Many of the banks don’t learn the lessons because they base all decisions on a predetermined formula and don’t know how to change. Let’s call it “Forced adaptation” The biggest problem is the people in charge have never personally sat down with a diverse group of people (one at a time) and seen the ups, downs, differences, and struggles they face over years of trying to help them as individuals. To banking a person is not an individual, they are a part of Group A or B and the tables say we raise their rates, or lower them. This as seen as the most efficient way to make decisions, but maybe the downfall of the information age is the decline of personal contact and caring.

Useless stimulus continues: refinance help from the government allows people whose mortgages are Freddie/Fannie owned to refinance. The problem is that bankers and government officials (who almost always come from the banking world) choose to see things with blinders on. You still need to qualify for the new loan based on your income and debts. People who need it most will probably still be a little above the 31% housing ratio required, due to job cutbacks, unemployment, and their overall debt ratio will be worse because in order to survive they have incurred huge credit card rates. There is also a large percentage of loans that are owed by neither Freddie or Fannie. The simple fact is that every person handles their finances differently, some spend more outside of home and can only afford 20% some never go out and can afford 40%. We are beyond qualifying based on a narrow set of parameters. What we need is an affirmation from people that they do want to stay in their homes and at the lowered payment they believe they can continue to make payments.

This is the land of opportunity and what we would be doing is giving Americans the opportunity to make good on their debts at a current rate (rates are in this range, if you can qualify). Let’s give them a chance (knowing that some are beyond saving) and prop up the economy in the process.