(Source: Journal Sentinel) – Very little was reported about the families who were caught up in this situation, who had NEVER missed a mortgage payment! They had to sell, due to a job loss, or other life change. When they went to put their homes on the market, they found out they owed more than they could get for them! Home values around them had declined from the short sales and foreclosures heaped upon us during this tumultuous time. In order to qualify to sell their own homes, they had to intentionally miss mortgage payments to qualify for having to “short” the bank. A double whammy! Perfect credit ratings ruined, and they had no control over it.
There were some who were “lucky.” My brother borrowed $40,000 from his 401K to avoid a short sale. He was one of few who had it. But then his company sold, and he took a paycut, and couldn’t pay it back. He was assessed a penalty for the withdrawl. My daughter had to relocate during this time. Her condo was bought just before the decline, and she had to sell it during this recession. $18,000 of her hard-earned savings prevented her from ruining her credit….but what did she really gain? It will take her years and years to save up that money to buy another house.
Millions of families across the nation were harmed by the greatest fraud the housing industry has ever seen, and not one CEO is going to jail for it. I would like to know who came up with the idea to make bad loans, and buy insurance to cover them. BRILLIANT! Insurance giant, AIG had to pay off those claims, and as a result was on the brink of failure until Congress voted to bail them out. Lucky for them, unlucky for us, as we had to sit back and watch my husbands Pension still decrease, while AIG handed out juicy bonuses to “keep the good employees from leaving.”
These financial institutions, literally had no risk. They were too big to fail. And now they are too big to jail. Fines can be levied, and maybe a few people will be compensated monetarily, but the damage is much more far reaching. What once was the heartbeat of America: Home Ownership, is still on life support. Where is the justice?
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