Could we have prevented these foreclosures

 

Well today is Election Day, but as a good American I have voted and move on to the next Issue. The next issue is foreclosure.  First off you understand that you have been hooked line and sinker. See if you’re not losing your home you don’t see foreclosure as the problem it is.  But to the person that has went through it or who is going through it, we have a big problem here.   The problem that I have is that it could have been fixed.  You see one thing a lot of people don’t know is that this could have been fixed, and every house could have been saved.

 

 What a lot of people don’t understand is that Fannie Mae and Freddie Mac has received over three hundred and sixty three billion dollars of which they got from the tax payer. No if you understand what Freddie and Fannie is all about.  They buy mortgages for the banks in the form of and insurance, and they provide guarantees on payments on mortgages.  They are sort of like an insurance company that insures the lender if you can not or fail to pay.  So what they did with these three hundred and sixty three billion dollars is paid lenders for bad loans. That’s it in a nut shell.

 

 Now the question you have to ask is who are the lenders?  And you will realize that the lenders are the banks.  So basically Freddie and Fannie are there as insurance for the banks, the banks lend to you because they are guaranteed their money from Freddie and Fannie.

 

Well this is not a bad thing until you look at it deeper.  You understand that the bank gets full price not a discounted or depreciated price.  So if you can see past your nose you will realize that the three hundred and sixty three billion dollars that Freddie and Fannie burnt through went to the banks.  Yeah the same banks that we bail out with tax payer income, and that we let eat up other banks and that made billions of dollars off the money the borrowed. 

 

Now the get paid by Freddie and Fannie for the foreclosures that have caused, they get the property back they get to resale it. Money money money.  You also understand that they received all this money from AIG also.  So basically seven hindered billion went to the bank all legal and you lose your home.  So what did our leaders do wrong that could have fix this problem.  Well if they used that seven hindered billion dollars to buy all the mortgages, quote bad mortgages from the banks, at a deep discounted price. Like about twenty five hundred dollars a house you see if the banks wore on the verge of going under they would have taken any deal to stay a float. 

 

They would have got the billions of dollars, we the tax payers would have got the mortgages and the Government could have lowered the people in trouble payments, be cause they would have owned the mortgages, they could have saved every ones home by re negotiating the mortgages.  They could have fixed the interest rates, fixed the type of mortgages, and lower the monthly payment, they could have put the arrears at the back of the loan, or just flat out forgiven the arrears, all the while keeping the home owner in his home.

 

It would have been kind of like saving how they save the auto industry. The mortgages could have been declared up to date and payments could be made to the government to repay the billions spent. People would have stayed in their homes and the banks would have got there bail out. The government could have used Freddie and Fannies setup to monitor and collect the mortgage payments.

 

 It really was that simple, I guess the question we should be asking is why there were no real stipulations as to how the money was used at the on set of the crisis.  We just gave them a blank check and the took it and they have no heart , its still business as usual. I guess what I am saying is that we had the banks on the ropes and we didn’t kick them while they were down, but they are kicking the hell out of us while we are down, how stupid can we be and breath, we had the ultimate opportunity and we passed it, or at least our government officials did, maybe our leaders are not as smart as we think they are but then again, maybe we are the dumb ones. I wonder if they all own stock in those banks. Well at least that is just my opinion.