CONSUMERS LOSE HOMES, BANKS LIVE RICHLY

Housing debt has become a financial cluster bomb.
Jim Hightower's Radio Lowdown
Jim Hightower's Radio Lowdown
CONSUMERS LOSE HOMES, BANKS LIVE RICHLY
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Counter conformity.

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Housing debt has become a financial cluster bomb.

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At first – Boom! – it hit those low-income folks who had been lured into subprime mortgages they didn’t understand and couldn’t afford. Not to worry, said Wall Street hucksters and Washington officials, we’ve got that little problem “contained.” Not exactly. Boom! – the next wave shattered the dreams of more upscale homeowners whose mortgages contained exploding interest rates.

And now – Boom! – the latest ones hit are those who’ve been enticed by bankers to take out “equity loans” on their homes. These are essentially second mortgages on the value of the home, and this dicey financial move has been driven hard the last 20 years or so by the marketing departments of big banks. Rather than encourage customers to pay off their housing debt and own their homes free and clear, the banks strongly urged people to take out second loans on their homes in order to buy a car or take a vacation. The bankers even went on the road to teach people how to cash-in on their homes, and an advertising blitz was launched to make it all sound painless.

“Live Richly,” was the slogan of a billion-dollar ad campaign by Citibank, adding that your home is your “ticket” to anything “your heart desires.” “Don’t sit on your equity,” scolded another – “Turn it into cash.” In short time, this promise of “free” money piled up a trillion dollars in added debt on the backs of millions of homeowners. It was a bonanza for the banks which pocketed billions of dollars in fees for extending this additional credit.

However, with home values plummeting and the economy tanking, the bankers’ boom has become the borrowers’ bust. Hundreds of thousands of Americans now can’t pay off these equity loans, and they face losing their homes, which will further depress housing prices across the country, setting off other bombs.

"The issue isn't just jobs. Even slaves had jobs. The issue is wages." --Jim Hightower


Once again, we learn that when bankers say “Live Richly” – they’re only talking about themselves.

“Home Equity Frenzy Was a Bank Ad Come True,” The New York Times, August 15, 2008.

“Battling the bastards is about as much fun as you can have with your clothes on.”

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