Banks, Not Working Families, Are Prime Beneficiaries Of Sub-Prime Mortgage Bailouts

[Omaha Steve]

http://www.laborradio.org/node/8165

Banks, Not Working Families, Are Prime Beneficiaries Of Sub-Prime Mortgage Bailouts

By Doug Cunningham

The Center for Economic and Policy Research says the various plans to deal with the sub-prime mortgage crisis provide little relief for most working families affected by it. Instead, banks are the major beneficiaries, according to a report from the center called “Sub-Prime rescue Plans: Backdoor Bank Bailouts. Economist Dean Baker says under these plans taxpayers ultimately underwrite bailouts that allow banks to make billions of dollars in profits. But working families will face a major loss of equity in their homes and wind up paying far more to stay in their homes than to rent similar properties. Baker says this crisis happened because policymakers somehow failed to recognize the $8 trillion housing bubble that hugely distorted both the housing market and the economy.

[havocmom]

1. Seems like the more bailouts, the more risks the banks take to make big profits

If their decisions are wrong, the working families foot the bill TWICE, through taxpayer supported bailout AND the continuing loss of their own equity as the housing market keeps going down the crapper.