Banking, mortgage industry, and home foreclosures problems are still growing. What was the root of the problem? May be, it has started with Iraq war or because of irresponsible government. May be the executive branch of the financial institutions is to blame. Or because most of the top level Brass in the financial sectors is homogenous and all of them have their heads in the sand. May be other problems and still more problems to come… 1. Over expansion of the banks and branches, there are more banks than the convenient stores. Billions dollars wasted on brick & motor storefronts instead of E-banking. 2. Most of the financial institutions have excess of employees by thousands and employees have nothing to do in the branch level. 3. Hedge Funds owners and big investors got their money out from the real estate and mortgage investments and moved over to defense and security investments. They left the small and middle investor to hold the bags. 4. Too many chiefs; Executive salaries and bonuses are not justifies and out of control. 5. Banks are not prepared and or have no real plans for defaulted loans or how to deal with them, other than opting out to foreclosures. 6. Banks did not help the customer in need when they fell behind their payments. 7. Banks did not tried hard enough to offer loan modification or refinancing to lower the payment or switch over to fix interest with the affordable payments. 8. Banks did not allow the customer to sell their home before going to foreclosure. Once banks opted out for foreclosure, only Law firms made billions and Banks got bailout money by the American hard earned money. In this game, are homeowners the big looser. When we loose home ownership, we loose the biggest spending power that keeps the Middle American economy afloat. How long it will take for the small and middle investor to start investing again on a regular basis? What is next? Is it the Commercial real estate sector? I hope not!
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