“I think that this plan will only delay inevitable future waves of the foreclosure crisis, rather than stem the tide,” said New Jersey Republican Rep. Scott Garrett , a member of Frank’s panel. “It provides no incentives or rewards to those homeowners who have been diligently making their mortgage payments, or to those who recognized their financial constraints and chose to rent a home rather than buy one.”CQ should have given him the proper title, but that aside, it gives another example of why Garrett simply does not get a major factor in the housing crisis. I've never understood why the Republican party has taken the stance the housing crisis was caused solely by people who failed to recognize "their financial constraints".
The bottom line is that the numbers so many mortgage brokers showed people did work, at first, but that they didn't have to worry about when they wouldn't because they'd be able to refinance before then.
I know, because I was at one point trained to do this as a loan originator. It's one of the things I'm absolutely the proudest about being a complete and utter failure at; I never closed a loan and actually talked people out of refinancing. However, lots of people found this was an easy way to make money, and I suppose I could have, too, if I didn't have a conscience.
60 minutes had an amazing piece on the system and the bank that ultimately brought down Wachovia: World Global.
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While I doubt Garrett will actually watch it or believe it, it's how it worked. It concerns me greatly that to this date I have yet to see a substantial press clipping or speech acknowledging the systemic practice of getting people into these loans. Garrett sits at the crossroads of our economic recovery, yet seems unwilling to look at where we really were in order to prevent us from ever traveling that path again.