Maybe it’s too late to put in my two cents on this whole bailout for Wall Street mess, but I’m a bit relieved it didn’t pass this morning. Before you start booing me, wait a minute to hear or rather read me out. The whole notion that we need to help these greedy lunatics by buying their crappy mortgage backed securities with $700,000,000,000 of our own money is misleading. I don’t think a single bank would have failed if they weren’t trying to rip people off to begin with.

Why are they demanding that we fix this problem from the top down instead of the bottom up? It doesn’t take a genius to see that if people weren’t foreclosing, there’d be fewer bad mortgages. The banks got greedy and offered exploitative loans to people fully aware of the risk. The banks didn’t care in an up market- they assumed they could reclaim the assets and sell them again on the open market at a profit. It wasn’t until the market became flooded with distressed properties that it became a problem for them.

SIMPLE SOLUTION: have courts intervene and renegotiate mortgage terms. Can’t pay your newly adjusted mortgage amount? A judge helps moderate new terms for the mortgage based on today’s interest rate with a 30 year fixed and the homeowner agrees to pay that lower amount instead of foreclosing on the property. Remove all penalties for the conversion on behalf of the borrower. The banks would still have mortgagors paying money to them, the homeowners would retain their homes and equity and the real estate market would be unencumbered by all of these distressed properties driving down home values for the rest of us. Best part is it doesn’t take $700 BILLION to do this.

Banks lose a lot of time and money trying to market foreclosed properties- it is not in their best interest to foreclose. It might have been five years ago, but obviously it’s bad for everyone today.

Don’t get me started on the fact Fannie Mae and Freddie Mac only RECENTLY stopped allowing brokers to hire in-house appraisers who were all too willing to justify loan amounts. We don’t need new legislation or regulation- we need to simply ENFORCE what we already have.