Mortgage Meltdown: Blaming the Victims – Answer to Ben

I have two answers for you on the question of fairness.

1. How fair is it, after you have saved and conducted yourself properly and with financial savvy, to see the value of your investment steeply decline as a result of some game Wall Street was playing with the banks? How fair is it that the houses in your enighborhood are going into foreclosure dminishing the value of your neighborhood and your house? The big benefit of saving these houses from going vacant is to you, not the lender, and not the borrower. The big danger is not that 10% will go into default or foreclosure — it is that 90% will suffer the consequences. So do you want to stand on principle and fairneess and watch the economy go to hell and a handbasket or do you want to forgive the borrowers, lenders and investment bankers and get back on track?

2. OK here is the other answer. You are a guy who obviously plays by the rules and reads the documents, and made it his business to gain some financial savvy and you know enough to be at least somewhat cynical of any deal. Let’s say you applied for a loan and the mortgage broker or representative of the mortgage lender “explained” why one mortgage was better than another. Let’s say he didn’t tell you that there were other options available that were better than the ones he was offering. Let’s say he didn’t disclose  that the lender was NOT taking the risk because they were selling the mortgage as soon as they closed. Let’s say the lender had a vested interest in getting you to sign ANYTHING regardless of risk or truthfulness of the appraisal or anything else. Let’s say the lender was sharing the bounty with bonuses, rebates and kickbacks to your real estate broker, mortgage broker, and anyone who would help get you to sign and that they were not disclosing that either. Let’s say you would have no way of knowing that the the lender was not taking on any risk and was just the sales agent for some Wall Street brokers. Let’s say all of those things. Would you sign that deal? I think not. And neither would anyone else.

2 Responses

  1. Your point is well taken. The ‘tone’ of the Bush administration has set the rules. Dishonesty and fraud have prevailed in U.S. business for years now [which includes the health care].
    Most people would never have signed their mortgage docs if they knew the true facts. Let’s get this economy moving and do something for everyone involved.

  2. […] UsLoanQuote.com | Loan Quotes wrote an interesting post today onHere’s a quick excerpt I have two answers for you on the question of fairness. 1. How fair is it, after you have saved and conducted yourself properly and with financial savvy, to see the value of your investment steeply decline as a result of some game Wall Street was playing with the banks? How fair is it that the houses in your enighborhood are going into foreclosure dminishing the value of your neighborhood and your house? The big benefit of saving these houses from going vacant is to you, not the lender, and n […]

Leave a Reply

%d bloggers like this: