Final Blog in Series About Secret Bank Loans as Miami Homeowners Deal with Foreclosure

For several blogs now, Miami Foreclosure Defense Attorneys have looked at a recent Bloomberg report on the $1.2 trillion in secret loans banks got from the Federal Reserve, without taxpayers knowing.

And what’s even more disturbing is how these banks have gotten loads of money — some as much as $100 billion — and yet have done little or nothing to help the average homeowner. Instead, their executives make huge bonuses and they continue to make money for themselves rather than helping the people who lead them to recording record profits and then bailed them out with tax dollars.
mgyPNHA.jpg
What all this goes to show is how unhelpful and greedy these banks are. So, if a person is struggling to make mortgage payments because they recently lost their job, the bank isn’t likely to help. But those who are facing a foreclosure in Miami must not let these institutions ruin their lives. Fighting back in court and showing a judge the problems with documentation and shady practices can help homeowners come out on top and intact.

The first two parts of this three-part series looked at the overall picture as laid out by Bloomberg — as banks got $1.2 trillion in loans that the public never knew about until now — as well as which banks made money and how the loans worked.

The third and final part of these series will assess why this plan hasn’t done anything to stop foreclosure in Miami and nationwide.

To review, when the real estate market collapsed in 2008, the Federal Reserve was quick to hand out loans to many banking institutions, both here and abroad. In total, the banks received upwards of $1.2 trillion in loans.

The nation’s bank says it earned interest on the loans and lost no money, but the whole situation is questionable. Bank officials who have gone out of their way to steal away people’s houses got loads of taxpayer dollars to act as a lifesaver, yet they haven’t returned the favor to homeowners.

As the real estate market peaked in 2006 and collapsed by 2008, the amount of private money available for banks to borrow was drying up. The Great Recession was here and credit across the board was unavailable. So, the banks looked to the government.

But the government didn’t tell the people. And it wasn’t until 2010 that new transparency laws required the Fed to disclose who it was lending money to. Officials argued that releasing the borrowers and terms of the loans would damage stock prices and stigmatize banks. After the U.S. Supreme Court denied an appeal to reconsider, the central bank released more than 29,000 pages of documents.

The more than 21,000 transactions make clear how much these private banks rely on the federal government to get by. And it’s private citizens’ taxpayer dollars they need to operate.

Despite that, they have done nothing to help distressed homeowners. Government-backed loan modification programs have rarely been used and have no teeth or enforcement. Despite loaning more than $1 trillion to these banks, the government won’t make them help the very people it serves.

And it stayed quiet as banks played games with investors. The Bloomberg article quotes a September 2008 press release from Morgan Stanley by announcing it got a $9 billion investment from a Tokyo-based company, yet it didn’t say anything about the $107.3 billion in got from the Fed.

Yet, through all this, the banks are still in a crisis. Even a recent $5 billion investment by Warren Buffett in Bank of America has done little to help the giant bank. Investors are weary and it’s with good reason. These large banking institutions have run their companies poorly for years and they are now reaping what they sow.

There are still millions of foreclosures on the market or in the courts pipeline and banks have done nothing to address them. They continue filing and they continue trying to take people’s homes and go after them for the difference. Had they applied this loaned money to foreclosures, it’s possible the economy would begin recovering and the banks would start to move out of the red. Instead, they’ve done nothing to help.

But fighting a foreclosure is always an option, regardless of the banks’ economic situation. Attacking the credibility of their documents and how they do their jobs are all possible in fighting for your rights in the wake of a foreclosure in Miami.

If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991.

More Blog Entries:

Banks Still Looking For a Break Even After Foreclosure Mess in Miami, Nation: August 3, 2011
Federal Housing Administration Concerned About Number and Severity of Enforcement on Miami Lenders: July 19, 2011
Additional Resources:

Wall Street Aristocracy Got $1.2 Trillion in Secret Loans, by Bradley Keoun and Phil Kuntz, Bloomberg