Banks feasting on bankrupt customers

If a bank makes $400,000 on a $200,000 house and the government guarantees the loan, isn't that a license to steal, big time? Any loan the taxpayers guarantee should be made directly at a small interest and house notes would be more than cut in half and we would make income for the treasury as well.

It's easy to understand why the mafia got into banking, with the government on your side it's much easier to steal; Likewise, the old protection rackets were nothing compared to what legalized insurance companies get away with.

We don't need minor change we need major surgery.

Mrchattycathy, I agree with your observation(s). But that goes to show that even back then we had problems that was being shown but basically ignored.

Do not let politics blind your eyes. Bailouts started before this last administration. What we really need to focus on is what is our core problem. Unless we put our finger on that, we can not fix it and Band-Aids will always be applied. No matter the fix it will not appear over night. We have become so impatient these days in not giving anything the time to work. No one administration is going to fix the core problem (Greed being one of the major factors). After a few of them the last one will reap the benefits of the one administrations that take the heat. I watching every move to see what future impacts are in place. Alternative energy was put on the back burner in the 70's. Vehicles could have already be doing what they are doing now, but were put on shelves. I had a cousin who designed one of those engines and he was bought out and we never saw the engine hit the market. So years of these actions have just caught up with us. Let us research these events and get them fully going now. I support the use of Windmill power to off set electric needs and give us safety grids. But it took this to get that project off the ground after 20 years of trying. Where were you 20 years ago?

When was this article written? It bothers me that most articles on MSN don't have dates on them so it's impossible to know if it's a new article or an old one.

Yes, we should all be more responsible for our finances; yet why doesn't this rule apply to corporations and banks that fail and file bankruptcy. They are not poor, yet when Enron went belly up, and cause millions of people to lose their saving and billions in unpaid dept, nobody told them "Oh no. You need to pay your dept", as the CEOs walk away with millions in their pockets.

Do the math. The money lost from individuals filing bankruptcy pails in comparison to the money lost when businesses and banks file.  So, to save us money, we give them massive loans to keep them afloat, and now then have all the excuses they need to cut pay, reduce benefits, drop pensions; yet somehow need to honor their agreements to pay CEOs bonuses.

I though bonuses were bases on profit, but I guess their based on screwing employees and getting away with in.

Bankruptcy should be hard for everyone, not just the middle class.

Bailing out banks was the biggest mistake ever made by our Government and worse of all giving relief to those who took on all sorts of exotic mortgages knowing well they can ill afford to pay for them.  Our whole system of Government needs to be rethought and redone.  The Government must function to protect only those who are hit by an act of God like Katarina and 911 type of situations. But not for the follies of Wall Street and individuals who were and are still living beyond their means.  Our Mortgage system to be completely overhauled and the two **** must be dissolved to devise a scheme like in denmark where no securitization of debts takes place like we have now and it can burden our Government ever in future.    In fact,  the Interest Deduction for Federal Income Tax purposes must be removed.   Because,  it is a act of folly perpetuated by a stupid Congress and Building Industry to subsidize and promote their business.   We are the old developed Country in the World who subsidizes  borrowing for a home.   No other country for good reasons have this give away of Interest deduction for Income Tax. 

We need to make Government small and efficient.  We should have publicly financed elections with a time window of only 90 days for electioneering.  We should guarantee high / good pay for our representatives with strict two term limits and bar PACS controlling the agenda or contacting any of our representatives while in Office.   This will attract smart and capable people to be our representatives in Congress and not some of those senile, extremists and morons who are now in effect on payroll of large companies or foreign governments.   And most Americans are so absorbed in sports and their lives that their view of the World is dictated or driven by a rich and well funded media companies.  They in fact set the Agenda and tone of what goes on and what to report and what not to report or to malign anyone like Rush Limbaugh is doing to President Obama.   Government.   The extremists must be watched like a hawk else we will face a bleek future of haves and have nots!

There are really three blocks of consumers who have been hammered in this economy. This is something that people who have not been following this story closely since mid-2006 don't understand.

The first block were the speculators. They were the first to get hit because they were in the hottest markets and they were the ones using the worst of the mortgage loan garbage and the most leverage. They were also the first ones to abandon their properties and go belly up.

The second block were the subprime borrowers. These people were just bad at math and were financially ignorant. They have learned their lesson hopefully for good from this experience.

The final block is what is going on now. These are the consumers and homebuyers who had good intentions and are generally prime borrowers who may have lost their jobs, were living in the worst hit areas of the real estate crash or had experienced some sort of health issue that just mushroomed into unmanageable circumstances.

In feel no pity for the first two blocks. I have some sympathy for the third block. And, until the issues surrounding this last block are resolved, the economy will never completely recover.

As for the financial institutions, these were the worst of the bunch. These people are professionals. Either they were stupid and didn't really know what they were doing in the first place (which makes you wonder about the professional standards of the industry) or they were just corrupt and decided that their duty to themselves and shareholders were more important than to the country or to their fellow human beings. No matter how you look at it, the bailout of these institutions were done to save the country. And, now there is a price to be paid. If this country (and everyone else in the EU) is smart, it will put back in the regulations that once existed, break up these monopolies/duopolies and start taxing transactions to limit the amount of speculation that permit these destructive asset bubbles in everything. When the industry has been shrunken to a proper size, we can take all of the capital that has been summarily wasted for a decade and get back to the business of rebuilding our country.

There is a disturbing trend in conversations like these to assume that the people who got into a situation that made them have to file for bankruptcy or who are in a bad situation are total deadbeats. There are a lot of intelligent, honest, hard working people out there who hit a rough patch. Anyone recall all the jobs that were lost in the last year and a half? Anyone recall the fact that the NUMBER ONE cause of bankruptcy is medical bills?

People need to educate themselves and be responsible. But for all of you who are just slamming people in a bad situation: I'm sure you're just perfect, have never made a mistake, a bad decision, or a bad investment.

Maybe we need to stop assuming the worst about the people in our society who are struggling. And to all the naysayers: Come back and talk to me when you have lost your job through no fault of your own or are too sick to work, have a family to feed and a mortgage to pay and have no income whatsoever. At that point you're living day to day. If the bank sent you an envelope saying  you'd been pre approved for a credit card, are you telling me you'd say "No, I'm going to pass this up because I am going to be responsible with my finances. My children can go a few days without eating, and who needs electricity?"

MEANWHILE the government bailed out the banks, and they took that money and gave millions of it to their CEOs...who are precisely the hypocrites who think bankruptcy laws should be tougher. We have become so self centered and greedy in this country that we have forgotten those around us.

Oh, and if these low income people who get into trouble are so stupid, you'd better not go where they work. So you're going to want to completely stay away from car washes or gas stations. These people are totally incompetent so you wouldn't want to trust them with your car. You can forget about fast food or buying groceries. Better clean your own office buildings too. And don't go to the mall, whatever you do. That's where a lot of low income people work. And definitely don't go to the luxury car dealership where I work. I am a college educated individual but I have to live paycheck to paycheck and can barely make ends meet. I've been without health insurance for three years so I couldn't care for my chronic illness and had to pay for things out of pocket, which ran up my debt.  I must be a deadbeat, and you definitely wouldn't want to come buy a car where someone like ME works, would you?