Taxpayers will soon be asked to bailout our largest banks -- again.
This time the public monies are needed to clean up the foreclosure mess created by the same bankers who melted the global financial system during the Bush years.
In their haste back then, the banks were careless with their paperwork. Thus, hundreds of billions of dollars of mortgages were sold, resold and sold yet again without the banks fully documenting who owned the paper.
Because the value of millions of houses that collateralized this debt is worth far less than the mortgages and millions of homeowners are defaulting, the banks are taking possession of these houses and trying to quickly sell them for whatever they can get.
In hundreds of thousands of foreclosure cases, however, public investigators report that the bank employees forged the foreclosure documents -- a felony -- claiming ownership that did not exist.
Because the banks' documentation is so weak, title companies are now refusing to insure mortgages on foreclosed homes even for people with the best credit records.
This paperwork mess is so bad that all the major banks and mortgage companies have called a halt to foreclosures. Their cleanup may take years to finish.
In the interim, hundreds of thousands of home industry workers, from construction to finance, will be jobless and the jobs of millions if others will be at risk, creating a major drag on efforts to reignite the economy.
As happened in 2008 with the sub-par mortgage crisis, the banks will ask taxpayers to put up the money needed to finance a backup mortgage insurance program -- TARP II. Their argument will be the housing industry is too big and important to fail.
Today, about 90 percent of the bank executives and corporate directors that created the financial meltdown of 2008 are still at work.
How many times will Congress and the President make us pay for these same bankers' greed and incompetence?
The one thing is clear -- the bankers who created this mess are unable to fix it. If more taxpayer money is required, I hope that the President and Congress will force the banks to fire their senior officers and boards of directors before a single penny of taxpayer money is made available.
If the President and Congress go wobbly with the banks now, a TARP III is almost certainly in our future for the greed of these bankers knows no limit.