With regard to homeowners in trouble I can see congress saying “no bailout” to everyone, or having a very narrow definition of who gets any help, such as those who were victims of fraud. Unless the buyer can show fraud on the part of the financial institution, the courts have no authority to change the terms of the contract. Republicans and 10 Democrats defeated a proposal to let bankruptcy judges ease the terms of subprime loans. Victims then turn to the issue of fraud. Everyone knows when they were lied to, although sometimes it takes time to discover the truth. It seems like Household International, Ameriquest, and now HSBC are the ones with a track record. They are the ones that should worry when it comes to proving fraud. Nationwide predatory lending settlements speak for themselves.

Their loans are still out there, and were not refinanced in 2003 to 2005 when fixed rates were at their lowest. Why not? Because of insurance packing, fees, early payoff penalties and the like. Our advocacy program recieved many complaints as this group found out they could not refinance. They missed the opportunity. That should not exclude them from relief under today’s programs. However, before Household International would settle their borrowers had to release Household from future litigation. Household International is now owned by HSBC.

Many homeowners who bought in 1997 through 1999 are writing to us today. The main complaint? They owe as much today as they paid for their homes when they bought them. Something is very wrong.

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