Part Five of a Five part series
Lending Institutions
(NON- living, breathing entities)
A quote that should be etched over the entrance of every lending institution and Congress!
During Times of Universal Deceit,
Telling The Truth is a Revolutionary Act - George Orwell.
Things to do before you read:
Here’s a little homework before you get too far along.
1. Research Glass-Steagall Act 1933
2. Repeal of Glass-Steagall Act 1999
3. Look up Resolution Trust Corporation (RTC) 1989
4. www.sfweekly.com/2010-09-01/news/why-obama-s-mortgage-relief-program-failed/
Now that you have a better understanding of the regulations that have been created, played with and lessons learned that are being ignored - we will proceed.
Money, ahhhh money! It can be a source of security, used to purchased ones basic needs, benefit those in need, provide items of satisfaction to the ego, but All to often it spawns GREED!
Think, Madoff, Rothstein, Ponzi anyone??!
BANKS --- These are the places we have traditionally come to for financing large purchases and to a certain extent we still can. BUT the game plan has changed.
We have gone from the mid ‘90’s and mid 2000’s basically with Lending institutions giving money away to anyone with a pulse, by pressure from Fannie Mae/Freddie Mac run by politicians that wanted not only the economy to seem bountiful but to catapult the populous mindset from a “Chicken in every pot” to “A home OWNER under every roof”!!
This ideology, lacking reality, creating an environment of Corruption, set in motion the inevitable “Bubble to BURST“.
Now, currently highly qualified people, applying for loans, having to disclose/explain why a payment three years ago incurred a late fee because you forgot to put a stamp on the envelope - and still being run through the ringer!!
The Banks are holding on to money- typically taxpayer bailout money - tighter and longer for many reasons.
The most prominent is the state of flux the world is in and the BANKERS don‘t want to be caught short. There are so many variables in play these days and I will only go into the Real Estate side.
With the quantity of Bank Owned homes and the unknown of how long they have to be kept on books , while maintaining them, paying taxes, clean-up/repair, etc. etc., when more will be stockpiled and for how long is a major factor in why banks are not letting loose of the cash. The short sales and what the loses will be, weigh on the picture and then certain gov’t regulations on modifications that are just starting to trickle out.
The second shoe should just begin starting to drop shortly too, with the commercial RE market.
Locally, we have been seeing businesses shutting their doors and having to walk away from their leases. The trickle-down effect is devastating on property owners that don’t have deep pockets. So, we go into phase two of the RE tailspin that will additionally be affecting lenders. They need to satisfy share holders/stock portfolios and all that keep the engin of our country running. With the current economic downturn, lack of business start-ups and jobs, that is the basis of the pyramid that is not being attended to.
So while the balance of not letting too many foreclosed homes drench the market while mostly investors soak up this supply, we the tax paying - Bailout supporting public, wait to see what next is in store on the horizon with the BANKS and all that controls the money supply
