https://4closurefraud.org/2013/04/22/re-inflating-the-bubble-obama-hired-back-all-the-clinton-era-officials-who-caused-the-housing-bust-so-they-can-do-it-all-over-again/ - Fighting Foreclosure Fraud BY SHARING THE KNOWLEDGE Tue, 23 Apr 2013 21:50:30 +0000 hourly 1 https://wordpress.org/?v=7.0.3 https://4closurefraud.org/2013/04/22/re-inflating-the-bubble-obama-hired-back-all-the-clinton-era-officials-who-caused-the-housing-bust-so-they-can-do-it-all-over-again/#comment-410611 Mon, 22 Apr 2013 14:52:17 +0000 https://4closurefraud.org/?p=59092#comment-410611 If anyone thinks the industry’s fraud can be easily attributed to those individual’s efforts to provide affordable housing for ‘qualified’ individuals they would be misguided. Banks dumped their risk via credit derivatives. http://www.investopedia.com/terms/c/creditderivative.asp The creation of derivatives For example, a bank concerned that one of its customers may not be able to repay a loan can protect itself against loss by transferring the credit risk to another party while keeping the loan on its books.
If you could sell a house and transfer the loan risk to others and keep the profits, would you do it? A sure thing? Particularly if you could insure the risk and be paid if it fails? Banks find it irresistable even now and want to continue without regulations. Think about underwriting a child who has no responsibility for his actions and the parent (government) must bail him out when he overspends or takes risks. As long as the parent (government) continues to buy out the child’s (bank)mistakes the child fails to learn because he continues to profit from his ventures. The banks were bailed out (don’t forget ‘who’ bailed them out) and warned not to do it again but the profit incentive remains. They took us to the brink before. The methods used, like MERS, to cover their faulty work is being rubberstamped by the Courts every day. Foreclosure laws are being revised to take away homes and re-market them. The bankruptcy courts were never allowed to modify loans. Investors took a hit but if investors gamble on bad products for high yield, they accept risk. They should know better and avoid that risk but as long as insurers deal in underwriting, risk is reduced.
The banks should have failed. Yes, I know chicken little said the country would go over the edge but would it? I wonder if only the banks would have had to restructure and learned a lesson. I don’t think we are out of the woods but the second round of housing failure will be different. The fallout continues to impact the ecnomy. Property taxes are rising. In the end the taxpayers underwrites the wayward children (banks) who fail to take responsibilty for their faulty products that increased yield through risk-penalties that result in a few bucks for those who lost thousands, cost of doing business! These guys made a fortune with their scam! Another sip of the kool-aid? Fannie and Freddie need restructuring, get rid of the fat at the top that uses these entities to feather their own pockets. Both parties missed their chance to pull the industry into line.

]]> https://4closurefraud.org/2013/04/22/re-inflating-the-bubble-obama-hired-back-all-the-clinton-era-officials-who-caused-the-housing-bust-so-they-can-do-it-all-over-again/#comment-410604 Mon, 22 Apr 2013 12:45:37 +0000 https://4closurefraud.org/?p=59092#comment-410604 Well isn’t this just way too special.

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