The Real Reason for Bush's Mortgage Bailout
posted by
Wally
9:00 AM
Interest rate 'freeze' - the real story is fraud
Bankers pay lip service to families while scurrying to avert suits, prison
New proposals to ease our great mortgage meltdown keep rolling in. First the Treasury Department urged the creation of a new fund that would buy risky mortgage bonds as a tactic to hide what those bonds were really worth. (Not much.) Then the idea was to use Fannie Mae and Freddie Mac to buy the risky loans, even if it was clear that U.S. taxpayers would eventually be stuck with the bill. But that plan went south after Fannie suffered a new accounting scandal, and Freddie's existing loan losses shot up more than expected.
Now, just unveiled Thursday, comes the "freeze," the brainchild of Treasury Secretary Henry Paulson. It sounds good: For five years, mortgage lenders will freeze interest rates on a limited number of "teaser" subprime loans. Other homeowners facing foreclosure will be offered assistance from the Federal Housing Administration.
But unfortunately, the "freeze" is just another fraud - and like the other bailout proposals, it has nothing to do with U.S. house prices, with "working families," keeping people in their homes or any of that nonsense.
The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value - right now almost 10 times their market worth.
Read more here Now why would anyone accuse a Bush administration of being complicit in fraud in the banking industry? Maybe Neil Bush could answer that (Google "savings and loan scandal"). A more important question is, since it was written by the banking industry, who is Bush's plan designed to help and protect?
Just like the Medicare Plan B Prescription drug plan, written by the pharmaceutical industry was designed to make shitloads for the pharmaceutical industry (screw the senior citizens). Just like Cheney's energy policy, written by the oil and coal industries was designed to make metric shitloads of money for the oil and coal industries (screw the people trying to fill their gas tank or heat their homes). This bailout plan is designed to save the asses of the banking industry, and screw the people that the banks already screwed.
The same think happened in the '80's when the taxpayers paid to bail out the criminals running the S&L's. Why should it be different this time?
Fraud
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