Hello again, thanks for reading! Here we are almost two years and 19 known loan modification denials later. Back in April 09 we started a discussion about loan mods, short-sales and the TARP bailout, thinking we were at the bottom and help was coming, but things have not gotten any better.....for the middle class anyway. Banks have made some money, the wealthy have done pretty well with the tax cuts, Gov't incentives, and of course, their personal investments, all while the middle class have lost most of their life savings. So who is to blame, Goldman Sachs, the US Gov't, the man on the grassy knoll, or Bernie Madoff? Well it was Bernie Madoff of course. He took $ billions, lost it and went to jail for 1000 years, while Wall Street took $ billions, lost it, and was rewarded with $ billions in incentives and bonuses. Want to read more about this? Matt Taibbi's Feb. 2011 Rolling Stone article entitled, "why isn't Wall Street in jail" will be available online tomorrow? Get your barf bag or punching bag ready, it is disturbing and anger management material for sure.
Sorry, back on track here. As of Feb. 2011 we see that many large banks have made money and paid back their borrowed TARP funds, which means the government and banks have some liquidity and should be helping homeowners soon, right? Not so fast, we need to dig a little deeper and well see that the largest holders of US Treasuries are China, Japan and the UK. So that means the real benficieries of the TARP bailout were Wall Street executives, China, Japan and the UK, not US home owners or the US economy.
So what does all of that have to do with short-sales, loan modifications, foreclosures and the millions of us home owners who are still struggling to make our mortgage payments? A lot actually. First, please understand that we need the rich to make their money and spend that money in order to support and stimulate the economy. However, we also need regulations on them which benefit the middle class. For example, lending us money at 1% rate or modifying our home loans. But we simply did not get that during or after the TARP bailout, worse yet, we still cling to the dream that we will get help in the near future. Unfortunately, I just do not see it happening as Banks are not being forced to help us. They have been "asked" to help us, but are simply refusing without penalty. They are taking back homes through foreclosure in record numbers, while the Gov't scambles and spends $ billions more on useless programs that never seem to work. Worse yet, Real Estate Brokers and Attorney's across the country spent $ millions advertising help for home owners through loan modifications, but in the end took a mountain of cash for up front work that was never completed. Again, why were the loan modifications never approved you ask? Well, because the banks make more in a foreclosure or short-sale and because the Gov't simply cannot force the banks to help us, as we are a free and capitalist economy.
There are many options available to us, from moving our cash to smaller local credit unions and choosing to short-sell our homes, so that we can live to fight another day. Whatever you choose, make sure you do your homework first and Never pay cash up front for services "to be rendered" as it has historically ended poorly for the middle class.
