“the banks are being paid to tear down the blight they caused by their predatory lending policies, with funds that are supposed to be dedicated to preserving homeownership.”
Excellent article that can be reached using the link above. The one thing that emerges from the analysis of what really did happen as opposed to what we were all arguing might happen 8 years ago, is that the banks clearly were up to no good.
The one thing that we can be sure of after watching bank behavior across the country is that they want the foreclosures and the foreclosure sales but they don’t want the property or the responsibilities that go with land ownership. If you ask yourself the question “why would the banks not to want to save homes and home ownership when the “LENDER” (whoever that is, would clearly have done far better modifying loans than foreclosing them into zombie homes,neighborhoods and cities. The way the banks handled this is that they defrauded the investors into signing their rights away leaving the banks in complete control of the entire lending and foreclosing process.
The lending and foreclosing process went hand in hand. That was the goal. Since the more loans failed the more the banks were able to cover the proceeds of their theft from investors, their efforts at modification and workouts — once the cornerstone of every recession — were only window dressing on a plan of driving loans into failure at great cost to the investors and the borrowers.
But what this article details is how much money Detroit alone lost as a direct result of mortgage crisis and the refusal of banks to employ the creative strategies for workouts the same way they used “creative” strategies for selling loan products. And now once again the cities are considering “reparations” which is ordinarily associated with war. The banks destroyed or severely injured entire towns, cities and states. After considering and apparently rejecting eminent domain to end foreclosures, people are now talking about reparations to be paid by the banks to the states, cities and towns who lost money simply because the banks, acting not as lenders but as intermediaries, decided to take us all down for their own benefit. Using the money from investors they cornered the market on money and loans.
And somehow we have seen our governmental public servants miss the obvious. The legislation passed in 1998 taking mortgage backed securities out of the realm of securities and into private contracts, was not really to blame for all this. The truth is that the paper issued by the REMIC trusts was not backed by mortgages or loans of any kind. So since they were not private contracts but instead of were securities sold under false pretenses, the bankers should have been prosecuted. But they were not and now the statute of limitations is probably running out.
I have nothing invested in seeing anyone go to jail. But if that is what it takes to send a signal to those who sit on the bench that this is not a borrower problem then so be it. I think the reparation idea is a good one. I think the eminent domain idea is still a good idea. And I also think that tobacco-like litigation against the banks is ripe now that we are coming to know the truth about their skullduggery. The great recession could have been just a blip on the historical timeline; but the real money for the banks was seeing the entire world go up in flames. I think a lot of people know what I am talking about even if they don’t fully understand the details — which Wall Street made as difficult as possible. I think that is why Bernie Sanders is getting record crowds. And I think a surprise is coming for any politician who fails to run against the banks.
Filed under: foreclosure