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Rather long article on banks, bank lobbyists and government representatives dealings with efforts to help the homeowners, not the bankers.
How Banks Are Worsening the Foreclosure Crisis (http://news.yahoo.com/s/bw/20090213/bs_bw/0908b4120034085635 - broken link)
snippet:
"The Obama Administration is expected within the next few weeks to announce an initiative of $50 billion or more to help strapped homeowners. But with 1 million residences having fallen into foreclosure since 2006, and an additional 5.9 million expected over the next four years, the Obama plan -- whatever its details -- can't possibly do the job by itself. Lenders and investors will have to acknowledge huge losses and figure out how to keep recession-wracked borrowers making at least some monthly payments.
So far the industry hasn't shown that kind of foresight. One reason foreclosures are so rampant is that banks and their advocates in Washington have delayed, diluted, and obstructed attempts to address the problem. Industry lobbyists are still at it today, working overtime to whittle down legislation backed by President Obama that would give bankruptcy courts the authority to shrink mortgage debt. Lobbyists say they will fight to restrict the types of loans the bankruptcy proposal covers and new powers granted to judges.
The industry strategy all along has been to buy time and thwart regulation, financial-services lobbyists tell BusinessWeek ."
I can solve it... unfortunately, I don't have any lobbying experience and I have no affiliation with the Clintons either, so Obama won't pick me to be in his cabinet....
If banks are insolvent and this is due to bad mortgage loans, don't they forelose and get the property?
So therefore, the banks are really not insolvent and have alot of property to sell.
Maybe they want to cause inflation and then sell the property at inflated rates.
If banks are insolvent and this is due to bad mortgage loans, don't they forelose and get the property?
So therefore, the banks are really not insolvent and have alot of property to sell.
Maybe they want to cause inflation and then sell the property at inflated rates.
Banks cannot profit with homes..they need money.
The bank took a loss when it foreclosed.
That $500K home from 2006 is now worth $300K but the bank had a loan on the books for $500K. $200K just vanished in thin air.
That $300K might be recouped but only if they can sell the home and get a mortgage for that amount ($300K).
Banks holding onto RE is not good for them and selling in a deflating market is not good for them either. Flooding the market with homes will just make the deflationary spiral go that much quicker.
That's why the banks are relying on government money to keep them propped up.
Last edited by HappyTexan; 02-13-2009 at 02:50 PM..
If banks are insolvent and this is due to bad mortgage loans, don't they forelose and get the property?
So therefore, the banks are really not insolvent and have alot of property to sell.
Maybe they want to cause inflation and then sell the property at inflated rates.
If they are tossing 6 million families out on their a$$ who exactly is going to be buying properties at these inflated rates? The banks are going to have to eat some debt one way or the other.
If they are tossing 6 million families out on their a$$ who exactly is going to be buying properties at these inflated rates? The banks are going to have to eat some debt one way or the other.
Hi drjones96,
Absolutely. The banking system needs to take a real term loss. The best way to do it is reverse the system by giving treasury notes to citizens and have them retire debt in proportion. The banks would naturally be closing the books on their assets good and bad along with their liabilities. Yes their assets would disappear but too bad, it was your system and now you lose.
The banks like the other option since the big ones are getting bailed out while their smaller completion dies and get bought up. The economic law is that the net loss in banking capital will raise the profits of the capital that remains. The survivors getting bailed out will own it all.
And so far that would be JPMorgan and Goldman Sachs.
(I'm keeping track of who pops up every time).
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