Banking and the business cycle;: A study of the great depression in the United States
Punitive measures taken by banks to reinforce other home owners to keep paying their mortgages are weak arguments at best. Thousands of mortgage modifications were done during the great depression and we don’t hear stories from the self righteous about how we should have let those people live on the street. Nor do we hear that people all decided to stop paying their mortgage because someone else who was in trouble got a loan modification. The problem is much more systemic and continues to pose a major risk to our financial system, modifying loans is one logical step to stop the downward spiral. If you are one of the people who would rather never be able to sell your home keep pushing for a massive foreclosure push by the banks, whether or not they are the legal owners of the defaulting property.
Wake up and smell the 2 x 4s. If we would have not had credit default swaps and other derivative products that were designed to let Wall Street squeeze three times the value out of a mortgage, we would not have seen half of the defaults.
It is absurd that banks would go out of their way to take an even greater loss on a property so they could complete a foreclosure.
We have let these people, those in charge at the banks, have free reign with billions of tax payer dollars. Most of the bankers still have their jobs. Clearly something is wrong this picture.
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