What is a lender's responsibility?

.
Lets see, the analogy would go something like this:

1. I own two homes, one in Chicago and one in Iowa.

2. I take out a Home Equity Line of Credit (HELOC) on the Chicago property.

3. I hire a gardener for the Chicago property.

4. My income is reduced so the bank closes my HELOC in Chicago.

5. As a result I lay off the gardener and prepare to sell out the Chicago house.

6. The gardener occupies that house in Chicago saying I owed him a sixty day notice plus back vacation pay. Further, the gardener says that this is all the fault of the lender of the HELOC.

7. The president elect says the gardener is right. Jesse Jackson, seeing a case of community activism, visits the gardener and gathers some public relations points. The governor of Illinois suspends all state business not with me but with the bank involved.

8. Meanwhile, I take out a HELOC on my Iowa property and hire a gardener there.

9. The bank says the real problem is that I had reduced income in Illinois and became a bad risk for them. They imply its my responsibility to pay the gardener.

Folks, from what I understand, this is pretty much an analogy for the Republic Window and Door situation. One of the things that got us in the current economic mess was political interference in the process of making loans, requiring home loans be made to those who otherwise would be poor risks. Now, our soon to be government, is insisting that the lender, in this case Bank of America, take another risky move and lend more money to Republic in order to pay its employees.

If we are going to cure our economic ills, we must insist that our banks go back to firm risk assessment. The "solution" desired by the Democrats is a very, very bad one -- its a reason that politicians should not be involved in lending. But their solution is "populist induced economics" - and it shows us what "sharing the wealth" really means.
.