Blaming homeowners of course, Bankers still take no responsibility

This is from an online article in msnbc online today that was originated by By Joe Rauch

at  Reuters
 
"If you didn't pay your mortgage, you shouldn't be in your house. Period. People are getting upset about something that's just procedural," said Walter Todd, portfolio manager at Greenwood Capital Associates.



Some said the issue is one of personal responsibility for one's own debts. 
.."Everyone's responsible for following the law. If we all don't have to pay our mortgage, should we just stop paying taxes, too?" said Anton Schutz, president of Mendon Capital Advisers. "Your mortgage didn't get to a robo-signer by accident, it's because you're not paying."
They created a system of
Here is a perfect  example of why the bankers that are running the system have screwed it up so badly. They created a system of

black hole securities that were meant to pay Wall Street first  and then pay the  credit default swaps next,  They created an MBS market that could not properly deal with a typical number of defaults.  The system created by Wall Street, for Wall Street and for the politicians was set up for collapse after an average number of defaults.  They didn't deal with the defaults early on because they didn't know who the owned the paper  or who would be paid by the sale of collateral.  They wanted to wash their hands of the business once they received there huge payments for disguising and selling marginal quality mortgages as AAA paper. 

They   actually put  millions of Americans back to work.  The problem is that these were the people set to retire and they didn't want to work anymore.  Many people who were counting on their home as a nest egg, have had to continue working or go back to work.  The collapse of the housing market was not because there were foreclosures.  There are always foreclosures for any number of reasons. 

 The banks can usually deal with them, negotiate with the borrower if possible or take the home back.  They can take the homes and usually sell them at a discount but they are made whole in most cases by the payouts from the mortgage insurance.  The banks rarely if ever lose when it comes to foreclosure.  They are covered by the insurance, they have already collected a few years worth of payments that are nearly 100% interest and they get to write off the balance of the mortgage and costs of the foreclosure for tax purposes. 

For Wall Street to be blaming the entire meltdown on homeowners is absurd.  It just shows that the bankers have become truly myopic and even more self interested. 

There are always foreclosures.
Why did the bankers create a system that would collapse completely if defaults occurred? 
Why were they so misguided? 

 The only reason is because it was easy picking for them.  The pillaged everything else they could away from the common man and the last frontier was real estate.  Since the Great Depression real estate has been a way for people to save for retirement while lining the bankers pockets with interest payments. The entire idea of amortization was really just to make the banks richer while disguising the fact that people will end up paying 3 or more times the value of the original mortgage by the time it is paid in full.  They realized they could pick a number of years that would make it seem tolerable to home owners.  Then they figured out how often people tended to move, which at one time was every 7 years, so they could make sure nearly 100% of the first 7 year's of payments would go to interest.  If the loan was paid back after 6 years, the bank make 6 years of full interest payments.  In any other venture this would be called a scam. 

But since it is the banks and Wall Street, they get bailed out with tax payer money that was to be used to help remove the bad mortgages from the banks so they could start lending again.  Oops.  The banks have hoarded all of that money and are now lobbying to be allowed to commit fraud to help their cause.  The trillions of dollars wasn't enough, now they want to disregard the law so they can make more profits.  We need our politicians to grow a new set and step up and say no.