[mEDITate-OR:
misread how big this problem really is, and who would be helped out...
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You may, permissive, as in ought to - economically, politically and legally - read Daniel's@Atlantic analysis of what he thinks he sees, and does not.
Then, you may also compare these thoughts below.
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Daniel, took me over two years to convince Jim@CR that ARM re-sets were no longer a problem, bcuz most if not all of them had already strategically defaulted, been foreclosed on or BKed out.
Didn't know/see if that was true in Cal, Nev & Fla, but it obviously was in AZ.
For exactly the same reason we now suggest to you that mortgage "write downs" are: first, not a very serious national problem, and for most no longer are one in the sand states; and second, will impact very few people outside the sand states. For many of the same reasons HAMP was designed, knowingly or not, to fail.
But, here IS "The Problem."
Those who were "sold" those bad ARMs & subprime RE loans, were told that through appreciation they would make out like a bandit - Mexican or American. What they were NOT told was that the maker of that loan had front loaded all the profit they might make in the future out of the property and into their pockets. Would take years for the borrower to break even. Would take a NY bankster minute to walk away with the cash.
Now, here is The Really Bad Problem: Many others did NOT take out bad ARM or subprime RE loans. They played by The Rules - put down 20% or more of their hard earned savings, on a conventional loan! They have desperately been paying The Bills. They cannot sell, they cannot refi, they cannot move, they cannot save themselves or their families future. They have, in Canadian English, been Pucked.
Would it really cost U.S. too much to "insure" them against the bad ARMs & subprime RE loans that were made by the Big Bad Bankster, to greedy investors - some living in the homes, many not - that surrounded them. Dan, are you familiar with "flood insurance". What, precisely, is the difference here?
First, understand that "The Write Downs" will not affect those around them without RE mortgages. Second, that it will not affect any of those who walked out & away. Third, those who refi'd out all their profits, will not get to go back N double dip.
Without naming names, there were many, some beginning, police, fire, school teachers, etc; and many more private employees of Intel, Boeing, and many other businesses that bought what they could find, at the only price they could find, as close to their jobs as they could get in AZ. They have lost Trillions.
You forgivably might think/argue that their neighbors also lost Trillions. No, they did not. They did not "sell high" and therefore MAKE or GAIN Trillions, but they also do not OWE Trillions.
The REAL question is are we, as a society &/v polis, willing to make a small adjustment to help those who did NOT cause this problem, but are being nevertheless Pucked?
We are NOT being forced to spread that cost out among all the rest of U.S. - yet. What we CAN do is force those who profited by The Puckin Mess, to "cover" the harm they forced upon those who did not ask for it, did not deserve it, and cannot protect themselves from it.
Can we expect Obama to do this for U.S.? Sadly, probably not, to his shame, and those who voted for him.
But, that does NOT mean that WE cannot do it.
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The true scale of this is not even mentioned. The new investor litigation is only BoA/Countrywide. Yet to appear in court are WAMU/Chase and Wichovia/Wells.
During the dead years - 02 to 06, in AZ and the other sand states, those same three banksters created over US$ 3.5 Trillion in RE loans. Of those, US$ 2.5 Trillion were very bad ARMs and subprime mortgages. Almost all of them, some report over 85%, are in "trouble" = deeply underwater, seriously delinquent, in or back out of the foreclosure or bankruptcy process.
ALL of the residents of the sand states have seen their property values decline by over 50%, or more. Not only the defrauded bad loan takers and the bad loan makers, but every BODY in those sand states.
How many of the 8 + Million of U.S. who have lost their jobs subsequent to this massive fraud, and collapse, did so bcuz of it? How may more will? How long will we be "unemployed".
Not only did their bad RE loans destroy over US$ 1.5 Trillion in THOSE sand state loans, but they impacted everyone around them!
Home owners in Az, Cal, Nev & Fla have lost a multiplier of US$ 1.5 Trillion - probably US$ 4.5 Trillion - and they/Obama are now willing to cut a deal to let the banksters off the hook for only US$ 20 Billion. MOG.
The same "advisors" that talked W into TARP and nationalizing FMae&FMac and bailing out GM, Chrysler, etc, are now talking Obama into screwing many of U.S. out of more than half of our home equity. Prior to the election "They" said that W was a simpleton and a fool..., little did they know.
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This is about "common law fraud".
Throw in a little SEC securities fraud, and a little criminal buying of forged, fraudulent paperwork, to be given to a court in violation of legal malpractice standards, etc.
If you really think that what Countrywide, Wichovia, WAMU and New Century were doing was in any way "legal", you should buy some waterfront property on the Salt River near Phoenix, Az. Or, some Colorado River bank property in Mexico, and the "end of the river", no puns intended.
This is NOT about who stopped paying - note: stopped - 85% of them already have. This is about who will EAT the loss.
There is a word, in law, "disgorgement"!
A repayment of ill-gotten gains that is imposed on wrong-doers by the courts. Funds that were received through illegal or unethical business transactions are disgorged, or paid back, with interest to those affected by the action. Disgorgement is a remedial civil action, rather than a punitive civil action.
Tis not about mommy & daddy Emperor Penguin's coughing up food for the kidlet. Tis about forcing someone who has stolen or defrauded someone to give back what they stole or obtained by fraud.
The question is, as Daniel is pointing out to you: WHO will cough up how much AND who will get the proceeds.
Daniel admits that he does not know all the answers. The least we could do is the same, about some of them.
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Should Mortgage Servicer Lawsuit Settlements Include Principal Cuts?
http://www.theatlantic.com/business/archive/2011/02/should-mortgage-servicer-lawsuit-settlements-include-principal-cuts/71681/
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