Busted: Bankers and The Global Economy

October 26, 2008

Leadership Needed in U.S. Foreclosures

New statistics now share that 2700 Americans lose their homes every day due to the banking and mortgage debacle combined with a sharply declining United States economy. That number is up from 1200 a day one year ago. What do you think? Clearly, Americans are losing ground.

Digital Economy has shared a wealth of information and perspective regarding the foreclosure crisis consuming the American populace. Sheila Bair, head of the FDIC, says that the nation is way behind the curve on getting anything done about the foreclosure crisis. The do-it-yourself attitude of the U.S. government has been no help at all. I’m not sure why the FDIC would bother commenting on the foreclosure crisis, but hey, I’m game. What she said next is much more important: “We need to act quickly, and we need to act dramatically to have more wide-scale, systematic modifications.…”

Sheila Bair is voicing something that Americans and politicians have been mouthing for the last year with little results. Part of the problem is the opaqueness of the mortgage system coupled with that of the securitized and bundled loans so prevalent in the U.S. The Federal Reserve would tell you that rules are the problem. Yet, the truth is that there is no speedy way to deal with the crisis. The mortgage process is outdated and hopelessly compromised by the new age of banking greed. Expediency is important to politicians and as a result, the crisis gets nothing more than plenty of lip service.

Naturally, there are plenty of excuses why foreclosure resolution is so difficult:
Homeowners walking away
Job losses
Negative equity
Availability of credit for new loans
Investor speculation
Complex investment banking instruments (mortgage-backed securities)

The credit market is such that no homeowner is able to get a loan, especially from a competing bank. Bankers don’t want any more trouble from strapped homeowners than they already have. If Congress and the Bush Administration had acted faster with determinant action, much of the carnage could have been avoided. Instead, they have placated the public with voluntary programs such as the Hope Now Alliance. Hope Now isn’t bad, it just isn’t powerful enough or fast enough. No meaningful provisions have been adopted to force the mortgage and banking industry to hold more responsibility for the loans they created.

Now, the nation faces a global meltdown of epic proportions. Can you imagine 2700 houses a day being dumped on the U.S. housing market? The fact is that little real U.S. leadership has been shown. Along with the commensurate lack of leadership, bankers and mortgage servicers are still being allowed to run amok. So far, too little, too late is the result of laissez-faire economics that the Bush administration has adopted. Yet the same laissez-faire politicians are providing taxpayer money as bailout grist for bankers and businesses that they deem as too-large-to-fail. America needs something more than a hands-off approach to business/consumer regulations and relations. Americans need real leadership and action with real protection provisions in place. Even if some American citizens are dead wrong in how they have handled their finances, Big Government needs to step up to the plate and hold back the tide of banking greed and process, while forcing foreclosure resolution to work. It is all in the rules and how they are enforced. So far, your United States government has lacked the will to act strongly and decisively. America needs real leadership, not excuses. ~ E. Manning
Selling Short to Avoid Foreclosure
Good New for Cheated Homeowners
Selling Short to Avoid Foreclosure

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August 30, 2008

FDIC Prepares for Banking Slaughter

The FDIC is seriously considering its future workload by expanding offices in Dallas, Texas that handle banking closures. However, the FDIC is trying to indicate that the 125,000 foot expansion is due to an increase in workload from the failure of ten banks this year, completed yesterday with the closing of Integrity Bank of Alpharetta, Georgia. 117 banks are now on the FDIC trouble list. The FDIC says that “it’s important to note most banks on the problem list will either cure themselves or end up being acquired by another company.” That is true. What is also true is that many failed banks don’t show up on the list at all. The silver lining in the situation is the number of government jobs that will be needed in the Dallas Metroplex area.

The FDIC reports that non-interest income at banks waned as trading and securitization services slowed. That is an understatement to be certain.

Sheila Bair reported: “We’ll be proposing changes to the current assessment system that will shift a greater share of any assessment increase onto institutions that engage in high-risk behavior to encourage and reward safer behavior.” The lack of honest information from banks has been and continues to be the Achilles heel in FDIC efforts. Fraudulent banking is reported as up by corporate information specialists while government regulators play down the significance of fraud and failure. The fear is palpable, but regulators are full of blather in an effort to convey confidence. ~ E. Manning

Check out an interesting article at RGE Monitor.

May 14, 2008

Home Today, Gone Tomorrow

Apparently Sheila Bair, noble FDIC chief, likes to engage in wishful thinking like the Federal Reserve. The difference is that Ms. Bair isn’t getting much respect or cooperation. Let’s face the facts: she doesn’t have much cash behind what she says.

She stressed the need for consumers to contact counseling groups and lenders to make an effort to prevent foreclosures. At a recent foreclosure prevention event she attended in California, Bair emphasized that policymakers need to better address the plight of home buying consumers. “I think we miss the human side of how this is impacting borrowers,” Bair said, criticizing efforts by some policymakers to cast troubled borrowers as investors or speculators. (more…)

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