posted on Feb, 5 2009 @ 07:17 PM
After replying to a question in another thread I started, I felt it deserved it's own forum. I was asked why I had issue with our current system of
bank credit? The questioners position was that credit is a good thing and provides entrepreneurs with many opportunities that would not exist without
it. This question arose from my failure to express my actual point clearly and is my position as well. What my credit beef is about goes slightly
deeper into the system and is unfair to say the least.
With all the foreclosures sweeping the U.S. these days Washington decided that lenders needed further compensation in order to rectify the situation?
This to me makes zero sense and anyone that has ever taken out a secure loan from the bank will know what I'm talking about. When a bank provides you
a loan on, say a house, it only does so after extensive due diligence to make sure their investment is secure. This security is never equal to their
investment and unless the borrower can provide more than even collateral, approval is denied.
Further profiting from this agreement comes from many costs and fees most of them being excessive as well as incomprehensible to the borrower.
Finally, the ever misunderstood interest rate is calculated, usually causing the loan amount to at least double, and closing can now take place. This
is a painstaking process and all mandatory conditions for approval. The reason for all this is to protect the lenders securities in the event of a
default. Should a borrower be faced with an inability to maintain the installments, the lender has the contractually agreed upon rights to repossess
all the original collateral securing their investment. Which is the fair and agreed upon conditions originally negotiated in the contract.
This is a contract that was agreed by both parties. When you default on your mortgage you have to leave your home. You have only defaulted the
remaining balance and any excess in value is to be given to you. This happening at point in time when home values drop is unfortunate and current
value is determined as the banks collateral. The contractual obligation is supposed to be over once this process is finished. The bank has been
compensated according to their terms and now has real property that's of equal value. These were the lenders terms. Anyone that has ever applied for
a mortgage knows that there is no negotiating. We accept the lopsided terms due to us being the ones in need and basically consider it the price of
If that is the case, why are we obligated to adhere to our governments agreement to further compensate these banks? Those that defaulted have already
fulfilled their obligations while those that haven't are still at risk? What about the fact that mortgage contracts are constructed on the lenders
terms? We had no negotiating power or say in those terms at all. We were completely at the mercy of the lenders set of obligations that provide a take
it or leave it choice, nothing more. Then again with the bailout taxation? No say at all, just take it or leave it?
Didn't the banks, on their terms alone, receive their compensation already? Aren't they being paid twice and then some? Is Washington promoting
those contracts to not be relevant? Are these laws written only for us to follow? Keep in mind these banks that Washington are so eager to service are
also mostly foreign businesses. Has Washington been taken over by foreign interests? Why are Americans accepting this? I'm starting to think so.
Maybe Obama is playing out his mysterious stimulus package as a distraction to this? Is this same tactic going to be used again when the commercial
loan bubble bursts soon?
I, as well as some other members, keep writing threads similar to this and they never seem to get much attention? I hope many ATS members find this
thread and seriously consider it's context. Any and all input welcome! Thanks to everyone that reads this regardless of opinion!