Monday, June 14, 2010

“The New Trend: Default On Your Mortgage And Stay In Your House”

I read Reuters Blogger Felix Salmon’s article entitled “The New Trend: Default On Your Mortgage And Stay In Your House” my comments follow!

I was truly amazed at the comments from his readers who simply don’t get it, and it is frightening to say the least about the level of unawareness that prevails among our culture.

As I stated in a similar article: “Living rent free and loving it”

“The Obama administration was more intent to save the banks, and did so against the very interest of the American family. Why do I say this, the government came to the rescue of the very culprit that caused the problem, (the Banks) with an astonishing $787 bn., and the insurance carrier that was allowing the foreclosures to continue, AIG with an additional $180bn.

“AIG was the guarantor of the Derivatives that paid the banks when a borrower defaulted. By providing AIG some 180 Billion dollars, the government not only allowed the banks to continue foreclosing on American borrowers, but promoted it, because when a default was reported to AIG, they paid the full amount of the loss, thanks to Timothy Geithner. If AIG would have been allowed to collapse, or paid to Wall Street insiders 25 cents on the dollar there would have been NO incentive to foreclose in the volume the banks pursued.

“Now another scenario presents itself in retrospect, the main problem facing borrowers today is the high interest rates, and over valuations of their property. In short most borrowers are under water, in some areas, like Nevada, this state of mortgage reality is as much as 80%. If the administration and indeed congress gave a rats hair about America rather that their beneficiaries, they would have made the money available to borrowers to pay to the banks for a loan modification and principal reduction. If they had Washington Mutual would still be around, as would Indymac. What congress in their ignorance have done, is to guarantee that the too big to fail got even larger.

“But they didn’t have the American public’s interest on their mind did they? And bank failures and consolidation is ongoing. If they had both the Banks and the public interest on their compass they would have been bailed out simultaneously, and then there would have been no depression. A much lower level of foreclosures, and sanity would have prevailed.

“As it now stands, millions of homes have already been foreclosed and millions more are waiting in the wings, the unemployment level is a real 63million representing 40% of the workforce. The economy is trudging along on one foot as those who have stopped making mortgage payments are actually, bless them, spending their money buying things they had put off to make instead their overpriced mortgage, and 30,000 good people are filing bankruptcy each and every week.

Now something to think about: what value did America have invested in Wall Street? And what advantage did America receive from Wall Street being bailed out for a second time?

And everyone knows it will happen again!”

Anyone who really believes that the public was wrong and the banks were the good guys, should read all the information that has been developed about the Banks and the FRAUD they perpetuated on an “unsuspecting” Public, the banks knew these loans would never be repaid, and they didn’t care as they sold these loans as securities and took out default insurance, think “CDS” consumers basically uneducated to the intricate mortgage loan documents relied on their bank or mortgage company, and a lot of seniors also did. And they were conned!

Countrywide and several other banks have already been sued by the Attorneys General of several states over “Fraudulent intent” and they are making modifications with principal reductions under court orders.

The Banks failed to explain the ramifications on such loans as option arms where the borrower only qualified for a payment less than his interest and the difference was added back increasing the principal of the loan. The Banks didn’t care as they planned this bubble to continue indefinitely and were looking already to a refinance where they made additional points.

For those who still side with the banks, try studying the history of banking, it has always been laden with unscrupulous individuals; perhaps it will enlighten you, or perhaps not!