[quote=patientrenter][quote=Arraya]Yes, PR the banks are responding to the will of the people. Just like with subprime. There was so many people that wanted loans the banks could not help themselves. See, the banks are super-trusting, pushovers in PRs eyes and evil strawberry picking Hummer drivers victimized the poor helpless banks.
Yeah, the banks benefit to loan modifications are not even considered. Right. It has nothing to do with trillions in bets they can’t pay as well as the easiest and quickest way to keep home prices high which their health depends on. Suurre…[/quote]
Like I say, Arraya, if you believe people with money should keep lending, and should also forgive loans, then just send me your check. When I don’t repay, I’d be happy to hear from you why that’s all for the best.[/quote]
Good grief. This is about driving motivations. Not what I believe should or shouldn’t be done. IMO, The motivations of the various bailout measures are to keep home prices high and transfer losses to the public, not erroneously, as you put it, some sort of misguided welfare driven by irresponsible citizen pressure.
The banks with their political enablers have created both situations. The bubble and the bailout.
With the bubble you either think:
A: The banks did it for immense profits with no regard for consequences due to their rapacious and addictive nature.
or
B: The banks did it because of immense pressure from irresponsible borrowers and politicians who took advantage of the banks naivety and good nature
With the bailouts
A: The banks wanted to stay in business and are using every trick in the book to transfer losses to the tax payer and keep RE values as high as possible for their own survival purposes and to keep the billion dollar bonuses flowing
Or
B: The banks, continuing down their naive and trusting path, are under considerable pressure from irresponsible citizens and politicians to continue lending and make underwriting as loose as possible.
I pick A on both. You seem to pick B
Of course, you have to account for the 10 million people that have lost their jobs over the past 24 months and the millions more who lost income. I would venture to bet this group of people contributed greatly to the loan mod programs and who also don’t fit your stereotype of people who bought and could not afford but were collateral damage.
In fact, I have not heard one story of a principle reduction of somebody that committed loan fraud on their first mortgage then turned around and had a principle reduction. Not saying it has not happened, but I have read a few loan mod stories and that is not the case.
Also, This does not necessarily mean I agree with any type of bailout or loan mod program, just that your stereotype is only small portion of the 7 million foreclosures, countless loan mods and the other few million people not paying in their homes now, from the past 2 years.
Last, the only entities that is lending is the government. There is virtually NO private mortgage money today. Ramsey did a good article on this where he said that the market would “collapse overnight” if the taxpayer stopped backing the mortgage market. And yes, I would like to stop my money being used to pay for overpriced homes in an entirely fragile economy, because it’s a gamble that is bound to lose. But that would stop the wall street windfall, collapse home prices and the top 10 financial institutions and we can’t have that.
