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Archive for January 2nd, 2010

The NY Times is reporting that the people who profit from foreclosures see loan modifications as a bad idea. Duh. It’s bad for business. I commented:

The opinion of Mr. Katari, who has a financial interest in more foreclosures (asset managers, folks, are the people who liquidate foreclosed property for lenders) is telling. Of course he’s against loan modifications and people keeping their homes; he profits from them losing them. This is like asking a wolf if protecting sheep is wise. Put the carpenters back to work indeed! We’ve already lost 50% of (admittedly inflated) value in some precincts and 20% or more here in New York. How much bloodletting does he want? Answer: more is never enough.

Call me crazy, but with rare exception, most people would happily keep their homes if their payments were lowered. The banks simply won’t agree to make the modifications permanent because they DON’T HAVE TO. Why is all the TARP money being repaid so quickly? So they can go back to being even bigger SOBs without being beholden to Uncle Sam. Remember “too big to fail?” Bailing them out with our tax money was like sharpening the guillotine blade for our own executioner. Now that they have been sufficiently re capitalized, even the Times has reported that they have positioned themselves to bet against the market improving. Did you think that the people who brought us the sub prime debacle suddenly became good guys?

It would be nice if the administration would show some courage and, once and for all, stand up to the hedge funds and their ilk to foster some real change (wasn’t that why he was elected?). The carpenters can’t go back to work if the housing market, the backbone of our economy, is further weakened. Read the writing on the wall. We should be in a recovery by now, and the real fallout may just be starting without strong leadership. There haven’t been 3 negative years in a row in housing since the Great Depression, which ironically, was also caused by the fox watching the hen house.

I felt better after letting off that steam, for sure.

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