Clinton Administration and Republican Congress, Unindicted Co-Conspirators

Hmmmm. So the banks and bankers get bailed out and the homeowners are on the street. Let's remember that the bankers "knew or should have known" their borrowers were too risky (the legal standard for liability). These homebuyers were not necessarily begging for the loans they weren't able to afford. They were SOLD them, by professionals. Just as the derivatives were bought and sold by financial professionals who "knew or should have known" they were not sound investments. There's plenty of blame to go around, and it is NOT just irresponsible borrowers, despite the GOP hue and cry about that (and don't get me started on what irresponsible borrowers the GOP proved to be, ever since Reagan's stupid "morning in America" borrow and spend campaign. Indeed, the public has mirrored the very same borrow and spend policy as the "fiscal conservative" party.)

So the programs that Bush himself heralded for "low income buyers with bad credit" weren't loans given by Congress, but lowered regulatory limits, which the GOP has always liked. Plus, massive marketing campaigns seduced some buyers just dreaming of what they could afford. As salesman-in-chief GW Bush put it "low income home buyers can have just as nice a house as anyone else," And just as bankers and Wall Street types said they were taken by surprise, so were some probably creditworthy homebuyers whose jobs got sent to China or their companies crashed in the falling economy.

Now let's get practical. It costs the community more to have unoccupied houses. Lowers home values, increases risk of break-in, vandalism, theft and fire. Hence it costs communities, in police and fire protection too. (Indeed, many have been stripped even of the copper wiring.)

Another practical note. These homes are not worth what the mortgage value says--that's the whole problem. So foreclosing gives the bank a home they can't sell even at a price which the current homeowner might well be able to afford.

So your suggestion, Guest Voice, is that we increase homelessness, increase community costs and saddle banks with properties they can't sell.

What if communities start charging banks for unoccupied houses, say $300 / month each for the extra costs to the community? Maybe banks and their borrowers might come to an accommodation after all.

A completely unidentified "Guest Voice"?

Who?

Where in the current story of the sub-prime collapse is the fact that 83% of these loans came from private lenders? Blaming the fall on Fannie Mae is a great but false talking point for GOP revisionism. Fannie was pressured because investors wanted in on the highway robbery going on in private enterprise. It didn't start the fire.

Yep, HemmD got it. We went through this in another thread about how the overwhelming majority of sub-prime loans had nothing to do with the government programs.

I thought we already had a much richer discussion of this with (maybe by Mikkel Fishman) with links to the Fed's Kroszner, Barry Ritholtz, Martin Wolf, etc etc.