Lady Liberty is a Big Fat Ho
Millions of homeowners defaulted on their loans in 2008. 58% of the modifications made during Q1 2008 ended up back in default.
Norm Miller, director of real estate programs at the University of San Diego School of Business Administration:
"The biggest reason modifications end up re-defaulting is because they are in markets where prices have continued to go down.
When people are underwater and don’t see an end to it, a lot of them just walk away,
even if they can make their payments, because they don’t want to be wiped out financially."
A third of owners will walk away when the value of their homes drops 20% or more below what they owe,
even if they can afford the payments, a situation known as “rational default.”
The FDIC said it expects 2.2 million loans with an average size of $200,000 to be modified this year.
It assumes a re-default rate of 33% and 1.5 million fewer foreclosures.
Home prices are down 19% nationwide since 2006, according to Integrated Asset Services.
Prices have dropped by 51% in parts of California and by 70% in some areas of Florida, the most in the U.S..
Erasing part of a mortgage to reflect a home’s current value creates a “moral hazard” that encourages risky investments in the future.
Evan Wagner, a spokesman for IndyMac:
“We’re trying to make the financial decisions you made when you bought your house more affordable for you, not undo your bad real estate investments.
When people say, ‘My home is underwater, therefore I can’t afford it,’ what they are saying is they have buyer’s remorse.”
The Nattering One muses: What would B of A CEO Ken Lewis say? Ken Lewis might ask, as only Ken Lewis might.
“I’m not the guy who walked away from the house he bought but can’t afford. I’m not the guy who reneged on his debts.
All I did was make it possible for you ingrates to live large, like me.”
And Mr. Lewis would be right, as he and his Wall Street Douche Bag and Banking Scum ilk...
were allowed to make all of the creative financing which fueled the drunken orgy possible, by none other than our whores on the hill.
Finance companies -- commercial and investment banks, insurers, investment-management companies,
private-equity firms and hedge funds -- have spent fortunes on lobbying efforts and campaign contributions.
Individuals and political-action committees representing securities and investment firms contributed $146 million to federal political campaigns in 2007 and 2008.
Since the start of 2003, Citigroup has been the largest contributor to the war chests of...
Christopher Dodd and Richard Shelby, respectively, the chairman and ranking Republican of the Senate Banking Committee.
Hedge fund SAC Capital Partners ranked No. 3 among Dodd’s biggest donors, followed by AIG and RBS.
Four of the five biggest contributors to the 2008 campaign of Barney Frank, chairman of the House Financial Services Committee...
are finance companies. Ditto for Spencer Bachus, the committee’s ranking Republican.
Employees and others associated with Goldman Sachs comprised the largest corporate-related donors to the Obama presidential campaign.
JPMorgan Chase was the sixth-biggest and Citigroup was No. 7.
People associated with Merrill Lynch, Citigroup, Morgan Stanley, Goldman Sachs and JPMorgan made up the top five donors to John McCain’s presidential bid.
Through the 80's & 90s, Citigroup’s financial muscle helped persuade Republican controlled Congress's to undo almost seven decades of regulation...
that separated investment and commercial banking and that kept banks and insurance companies out of each other’s businesses.
Hedge funds and private-equity firms in 2007 successfully defeated proposals that would have resulted in their paying higher taxes.
Since the beginning of 1989, Freddie Mac and Fannie Mae’s employees and political-action committees donated $19.5 million to candidates for federal office.
In conclusion, private capital has corrupted our political system and the pervasive role of lobbyists needs to be eliminated.
The U.S. government has been reduced to nothing more and nothing less than a pack of whorish prostitutes for sale to the highest bidder.
The founding fathers didn’t plan for a country where industries or even single companies...
might grow so wealthy that they could purchase compliant regulation and beneficial laws.
As we have nattered before NOTHING and NO ONE can stop this trainwreck, its a fait accompli. Can we prevent this from ever happening again? Yes. What's the first step?
The long-term goals of altering how banks are managed and redesigning the U.S. regulatory structure...
are doomed unless changes are made to laws on political campaign contributions.
One solution is to have only taxpayers fund campaigns for Congress and the White House, removing altogether the corrupting role of private capital.
This would send a clear message: Lady Liberty is no longer a big fat whore for sale.
Hattip to Bloomberg here, here and here.