Late on your mortgage? Did you know you might be able to negotiate a 20 percent reduction in what you owe? Josh Rosner, a financial analyst specializing in mortgage-backed securities, says that lenders know that if a home goes into foreclosure, the lender will lose 60 percent or more. So what's stopping them? The banks that hold the second mortgages. Those banks routinely block such requests because debt reduction for a borrower would spell instant losses for them. And Treasury is letting them get away with it.
It's enough to make most people furious, and a recent New York summit that brought together the rock stars of power-to-the-people financial reform-everyone from TARP watchdog Elizabeth Warren, Nobel Prize-winning economist Joseph Stiglitz, and investor George Soros to Rosner, ex-New York governor Eliot Spitzer, and MSNBC's Dylan Ratigan-one message came through loud and clear: The American people are mad as hell about a financial system that puts them last, and aren't going to take it anymore.