good as the problems in Ohio and elsewhere got worse. The law would give prosecutors additional tools to go after those who had abused borrowers. By the start of 2009, Faith said, the Ohio attorney general had filed multiple suits under the new law.

Still, the victory felt hollow and it would come to feel more so in the coming months. “We knew at the time we were too late,” Faith said. No one on his side of things was particularly surprised, he said, when “six months later the wheels fell off” and Ohio’s problems transmogrified into a worldwide calamity.

Not long after the signing ceremony, Bill Faith made the three-hour drive to Youngstown to visit his mother. He hoped to do a little boasting, he admitted, or at least get some rest, but instead she started lobbying him. She told him about people she knew from church who had gotten themselves into a deep financial hole using the services of payday stores, and she mentioned people they both knew from the neighborhood who had gotten themselves in trouble the same way.

“I have this big win and my own mother, she’s on me about dealing with this other thing,” Faith says. “I’m all excited, ‘We did it,’ and she’s like, ‘That’s nice but what about payday lending?’” he said. He hacked out a throaty smoker’s laugh, shot me a glance, and asked, “Ya know?” With time, the payday lenders would grow to despise Faith with nearly the same intensity they normally reserved for Martin Eakes.

There’s something monomaniacal about Bill Faith. He burrows so deeply into an issue or a project that it’s as if the rest of the world ceases to exist. His wife of more than twenty years, Barb Poppe, describes it as “the zone.” It doesn’t make a difference if her husband is working at the computer or deep into a document or just playing cards. “When he gets in the zone, that’s what he totally focuses on,” Poppe said. But that also means Faith can miss a lot while he’s concentrating on something else. For the longest time this advocate for the poor was oblivious to all the payday stores opening in and around Columbus. To the extent he even understood what a payday loan was, he figured it was something people took out once in a blue moon. “I’m embarrassed to say that the cycle of debt and people getting sucked in was something that never even occurred to me,” Faith said.

Before his mother brought up the problem, Dan McCarthy, his lobbyist friend, and Tom Allio, a political ally running the social action arm of the Catholic Diocese of Cleveland, did. McCarthy had never taken out a payday loan, but he knew his sister had because she put him down as a reference and lenders started calling him at work whenever she was late on a payment. It got so bad, McCarthy told Faith, that he had written a big check just to make the phone calls stop. McCarthy, who had worked with Faith on the predatory lending bill, had even half joked with his friend on the night they finally won, “Now we go after the payday lenders.”

For Allio, payday had become his issue a couple of years earlier when he first learned about a woman named Peggy Daugherty. Daugherty, traveling back and forth from central Ohio to Cleveland to get medical attention for her daughter, had borrowed $300 to pay for work on her car. By the time a friend intervened, Daugherty, a middle- aged woman living on a monthly disability check of about $900 a month, owed money to five different stores and had already spent more than $1,000 in fees. To Allio, payday was nothing but an extension of the predatory subprime mortgage lending problem, and in fact he had irritated Faith no end by suggesting they add a payday rate cap to the predatory lending bill.

“We already were up against the entire mortgage industry,” Faith said. “At that point we didn’t need a whole