The Mortgage/Foreclosure Rescue Is No Rescue
It appears that the much ballyhooed mortgage rescue for all those homeowners living in primarily the West and Southwest, and Michigan appears to have been no rescue at all.
Last month once again saw a record number of foreclosures in those states and there has been no significant rebound of the housing market throughout the nation. Of course, the boom and bust cycle has been blamed by the mainstream media in claims that most of those buyers either "borrowed too much" or bought too much home.
As one who lived for many years in a state that has seen these boom and bust cycles since the 1970's, Arizona, I can tell you there is much more to it than that.
What lead to this disaster simply has not been widely reported, nor has been addressed in any significant manner by either this, or the prior Administrations.
What hasn't been disclosed in the mainstream media is the fact that most of those states are "foreclosure friendly" states to begin with, and states with a high turnover rate due to the fact that they are retirement states for most of the Canadian and East Coast retirees.
And that most of those new loans and refinances weren't simply "creative" loans, or even "interest only" loans at all, but many were not even based on the U.S. prime interest rates, but on the London banking rates (the LIBOR, or London Interest Bearing Origination Rate).
At the current exchange rate, that means most of those loan adjustments will be based on a currency rate that is one and a half times that of the U.S. dollar at this point.
Which means that an adjusted rate of 3% based on the London market rates is another one and a half percent over one based on the U.S. prime.
With all the publicity and mass media promotion of the Fed's slashing interest rates during this economic tsunami, little has been said that if a home mortgage rate isn't even based on the U.S. prime, the Fed's slashing of interest rates isn't going to assist in any significant manner whatsoever those home buyers who were "sold" loans based on a foreign currency and interest rate.
Which begs the question, how in the world could U.S. charter banking institutions be selling mortgage loans in this country that are not even based on the U.S. currency to the American public?
One of the prime lenders of these loans was based in Michigan, and most of the others were based in California, although even the Michigan bank which is under investigation at this time, it was announced, heavily sold loans in the West and Southwest through its offices there. However, nothing has been published on the London bank rate loans some of these entities were selling to the unsuspecting public.
Interestingly enough also, those states that are affected have the highest number of Canadian retirees, or as with Michigan, border Canada. Which would mean perhaps that those banks were attempting to compete with the Canadian banks for a share of the Canadian market for homes purchased by Canadians in the United States but using "their" currency rates in order to so do thus bulking up the profits of those lenders in the process.
And they were bankrupt?
Which is even more troubling that banks in this country which are federally insured by the FDIC and Fannie Mae and Freddie Mac would be compromising the economy of this country on behalf of foreign investors in second "vacation" home properties, or were somehow unaware that their affiliated banks were selling loans based on a foreign interest rate or currency. That would be highly suspect, as such information would be readily discernible during any bank audit, and I'm sure one or two of those big box lenders especially in California had to have been audited during that boom.
Although many of the Canadians especially in Arizona only live in the United States for six months out of the year, they don't pay any U.S. federal or state income taxes nor a proportionate share of the sales and other taxes United States full time resident citizens pay, although as with the bank bailouts, it was the United States citizens that ate the risk for those banks that wrote many of those loans for those foreigners who defaulted also, since many were second homes to begin with and while they may have lost their investment for most of those huge closing costs that also were a part of some of those loans, they didn't lose their true "home" at all.
Not like the Americans who were also sold those loans in order to both bulk up the profits of those banks, and also assume some of the risk through the backdoor for those loans which were sold to the Canadian market.
While Obama then "saves" the pension plans of the GM Canadian workers, while giving the "buck up, we all must sacrifice" speech to the U.S. autoworkers in Detroit then that were laid off.
It appears this proclaimed "citizen of the world", as with the last Administration, is more concerned with appeasing the "world" audience and investors, rather than protecting the homesteads of the U.S. citizens.
Since the actual terms and conditions of those loans actually have not changed when there was no meaningful regulatory functions included with the bank bailouts.
Instead, it does appear that in this Administration is promoting now primarily refinances, and advertising these slashed Fed rates for new home buyers and purchases with tax credits, it would appear, again the "hook" so that instead of "rescuing" or protecting the U.S. citizens home investment, the Obama Administration is simply working for the European bankers and attempting to get more and more Americans into those fraudulent London market rate loans so that even more Americans lose their homes during the next boom and bust cycle.
This "rescue" sounds more like a set up for the next generation, and those retiree boomers, or possibly the "new" Americans that Congress and this Administration, as the last, wishes to "legalize," who cannot read English or at least might have a little trouble with all that legalese now in those 50 page loan docs.
You know all those "kids" that this Administration and the last used at election time in order to score points with the voters, to be the next victims in another ten to twenty years, in order to lose even the small amount of equity they may have built up with those usurous rates.
I do believe that there may be more important legislation needed here than the No Child Left Behind Act in order to protect America's children from the banking industry so that maybe they, too, can someday truly realize the American dream of home ownership and not simply "stewardship" for the British or the U.S. banks working in partnership of their home and land.
And now these properties in the West and Southwest are once again being hawked in the East Coast and Canadian markets for the upcoming boomer generation - many of whom are hardly the golf cart type, but be forewarned all you East Coast and Canadian tenderfoots. Promoting all the "steals" now that can be had.
The term "steal" is actually quite accurate, in this case, literally.
The British bankers are on their way to reclaiming the West and Southwest for the Crown, with the assistance of the Tories in Washington who apparently are selling not only a great deal of our vital industries and infrastructure to foreigners through the "global" stock market, but now even the private land in this country through the backdoor by not simply not regulating the U.S. banks and their lending practices, but actually facilitating a British takeover of our entire country parcel by parcel, as it were.
Tags: Mortgage , Foreclosure , Rescue , Banks , Banking , West , Southwest , Economy , Lenders , Foreclosures
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