This morning the NY Post rightly slammed the Assembly Leader for his reckless bailout for lenders and borrowers alike in the mess that is the subprime mortgage market. I generally do not agree with a lot of what the Post writes about but when it comes to this, they are right on. Giving $180,000,000.00 to the banks and institutions that lent this money is ridiculous, not only because New York is facing a budget crisis (that makes it bad enough though) but because the banks do not deserve to be given anything back. It was wrong for them to lend the money in the first place and I believe it should be criminal.
Also, the Post points out that these millions will be taken from the millions of responsible borrowers through their taxes to those that borrowed without reading the details of their mortgage agreement. Now I believe that it wasn't entirely their fault, there was a reason why the banks preyed on many of these people specifically. The people that run these programs at the banks aren't stupid, they know how to spot easy marks like any hoodlum on the street, the only difference is that they wear suits.
Another difference between the criminals on the street and the ones in the midtown and downtown banks is that the suits have friends in Albany. You would never hear a legislator talk about bailing out loan sharks and shylocks who had gamblers and druggies who defaulted on their payments, would you? Yet the banks know how to have friends like Sheldon Silver and Darryl Towns.
From The NY Post:
Most astounding about Silver's plan, though, is that it not only seeks to hold harmless those who take on more than they can handle, but it also essentially legitimizes that practice - by doing the same thing itself.
We repeat: There's no money to fund it. And when asked about this wee oversight, Silver gave the classic response of those who can't say no: The state would just have to find the money, he said, for the 50,000 households "in some state of foreclosure" - just as it does for cops and other key public servants. (That is, the financially responsible other 19 million New Yorkers will have to pony up.)
"We have to be creative," said Banking Committee Chairman Darryl Towns, in trying to close the budget gap. But "this is one of our priorities."
Their priorities are to their friends in the banks. While many borrowers are let off the hook here and will escape foreclosure, the banks are the real winners here because they still get some money back from their abysmal failure of not trying to be good stewards of money and capital.
That $180 million should have not been spent at all or at the very least be put to programs that have better use for New Yorkers. And while you are at it, why not prosecute the banks for the crap they pull, then we would have less trouble with our budget shortfall.
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