Cramer: Banks hurt their own cause
Jim Cramer | [email protected]
No wonder retail is doing so well and looks like it could have another breakout here. No wonder auto sales are running at 14.9 million, an astounding number given the high unemployment rate.
All of this is good news, and it is directly related to the endless mortgage-bond buying that Fed Chairman Ben Bernanke's been doing. It is concrete evidence of the plan's success. So is the "rising fast" headline about housing prices in USA Today, a non-ideological newspaper that tries to get at the truth like no other.
Here's the problem, though. If only the banks that own so many underwater mortgages would agree to let people refinance. So many banks don't, and they are simply hurting their own cause.
If you want housing back and starts higher, you have to allow these people to refinance. But the banks are so afraid of the walkaways that they won't do it. They are afraid of the deals that have to be cut. In many cases, they won't even listen.
So yes, it is great news, and it is a result of Bernanke's genius. But it is not enough unless the banks agree to help millions of underwater homeowners. These people are not asking for a principal reduction. They just want the same deal those who didn't overpay got.
Is that really too much to ask?