How a Bad-ass California Mayor is Taking on Big Banks
Posted by freedomforall 10 years, 1 month ago to Economics
Mayor Gayle McLaughlin is using eminent domain to help homeowners and challenge Too Big to Fail.
In a nearly $13 billion settlement with the US Justice Department in November 2013, JPMorgan Chase admitted that it, along with every other large US bank, had engaged in mortgage fraud as a routine business practice, sowing the seeds of the mortgage meltdown. JPMorgan and other megabanks have now been caught in over a dozen major frauds, including LIBOR-rigging and bid-rigging; yet no prominent banker has gone to jail. Meanwhile, nearly a quarter of all mortgages nationally remain underwater (meaning the balance owed exceeds the current value of the home), sapping homeowners’ budgets, the housing market and the economy. Since the banks, the courts and the federal government have failed to give adequate relief to homeowners, some cities are taking matters into their own hands.
In a nearly $13 billion settlement with the US Justice Department in November 2013, JPMorgan Chase admitted that it, along with every other large US bank, had engaged in mortgage fraud as a routine business practice, sowing the seeds of the mortgage meltdown. JPMorgan and other megabanks have now been caught in over a dozen major frauds, including LIBOR-rigging and bid-rigging; yet no prominent banker has gone to jail. Meanwhile, nearly a quarter of all mortgages nationally remain underwater (meaning the balance owed exceeds the current value of the home), sapping homeowners’ budgets, the housing market and the economy. Since the banks, the courts and the federal government have failed to give adequate relief to homeowners, some cities are taking matters into their own hands.
That said-how is eminent domain a moral solution?
one bad govt policy chasing another bad govt policy and so on and so on...
let's throw some senators and representatives in jail and Presidents who signed laws into existence and the Fed and...
And, if you don't ask WHY securitization and all that other workaround crap came into being... what might have influenced or encouraged banksters to invent such things in the first place, you're not practicing Critical Thinking. (no, not talking to you, OA... ;) )
So, on average, we elect lawyers and politicians to make laws that control aspects of physics, chemistry, ecology, human rights, etc., where some or all of them might have NO qualifications or experience applicable to the subjects at hand.
Sort of like the 'only landowners may vote' concept, I'd love it if congressmonkeys had to take some kind of qualification test to show they knew anything about the subject material of the law(s) they were proposing OR VOTING ON.
Wouldn't that be a scream?!
First a session for them in Guantanamo to get the truth, then hot tar and feathers followed by concrete overshoes.
They should get the justice that they arrange for the people including economical, timely punishment.
(Think this is too harsh? Stop being naive ;^)
Below the surface of most cynics is a frustrated idealist.
(No argument with your fears of misuse by government officials.)
I suggest you read the comments posted in addition to the main article or to address your comment to the author instead of the one who posted it. Then think before you criticize.
As for my views, the primary source of looting is the federal government and its centralized power. That power is being manipulated for the benefit of big banks and wall street insiders, imo. If, (and a BIG IF) a state government official uses state power to defend the rights of the people against the banking cartel, it could be a step in the right direction... or not. I don't trust ANY politician (as indicated in many of my posts including within this topic) but I believe that a return of states rights is a good thing. It remains to be seen if the actions in this case are good for liberty or bad.
How could anyone possibly know they couldn't afford a $500,000 mortgage on $50,000 income?
The vast majority of folks underwater are that way of their own making, many on $0-down loans. Basically, they got to live in homes beyond their means (and get the tax deduction) for as long as it lasted. Now it's time to pay the bill, and the nanny-state is going to force business to lose even more money.
Who is John Galt?
Many others got big short term profits from the excess lending: Home builders, carpenters, plumbers, workers, real estate brokers and salesmen, land sellers, appraisers, RE tax authorities, appliance stores. Maybe that's why the ceo of Goldman Sachs said they were "doing God's work."
That's not to excuse them, just to explain that it was a business decision to take the less painful path in the short term.
They (government) made it worse with the bailout. Had they allowed institutions to fail and foreclosures to happen, the free-market would have corrected the problem (as it did during 80's savings and loan meltdown).
The solution is NOT to allow government agents to decide what property is now worth and invalidate contracts. Do we suppose the risk won't then be factored into future loans, driving up the cost yet again for the rest of us???
All my opinion based on research done at the time and off the record discussions with regional people at Resolution Trust authority.