Outlaw the purchasing of mortgage bundles or derivatives with tarp or stimulus money. Troubled Assets Relief Program can be defined as the review and altering of home loan contracts made under false pretenses, false appraisals, or without documentation of the borrower’s ability to repay the loan.
The relief should be in the form of giving back the principle lost in these mortgage derivative scams. Give it back to the original investors, the pension funds, the cities and states, etc. Giving back the principle would let people have their own money to invest where they want and to use what bank they want. Cancel the bailout funds squandered on paying off bad mortgage derivative debt and return the money to the people who invested in these fraudulent ‘securities’.
The property values will continue to fall to 40% of boom value. That was the runup amount from a slow growing housing market created by the requirement that a responsible borrower will have a cash down payment in order to get a loan. Make too many of anything and the price will drop after market saturation.
Forget the idea that a first time borrower has to buy a new home in order to get the tax credit. If somebody cannot afford to buy any home without a tax credit, possibly they should not be buying until they have a down payment. Forcing people to buy new homes to get the credit is focusing gain once again on the developer rather than on a savings for the home buyer. The market is glutted with new and used homes. We don’t need developers driving up the price because the tax credit is restricted to new housing. Rule by developer is over and the mortgage derivatives scam should be over.
Regional banks can handle local mortgage lending. These reworked and new loans should be serviced locally and the ownership of the loans should remain with the institution that originated them. Close out Fannie and Freddie. They are perpetuating the practice of dealing in mortgage ‘securities’ and derivatives, which is creating havoc in the investment world and shaking faith in these institutions. Perhaps the old bad banks should be closed out in favor of regional banks.
Spending TARP or stimulus money on more mortgage derivatives is pouring money down a rat hole. Give the principal back to the people, not the high rollers who caused the problem.
Another problem rearing its head is credit card debt derivative ‘securities’. The credit card people run up the value of their debt by merely adding interest, fees, penalties on the original charged amount. These people are pretending that these kinds of payday loan type charges are real value and then asking for bailout money to pay for them because of the money they cannot lose because they are too big to fail. The value was never there. No TARP or stimulus money to bailout credit card debt.
The moneylenders are walking the halls of government with their hands out and taxpayer money should not go to support their addiction to mortgage and debt derivatives. Don’t pour tax money into a failed business model. Where are the indictments?