Subprime Apocalypse Bailout?
March 18th, 2007Via: PR Newswire:
One of the nation’s biggest and most respected advocates for fair housing, the National Community Reinvestment Coalition, urged the Administration and Congress to amend federal regulations to allow the Federal Housing Administration to refinance sub-prime borrowers’ loans in default, preventing a torrent of defaults and foreclosures expected to deluge the mortgage market as a result of the sub-prime lending crisis.
NCRC also called for legislation to establish a national rescue fund to support low-income borrowers, strengthen consumer laws and eliminate nontraditional, exotic loans and incentives for bad lending practices.
According to housing experts, anywhere from one to three million Americans may lose their homes this year; another 100,000 people in housing-related industries could be fired, and an estimated 100 additional sub-prime mortgage companies may go under. As sub-prime lenders retrench, it will become harder for working-class people to buy a home and, as more people lose their homes, the overall economy could be in danger of a recession.
“As this crisis worsens, mortgage tsunamis will ravage working-class neighborhoods across this country. Sheriffs will be knocking on people’s doors, only to find keys and furniture left behind. This is not the way the market should work. We should have a higher standard. We should not allow this to happen,” said NCRC’s President and CEO John Taylor, at the organization’s annual conference, “Broken Economies — Making Market and Governments Work for All Communities.”
A fair housing institution recommends helping working class people meet their predatory mortgage obligation? Sorry, we can’t have that, that’s communism! (helping PEOPLE?, what’s next? let them have cake and pick themselves up by the bootstraps they don’t have). Massive corporate welfare through heavy “free market management” and indirect bailout is the american way…(it’s still gonna fail, though…)
Ron Paul hits the nail on the head again!
Don’t Blame the Market for Housing Bubble
Full text here:
http://www.house.gov/paul/tst/tst2007/tst031907.htm
The Federal Reserve provides the mother’s milk for the booms and busts wrongly associated with a mythical “business cycle.” Imagine a Brinks truck driving down a busy street with the doors wide open, and money flying out everywhere, and you’ll have a pretty good analogy for Fed policies over the last two decades. Unless and until we get the Federal Reserve out of the business of creating money at will and setting interest rates, we will remain vulnerable to market bubbles and painful corrections. If housing prices plummet and millions of Americans find themselves owing more than their homes are worth, the blame lies squarely with Alan Greenspan and Ben Bernanke.
This is what an anal double-penetration must feel like:
“Through mortgage-backed securitization, banks now are mere loan intermediaries that assume no long-term risk on the risky loans they make, which are sold as securitized debt of unbundled levels of risk to institutional investors with varying risk appetite commensurate with their varying need for higher returns. But who are institutional investors? They are mostly pension funds that manage the money the US working public depends on for retirement. In other words, the aggregate retirement assets of the working public are exposed to the risk of the same working public defaulting on their house mortgages.
When a homeowner loses his or her home through default of its mortgage, the homeowner will also lose his or her retirement nest egg invested in the securitized mortgage pool, while the banks stay technically solvent. That is the hidden network of linked financial landmines in a housing bubble financed by mortgage-backed securitization to which no one until recently has been paying attention. The bursting of the housing bubble will act as a detonator for a massive pension crisis.”
http://www.atimes.com/atimes/Global_Economy/IC17Dj01.html
Saw this days ago, courtesy of iTulip. At least they call it what it is, a taxpayer-funded bailout of investment bankers.
“More Wealth Re-Distribution: Taxpayers to Banks”
http://www.itulip.com/forums/showthread.php?t=1078
“…In other words, taxes and more taxes and more Federal debt. The folks over at CAP have their hearts in the right place, but the approach of using taxpayer money to solve the foreclosure problem is misguided. That only encourages the banks to do it again. I have a better idea. How about this time Goldman Sachs, J.P Morgan, Merrill Lynch, Citibank, BoA, et al, clean up their own mess and pay for the bailout instead of taxpayers? Sure, the cost might put some of these banks out of business, but who cares? Other better run banks will take their place….”