Home > Banks, Economy, USA > Banks and Credit Unions Become Real Estate Companies

Banks and Credit Unions Become Real Estate Companies

This morning there was an email in my inbox from BECU – “BECU Has Specially-Priced Homes for Sale“. I bet.

I have been suspicious of what would happen as the foreclosures continue to occur and banks seem unwilling to help homeowners. You see, banks have little incentive to assist homeowners. They get $1,000 from the government if they help a homeowner stay in their foreclosing home. Then they get $1,000 a year for the next three years afterwards, if the homeowner stays current on their loan. If they let the house foreclose, they collect all kinds of delinquency fees (‘junk fees”), they don’t actually take the loss on the home – the investors do – and then they can re-purchase the home at the foreclosure sale. Thus, they re-acquire the home for a pittance and can sell it cheap for a profit.

What’s ridiculous is that this whole crisis is circular. Here’s how it goes: our tax dollars are put into the Obama program to pay banks the incentive to help homeowners, banks ignore the incentive and foreclose on the majority of homes anyway (recent numbers indicate only 12% of homeowners in foreclosure have received assistance), homeowner credit scores are shot to hell as a result of foreclosure, banks make out like bandits on fees and don’t bear the costs associated with foreclosure, they buy back the home for cheap, and sell it for its actual value, or roughly 30-40% less  and for the interest rate you begged them to give you.  In May, 1 in 8 homeowners in the U.S. was in foreclosure. If government was smart, it would have worked with homeowners instead of entrusting this to the “banksters”.

Bankster

Urban Dcitionary:

1) Noun. A portmanteau or blend word derived from combining “banker” and “gangster.” Usually referred to in the plural form “banksters” to refer to a predatory element within the financial services industry, such as those offering “too good to be true” adjustable mortgage rates for home buyers.

2) A portmanteau of the words “banker” and “gangster.” These are integral to the capitalist system.  While a gangster might steal your possessions with a knife or a gun, a bankster will steal your possessions with a pen, paper and legal mumbo-jumbo snakeoil bullshit. (slightly edited by me).

3) too dumb to reprint here…

What next John-Boy?

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Categories: Banks, Economy, USA
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