While he steadfastly maintains that administration failure HAMP (Home Affordable Modification Program) is critical to homeowners everywhere[1], U.S. Treasury Secretary Timothy Geithner did admit yesterday in a hearing before the House Committee on Financial Services that the government made “avoidable” mistakes that probably led, in part, to the housing market crash[2]. Think the treasury secretary is moving away from the idea of massive government control over the housing market because he is acknowledging the role of government in the housing crisis? Think again. Geithner blames the government for its lack of involvement. “We allowed an enormous part of the mortgage market to shift to where there was little regulation and oversight,” he explained.
Basically, Geithner’s explanation for the housing crisis is that private industry was allowed too much leeway in making loans. This is arguably true, but leaves out the massive incentives provided by the government to lenders to encourage the “securitization chain that lacked transparency and accountability” that Geithner cites as a result of the lack of oversight. In the same testimony, though, he pointed out that winding down government-controlled Fannie Mae and Freddie Mac will “fundamentally transform the role of government in the housing market,” which is, indeed, likely. However, he emphasized that there is still a role for the government in housing reform, since “these steps alone will not give rise to a housing finance market that meets the needs of families and communities.” He went on to suggest reforms that “restore confidence in the mortgage market among borrowers, lenders and investors” and that would lead to a different concept of the “American Dream.” “Our goal is not for every American to become a homeowner,” he said.
On the whole, this sounds like a positive perspective from the administration. However, it also sounds like Geithner is leaving plenty of room for an enormous government role in the “reform” of the system even as he explains plans for removing Fannie and Freddie. Do you think that this administration can effectively reform the housing market? Does it need reform, or just a good cleaning out?
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[1] http://www.reuters.com/article/2011/03/01/usa-housing-geithner-hamp-idUSWEN874220110301
[2] http://www.dsnews.com/articles/geithner-concedes-government-incentives-distorted-housing-market-2011-03-01
What we need is for our existing laws to be enforced. Prosecute the Banksters, heads of the Rating Agencies, top Wall Street Execs, and anyone else that is guilty of the crimes that have caused this massive problem. A critical component, in my opinion, would be to determine how much these individuals profited from their illegal activities. Then “claw-back” those funds and use them to help solve the problem. As long as the rich and powerful are allowed to continue to profit from their illegal and immoral activities, the problem will continue. All foreclosures should be stopped until the lenders can prove that they actually own the note. It has been documented that many securitized notes were illegally sold numerous times to different investors. This is fraud, and it is part of what created the enormous profits and executive bonuses at the banks and Wall Street Firms. Furthermore, the lenders and servicers should be required to prove that they have the legal “standing” to foreclose. Not with forged and backdated documents, but with proper documentation. Any mortgage that involves MERS should be declared invalid because it too is a big fraud that was devised by the big banks to create even larger and illegal profits. Law enforcement agencies and the courts need to do their jobs and enforce the laws. That is what they get paid to do. And, if they don’t, they should be replaced by people who will. This would be an important step in fixing this mess. I, for one, am sickened by the record profits and bonuses being paid to the fraudsters who have robbed the American people from their homes and jobs. Thomas Jefferson was spot-on when he said: Thomas Jefferson Quote:
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
- Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802)
Over 50 million home loans were made to Illegal Citizens; these home loans were all made possible through “ACORN”. “This is how are current financial system works: Financial Institutions take huge risks to make astronomical amounts of money. If they win they keep the money. If they lose the government will ask the American taxpayer to take the loss. And they have enough lobbying money to keep it that way.” Thank you for reading this.
True Bryan – First we have to understand our government is really Corp American . Example Pres Bush = his fathers oil company = tax benefits for the oil companies, VP Cheany = Halliburton = billion dollar contracts for the Iraq war ++++. The drug companies give money to the FDR , the FDR accepts employees that pass laws for the drugs companies. Pres Bush pass a law that say only drugs can cure, and that is false. Drugs do not cure, they treat symptoms. Vitamin’s will reverse scurvy, I think they call that a cure!!! Our government has been brought and sold by corp America!!