Core Financial Values

Bank New Tactic Blame the Borrowers

Posted on Tuesday, October 19, 2010

Once again, as another harebrained scheme unravels, the swinging dicks of Wall Street manage to appear impervious to reality and completely immune to the truth.
Nearly every Attorney General in the country is now investigating what was not just simply serial fraud but a no-holds-barred crime spree affecting millions of mortgages across the country.

If you want to see an excellent explanation of the foreclosure fraud, check out the in-depth post, "Foreclosure Fraud For Dummies" by Michael Konczal's, a fellow at the Roosevelt Institute.
The Wall Street frat boys, in a propaganda blitz that would make Tokyo Rose and Joseph Goebbels envious, have come out in droves to blame the victims.
In a piece from the New York Observer, one guy who was most likely too gutless to be identified by name is described only as a man wearing a bespoke blue-striped shirt, a Herm├ęs tie patterned with elephants and Ferragamo loafers said, "You had people putting zero down to get massive houses they couldn't afford to be in, but now they want to stay. And the government wants to let them stay, because they're voters."
One example of these massive houses is the house in Maine that started the robo-signer investigations. Nicolle Bradbury bought her house seven years ago for a whopping $75,000. "A major step up from the trailer she had been living in with her family", the New York Times reported.
Propaganda isn't new to the Masters of the Universe. It started with the dream of homeownership and cheap loans. Alan Greenspan perpetuated the attitude by suggesting that people use their homes as ATM machines and praised the use of Adjustable Rate Mortgages (ARM). Wall Street ran with that and pushed ARMs at an alarming rate. At the height of the boom, during the four to five year period before the financial meltdown it was virtually impossible to get a conventional 30 year mortgage. When the financial crisis hit, banks quickly went into action and blamed the entire fiasco on subprime borrowers.

"If it weren't for the banks pushing these risky mortgages on brokers and agents with massive incentives, no one would have bought them. But when it's the only thing you can buy and you're looking at skyrocketing home values being artificially inflated, what choice do you have," said Steve Dibert a loan fraud investigator at MFI-Miami.

Bankers, of course, see it the other way around and prefer to blame homeowners -- who had nothing to do with creating, what bankers refer to as "complex financial instruments" when asked to explain credit default swaps, securitized loans, and derivatives as if the rest of us are too stupid to understand.

Citi chairman Richard D. Parsons told the Observer this summer in an interview, "The loans wouldn't have been there in the first place if American home buyers, driven by what The Weekly Standard calls immediate gratification without personal responsibility, hadn't overstepped their bounds."

Stories like Bradbury's are the majority. As opposed to the occasional ridiculous story of the cab driver with eight homes and the 14-year-old who bought a McMansion with paper route money, which the banks would like us to believe are the cause of the meltdown.

The majority are hardworking, honest people who simply want to stop being screwed at every turn. One homeowner who contacted me through had this to say:
Richard Zombek Huffington Post

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