Thursday, September 18, 2008

State Enforced Slavery

This is a dark day for every American Citizen dreaming of home ownership. Senator Charles Schumer has introduced legislation on the Senate floor today that will effectively turn any homeowner with a mortgage into an indentured slave to the government/banking complex.

The New York senator will propose offering banks a lifeline if they renegotiate mortgages for those people close to losing their homes.

WASHINGTON (AP) -- Sen. Charles Schumer plans to offer a broad economic proposal for the government to offer a financial lifeline to those banks that are willing to renegotiate mortgages for those on the brink of losing their homes.

The New York Democrat is an outspoken advocate for the financial industry, since so many of those workers are in his home state. Aides said the senator plans to outline his plan on the Senate floor Thursday afternoon.

Under Schumer's model, the government would give capital infusions or loans to banks in return for an equity stake, similar to the deal struck with insurance giant American International Group (AIG, Fortune 500) earlier this week.

In return, the banks would lift objections to legislation allowing loan modification for homeowners in bankruptcy. Currently, a person in bankruptcy cannot renegotiate the terms of their mortgage, unlike other kinds of debt.

Schumer's plan is an alternative to another proposal in Congress to create a federal agency to buy up bank debt, shifting potential losses onto U.S. taxpayers. It would be similar to the Resolution Trust Corp., which lawmakers established during the 1980's savings and loan crisis.
After the first few thousand defaults under the new plan the Government/Banking partnership will enact legislation mirroring the Guaranteed Student Loan Program. Student loans can never be defaulted on. It eliminates bankruptcy protection. The homeowner under this model is stuck in their overvalued home and unless they can sell will never be able to get out from under the debt. The Government will pursue you relentlessly garnishing wages and freezing assets. You literally become a debt slave to the state, locked into your home and forced to work whatever job they throw at you.

This has been the plan all along folks, long before they nationalized Freddie and Fannie. Dump the house, buy a trailer and plant your own beans...before you are forced to plant for someone else.


theotherryan said...

There is a choice. Don't buy a home and go into bankruptcy. said...

I agree with theotherryan.

Simply do not go into debt. Period. Debt = slavery. Pay as you go and be free.

Mayberry said...

Sure. But for those of us stuck in debt at the moment, we're screwed. Trust me, if I can get out from under this house, I'll never take on another loan again......

Mayberry said...

I want to add that this whole thing scares the crap outta me!!!

BigBear said...

Unfortunately anytime the fedgov gets involved it never benefits the taxpayer. This thing was written by the banks to serve their own needs.

Anonymous said...

How about holding people accountable for their choices!??

If you owe money, pay it. This just holds people to that ideal.

If you get in debt, you must pay your way out. No, one made you buy that half-million dollar home- you made that choice- now deal with it.

I know it sucks to be in debt, but if we keep letting people walk away from the debts, they will not learn and just keep getting more.

I agree with what has been said earlier- stay out of debt, or at least, manage your debt so you don't go into bankruptcy.

What worries me more is that the Fed now owns Fanny Mae. We just came one step closer to becoming a communist state.

Anonymous said...

Most US States are what is known as "non-recourse" states, that is, existing state law specifically says you can walk away from your mortgage or similar secured debt 'without recourse', a judicial term meaning you surrender the contractually agreed-upon security (in this case, the home) and that is that.
These laws have withstood legal challenge and the courts have upheld them.
So unless the fedgov plans to dissolve contract law, re-write millions of existing legally binding contracts (of which it is not a party of either part), ignore legal precedent, and subjugate the states to yet another unconstitutional power grab, I cannot see this ever becoming reality.