Monday, October 11, 2010

What is occurring TODAY is a hold by banks of foreclosures.

...Today, Case's mood (click title to entry - thank you) is far more subdued. In scarcely two weeks, he and other housing analysts have watched as the once-staid world of back-office bank procedures has spawned a scandal that threatens to further unhinge the housing market....

Perhaps I have been too abstract in some of my statements, so, let me be more PLAIN.

These are the foreclosures facing the nation in 2008.  Two years ago.  Nothing abstract about that.

What the bank bailout SHOULD HAVE DONE was to 'close the gap' between the cost of the homes and the current market value in 2008 after the bubble broke.

Every homeowner in the USA doing what was expected of them, should have received a 're-valued' mortgage with new 'reduced' monthly mortgage payments.  $700 billion could have done that. 

But, one might say, that would not have saved the banks and we would have experienced an economic collapse anyway and we would be in the same boat we are today.

Not so.

The housing market, if the banks had applied their borrowed monies to the 'ACTUAL' toxic assets would have been buoyed ONLY at a lower 'value.'  Homeowners would lose money, but, they won't have lost their homes and their equity would be somewhat intact.

With homes being owned and not abandoned, the market would have stabilized and the American Dream would be mostly intact, but, with slightly less wealth.

The investment banks on the other hand, would still be here but with loans to pay off.  They would not have paid them off as quickly as they did.

It would have been the banks that felt the biggest pinch.  NOT.  Americans.