They were forced to make those loans by the clinton administration. Those people thar took out those loans and are defaulting should be thrown outin the street. If their loans are modified I consider it theft from me.
Making those loans was one thing, but the destroying factor was people figuring out a means to push them off on others in packages and the subsequent evolution of an industry to "insure" them via unregulated instruments. If it weren't for the latter (and it applies to all types of loans as we'll be seeing going to the next couple of quarters) we'd be barely noticing the forclosures and the people would just be out on their asses.
As it stands, these instruments and the corruption of their creators has quite possibly destroyed the economies of the western world.
The thing about your comment on modifications is spot on too. When the politicians address the "poor wittle homeowner", the do not just nothing for the mortgage package holder, they actually throw more chaos into the unravelling system. The modification "steals" downstream revenue from tranches cut out of the morgage blocks and still throws the CDS and CDO instruments that back them in default...
You mean collateralized mortgage obligations. CMOs. Bundles of mortgages traded like bonds and other securities and that usually have derivative bets embedded
and the subsequent evolution of an industry to "insure" them via unregulated instruments.
Unregulated instruments = credit default swaps (which are derivatives) that insured the CMOs (phony insurance to be sure) so that the stooge rating agencies would give these (toxic) bundles an A+ rating. Thus making them marketable
If it weren't for the latter (and it applies to all types of loans as we'll be seeing going to the next couple of quarters) we'd be barely noticing the foreclosures and the people would just be out on their asses.