U.S. homeowners struggling to make payments on mortgages worth as much as three times the value of their home were astonished to learn that their banks had decided to offer principle reduction and lower interest.
“We’ve been negotiating for years and the banks have been unwilling to budge” said Deepa N. Dette from Salem Quick, Wisconsin. “Now this? What does it mean?”
To answer this question, I spoke to Hugh Reilly-Kairs, spokesperson for the American Banking Oligarchy:
RIGHT: Click on image to see it full size.
Barb Weir: Mr. Reilly-Kairs, please explain the thinking behind this decision.
Reilly-Kairs: Honestly – no, really, Ms. Weir – we were surprised that anyone doubted the willingness of U.S. banks to reduce their principles. We didn’t have many to begin with, but we’re always willing to cut back further.
Barb Weir: I really don’t think this is what–
Reilly-Kairs: We have been willing to let whole communities become blighted and deserted except for criminals and wild dogs just to foreclose on homeowners so that we can collect on the mortgage insurance.
Barb Weir: Mr. Reilly-Kairs, it’s not that kind of princip–
Reilly-Kairs: In many cases, those homeowners paid taxes that bailed out the insurance companies that paid us.
Barb Weir: It’s principal, p-r-i-n-c-i-p-A-L, Mr. Reilly-Kairs. You know – the non-interest part of the loan.
Reilly-Kairs: That’s right, Ms. Weir. The insurance company, backed by the taxpayer, pays us 80% of the p-r-i-n-c-i-p-a-l, even if the house is worth only half that. It’s a great system and then we get to sell it off for peanuts and still make a nice profit. That shows pretty unprincipled methods, if you ask me, but we’re willing to see if there are any principles left to shed.
Barb Weir: OK, Mr. Reilly-Kairs, but your announcement also spoke of lower interest.
Reilly-Kairs: Yes, that’s right. We have very little interest in these homeowners or their communities. Sometimes we’ve fixed up a couple of homes after we foreclose, in order avoid blight penalties, but we’re willing to reconsider and show less interest in them. In that case, whoever buys the properties (if anyone) will have to worry about the fines. In fact, we pledge to take no interest at all.