WASHINGTON, March 19  /PRNewswire-USNewswire/ — The Federal Reserve Board has repeatedly tried since September to contain the foreclosure crisis damage that’s spreading rapidly into the general economy. It has lowered key interest rates a half dozen times and, to quote the Wall Street Journal, “undertaken the broadest expansions of its lending authority since the 1930s.” The most dramatic action, however, came last weekend as the Federal Reserve orchestrated a bailout of Bear Stearns, one of the main financial firms responsible for causing this subprime mortgage mess in the first place.

Bear Stearns has been one of the most aggressive funders and servicers of the abusive, unfair subprime mortgages that are now pushing the country to the brink of recession.

In keeping Bear Stearns solvent, the Federal Reserve acted to avert a domino effect it feared could spark a wider financial market meltdown. But if a firm that’s partially to blame for this crisis warrants help, then surely so do millions of ordinary families who are struggling to keep their homes. Consumer spending accounts for 70 percent of economic activity in this country. As such, individuals are the backbone of the country’s economic well-being, as much as or more so than large but reckless Wall Street lenders and investors.

More than 2 million families who have  been sold unfair, deceptive home loans will face foreclosure in the next 24 to 36 months. An additional 40 million families who live in surrounding neighborhoods will see their property values plummet by $350 billion as a result. Communities will see tax bases erode further. For the common good, federal officials need to act fast to find solutions for working families and neighborhoods: Averting foreclosures on Main Street would not only help families and neighborhoods, but would also benefit Wall Street by avoiding further losses to lenders and investors.
The U.S. Treasury’s plan for lenders to voluntarily modify home loans to affordable terms is failing to keep up with new foreclosures, just as a request for voluntary help for Bear Stearns would have been insufficient. To stop the wave of foreclosures, the Bush administration needs to support and Congress must pass a targeted change in law to permit bankruptcy judges to make limited adjustments to mortgages.

Judges now can make changes on mortgages for vacation homes and commercial properties — current law puts only home loans on primary residences out of reach. Bills now under consideration the U.S. House and Senate allowing court-supervised loan modifications in cases where foreclosure is the only other option could keep 600,000 families in their homes. And it would not cost taxpayers a dime.

But that won’t be enough; this massive problem requires more than one approach.  We also need to implement proposals to expand FHA loan programs to help defaulting borrowers refinance, and quickly.

If massive foreclosures continue, states and communities and individuals all over the nation will suffer economic damage for years to come.  Congress and the White House must support legislation to allow families relief through the courts and work to find additional ways to bring much needed help to struggling homeowners.
About the Center for Responsible Lending

The Center for Responsible Lending (http://www.responsiblelending.org/) is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help (http://www.self-help.org/), one of the nation’s largest community development financial institutions.

Center for Responsible Lending

Johnny gets sick at McDonald’s from a double cheeseburger tainted with ecoli. Results, a massive recall of all beef associated with the meat packaging facility and eventually  the complete shut down of the company that sold the tainted beef to Johnny.

Meanwhile Johnny is OK now and still eating double cheeseburgers. The beef company is out of business. Kaput, el finished, sayonara, GOOD BYE.

One burger, one kid, an upset tummy, and our Government is there to save the day with the mighty nationwide beef recall. Maybe the reason these beef companies get shut down so quick is because they do not offer too many political campaign contributions to get the shaft from our government? Maybe they should play the Capital Hill game a bit more, take buckets of their “tainted cash” to Washington and take a clue form the CEO’s of lending institutions. Just a sick political thought! Seems like it works perfect for them…………..

Johnny’s dad kicked the cow and had to pick it up with a fork lift. He really was not nice to those cows because they did not move when he said move. So, he kicked them and was caught on video.

Results = 123 Million pounds of beef recalled in the largest recall of beef ever. No one got sick. No one died. Cows are OK now. Geez folks, that was a close one!

Oh wait, Johnny just got a toy made in China. Good thing Johnny’s mom is a scientist and checks for lead based paint. The results come back positive and every darn toy is recalled around the world. Toy company is shut down and the president does the honorable thing in China and kills himself. Yes, he killed himself.

Meanwhile in the glorious US of A, the people of our country have been forced into a recession (yes, we are!) by these lawless lenders and Wall Street brokerages that our government protects and shields (if you do not think that, then you need to wake up and smell the trillion pounds of toxic loans because it stinks!), over 1 million homes foreclosed on, murders, suicides, economic blithe, homelessness, lawsuits, joblessness, lay offs, scams, theft, deception, depression, sleeplessness and  divorce.

All as a a result of “tainted and toxic loans!”

Yet our government does little to help the MILLIONS of victims as it pumps billions into Wall Street and the banking systems to “save” lending institutions and Wall Street. Meanwhile in the streets of America, the people continue to get sick and suffer in their homes. Silently, alone………….

In no way to I condone cruelty to animals and in no way do I condone cruelty to humans. The above examples are true and are done with a Moe spin to show how hideous this really is. Thanks to Peter Miller of Realty Times and FHALoanpros.com for giving me the fire to write this post.

Peter Miller/Realty Times:

The other argument made by lenders has been that they were social do-gooders, moral folks offering cheap loans so more families could own housing.

Now we know that the do-gooder argument doesn’t hold water. Figures from the latest Census Bureau survey show that homeownership in the last quarter of 2007 was down to the lowest level seen since 2002. You remember 2002 — that was before toxic loans were widely marketed.

The reason millions of people are facing foreclosure today is very simple: A lot of money was made originating, selling and packaging loans with terms that were unfair and unconscionable from day one. Like tainted food, defective cars or toys covered with lead, such flawed financial products should be recalled at no cost to the consumer. After all, isn’t that the moral thing to do?