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Archive for November 30th, 2011

Secret Bailouts Totaled 7.7 Trillion Dollars – Where is the Outrage?

A shocking report from Bloomberg reveals the amount of money given to big banks as part of the bailout in 2008 and 2009 was nowhere near what we thought – it was far, far greater. 

Apparently, the Federal Reserve committed 7.7 trillion dollars – that’s trillion with a T – as of March, 2009 to rescuing the financial system.  To put that number in perspective, it’s half of America’s Gross Domestic Product and half of everything America produced for the entire year. 

The extent of the bailout wasn’t known until just recently, as the Federal Reserve and the big banks had been fighting to keep it a secret.  Now we all know.

I’m so outraged by this I can barely draft a coherent blog.  This is thoroughly disgusting stuff.  Our country absolutely killed itself financially to help the banks – in ways we didn’t even realize until just now – and what did it accomplish?  How are we better than we were in 2008 or 2009? 

For those who want to act like everything here was above board, then you tell me – why was there so much effort to keep this a secret?  The failure/refusal to communicate all of this to the American public is truly disgusting and, to me, perhaps the most glaring sign yet that our government and political system needs a complete overhaul.  The Fed and the big banks used our money like a game of Monopoly, with no accountability and no strings attached.  Everyone – from President Obama to the unemployed and everyone in between – should be outraged and demand widespread change, starting immediately.

Mark Stopa

www.stayinmyhome.com

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Loss-Share Agreements – Why Mortgage Modifications Don’t Happen

The Sun Sentinel just posted a terrific article about loss-share agreements, which goes a long way to explaining why loan modifications so rarely happen for deserving homeowners. 

This is a concept I’ve discussed previously, most recently when BB&T pursued foreclosure on a Mobil gas station owner who was one day late in his monthly mortgage payment. 

The Sun Sentinel explains the phenomenon very well with an example. 

Suppose the FDIC transfers a $350,000 home loan to Big Bank at a 30% discount ($245,000) with a 90-percent loss-share guarantee.  Big Bank then sells the home after a foreclosure for $150,000.  According to the FDIC, Big Bank’s “loss” is $200,000 ($350,000 minus $150,000), and a check for $180,000 is sent to cover 90% of the “loss.” 

With sale proceeds of $150,000 and loss reimbursement of $180,000, Big Bank just made $85,000 by foreclosing on an American family.  Perhaps worse yet, since the FDIC is run by the U.S. Government, it’s American taxpayers who are footing the bill for these “losses.” 

So if you’re wondering why loan modifications are so hard to come by, wonder no more.  Big Banks profit by foreclosure, and the U.S. Government is largely to blame. 

Here is the rest of the article.

Mark Stopa

www.stayinmyhome.com

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