quidditchgrrl

This is how it is, eh?

I should really stay away from the news; all it does for me is make my blood boil.

The housing crisis is at it's nadir.  The banks have taken the $700 billion "bailout" - also known as the "executive wading pool" - and put it into buying each other out and shoring up their already-secure assets.  Try to get a car loan lately?  How about pre-approval on a mortgage?  They're tighter than Ebenezer Scrooge's pursestrings, and you'd better have 20% down.  So much for helping bailout the economy.

My logic (and yes, I know that earth logic does not apply to the financial industry) keeps asking, "but why don't the banks help their borrowers get back on their feet by reducing payments, then gradually increase the amount over 5 years?"  Or something.  Kind of like graduated repayment of student loans, it would increase a specific amount every 14-21 months.  No surprises.  Wouldn't that make money for the lenders, rather than having to absorb the cost of foreclosure and resale?

Ah, but I forgot:  the government.

I read this article this morning. It's kind of a teal deer, so let me summarize:  woman buys house she CAN afford, FHA loan, not an ARM.  Through a number of changes in circumstance (father's death, loss of job, medical and mental disability), she falls behind in her payments.  Bank refuses to negotiate.  She sends in partial payments (1.5 months of mortgage); they return the money.  They notify her via notes on her door (OMG WUT LOL) and phone calls, rather than first-class mail, about her options - WaMu admits that in court.

Did I mention that WaMu, before BoA scooped them up, received $25 BILLION DOLLARS of bailout money?  Well, the more you know.

WaMu repeatedly sends demands for payment, but refuses to accept less than the full amount owed.  They request the same information over and over; they state she's not eligible for a restructured mortgage (hello?  FHA?).

Now, she's able to make the payments, but the bank refuses to accept them, period.  Those payments are going into a trust fund, since WaMu won't take them.  WaMu says that she owes nearly $23K in interest for the money they refuse to accept.  The case is still grinding through court.

BUT LET US GET TO THE POINT.  This sentence says everything one needs to know about the way this all works:

"If the bank does prevail in the foreclosure case, the FHA will pay off the loan from its insurance pool and Lewis’ house will become the government’s problem."

Ah, yes.  THAT is the reason WaMu is stalling - they are betting on the foreclosure to go through so that they'll get a nice lump-sum buyout on the house.

And that is the reason I should give up all news, lest my head explode from the sheer gutlessness of the banking industry.  Cowards.  Lowlifes.  Bottom-feeders.  Egomanics.  Sociopaths.  Suburbanites.