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Dean Baker on Bogus Mortgage Settlement

Feb. 9, 2012 - Full of sound and fury, signifying another back door bailout. Dean Baker sets the story straight on BBC World News.

Back from the Dead

Jonathan Baker bought his house in Eugene’s Jefferson Westside neighborhood for a dollar.

The previous owner’s husband had died in 2010, and after 18 months of disagreement about mortgage payments with JP Morgan Chase Bank, she abandoned the house. From 2012 to the end of 2015, the house lay vacant, wasting away, undead — a zombie house.

When a homeowner ceases mortgage payments, banks often fail to maintain the property post-foreclosure and sometimes even stop foreclosure proceedings — without notifying the owner after the house is empty. The defaulted property racks up fines as well as the costs of maintenance, security and legal fees.

When banks keep possession but cede responsibility for maintenance, the resulting zombie houses stress delinquent owners, create a persistent neighborhood blight and often cost cities and counties money.

“We have not dealt with the wreckage of the 2008 housing crisis. Buying these homes out of foreclosure and short sales is very difficult,” Ted Coopman says. Coopman is a Jefferson Westside Neighbors councilor.

Is the banking/mortgage meltdown the goverment's fault to begin with?

Does this crisis show the failure of capitalism? Or does it show the failure and arrogance of government meddling? Is it possible that ONE MAN is responsible?

This is really oversimplified. The US doesn't have a purely capitalist economy. It has a mixed economy that combines elements of a free market economy and a socialized economy.