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Rethinking Debt: Deadbeat Creditors

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The amount of bad home equity loan business during the boom is incalculable and in retrospect inexplicable, housing experts say. Most of the debt is still on the books of the lenders, which include Bank of America, Citigroup and JPMorgan Chase.

The irony of this statement is that these are three of the institutions that are directly responsible for the housing collapse and continuing financial chaos. The further irony of this is that these three banks actually receive government support (away from TARP bailouts) to put these debts "off the balance sheet."

Ever heard of Term Auction Lending Facility or Term Securities Lending Facility? These are official "federal programs" (i.e. legal ways to avoid repaying debt) that allow insolvent or debt ridden banks like B of A, JPM Chase, and Citi to unload bad "assets' like defaulting mortgage securities in exchange for taxpayer cash.

Yet JPMorgan Chase, B of A, and Citi are three of the nation's most aggressive foreclosers and debt collectors. Yes it's true--the same folks who put us in debt are now collecting on our debts.

Creditors have become the modern oppressor enslaving borrowers in debts they themselves refuse to pay. So the bad investment you made on your home is your problem and the bad investment your creditor made on your home is your problem too.

The difference between leveraged creditors and ordinary debtors is that the government (Federal Reserve, U.S. Treasury and Congress) has their back and not yours. Big creditor banks are legally allowed to dump their debt on taxpayers, but they will pursue folks experiencing economic hardship directly due to their own mismanagement to the "fullest extent of the law." All this subjective "immorality" proves is that the "law" needs to be changed.

So who is the real deadbeat now?

The underwater unemployed borrower swimming upstream to try to salvage his or her home? Or the bank that created the economic collapse and is now able to have you pay all their debts through bailouts, "toxic asset" programs, special privilege, lobbying and distortion of the free market system?

Like King Rim-Sun it might be time to give the debt enslaved some relief and put ordinary citizen toxic debts "off balance sheet" too.

Like the third debtor in the New York Times article remarked, "There is strength in numbers." Come on America, let's turn this tanker around.

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Monika Mitchell is the Chief Executive Officer of Good-b (Good Business International)a leading new media company xcelerating the movement for better business for a better world.

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"Deadbeats" are no longer debtors in post-crisis A... by Monika Mitchell on Thursday, Aug 19, 2010 at 12:22:34 PM
What a great piece. Brava! I too have noticed that... by Chaz Valenza on Friday, Aug 20, 2010 at 2:35:48 PM
This article didn't stay up as Headlined long enou... by Debbie S on Saturday, Aug 21, 2010 at 1:38:46 AM