Posted in Foreclosure Defense

If You Think the Meltdown Was the Fault of Homeowners, Think Again… – Mandelman Matters

From Mandelman Matters:

If you’re thinking that our economic crisis was in some way the fault of homeowners who couldn’t afford their mortgages, please consider the following:

At the end of 2007, there were roughly $1.4 trillion in sub-prime mortgages in this country.

If “irresponsible sub-prime borrowers,” caused the meltdown, then $1.4 trillion would have solved the problem in its entirety, right?  Because that’s all the sub-prime loans there were.

But, between the Federal Reserve, the FDIC and the Treasury over $13 trillion has been pumped into financial institutions to fix the “housing correction,” which is what Hank Paulson was still calling our economic collapse as of November of 2008.

At the end of 2008, there were $11.9 trillion worth of mortgages in this country.  So, with $13 trillion, the government could have paid off every single one… and still had a little over a trillion dollars left over.

But there’s a lot more to the economic problem than that, explains Nomi Prins, my new favorite financial uber-genius and author of “It takes a Pillage.” Wall Street had been playing the leverage game… somewhat like they did in the 1920s, I suppose… but on mega-steroids.  Leverage means borrowing on assets, and Wall Street banks were leveraged by 30:1, commercial banks by 10:1, not including their “off-the-balance-sheet” holdings, which could make their leverage ratio significantly higher in many cases.

So… in “Pillage,” Nomi Prins explains in terms anyone can understand that factoring in the leverage at 11:1, we’re looking at a $140 TRILLION economic problem… yes, you read that correctly… that’s trillion, with a ‘T’.  Our Wall Street bankers, through the abuse of the securitization process and excessive amounts of leverage, created a potential tab of $140 TRILLION for the people of this country to pick up.

Read the Rest here:  If You Think the Meltdown Was the Fault of Homeowners, Think Again… – Mandelman Matters.

One thought on “If You Think the Meltdown Was the Fault of Homeowners, Think Again… – Mandelman Matters

  1. Because most people don’t know about or understand rehypothecation, or the FACT that the loan angle was just a facade to collect collateral for a pre-existing procurement to securitization and rehypothecation scheme – it’s very difficult for a journalist to simply justify why the crisis was not the homeowners’ fault. Liar loan bankster propaganda was already in place because ”the Mortgage Securities are the Assets behind Our Currency.”


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