By Don White

October 8, 2008

Orlando, FL--The Wall Street Journal this morning ran a story reporting that 11 state attorneys general and banking regulators from those states are strongly suggesting that the nation's largest subprime-mortgage-servicing companies follow Bank of America Corp.'s lead and embark on a broad-based loan modification program.

At the same time, the WST reports that one in six American homes are "under water" financially--meaning the values have dipped below the mortgage loan balances.  This is also sometimes called "upside-down loans."

The call from these 11 states, of course, has to do only with sub-prime loans because they are the ones most likely to go into default. But since there are so many homes with prime loan arrangements under water, wouldn't it be fairer to have an across-the-board loan modification program?

Let the banks and the homeowners come together and figure out house values and how much the people owe. If on a "solid" loan the balance due exceeds the value of the house today, maybe the bank should reduce the balance down to below or equal to today's values.  But who is to say this will solve anything?  Home values continue to decline and no one knows where the bottom is or when market prices will stabalize and start moving up again. Could be a year, could be three years--nobody knows the depth or extent of this housing recession.

Where are our real smart economic gurus when you need them? I never did believe Alan Greenspan was one of them, nor Ben Bernanke. But why can't someone predict when the prices will stabalize? Well, because it depends on so many variables. Things like how many more homes will go into foreclosure? How long it will take them to implode? How will the international market affect the US market? How much money do we have left to bail out our homeowners?  How long it will take China and other creditor nations to say "no more money for you, USA, you're bankrupt."

Isn't it ironic, that our arch enemy--a repressive nation that not long ago was called a third world country--is now our "Daddy?"  It's true, they own us, and now we must go crawling to them for more money?

I find this quite ironic. It's a sad commentary about the character of American citizens. I say that without realizing that only 5 percent of US homeowners are caught in this foreclosure debacle.  Ninety-five percent of US homeowners are solid people. At least they were before this melt-down. Why did we have to have this at this time, of all times, when we're fighting two foreign wars and Iran and North Korea are about to get nuclear bombs? It happens precisely when the genocidal Iranians are bragging that they want to wipe Israel, our best Mideast ally, off the face of the globe and we may have to stand idly by watching the carnage? With John McCain America wouldn't stand idly by, but with Barak Obama I'm not too sure.

It all stems from the greed of many American people, the "Now Generation." We are far from the greatest generation that ever lived. They were our grandfathers and fathers who defeated Hitler and preserved our freedoms. We want everything NOW! We don't save anymore, and that goes for the rank and file American. China and many other countries have saving rates that far exceed those in the U.S. Americans have become too prideful, too rich. . . and now the fall.

We as Americans are also the world's best friends. We bail out other countries right and left, and now, ironically, we are looking for help from our "friends" and they won't be found.

"We believe that every major servicer of subprime loans should adopt these types of programs as soon as possible," state officials said in a letter sent Tuesday to 16 servicers. "We urge you in the strongest possible terms to adopt a comprehensive, streamlined and effective loan-modification program as soon as possible."

The letter was signed by Iowa Attorney General Thomas Miller on behalf of the State Foreclosure Prevention Working Group....