California's 90 day Foreclosure Freeze

At lunch today I was listening to several people talk about California’s new foreclosure prevention act. You should have heard the people talk about how unfair this new law was! I heard words like moochers, freeloaders, bozos, crooks and the list goes on.

Why is it that every time the topic of helping homeowners comes up there is someone insinuating that the homeowners are getting something for free or they talk about how unfair it is that the homeowner is getting some sort of help.

Facing the loss of one’s home (foreclosure) has a debilitating affect on a great number of people. Thinking that they have 3 months free rent is absurd.

There is nothing “free” about facing the reality that you have no where to go (bad credit often means no rental available).

There is nothing “free” about losing a job or having your hours cut.

There is nothing “free” about closing a business you worked years to build up.

There is nothing “free” about the diminishing balance in your 401K/retirement fund.

Sure, the homeowner needs to take a share of the blame, after all they made a decision to purchase or refinance a home. But what about the banks? Aren’t they the ones who really created this mess by instituting loan products that made it too easy for people to participate? They are the ones who created a loan program that made it possible for anyone to get a loan with no financial verification which led to this financial debacle!

Was it is okay for them to securitize our loans (both credit cards and mortgages), rate them as “Triple A” then sell & resell them to the highest bidder, knowing that these type loans were destined to fail from the beginning? Shouldn’t that be considered “FRAUD”?

Why do they deserve a “pass” from our wrath? Surely everyone understands that if they had not let their greed overwhelm their logic we wouldn’t be in the economic predicament we find ourselves in today.

I say Congrats to California for taking a stand on the side of the homeowner! It may not be the cure all for this problem, but it makes the banks as least “try” to work through this problem before closing their door on a homeowner in distress.

The Economic Plot Thickens

Today, Bank of America's CEO Kenneth Lewis said that he believed former Treasury Secretary Paulson and Fed Chairman Bernanke wanted him to "keep quiet" about the worsening terms of the bank's acquisition of Merrill Lynch comes to no surprize to me.

What we have here is just another example of the "let's take care of my friends" game that has been played and continues to be played by the good ole boys on Wall Street.

Lewis claims that Paulson and Bernanke warned him that failing to complete the Merrill Lynch takeover would "impose a big risk to the financial system". Has anyone explained why? Why Merrill Lynch and not Lehman Brothers? Surely both companies deserved to be saved, didn't they?

BofA had already received 25 billion from the TARP funds. In order to complete the deal for Merrill, BofA received 20 billion more.... before completing the deal for Merrill, didn't Kenneth Lewis read the financial statements of the company?

Or was he so worried about acquiring another "prized" bull, (remember Countrywide?), that he turned a blind eye!

Now he's pointing fingers! HA! He's acting like the kid who caught with his hand in the cookie jar, blaming everyone but himself for the debacle his company is involved in.

Mr. Lewis, I think it's time for you to take an Ethics class. You would probably not be visiting the Attorney General's office under these circumstances if you had remember the old adage "all that glitters is not gold".