Foreclosure crisis continues, the election produces: another Republican House, another Democrat Senate, and the same president.
Meet the new boss. Same as the old boss.
I have been railing against the mortgage villains, industry, organized crime syndicate, whatever you want to call it, since before I started blogging, years ago.
Am I alone? Uh, no. Even the N. Y. Times is on board. Not a usual bedfellow of mine.
Their superb reporter, Gretchen Morgenson, author of Reckles$ Endangerment, which tells the whole ugly foreclosure crisis story, and she writes about how both campaigns ignored this issue, and, how we are really set up for the foreclosure crisis to get worse.
Most NY Times readers are fans of the Dodd-Franck bill, yet more regulation that will save us from ourselves. Well, it is designed to save even more big bad guys, so they have nothing to lose in the next foreclosure crisis.
Many Americans probably think the Dodd-Frank financial reform law will protect taxpayers from future bailouts. Wrong. In fact, Dodd-Frank actually widened the federal safety net for big institutions. Under that law, eight more giants were granted the right to tap the Federal Reserve for funding when the next crisis hits. At the same time, those eight may avoid Dodd-Frank measures that govern how we’re supposed to wind down institutions that get into trouble.
In other words, these lucky eight got the best of both worlds: access to the Fed’s money and no penalty for failure.
Its like all our politicians are corrupt, or something.
Sheila Bair was at the FDIC (which insures the banks) during the last foreclosure crisis meltdown.
What does she think?
“Dodd-Frank should have been all about contracting the safety net,” Ms. Bair said last week. “But this was a huge and unprecedented expansion of the safety net that provided expressed government support for for-profit entities. These financial market utilities are the new government-sponsored enterprises.”
Color me skeptical that the government will allow the mortgage companies to fail, then housing prices to hit bottom, so that we can have a real recovery.
My prediction? Another, or, worsening, foreclosure crisis as the politicians continue to bail out the bad guys with our money.