Help Us Stop the Bailout
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Congress Has No Intention of Regulating Lenders and Merely Wants to Give Away More Than One Trillion Dollars to Wealthy Corporate Campaign Contributors Have you bothered to read some of the advertisements that still fill e-mail inboxes, fax machines, voicemail boxes, and every other area of communications? On August 25, 2007 an article about the mortgage crisis at the San Diego Union Tribune website (http://www.signonsandiego.com/news/nation/20070825-0909-mortgagecrisisvictims-abridged.html) had the following ads beneath it:
Refinance.LoanOffer.com
Refinance at 5.35%
Fixed
$250,000 loan for
$650/month. See New Payment - No SSN Rqd. Save Now! Let's see, "get a $300,000 loan for $875 a month" -- that means that for $3,500 a month, a borrower could take a loan for $1.2 million. And a median dual income family might be able to just barely squeeze that. Why the cashier at the mall who is ringing up your purchases may very well have taken out a $1.2 million option payment, zero down loan. That person has no hope of paying back the loan and is hardly worse off if she suffers foreclosure. With "zero down" the only thing she has to lose is her credit score. And that brings me to two points. First, if people like Chris Dodd (D-CT) were worried about ordinary people, then why not call some of the people behind these ads in to testify before the Senate Finance Committee? If Mr. Dodd is considering a bailout without first addressing the loose lending problems, then perhaps we should all go out and get $1.2 million option payment loans with zero down payment because Congress -- to help keep us from losing our homes (yeah right!) -- will arrange to get us payments we can afford and pay the rest from the US Treasury Another important point is that if these people made zero down payment and the only thing that they have to lose is a hit to their credit score, Congress can bail them out without spending one thin dime. How? Pass a law that forbids credit reporting agencies from reporting foreclosures that occur from 2007 through 2010. That's all they have to do. It would be nice if they also made a temporary exemption of imputed income from forgiven debt. Under US tax law, when a lender makes a "short sale" that results in the house being sold for less than the mortgage, when the lender accepts the short sale as final payment on the loan, the difference is taxed as income to the borrower. Here, people making $40,000 a year could have an extra $200,000 in income in the year of their foreclosure and they will be forced to declare that as income and pay income tax on it. Tax they will not be able to afford to pay. A real bailout for homeowners would exempt imputed income from forgiven debts from taxable income from 2007 to 2010. Congress doesn't want to bail out homeowners and they will never even consider steps like these that would actually help people who were suckered into complex and risky loans. Congress wants to funnel what will likely become more than ONE TRILLION DOLLARS to banks and investors all over the world in exchange for campaign contributions and a whole new industry to have a lucrative revolving door. Look at Iraq. The planners knew that it would cost enormous sums of money and that victory would either not be possible, or would take a decade. Here's a video of Dick Cheney explaining that it would be extremely difficult and take forever: http://www.moveon.org/r?r=2879&id=10983-6129998-aIf1nM&t=2. Whether you think the war is right or wrong, or thought it was right or wrong at the beginning, one thing is certain: if the White House and Congress told the American people that the Iraq project would take ten years and cost more than $1 trillion, very few people would have wanted to go along with that. I believe that many knew exactly how expensive and difficult it would be -- I believe that many knew it would make a profitable business for many, many years. And this it has. How is the mortgage morass similar? Modern American government, Democrat and Republican alike, is designed to raid the public treasury in any way possible to redistribute that money to its constituents which are essentially businesses, investors, campaign contributors and others with ties to that party. The Democrats and Republicans do not differ in this, which is their central purpose. They differ only in superficial ways that were shaped and directed by Public Relations firms. Anyone calling for a bailout must expect that the numbers will become staggering. The evidence is everywhere. "No SSN Rqd!" the ad reads. Lenders have and continue to make very large loans even to illegal aliens -- some of them unemployed. I know because I've seen the loans. I've personally interviewed the borrowers and read their paperwork. Will Chris Dodd's bailout include illegal aliens? What about illegals making less than $30,000 a year who received a zero down $750,000 stated income option payment loan? Will Senator Dodd's bailout use money from the US Treasury -- YOUR TAX MONEY -- to help someone illegally inside of the United States who makes less than $30,000 a year remain in a $750,000 home? Perhaps we should ask him. Congress, Bill Gross and the White House are all going to try to sell this as a bailout of homeowners. "Working families" they will say, need the government's help. This is a dirty lie. A refinancing scheme using Fannie Mae and Freddie Mac will do nothing more than prolong the agony of these families stuck in depreciating homes with payments that they cannot afford. Perhaps we can move them into FEMA trailers in the desert and make them continue making monthly payments on their homes while Fannie Mae rents the homes out to try to make up some of the shortfall. Yes, this is all about helping working families. I challenge Mr. Dodd to introduce legislation called something snappy like "The Emergency American Family Homeowner Assistance Bill of 2007" that (1) exempts from taxation imputed income from debt forgiveness from the foreclosure or short sale of a house from 2007 to 2010, and (2) that forbids credit reporting agencies from reporting foreclosures, charge offs, short sales and any other real estate related borrower failure relating to real estate from 2007 to 2010. Let's see how much these people care about homeowners. |