Busted: Bankers and The Global Economy

February 2, 2008

Mortgagers Want to hold onto profits

Filed under: banking, government, money, politics — Tags: , , , , , , , , , , — digitaleconomy @ 12:00 am

FDIC: Subprime Modifications ‘Lagging’
Associated Press Article
When the average person reads this article, the eyes may glaze over from lack of understanding. The FDIC is worried. Foreclosures have continued to spiral upward as subprime loan expenses and interest continue to rise to the consumer. Defaults are continuing at an alarming rate and the FDIC is concerned about having to cover the defaulted loans. The FDIC says that mortgagers need to act more quickly to prevent a another wave of defaults. Mortgagers have also been told to invoke “interest only or payment options” on existing loans and they have been very slow to move.
The article quotes “the industry has cited concern about legal liability for their hesitancy in modifying subprime loans.” Ple-e-ease! Why is all this happening? The mortgage industry, despite looking the boogey man of default in the face, cannot bear to invoke loan options to give relief to subprime loan consumers because of the money. They are holding the mortgage notes and they can’t stand the thought of giving up their income. Mortgagers would rather lose the loan, write it off and have the FDIC cover the loss than to do anything. Do you see the attitude the mortgagers and bankers really have? ~ E.M.

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