MrOpinionated's Blog

With the failure of Wa Mu caused by bad debts it makes you kind of wonder if the banks should do something to help their borrowers.  I think it would be a good idea to offer some kind of forebearance or moratorium on payments for people who are having trouble paying their mortgages.  With so many people out of work and up to their eyeballs in debt, the number of foreclosures will continue to increase.  Why not offer a decrease in mortgage rates or some other solution to help the consumer out?  Wouldn't that be better than foreclosing on thousands of properties that are not selling.  Why would the banks want to become the owners of all those houses?  Certainly someone has to maintain the properties and taxes have to be paid.  So the property management companies make some money while the banks lose as the value of those foreclosed properties decreases. 

Even while Wa Mu and the other credit card companies are charging 24+ percent interest charges and numerous late fees etc, they are still losing money.  And yet they continue to solicit more and more people.  They entice consumers with more and more credit cards and some people just can't handle it as the payments keep going up and up.   Obviously, if you keep charging more than people can afford the bubble has to burst somewhere. 

Who is to blame?  Of course the consumer must take some of the blame.  They are faced with rising gas, food and utility bills and a shortage of jobs.  But when you put those credit cards in front of someone who is hurting and then charge fees that people can't afford, then you have a problem.