The too big to fail banks have milked the system for so long that they know no other way to do business. They are saying all the right things, saying they don't want more houses back, saying they are putting major resources to the HAMP program and that they are willing to work things out with home owners. This is complete propaganda. The largest banks that were given the most money will not do any principal reductions even it if it would save them thousands of dollars. They are ridiculous in their demands.
The program is supposed to help homeowners. However, it is being used to placate everyone who knows the banks have fleeced every home owner in the country. They banks are willing to forgo hundreds of thousands of dollars in order to not have to reduce the principal of a loan even if is the best option for both parties.
I spoke with someone trying to work out a modification this week and I had trouble believing what the banks were doing but I know it is true. Even with a homeowner willing to accept the burden of a mortgage worth over 300,000 more than the property value and clear evidence that the bank would stand to lose a minimum of 350,000 if they foreclosed on the property, is not willing to flex at all regarding principal write downs. In this case writing down 100,000 would likely save the bank 250,000 and get them 10 more years of interest payments on the loan. It makes no business sense. There is no logical argument to why the banks would dig in there heals when they have someone with income that would qualify easily under the HAMP program with partial principal reduction. It is a no brainer. A home would be saved from foreclosure and bringing down the entire neighborhood, the home owners would have a home, and the bank would be getting payments again that would not be too much lower than the original loan.
This is why bank execs get paid 17 million a year. It makes so sense. When the bank has someone that would even qualify if they would be willing to put the 100000 on the back end of the mortgage with the HAMP program. The owner is not even asking for principal reduction, just to structure a deal and restart his loan with a longer term.
They could have a deal done with their first meeting and be set to receive payments next month but the banks in all their wisdom would rather rape the public again after they have gotten paid 3 times for the loan. The government bailouts were not the only gift received by the banks. For example, we all know that Bank of American did not pay full price on the dollar for countrywide and it loans. The third payout is the incentives given to the banks to pretend they are making efforts to help owners through HAMP.
The banks have brought the housing market to its knees and now they have a chance to do the right thing and work at bringing it back just by working with homeowners. But there propaganda campaign telling the world they don't want more houses as they just sit and milk the taxpayer, government and home owners. Then of course, give all the execs a few million dollar a year raise for successfully defrauding the government and the public.
I can't believe the banks are getting away with out any repercussions. They have taken over running of the country and they are doing whatever they want, regardless of the law changes or so called changes in the industry.
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Friday, February 18, 2011
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