Here in Nevada, America's foreclosure capital, Democratic presidential candidate John Edwards' strong words about the "predatory" practices of some mortgage lenders may be resonating with voters.
But a company that paid Edwards hundreds of thousands of dollars has a subprime lending subsidiary that brought some three dozen foreclosure proceedings in Nevada during Edwards' tenure, according to court records.
The records show that almost all of the properties foreclosed upon by Green Tree Servicing LLC between late 2005 and the end of 2006 were "manufactured homes," or mobile homes, most used as primary residences, often by the elderly.
Edwards has made fighting poverty and helping people in need one of the top subjects of his campaign rhetoric. He has blasted the lenders he says bear some of the blame for forcing people out of their homes.
An Edwards spokesman said the former North Carolina senator and former vice presidential nominee has proposed strong policies to stop lending practices that are predatory, but not all subprime loans are bad.
"For many families, home ownership is not possible without subprime lenders," Adam Bozzi said. "Senator Edwards believes they can serve a valuable purpose. At the same time, he is proposing tough regulations to stop lenders from taking advantage of families that need help and to help homeowners who can't escape these unaffordable mortgages."
Edwards has said he did not know about his ties to subprime lenders and shed them as soon as he found out. He also points to his aggressive work on poverty issues and his tough proposals to address predatory lending. He has called for legislation to regulate mortgages and lending practices while helping struggling homeowners.
Nonetheless, the subprime links mean Edwards cannot claim to be an outsider to the kinds of corporations he criticizes. And his involvement puts him in the awkward position of defending some subprime loans while criticizing others.
Between his vice presidential run in 2004 and his current run for president, one of Edwards' activities has been corporate consulting work for Fortress Investment Group. He has also run an anti-poverty think tank and campaigned around the country for raises in the minimum wage, including in Nevada.
At Fortress, Edwards was paid for part-time work giving the company political and policy advice; he also has said he sought to learn about the hedge fund industry. He ended his work for the company in December, according to his campaign.
Edwards was embarrassed in May by revelations that Fortress, which paid him nearly $500,000, owned the subprime lending company Green Tree and had purchased and expanded the company now known as Nationstar Mortgage.
Edwards invested millions of his personal fortune with Fortress, but his campaign says the money was in funds that included Nationstar but not Green Tree. When Edwards discovered the Nationstar link, he divested from the company. Nationstar doesn't appear to have a presence in Nevada.
Edwards also set up a fund to help New Orleanians facing foreclosure on homes destroyed by Hurricane Katrina after it was revealed that Green Tree was continuing to pursue foreclosures there.
Nevada had the highest foreclosure rate in the nation in the third quarter of 2007, according to statistics reported Thursday. With one foreclosure for every 61 households, the state's foreclosure rate more than tripled from the same time last year, according to the RealtyTrac foreclosure reporting service.
Nationally, the rate stands at one foreclosure for every 196 households, up 100 percent from November 2006.
Thousands of Nevadans have found themselves in over their heads and facing losing their homes as a result of the slowing of the once-hot housing market.
Critics say lenders fueled the crisis by extending credit to borrowers who weren't qualified or on onerous or deceptive terms.
Wall Street, experts say, enabled the lenders by buying up the debt, thus enabling them to lend more, and with fewer consequences.
"There was huge demand for loosening of guidelines to get Americans into homes," said Rick Piette, owner of New Home Resource in Las Vegas, who has 25 years in the mortgage business.
Everybody had good intentions, he said, including hedge funds like Fortress that bought up the so-called mortgage-backed securities.
"They loved them, they wanted them, they made big money from them," he said. "The looser the guidelines, the higher the interest rates, the bigger the profit for investors. It was golden, backed by American homeowners."
Gail Burks, president and CEO of the Nevada Fair Housing Center, said plenty of unscrupulous companies also got in on the bonanza. "It was a go-go-go mentality and the greed of Wall Street," she said.
Perhaps ironically, poor people make up a small portion of those affected by the credit crisis -- but it is the portion with which Edwards is associated. Most of the new foreclosures are falling on speculators and middle-class home buyers who got in over their heads and who now owe more than their properties are worth.
It's hard to generalize about predatory lending, Burks said. Each loan has to be examined to see if it is deceptive or if it wasn't in line with what the customer's credit should have merited.
"There's a difference between predatory lending and subprime lending," she said. "Subprime lending is something we all have needed or will need. If you wiped it away, something worse would come in its place."
However, many buyers who would have qualified for prime-rate loans were instead issued subprime loans, with their higher interest rates, by unscrupulous brokers, she said.
Green Tree did not originate loans in Nevada but bought them from other lenders, mostly small, local lenders.
Servicing companies such as Green Tree are part of the problem, Burks said. The center deals with many cases where servicing companies don't give borrowers adequate opportunities to avoid losing their homes.
"If you're a very educated consumer, you can select a good lender and know what they're offering," she said.
"But what you can't control is that once you choose a lender, you have no control over the loan being sold to another company, to Wall Street, to sometimes not such a good company."
Green Tree is one of the servicing companies the center has had complaints about, Burks said, describing Green Tree as "in general ... not a mainstream financial company."
Green Tree specializes in the highest-risk mortgages to buyers of the cheapest houses: "manufactured homes."
Edwards was employed by Fortress starting in October 2005. By that time Fortress-owned Green Tree had been active in Nevada for several years and had already brought hundreds of foreclosure actions.
Between October 2005 and November 2006, Green Tree brought 38 foreclosure actions in Clark and Washoe counties.
Most of those foreclosed upon by Green Tree in Nevada appear to have been mobile home-park residents who had lived in their homes for five years or more before they began to fall behind on their payments. The loans had interest rates as high as 16.75 percent, according to court documents.
One couple in 1997 bought a mobile home priced at $34,000, putting $3,000 down and borrowing the rest at a 12.25 annual percentage rate.
In June 2005, they began to fall behind on their payments. Green Tree filed court proceedings in January 2006.
A process server observed through an open door that "the residence was fully furnished and there was a walking cane in the front room," indicating that it was occupied.
In March 2006, sheriff's deputies informed the man, then 74, that he had 24 hours to vacate. He informed them that the woman had died.
When deputies returned with a Green Tree representative a few days later to change the locks, the mobile home was empty.
The man could not be located for comment. When visited recently, the trailer had a new resident who said she didn't speak English. Behind her, the home was mostly bare. Cars in the driveway had California plates.
Nevada now is one of a handful of states scheduled to vote first in determining the Democratic presidential nominee. Edwards, lapped by his rivals in fundraising and struggling to break out of third in the polls, has staked his chances on the four early states: Nevada, Iowa, New Hampshire and South Carolina.
Edwards has visited Nevada almost 20 times to campaign. His operation here lacks the resources of his top rivals', but he has set his sights on the state's large, politically active union presence to give him support in the state's Jan. 19 caucuses.
Edwards also argues that he can win the caucuses because his small-town, working-class roots appeal to rural voters.
The son of a millworker, Edwards became a multimillionaire as a personal-injury trial lawyer, work he has portrayed as fighting big corporations for justice on behalf of the little guy. He now lives with his family in a 28,000-square foot mansion in North Carolina.
"John Edwards has lived the American dream," Bozzi, his Nevada spokesman, said.
"This is someone who came from a family that did not have a lot who grew up to be a success, made millions of dollars, lives in a big house, does well for himself and his family, and is still fighting for the working class and middle class families he grew up with."
Contact reporter Molly Ball at firstname.lastname@example.org or (702) 387-2919.