Should the American Public Get Stuck With the Bill for the Banks’ Bad Decisions
The action of sending back their keys to the home in lieu of the loan payment has been termed “jingle mail.” Both homeowners in default or who do not want to overpay for their home as well as financial corporations are increasingly turning to jingle mail to relieve themselves of large financial burdens.
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Investment banks have also been engaging in jingle mail, a form less public than homeowners but also more costly. The Federal Reserve is encouraging banks to use as collateral defaulted mortgage debt in return for loans, which is encouraging the whole banking system to get these defaulted loans off of their books and keep up an appearance of financial health.
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When lenders send in nonperforming loans to the government in return for Treasury securities and loans, they are creating an edifice of financial fraud and sticking the general public with their toxic mortgage loans. Large financial corporations sending in jingle mail and sticking the American taxpayers with the cost is a clear reflection on the moral risk, corruption, and financial manipulation of corporations taking advantage of the feds.