Von Aldo
Dodd to Demonize Financial Institutions Today

Dodd to Demonize Financial Institutions Today

Big Boy Did It: Those mean 'ole financial institutions suckered your clients!Yep, Big Boy did it. Big Boy is the name that I have pinned on banks and Wall Street --- in short, all financial institutions. Like Dick Tracy's Big Boy, Wall Street and money center banks caused the financial/housing bubble and are railroading innocent property owners via "robo-signers." Today Chris Dodd (D-CT), the senator who enjoyed below-market mortgages from his friend Angelo Mozilo of Countrywide, will spank financial institutions for seducing innocent people into taking mortgages they couldn't afford. But only this isn't true. The truth is much uglier and doesn't play well to the populist oratory that passes for serious political debate in the U.S. these days.

Gasparino, a senior correspondent for the Fox Business Network, writes in his column in today's New York Post, titled, "Show Us the Victims," that The hearing, of course, won't dwell on the mistakes of the vast majority of alleged victims of this scandal -- namely, how they rolled the dice on the housing bubble, taking out loans they knew they couldn't afford."

He continues: Its title -- "Problems in Mortgage Servicing From Modification to Foreclosure" -- tells you all you need to know about the goal: to stoke anger at the big banks by portraying all those who've been forced from their homes in the last two years as innocent victims, seduced into taking out unaffordable loans and now victimized by the same banks and their teams of 'robo-signers,' who denied them 'due process' by rubber-stamping foreclosure documents without proper review."

According to Bank of America, the average person "victimized" by a robo-signer hadn't made a mortgage payment in nearly two years. Many (about a third) had abandoned their homes long ago. In fact, people at BofA tell me they've yet to find a 'real' victim -- that is, a family that was evicted from its home even as it met all its obligations."

Gasparino concludes: "It's ironic that the state regulators, Dodd and most of the media have all but concluded that the big banks both committed massive fraud and that the fraud produced scores of real victims. This, even though, if you look at today's witness list, you won't find any."

Which is why I agree with an editorial from yesterday's Investor's Business Daily that argues that Fin-Reg (a.k.a the Dodd-Frank Wall Street Reform and Consumer Protection Act) should be gutted. After all, the legislation leaves out a main culprit in the financial bubble, Fannie Mae and Freddie Mac and the ill-advised "affordable housing policies that drove them into the subprime market."

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