Wednesday, September 17, 2008

Mortgage woes to be billed to taxpayers, again!

Wall Street is suffering from mortgage loan abuse that it inflicted on itself, and the only thing that former Federal Reserve chairman Paul Volcker can think of is another federal bail-out like the Resolution Trust Company (RTC).

Remember that the RTC was created to use taxpayer money to fix problems created by the folks charged with home loans, the Savings and Loan (S&L) industry players. The charter of the RTC specified that the agency would not investigate, nor would it turn over to investigating agencies of the government, any evidence that a crime might have been committed in the razing of the S&L businesses.

A little over two decades have past and here, again, we are dealing with huge economic woes caused by players in the home loan businesses and Wall Street’s money (paper with monetary value; we’re told) manipulators. Once again taxpayers are being called upon to bail out the players, without consequences for said players!!!

I think not!

Home loans can, in a single transaction, put large quantities of money on Wall Street’s field of play, and that money is then toyed with; while lobbyists for the players successfully request the government regulators turn a blind eye.

A better solution to this problem is to let the Bankruptcy Court system restructure the debt that is secured by one’s own home; currently they are not legally able to do so. This is necessary because the loans that are the largest percentage of the failures have always been called sub prime; for known, good reasons. Another kind of loan that is prone to failure is the Adjustable Rate Mortgage (ARM), because it’s sold to less qualified borrowers at rates that will ultimately be most profitable to the lender; most burdensome to the customer.

These money manipulating players need serious regulation and accountability, because they have repeatedly proven their ability to throw prudence to the wind in pursuit of profit; then call for the taxpayers to save them from themselves (without consequence, of course).

How long will it take voters to realize that they are the customers (borrowers) being abused by this process? The voters must inform their legislators that this situation needs to be controlled, once and for all, or they’ll be replaced by those who will.

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