I doubt that anyone is oging to let the lenders off the hook. I also doubt that regulation changes will be timely. I think ther eason we look to third party libaility is two-fold:
- Better to have defendants pointing the finger at each other than at the Plaintiff
- Better to awaken these third parties that the financial institutions are not so trustworthy that you can just take their word for anything.
If third parties had faithfully performed their jobs and done due diligence, red flags would have gone up all over the place.
As to the benefit for the people who are not DIRECTLY in mortgage trouble, the first thing is to stop the slide in your home equity and the second thing is to stop the slide in the purchasing power of what you have and what you earn. The only way to do that is to stop the foreclosures, evictions, vandalism of empty homes, and other downward pressures on home prices. The second thing is to take whatever actions are necessary to prevent the continuing slide of the dollar. You are in a multiple whammy situation here. Your asset values are falling while prices are increasing, and the value of your purchasing power is plummeting.
Regulators, bearing down on those balance sheets that have “off-balance sheet” losses, are doing the right thing at the wrong time. It is the right thing to get the truth out to investors as quickly as possible before they make their next investment decision. But it is the wrong time because unless these financial institutions get some breathing room, we will all suffer with them.
Filed under: bubble, CDO, currency, Eviction, foreclosure, foreign relations, GTC | Honor, interest rates, Investor, Mortgage |
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