Again, what does this do to normal people with jobs, homes mortgages, money in the bank, and, oh, JOBS?
If applied ot every mortgage that uses MERS...here’s what happens:
-70% of mortgages are wiped clean
-nobody can get a new mortgage
-while home values plummet, few people have a loan so that’s a wash
-100 million more people lose their jobs as the entire system collapses
My son’s grandkids might live in a reasonably upward society someday. The rest of us are doomed 10 times worse than we were already.
This is why I’ve been advocating that the GOP get their head out of their plump posteriors and start learning about this stuff. Someone needs to take charge of this situation before it snowballs.
But nooooo. The GOP wants to keep parroting their focus-group talking points. “Less regulation. Free markets. Blah, blah, blah.”
In short, the DNC are the evil party, because they helped set the stage for this with their idiotic destruction of lending requirements for minority borrowers. The GOP, being the Stupid Party, went along with it, then doubled down with “less regulation, tastes great.”
The only way to get control of the financial situation in the US now is to re-regulate the markets. Get the crap out into the open, and DEAL with it.
Instead, right now, we’re copying Japan’s lost two decades of “extend and pretend.” Extend sovereign credit to prop up the banks as the turds hit the turbine blades, and pretend that it is all OK. This is also being done in Greece right now too. It won’t work in either place. The Japanese had enough wealth in their society to not need to borrow externally to cover up their banking fiasco. Both the US and Greece depend on external borrowing to prop their messes up.
The adult thing to do is admit that the situation needs to be cleaned up. There are banks that will go under. Quit pretending that the crap on their balance sheets is serviceable debt. It isn’t, so quit pretending that it is worth something. There are bankers who committed mail and wire fraud in selling bogus mortgage “backed” securities. There are banks committing frauds upon the courts in these foreclosure proceedings. Indict them and send a message. As they say in French: “Pour l’encouragement d’ les autres.” They used this when they’d shoot deserters from the FFL. Likewise, the best way to get bankers to adhere to the law is make a few bankers truly miserable. Make them into paupers, wipe out their families, destroy their lives by convicting them of the frauds they committed and put them in prison. Why should Bernie Madoff be in prison for only $50B in fraud when there are bankers out there who have committed at least five times that in mortgage security fraud?
Look, we had a huge problem in the S&L scandal. We came through it, right? Want to know why? Because bankers went to prison as a result of it. The fraudsters got wiped out, a whole bunch of debt was peddled off through the RTC to speculative investors, we closed up a whole bunch of banks, etc. We cleaned up the mess. It was painful, but we did it, and we got through it.
The GOP could do much worse than to take a lesson from those days.