Chapter 7 and Chapter 13 Bankruptcy Attorney Sacramento
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The New Economics


  (Bankruptcy Options)

Since 2007, the dynamics of the financial world, as we know it, have changed dramatically.

Wall Street dominates main street, financial institutions appear to have more potential pull than our politicians, and the middle class is slowly disappearing as a result of a plague of foreclosure and unemployment quickly spreading around our country.

These events have many causes.

The story begins with the introduction of the sub-prime mortgage: A lending product with colossal defects based on the fatal financial assumption that property values would continue to rise (15% or more) each year for an indefinite period. This product was then resold to investors as a “mortgage derivative” and to bank and financial institutions, all around the world, all assuming a permanent appreciation in home values.

In 2007 and 2008, when it became clear that real estate values had not only peaked but were falling, financial institutions began failing one by one. A killer virus, the sub-prime loan and its derivatives, was toppling the mighty Wall Street giants. The banks and financial institutions, betting on the sub-prime product, had made a fatal miscalculation. The “Great Recession” had begun in earnest eliminating a once vibrant real estate, construction and manufacturing industry in our country.

At that time, seeing the desperation in the financial system, the administration managed to create a “white knight”, the $750 billion bailout. Our tax dollars, given to the banks, postponed the banks failures, and they rose out of their financial “death bed”.

As these funds stabilized the books of the financial institution that hadn’t already failed, for the time being, a curious trend began to develop. Banks were afraid to lend to borrowers desperate to save their homes, and businesses. This began the cruel hoax known as the mortgage modification programs. The banks and financial institutions who created the sub-prime disaster, after being revived by an unprecedented infusion of our tax dollars, left the middle class struggling, and the homeowner dangling, Fifteen million foreclosures later, the middle class has had to beg for its bailout.

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