The American Dream and the Foreclosure Nightmare

The American Dream and the Foreclosure Nightmare - The...

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The American Dream and the Foreclosure Nightmare “One in every 593 housing units received a foreclosure filing during the month, according to RealtyTrac's April 2011 Foreclosure Market Report,” (CNBC, 2011). Do you feel like the Banking industry got away with robbery after the bail outs? Well if you answered “hell yeah!” Then you are in for an unpleasant surprise; because it’s still happening and we’re paying for it. Again! Many people were led to believe that they had the “American Dream” within reach. Only to realize they had just bought into a nightmare. Unscrupulous lenders gave out bad loans and continue to do so with government backed loans; while many borrowers acted irresponsibly. Some borrowers knowing full well; what they were taking on was well above their means. There are fundamental problems with current lending industry oversight; American consumer complacency; the US cost of living. In April 2007, Goldman Sachs purchased a controlling stake in Senderra Funding, a former subprime lender in Fort Mill, S.C. Goldman, which has received $10 billion in direct federal rescue money, converted Senderra into an FHA lender and refinance organization. The strategy appears likely to produce hefty margins. In September, Goldman paid 63 cents on the dollar in a $760 million deal with Equity One, a unit of Banco Popular, for a batch of subprime mortgage and auto loans. Through Senderra, Goldman plans to refinance at least some of the mortgages into FHA-backed loans. Because of the government guarantee, it can then sell those loans to other financial firms for as much as 90 cents on the dollar, according to people familiar with the mortgage market. That's The size and scope of the foreclosure crisis is just as big and complex as the solutions. Here are just some of the players: Borrowers; US Government agencies specifically the FHA; Lending institutions “Big Banks,” such as Bank of America, Chase, and Wells Fargo; servicers aka “collectors”; mortgage brokers such as Nationstar, Premier Mortgage, Liberty Mortgage; Investment firms like Goldman Sachs; and list goes on. Would a convicted sex offender be allowed open a day care? Of course not, then why are convicted lender offenders allowed to give out more loans? There’s no one holding them accountable for their action that’s why. One example is a company called Premier, who faced felony charges and bankruptcy. They like many other lenders gave out bad loans. Meaning they approved loans to unqualified applicants and when borrowers couldn’t pay. They then hit them with fees that later forced them into default and eventually foreclosure. Also; like many other unethical lenders that were charged and fined, they didn’t go away. The actually stayed in business by changing names; secured future business through government; how did they do it? Premier kept it in the family; fortunately they saved on office space by using
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This note was uploaded on 01/16/2012 for the course PSYC, SOC PSYC 100 taught by Professor Staff during the Spring '11 term at Palomar.

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The American Dream and the Foreclosure Nightmare - The...

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