Obama's latest government bailout program aimed at stabilizing the housing market is called the Homeowner Affordability and Stability Plan. It should be renamed "Taxpayer money to line the pockets of the same bad banks that made billions in profits funding bad home loans".
This program is primarily designed to help homeowners who made bad mortgage borrowing decisions and bought homes at the height of the housing market bubble and secured adjustable rate loans to finance 100% of those purchases. The banks that made those original bad loans: BofA, Citi, JPMorgan Chase, E-Trade and many others (Washington Mutual, Wachovia, Countrywide etc.) made billions of dollars in profits when they took these worthless loans and sold them to the investment banks: Bear Stearns, Merrill Lynch, Lehman Bros and many others as well. Those "investment banks" then packaged these very bad loans and sold them off to unsuspecting investors around the world as being backed by American homeowners, the most trusted borrowers on the planet after the US government itself. Problem is that these bad mortgage bundles went bust last year and these "investors" stood to loose billions if these securities went under.
In any event, the point of this article today is to point out that the very banks (see above) that created these worthless mortgage loans and made BILLIONS of dollars in profits when those loans were resold on the secondary markets (and then caused the enormous financial crisis and economic implosion of the past year) are now poised to have those bad loans guaranteed by taxpayer money. What an outrage.
Why should taxpayers, after providing $750 billion in TARP funds to the financial industry, now have to fork out another $275 BILLION to rescue them from the remaining mortgages still out there that will default in the coming months???
It was their inability (or unwilligness) to properly asses the initial risks that led to this economic crisis and the initial TARP bailout. Now we're going to put another $275 Billion dollars of taxpayer money into their pockets to bail them out of the very policies they initially created to generate BILLIONS of dollars in profits. Where did all those profits go???? Where's the BILLIONS they made from the sales proceeds of these bad mortgages to other institutions? Who knows.
All I know is that this is really making me mad. The same banks that created ways to lend TRILLIONS of dollars to worthless borrowers and then made BILLIONS selling these worthless investments to other unsuspecting investors are now going to be bailed out for their outrageous actions over the past 5-7 years.
Its time for people like me to think about defaulting on credit card debt. It's the only way I can punish these banks for putting me and my lively hood in jeopardy. It's not enough for them to raise my interest rates, lower my credit limits and curtail future lending, no, now they're taking federal tax money to stay in business while I'm potentially going to be forced out of business.
These outrageous banks will receive $1,000 up front for each and every modification they start regardless of whether or not the modification works out. If the target is to modify 9 million loans, that's a 9 BILLION dollar windfall for the banks.
Enough is enough. Let the big banks fail and let the government return these tax dollars to me to do with that money what I need to do to keep my family housed and fed. What do you think?
Wednesday, February 18, 2009
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