The New York Times recently wrote about a former South Florida banker who acknowledges that banks’ loose credit is the reason that the real estate market and financial system in the United States collapsed. He acknowledges that because of his actions — and those like him — foreclosures in Miami and nationwide went viral, leading to strategic defaults and under water mortgages.
It’s encouraging that at least some people are finally acknowledging what the rest of the country has believed for some time. Sadly, it’s too little too late. The banks got more than $7 trillion in secret loans from the Fed, made billions from those loans and still are going after people’s homes.
The best way to fight the banks is to fight a foreclosure with an experienced and aggressive Miami foreclosure defense lawyer. The banks have made many mistakes and they should pay for it. Over are the days that they have so much financial strength they can bully borrowers.
Many people sought to buy homes, doing business as usual, in the late 2000s. Sadly, though, many people were buying second homes that they hoped to flip and make a profit from, so banks, with their loose credit, were lending out billions of dollars to people in states outside Florida. For a while, it worked and they were able to make a quick buck.
But when 2007 came and the bubble had nearly burst, many people were stuck with a second house that had lost value. Then, things spiraled out of control. People began defaulting in droves and prices began plummeting.
Banks watched this happen before their eyes. What once was a time of joy with bankers lending out money and just waiting for the big benefits turned into a nightmare. Ultimately, it has cost millions of people their jobs and sent the nation’s and world’s economies into a tail spin.
According to the article, former Chase Home Finance vice president James Theckston told the newspaper that in 2007, his team wrote $2 billion in mortgages, sometimes without documentation. He said people without jobs, income or assets could get a loan just based on a good credit score.
He said that bank officials enabled the problems by telling bankers to loan out the money, even when it didn’t make sense. Senior bankers turned a blind eye, especially because mortgages were securitized and sold to investment groups.
The banker said that some executives got a commission that was higher from subprime loans, so they would entice mainly black and Latino borrowers, some who weren’t fluent in English and who weren’t savvy, to get a loan. When the newspaper contacted Chase, it’s spokesmen acknowledged the subprime and no-document mortgages and says it doesn’t do that anymore. It points out that it has offered four times as many loan modifications than foreclosures.
The article goes on to report on the Fed’s $7.8 trillion in secret loans to banks and how the loans helped keep our country’s financial system afloat, it also rewarded the bad behavior of bankers and has left homeowners helplessly toiling in foreclosure. Many of the least sophisticated borrowers in America have been hurt especially hard.
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:
Financial Expert Loses His House and Tells How to Avoid Foreclosure in Miami: November 7, 2011
A Banker Speaks, With Regret, by Nicholas D. Kristof, The New York Times