Just watched a video on PBS about local governments suing banks to recover bailout money. It's claimed the banks have created a public nuisance by allowing large number of foreclosures to occur, destroying neighborhoods and reducing the tax base.
Are lawsuits the only solution for local governments?
Seems to me, that the still employed don't have less money, but just aren't spending it, thus creating the meltdown. And what created this scare is the banks going bust because they lent more money than they had. So give the banks tons of money that doesn't exist, and create jobs (pork) with money that doesn't exist.
Some say this bank giveaway was the biggest transfer of money, public to private in history. Won't be anything left to give to the states. They can try to sue these gangsters but doubt it will do much good.
Five months ago there was talk some American cities plan to sue banks and the FBI had opened criminal investigations against some banks that include accounting fraud and insider trading. I wonder if it will ever go anywhere.
I don't think they have a right to sue the banks for foreclosing. However, they do have a right to sue banks for failing to keep up properties after they foreclose. If a home sits vacant for a while, and the lawn never gets mowed, windows get broken, and as a result property values in the neighborhood drop, they should have a case against the bank for their losses.
Contrary to public opinion, banks do not want to foreclose, but when someone doesn't pay their mortgage, it's the only tool they have to recover their investment.
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