Business Week recently published a very well written expose on this topic called,
How Banks Are Worsening the Foreclosure CrisisHow the banking industry is undermining efforts to keep people in their houses
By Brian Grow, Keith Epstein and Robert Berner
Cover Story February 12, 2009, 5:00PM EST
"The bad mortgages that got the current financial crisis started have produced a terrifying wave of home foreclosures. Unless the foreclosure surge eases, even the most extravagant federal stimulus spending won't spur an economic recovery"
What really came first - the chicken or the egg - bad mortgages or bad lending practices? CNBC recently aired an investigative report, "The House of Cards", where they exposed how Wall Street, urged by the Bush administration, lowered guidelines to allow just about anyone to get a mortgage. The story exposed the fraud not only by Wall Street but by the rating agencies who fraudulently gave AAA ratings to securitized mortgage packages which indicated these investiments were safe. With AAA ratings, the worldwide investment community would gobble them up not really knowing what they were buying.
So the banks intentionally created "bad" mortgages - which they had to know would crash - now they want to take back the homes they financed. Why? My belief is that they are looking towards another windfall profit era when home values begin to appreciate. They will have ownership (I question the legality of their taking possession) of millions of home and when the market is right they will sell them at a profit. I have read that two thirds of the foreclosed properties in Florida are not even listed - they are being hidden by the banks.
"One reason foreclosures are so rampant is that banks and their advocates in Washington have delayed, diluted, and obstructed attempts to address the problem. "
"The industry strategy all along has been to buy time and thwart regulation, financial-services lobbyists tell BusinessWeek . "We were like the Dutch boy with his finger in the dike," says one business advocate who, like several colleagues, insists on anonymity, fearing career damage. Some admit that, in retrospect, their clients, which include Bank of America (BAC), Citigroup (C), and JPMorgan Chase (JPM), would have been better off had they agreed two years ago to address foreclosures systematically rather than pin their hopes on an unlikely housing rebound."
Conspiracy is a very loose term and I don't like its' use in most cases, but in this case I believe it is relavant. The conspiracy exists not only amongst the banks but at certain levels of our government working with the banks. The purpose of course - greed.
"In public, financial institutions insist they've done their best to prevent foreclosures."
Oh yes, how good these financial institutions are at advertising and promotion. One need only go back and see how they promoted and advertised thier mortgage programs enticing everyone. They are masters at this. First they advertised how beneficial Adjustable Rate Mortgages (ARM) were, then to create more business they advertised how bad they were offering homeowners new fixed rate mortgages. Propaganda, publicity and deception, all in the name of - your guessed it - GREED.
"AN INDUSTRY IN DENIAL
However the skirmish ends, the industry's contention that it has done as much as possible to limit foreclosures seems hollow. Some statistics it cites appear to be exaggerated. Even pro-industry figures such as Steven C. Preston, a Republican businessman who headed the Housing & Urban Development Dept. late in the Bush Administration, concede that many lenders have dragged their heels. "The industry still has not stepped up to the volume of the problem," Preston says. One program, Hope for Homeowners—which Bush officials and banks promised last fall would shield 400,000 families from foreclosure—has so far produced only 25 refinanced loans."
"Some from the industry denied a foreclosure problem existed, including Sandor E. Samuels, at the time chief legal officer of subprime giant Countrywide Financial. They vowed to continue selling loans with enticing introductory rates as well as those requiring minimal evidence of borrowers' income. "We are going to keep making these loans until the last second they are legal," Samuels later told a fellow participant."
"Much of Dodd's attention shifted to his campaign for the Democratic Presidential nomination. Senate Banking Committee spokeswoman Kate Szostak says Dodd aggressively pursued the foreclosure issue, but "both the industry and the Bush Administration refused to heed his warnings." The lawmaker accepted $5.9 million in contributions from the financial-services industry in 2007 and 2008."
Are you beginning to get the picture. There is so much more in this article from Business Week. It is rather long but is a MUST READ if you are in any way at all interested in "the truth".
If you still don't believe there are games being played at our expense just look at this information published on the same page on Business Week as the article.
The figures under the 2007 and 2008 columns represent the lobbying dollars spent. It appears that legislation in our government is governed not "by the people" but by the corporations. Is this the way our founding fathers meant it to be? I don't think so. We, the people of this great nation are being hijacked and enslaved by the large and ever growing larger corporations as "our" government plays along.I for one feel manipulated. Millions of Americans have been manipulated as the move is on to make the majority of us indentured servants.
Other interesting reports:
This podcast link from Business Week in reference to the article subject of this post. It should open in your player. This is audio not video,
Banks dont want to help anyone. They have no emotions.
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