Re: “Profits soar at 2 largest mortgage lenders” (TNT, 10-13).
This article was tempered with information about the big banks’ tax write-offs, considering their predatory behavior led to the collapse of the housing market.
The bankers knew the risk involved with ARM loans, questionable second mortgages and easily available equity credit. To protect themselves, the banks bundled the loans and sold them to unsuspecting investors, making a profit on top of the home loans.
When the economy collapsed, the banks claimed they were on the brink of insolvency and turned to the federal government for help. The taxpayers were on the hook for the Troubled Asset Relief Program. The banks made money selling the homes, made money selling the loans, and were rewarded by the government.
Many taxpayers were upset over the banks foreclosing on their homes and spurred the government into action. The government made great headlines by assessing fines on the major players, but a large portion can be written off on their taxes.
With their legal troubles behind them, the banks are now free to sell the foreclosed homes, profiting from the original home loans, the bundled loans, the TARP bailout and a tax write-off. No wonder they are doing well.