After filing Chapter 13 bankruptcy (mortgage included -fixed rate) my husband became unemployed, so we are now 6 months behind on our mortgage and our attorneys are submitting for a loan modification, what is the process? Is a loan modification always granted?
My husband is now currently working and has been for 3 months now, it has just taken us this long to finally get in touch with our attorneys and also the mortgage lenders attorneys.

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Surely it’s not the idea of government offerring a reasonably priced and fairly administered health insurance contract?

We have seen how corporate America works. From the big banks, to the big credit card companies and mortgage lenders, right. You don’t pay these guys at least million per year, they wouldn’t even consider showing up for work. Most of them wind up getting Million or million when all parts of their pay and compensation and pension and healthcare and expense account are figured in.

So the idea that corporate America is ludicrously greedy and rapacious is not news to anybody who has actually been on planet Earth for the past 10 years, right.

Now comes government, and says it wants a non-greedy, and non rapacious healtg insurance company. It wants to set one up. It wants a chance to compete with the insanely greedy private companies, maybe offer a better product, or make them offer better products by giving them some honest competion.

Well, if that’s all there were to the offer, only a real Chicago School Purist would object.

So, what’s the big objection to the Public Option?

Here it is.

Imagine a company that wanted to sell flood insurance. OK so they sell most of their policies in the floodplain areas of the USA.

In order to attract customers they say "We will pay off on these policies even if you buy them after your house has been completely washed away and destroyed utterly by a flood."

Well, of course they sell a lot of policies, particularly after big floods. Everybody whose house has been destroyed buys a policy for ,000 and then puts in their claim for their destroyed house for 0,000.

Miracle of miracles this company soon finds itself in big financial trouble. Why?

Because ,000 is a much smaller number than 0,000.

Now come the company executives, and they say, "How were we to know that our business model was faulty?"

We went to Princeton, Harvard, and Yale, we studied speechmaking, and community organizing, and political theory. We have never seen the inside of any business, met any payroll, done any cost accounting, kept any books, or developed any business models.

How were we to know?

Is this really similar to a health insurance company that agrees to insure all persons regardless of pre-existing conditions.

Imagine that the person is like the house.

Imagine that the pre-existing condition, perhaps glioma of the brain, is the house already having gotten washed away in the flood last week.

Imagine that the premium is ,000 per year.

Imagine that the operation for the glioma costs 0,000.

Now, the rule of arithmetic that we visited earlier
is still true, ,000 is a smaller number than 0,000.

Who could possibly imagine that such a health insurance company would run into financial trouble, and quite quickly, and quite deeply?

No one in government. They went to Princeton, Harvard and Yale, you know the drill.

The problem is this: The bad flood insurance company only hurts itself, it’s policyholders, its employees and it shareholders. It winds up in bankrupcy Court and gets eliminated, within about 6 months.

But the bad (crazy) U.S. Government backed health insurance company, can’t go bankrupt. It has the full faith and credit of the Federal government behind it, who can print money, or take the bad debt onto the Fed Balance sheet.

So this becomes the money black hole. It’s like a cash whirlpool. The money disappears down it, and never comes back, and it gets bigger and hungrier every day, every hour.

The rathole down which USA disappeared.

So — the problem is all about the fact that the government has a completely crazy business model for how a health insurance company can operate — and it’s not their fault — what do they know from insurance? Zilch — they are community organizers!

So this is an idea in which everybody is a victim, even the ones coming forward with the idea now, they are victims too ”How were they to know?"

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Excerpts:

This bailout was a terrible idea. Here’s why.

The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.

This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy’s allocation of its financial resources.

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html?iref=mpstoryview

Why is this not considered as being an option? Why must the taxpayers foot the bill for bad decision making?

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