Big Banks Save Billions As Homeowners Suffer, Internal Federal Report By CFPB Finds

RE:  “The presentation adds that given the extent of negative equity -- underwater homeowners owe $751 billion more than their homes are worth, according to data provider CoreLogic -- "we have gravitated towards settlement solutions that enable asset liquidity and cast a wide net." The solution is an emphasis on reducing mortgage debt and enabling short sales, thus allowing borrowers to refinance into more affordable loans or to sell their homes and move on.”

      CoreLogic’s comments along with Michael Farrell’s “there is not enough money in the banking system to fund our nation's housing stock” (below) is exactly why I think the states should demand to take over the loans as part of the AG Settlement.  Homeowners DO NOT NEED to “move on.”  That is a senseless remark given that the banks are buying back these homes at less than market value – and if they would give that figure to the borrower in a modification or even negotiate the interest to 2% – the borrower could keep his home. 

      Doesn’t anyone take into consideration how much it is costing the US in welfare to displace people?  Hawaii has 160,000+ folks on food stamps.  And why not, the gov’t takes away their home – why bother to work?  Before the economic collapse these homeowners has stellar credit.  It was the nicotine in their refinance fix.  That means they were making payments – until they lost their jobs – because the BANKS COLLPASED THE ECONOMY.  Not because these people were deadbeats.  They were manic about their credit.  The investors sued the banks for inflated appraisals long before the borrowers began to default – neither the borrower nor the investor had control over the appraiser.  So, if there is a $751 Billion discrepancy – it belongs to the bank fraud – not on the backs of the borrowers.

      So, when CoreLogic says “move on” – get a grip here folks.  $21,000 isn’t going to come close to covering up the bank fraud and clouded titles – and there is plenty of it.  Simply put:  The banks wrote more loans than they can handle.  There is no place for all of the loans to go and be occupied as mortgages – unless the states take over the loans from 2003-2008. 

      The states can reconstruct the mortgages with the borrowers – collect the income and split it with the counties and investors if they haven’t already been paid by TARP or insurance. 

      It’s only a matter of time before the fact that these banks collected insurance and TARP on these loans and then continued to try and collect from the borrowers starts to come to light – and that would appear to be insurance fraud… probably the main reason for the foreclosures in the first place.