I have just sent this appeal to my representatives in Washington. Feel free to copy and paste and send to your representatives.
Please do NOT support the $700 Billion Bailout Plan until the Banks and the Lending institutions identify the Toxic Loans and DE-BUNDLE them.
It would take very little effort on their part to identify each loan based on a computer search of their existing loans:
1. Full Default = no payments in 3+ months (Toxic)
2. Partial Default = no payments in 1-3 months (Potential Toxic)
3. Good Standing = on-time payments
Then the Government can:
(1) Not buy the Full Defaults and demand the banks/lenders write them off.
(2) Buy the Partial Defaults at a heavy discount to reduce the risk and stabilize the market.
(3) Let the banks/lenders keep the good loans.
This can be very easily identified by looking at systems that administer the loan payments. Any bank/lender/institution that is refusing to do this is trying avoid the consequences of their actions and making the gov’t pay for bad loans.
Please, please, bring this to the attention of other lawmakers and DO NOT vote yes for any Bailout plan that lets these institutions and their management off the hook for being irresponsible and lazy.
This is not 1950, all these records are electronic and information systems manage and track all their loans and related payments. These companies could separate the loans in the 3 categories listed. They refuse because they want the government to cover the risks and leave the taxpayers holding the bag. That is grossly unethical and unfair.