Crack Addict Bankers Put Their Finger in the Dam

From the Website of the Neighborhood Assistance Corporation of America

NACA announces ONE BILLION dollars in assistance for subprime lending victims. While the predators are blaming the borrowers , NACA is the first to provide a solution to save peoples home. Click on the enclosed Press Release for more information on this "first of its kind" announcement.

The deal is Bank of America and CitiGroup will advance money already promised to NACA who would in turn use it to refinance subprime mortgages (2 million of which are set to click up several points this year). So for those who spent money they didn't have to buy houses they couldn't afford: whew!

...or maybe not.

NACA says a billion dollars can only bailout 7200 families which leaves more than 900,000 shaky loans still out there. Eyes are now looking toward a federal bailout (S&Lwha). But who needs bailed out isn't exactly clear.

Nonprofits say working families were taken advantage of by predatory lending so it's them we need to help. Local governments are cringing over the idea of a run on housing and plummeting property taxes. And everyone with a stock portfolio is anxious to prop the market up.

Oh wait, I almost forgot about the kind folks who lent the money in the first place (from WaPo):

"If we foreclose, we lose 50 cents on the dollar generally, and the cost to restructure the debt is typically a heck of a lot lower than that," Litton said. "That's our motivation."

Perhaps lenders should have checked for more than a pulse before they dolled out the credit. When did the mortgage industry start resembling crack addicts?