Posts Tagged ‘new reality’

There are several excellent points in this article. First, debts that cannot be repaid won’t be. A person underwater by tens or hundreds of thousands of dollars is eventually going to default (the majority of them anyway). There are exceptions, bust most will not stand by and pay a premium for years on end while their neighbors pay a fraction of the cost for the same housing. Further, as the banks are bailed out again and again and no relief is given to the homeowner, default becomes palatable.

Second, the government has sacrificed our economy to the banks profit. The bailouts and continued programs purported to “help homeowners” – themselves just thinly veiled bailout vehicles for the banks – can be characterized in no other way.

Finally, the government as a sovereign entity holds absolute power over the corporation. That they have not forced resolution only backs up the second point; the economy takes a back seat to corporate profit and political power.

This will not end well. Instead, it will end in the destruction of millions of financial futures.

Millions of lives have been financially ruined (through some fault of their own, to be sure…but there are contributing macro factors). Millions more will be ruined as they struggle to hold on and continue to pay their mortgages in the hope the banks and politicians will act to stem the tide, rather than profit from it.

Read the whole thing.

 

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…and tells it like it is. Unfortunately, this is a pyrrhic victory. Their conduct is well known, as is the fact it will continue unchecked.

 

If you haven’t followed the housing market, you may not be aware of what a Credit Default Swap entails. Basically, it’s insurance against default. Of course, there is a twist. You need not own the asset on which you’ve taken out the insurance. This is part of the process that broke the US housing market.

The practice should be abolished. No other insurance policy allows you to insure something you don’t own.

All that said, the notion that Greece – via this most recent bailout – may be able to sidestep paying the insurance on their default is absurd. It’s word games. The notion that a state bailout, in Europe or America, avoids a default is a false premise. Greece, like the banking industry here, defaulted. That is why they need and needed a bailout.

All of this is just further evidence the rule of law is broken.

 

The bank settlement doesn’t address the rampant fraud perpetuated by the banks. When asked, prosecutors and politicians say this is just the initial step. I don’t agree; when the dust settles (what little dust this will create), the banks will point to this settlement and say, “But we’ve paid our dues.” Further, politicians will look to this and say, “We made the banks pay!” Neither of which is true.

 

There are entirely too many “coulds” and “mights” in this article. One other detail jumps out; if California receives 9 to 15 of the 25 Billion, a “couple hundred million” per remaining state is not valid. These banks are being given a free pass, especially when you consider how much the taxpayer has given them. We are literally paying the settlement for them.

 

 This is being touted as good news.  It is not.  For relative chump change, these banks will be indemnified for their crimes.  The same banks will then charge fees, recouped from the payout no doubt, to help a limited number of people. Be assured they are right now looking for any loophole that will allow them an out.    Be also assured their friends in the judicial and legislative systems are helping insert more of the same loopholes. 

 Most states allow a lender to pursue a deficiency judgment for years after a foreclosure.  Further, acknowledging that debt to a collector during those years can “refresh” the statute of limitations on thr debt.  This is why a short sale or bankruptcy is the preferable route; it deals with the debt up front.  

Banks are not your friend.  They are not your ally.  They do not – as an institution – have your best interests at heart. 

 As always, Mish has great words.  However, the comment thread is even better than Mish’s post…it gets deep fast.

 From Kelo to this most recent ruling, the judicial system seems hell bent on placing the corporation above the citizen.  By forcing arbitration, they have given big business – banks, specifically – yet another lever over the consumer.  

Get out of debt and stay that way.  Remove their control mechanism.  

I am aware that last sentence sounds like something a conspiracy theorist would say.  I am okay with that.

This took longer than I thought it would. However, it’s good to see lenders looking at this rationally. Missed mortgage payments are no longer strictly indicators of inability to afford a house.

auto loans and mortgages