Posts Tagged ‘hope for homeowners’

Thank You, Captain Obvious!

Ok, so I haven’t been updating here much lately, but I am back, and I came across this post at Crooks and Liars today about the testimony at yet ANOTHER foreclosure crisis hearing in the House. Yet another financial expert is telling our Congressmen that the Treasury is all about protecting the banks and not the American people.

Umm..let’s see. The foreclosure crisis started in late 2007 and rapidly picked up steam when it finally took a tumble off a cliff in the fall of 2008. There have been  plenty of congressional and senatorial hearings during this time, with our representatives and senators wringing their hands about what can be done to fix the mess. Since then, millions of families have been foreclosed on, most of them, I might add, wrongfully, given the fact that we now know the extent of the mortgage fraud on the parts of servicers, Wall Street, and the brokers that sold these crappy, crappy loans to the American people.

Since then, what do we have to show for it? Bush tried Hope For Homeowners, and that didn’t work because no one who was in trouble could qualify. Then Obama comes along and he tries HAMP. Although HAMP has done better than Hope for Homeowners, it must still be classified as a complete failure because it is at best a band aid over the gaping wound that is the U.S. housing market. Millions of families have lost their homes since the advent of the crisis and millions more will lose their homes before its over.

So, why has nothing changed? Why can’t the government keep our great nation from bleeding out? As Adam Levitin put it “The federal regulators don’t want to get info from the servicers, because then they’d have to do something about it.” and “The prime directive coming out of the Treasury is ‘protect the banks and don’t force them to recognize their losses.”

As I have said many times, the only way to fix the foreclosure mess, which by the way, is one of the major impediments to a full and thriving economic recovery, is to tell the banks they’ve got to take their lumps, and modify every single distressed loan in the nation. Sure, this will cause  some banks will fail, but other, more stable banks will rise up to take their place. That’s capitalism. The bankers were the ones to take enormous risks with our money and the financial stability of the entire nation and they should be made to pay for their folly. The American people have already paid in blood, sweat and tears for what was largely not their fault.

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