The Morning Report
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Wednesday, Feb. 21, 2007 | The basic problem has been an unregulated housing market that allowed prices to rise 200 percent above the basic value for properties. Then the banks lure people without the means to afford a home, let them trap themselves with these interest rate schemes, then gorge them for the interest payments until they are unable to pay another dime. They go bankrupt, lose their home to the same bank that has been getting the interest payments which caused the borrower to go broke in the first place, and then the banks sell that home to another unqualified borrower for the same nasty cycle to repeat itself.
We need the federal government to launch serious investigations into the banking industry (going past the Dodd Senate hearings) and send some of these lenders to prison for fraud. There should be a debt holiday and debt forgiveness imposed on current debtors, followed by strict regulations that will keep people who can not afford the debt they are incurring from being able to incur such debt. As it stands now, what the banks are doing is no different than a drug dealer stringing out his junkie clients until they are hooked and can’t escape.