JP Morgan, Bank of America, 8 big lenders are also stopping foreclosures because of their possible involvement in foreclosures mills, churning out possibly fraudulent foreclosure letters to quickly foreclose on as many people as possible. Stop Foreclosure Fraud.com is a good site to follow the issue. Geithner is talking about an aid package, buying home mortgages to the tune of $100 billion. They should not go in with aid for the big banks – this would be another grave mistake on Geithner’s/Obama’s part (and fodder for calling for Geithner’s resignation).
“The Obama administration outlined a plan this week that would provide housing relief, help remove illiquid assets clogging banks’ balance sheets and spur lending. Geithner pledged to buy and modify troubled homeowner mortgages, and Senate Banking Committee Chairman Christopher Dodd said the aid could be as much as $100 billion.”
Going in and saving the banks’ balance sheets will not fix our foreclosure issues, it will buy the big banks some time and further concentrate wealth in the CEO class, but the big banks will still have troubled balance sheets beneath the aid. Instead, we should allow the big banks in this fraud to collapse and fail — we can reorganize the good parts, sell them in the private market at a profit, and have a healthier banking system for it.
Please see post on what should happen to GMAC and why GMAC should really just be broken up. A housing market reset and right to rent proposals is necessary policy and much too late, but still especially expedient, effective, justified, and economically stimulative.
Archein