The "fraud" associated with bad foreclosures amounts to nothing more
than not being able to produce the original documents (mostly because of the
MERS mess). That's bad management. It fails to meet the test for fraud.
The bank meltdown and bailout happened because of unregulated
creation of derivatives that sold risk on out-dated statistical models which
made them appear safer than they really were. The change in the historical
models was precipitated by a Clinton-era push to get weak borrowers into homes
(made possible by partial deregulation rising out of the Bush-era) and Alan
Greenspan's belief (attributed Ayn Rand) that the markets should regulate
itself.Defaults increased dramatically as the market went south and
the derivatives created enormous liability. Banks deemed "too big to
fail" were bailed-out. Taxpayers were left holding the bag. But without
the intervention, the destruction in the US Capital markets is likely to have
been so far reaching and the pain so intense that any semblance of normal
commerce would have been destroyed. The bailout was the only rational
approach.However, none of this makes buying a house a bad idea.
Greed and imprudent use of credit is the problem.
I suppose it would be well to present a little more foreclosure news.The
Office of the Comptroller of the Currency was bound and determined to find
trickery by those big bad banks when it came to loaning money. After taking 20
hours per file (at $250 an hour) to review them and look for fraud...well, they
didn't find any. So they are going to stop looking and start using the
money for relief to those who bit off more than they can chew.Here's
the reality check: Banks don't make money when they foreclose on someone.
They take a big loss. They hold on to properties so they don't glut the
market. They fix up the holes people punched in the walls to show those big bad
banks. They have to keep the properties up and keep squatters out.All the
while getting ZIP on the loan that defaulted.But keep up the narrative.
Newspapers will publish the anecdotes. Meanwhile, BOA will just charge all of
us more to cover the settlement costs. That's redistribution for you.
No need to worry about the unclaimed funds for bad bank debt, the banks will
figure out a way to claim it so isn't returned to the tax payers.The banks and mortgage loans are not even attempting to any changes, they are
just redistributing the losses and debts thorough other means of recovering the
burp in their profits. Adding fees and services at high cost is one way they are
recovering, almost criminal the way the feds have allowed banks to continue
their graft.Home buying and ownership is such a hoax and loss for
homeowner's its a shame to even call it a assets anymore. I don't know
who ever coined the idea that home ownership is the amreican dream was a real
flake. It has never been the american dream, its the bankers dream to have every
american indebted with a home he can't pay for, even to this day of
economic depression.When we had prosperity and growth in the mid
20th century, we also had expendable cash incomes that were not high by any
standards, I mean under $100/mo expendable for car, home, gas, and food at
$4.25/hr (#250,000 today)