Banking Temper Tantrums Inflicting Economic Pain on Massachusetts

by jhwygirl

This is rich: GMAC mortgage lending exited the mortgage market in Massachusetts today.

GMAC did this is in reaction to Massachusetts Attorney General Martha Coakley filing suit against 5 banks in the state for “deceptive and unlawful conduct” in foreclosures.

This is the first significant lawsuit to come about for the banks’ robo-signing of foreclosure documents. Currently New York and the federal government are investigating Bank of America for its foreclosures on active duty military.

Foreclosing on soldiers homes while they’re overseas.

The stories go on. They’ve foreclosed on homes that they couldn’t produce the finance paperwork.

Yet we taxpayers have bailed these crooks out and the federal treasury is lending them cash at .25%.

So when a political entity like the State of Massachusetts decides to enforce the law and sue them for their unlawful practices, GMAC just shuts down shop.

Intentionally inflicting economic pain on Massachusetts.

Banking reform did nothing to reign in our banking system. They’re still “too big to fail”. Bank bailouts were not eliminated.

Banks have been making money on money – a shell game economists have been warning against for darn near a decade.

Used to be they made their money on well thought out investments such as real estate and business. Now they make their money by charging what used to be back alley loan shark rates (double-digit credit card rates). They charge ATM and debit card fees to their depositor while doubling up on those charges by strapping businesses with fees to accept these cards.

  1. Turner

    GMAC is cutting and running? Isn’t this what the cop shows call a sign of consciousness of guilt? It seems to me that they must have something to hide.

    Go after them somebody!

  2. lizard19

    yeah, piss off the bankers, and they’ll even embarrass the engine of the EU, Germany.

  3. Just a couple of points. First, I suppose it’s superfluous for me to reiterate that I was against the bailouts from, well, the time of bailout of The Continental Illinois Bank way back when, The reason big banks take on extraordinary risk is because we have, for nearly 40 years, trained the bondholders that they will be saved by Uncle Sam. But let’s do consider GMAC Mortgage.

    GMAC leaving MA is hardly going to inflict any economic damage on the state. The existing demand will be absorbed by competition. The good news is that it makes that loan demand available to local and regional banks who A) need the business B) are much less abusive and C) don’t benefit from the rate spreads of big banks that act as Fed primary dealers. That’s not to say that the U.S. mortgage market doesn’t have some serious systemic and cyclical problems. It does. But to the extent that the various state’s AGs are able to extract damages out of bank with suspect practices it seems it might be easier if the bank in question doesn’t have conflicting business inside the state.

    So, if I were a resident of MA I would say to GMAC: Don’t let the door hit you on the ass.

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