Lest one think the our politics isn't run from top to bottom by the Predator classes, see what happens when their victims attempt to take advantage of some of the protections written to protect debtors over the years.
To Hell With the Free Market
In the Service of the Rich
By DEAN BAKER
The supposed free market fundamentalists are once again running to get a helping hand from Big Government. Apparently, the Republicans are outraged over the fact that many homeowners are now "strategically defaulting" on their mortgages. They have stopped paying a mortgage even though they can still afford the payment because they decided that they would be better off just giving the house back to the bank. There have been some press accounts talking about strategic defaulters who have used their savings to buy a new car or even take a trip to Europe.
This has outraged Republicans in Congress. They have now proposed a bill to have the government punish strategic defaulters by denying them the option to receive a loan insured by the Federal Housing Authority (FHA).
It is important to get some perspective on the issue here. Strategic defaulters are following the terms of their contracts to the letter.
The mortgage contract requires a homeowner to pay a mortgage in order to stay in possession of the house. The penalty for not paying the mortgage is that the bank gets to retake the house.
Banks know (or are supposed to know) when they issue a mortgage that there is some probability that the homeowner will not repay the mortgage.One of the reasons that homeowners may not repay the mortgage, and cause the banks to lose money, is that the home falls in value. Banks should have incorporated this risk into the interest rate they charged on the mortgage.
Since nationwide house prices have fallen 30 percent since the peak of the bubble, and much more in some areas, there are millions of homeowners who would do better by turning over their home to the bank than by continuing to pay their mortgage. Now many homeowners are taking advantage of this option to the detriment of the banks or other holders of the mortgage. more
Amnesty for the Banksters, Debtor's Prison for the Serfs
Evicted and "served": A Sheriff's deputy presents Vicki Valentine with a "writ of possession" that supposedly entitles a private investor to confiscate her home. That investor acquired the alleged right to foreclose on Valentine's home by purchasing a "tax lien" involving an unpaid $362 municipal water bill. The bill grew ten-fold after fees and interest, an amount the unemployed mother couldn't pay.
Long before he orchestrated a scheme to rig auctions of tax liens in Baltimore, attorney and real estate mogul Harvey M. Nusbaum had a long and lucrative career in officially sanctioned crime as an IRS agent.
In 2002, Nusbaum grew weary of robbing people on behalf of the state. Rather than repenting in sackcloth and ashes, as any decent person would, he hired out as a privateer -- a freelance buyer and collector of tax debts.
This form of retail fascism -- a public-private partnership in plunder -- was immensely profitable for Nusbaum. Had he exercised even the slightest restraint on his corrupt appetite, Nusbaum most likely wouldn't be headed for prison. more
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