Big Banks Recover While Foreclosed Homes Auctions Grow
Three of the nation’s biggest banks, JPMorgan, Goldman Sachs and Morgan Stanley, who received huge bailout money from the federal government a few months ago as the nation was reeling from the effects of foreclosed homes auctions are now swaggering with their statement that they are now able to repay the funds used to save them from collapse.
The big banks have been profiting from sales of stocks and debts, credit card loans, loan refinancings and mortgage loans.
Meanwhile, more and more dwellings are being added to foreclosed homes auctions. According to RealtyTrac, the foreclosure rate of one unit in every 374 homes in April was the highest foreclosure rate recorded since it began monitoring foreclosures in 2005. More than 342,000 homes across the country were hit with default notices, sales notices and repossession notices, including 63,903 real-estate-owned units ready for foreclosed homes auctions.
With many industries affected by low home values and growing foreclosed homes auctions, many workers have lost their jobs, pushing the unemployment rate to the record level of 8.9 percent.
And the most affected are the minorities and the people of color.
According to Rinku Sen, head of Applied Research Centre which helps shape public policy on racial justice, the problems of growing foreclosed homes auctions and joblessness have especially clobbered people of color.
Sen explained that the banking system and the local and state governments failed to see the growing problem because they were not paying attention to communities of color.
Officials of the National Association for the Advancement of Colored People said big banks and lenders issued mortgage loans to people of color with higher interest rates and poor payment terms. The NAACP is bringing some of the big banks to court, many of which received federal bailout money.
The country’s largest nine banks were given $125 billion in giveaway terms favorable to the banks. American University’s economics professor emeritus Robin Hahnel said the bailout is a massive subsidy because it is not clear if the banks are able to repay the bailout money within ten years.
The big banks will also continue to make money from credit cards despite the approval of the credit card bill reform legislation by the Senate.
The American Bankers Association’s president Edward Yingling said that it can find ways to go around the credit card reform legislation to continue charging interest rates.
With such attitude, the big banks will continue growing while more American workers lose their homes to foreclosed homes auctions.
