Mortgage lending has been in the headlines for months. The figures reported for bad loans, those the banks call non-performing, are at astronomic heights. Most of us can not fathom the impact one/half a trillion dollars in loses or more. To save face we hear of many, many schemes to bail out the lenders, the property purchasers, the brokers and just about everybody involved in these sub-prime loans. According to the F.B.I. reports, they are beginning to take some criminal action toward the perpetrators; two Bear Stern operators, and 406 individuals around the country. One such scenario of many is inserted below.
Instead of stealing an identity to secure a credit card, scammers have been zeroing in on people they think have a lot of equity in their homes. They steal their identities, then go online and get a home equity line of credit on that person's house and take the money. The FBI said the possibilities seem to be endless, and even in a down market, there are many opportunities for scam artists. NY Times 6/21/2008
The total impact of this financial debacle is a long way from being settled. These crimes and abuses of power appear to be more far reaching than the Savings and Loan scandals in the early 1980’s. The S & L’s were bailed out by the Federal Government, and to the best of my recollection nobody did any real hard time for those abuses. This time these greedy, mendacious loans were executed at several levels. The fallout and financial impact of thousands of unsuspecting victims, those who failed to read the fine print of their mortgage contracts, and a small army of bankers, brokers, lenders of all stripes, and now a whole new agglomeration of predators poised to scam the unsuspecting, will be decided in large part with tax payer dollars, a declining stock market, and an untold amount of financial instability.
The scariest part of all this is that it will be a long, long time before the financial institutions will reveal the complete extent of the losses which they are supposed to declare. Since the numbers are in the billions, it is bound to have long term implications for hundreds of thousands of people. In the fall of 2007, I said of the first announcement from one of the big banks: “This is going to be like discovering cockroaches; if you find one or two there are probably 100’s.” Well, we have heard about 200-300 billion.
We talk about billions and trillions today without really understanding what the numbers translate to in life impact for the average citizen. In Lee Iacocca’s book, Talking Straight, he describes what you can think of a billion as in terms of time. It would take you and me around 33 years to count to one billion. Who is guarding the financial chicken-coop? It sounds like the Fox is to me!
Charlie Courtois,
Forsyth, Georgia
