Monday Links a Fitting Reminder

Are Securitized Mortgages Subject to Usury Laws? – Naked Capitalism, Yves Smith

Most institutional lenders in the United States are not subject to usury laws…..are debts held in securitized pools subject to usury laws?…

Housing Bubble Comparison: US, UK, Canada, Spain, Australia, Japan - Mish

Is Slashing Mortgage Principal the Answer? – The Wall Street Journal

How would principal reductions induce more people to walk away? Let’s say your neighbor, who hasn’t made any payments on his loan for months, gets a huge reduction in his loan balance. Meanwhile, you’ve been working three jobs and dining on cat food to pay your note each month. Your reward from the bank? Zilch.

So maybe you’d decide to stop paying, too, in the hope of the same deal your neighbor got.

Franklin Roosevelt’s First Inaugural Address: A Fitting Reminder For Our Crisis Today - Jesse

It’s worth reading this. It shows a mindset in terrible, overwhelming times that was determined to set things right, not to take care of business, but to address the business of the people directly, and not only the immediate concerns of the crisis but the long term problems that caused the financial collapse in meaningful ways.

Ways, I should add, that stood the test of time until they were overturned in the 1990′s by the efficient markets ideology and a multi-million dollar lobbying effort by Wall Street.

Yes, It’s Okay To Walk Away From Your Mortgage - Henry Blodget

As many Americans begin to realize that it will be many years (if not decades) before their houses are worth what they owe on them, the idea of walking away from your mortgage is going mainstream.

Not surprisingly, the mortgage industry is doing everything it can to prevent this, including telling homeowners that they have a “moral obligation” to pay.

But do they?