Is it Time to Spank Your Bank?

Banks bailed out of bankruptcy by the federal government, refuse to help out homeowners - so why do homeowners keep their accounts at these same banks?

EXPERT, BIRMINGHAM, BLOOMFIELD, DETROIT, ROCHESTER, ROYAL OAK, TROY, MICHIGAN

A recent federal report card through September on the results of the Making Home Affordable Program, shows real dismal progress.

Despite 85% of eligible 60-day plus delinquent mortgages being covered by the 63 servicers pledged to participate in the federal government's loan modification program, only 16% of eligible homeowners have been offered help.

Now that is an improvement over July's 9% and August's 12% numbers, but at this rate it'll be almost another year before banks are helping half of the eligible homeowners. Most will be foreclosed on by that time.

What's really interesting is comparing how much banks received in federal TARP bailout funds and how they're "rewarding" the taxpayers that fronted the funds with loan modifications.

Bank of America is thumbing its nose at taxpayers the worst with a low 11% rate of assistance - all the more troubling as it's the nation's largest bank and still hasn't paid back its borrowed TARP funds yet.

The numbers above have greatly improved since July, but notice they only cover mortgages that are behind by 60 days or more?

Obama's wonderful promise to homeowners was that you DIDN'T have to be behind on your mortgage to qualify for a loan modification! I'm sure the numbers would look a lot worse if mortgages behind 30 days were added to the figures, much worse if every homeowner with a mortgage payments more than 31% of their gross income was added to the stats.  By the way, that 31% number is what's supposed to qualify a homeowner for Obama's Making Home Affordable program.

Now here's the big question - know anyone with a mortgage at one of the above firms who's trying to get a loan modification?

If you do, ask that person how it's going. Chances are they'll tell you horror stories about paperwork getting lost multiple times, phone calls unanswered, conflicting advice and more.

Do you think these banks really care about homeowners - that also happen to be taxpayers?

As evidenced by their terrible track record with loan modifications, some banks don't care one bit. We're all less than pawns as far as their concerned.

Now ask yourself, where do you have your checking and savings accounts?

Why are you giving your business to these banks that show so little concern for Americans needing a break, when we the taxpayers gave them a break with our bailout tax dollars? Where's the trickle down fairness? The, "do unto others as you'd have them do unto you?"

If the banks wanted to play hardball with homeowners and tell them, "too bad about your financial difficulties, we're foreclosing anyways", then they shouldn't have come begging for our tax dollars as TARP funds. We should have shown them as much mercy as they're showing homeowners. We should have let tese banks fail.  What goes around comes around guys!

Unfortunately, it's too late for that as they got their bailout funds, paid themselves bonuses for the mess they created and laughed all the way to their own bank accounts. We were suckers.

We can still get back at these banks though.

This is the official start of the "Spank the Banks" campaign.

The only way we "itty-bitty" taxpayers can show these banks that they need to treat homeowners with more respect, is to take our business away from them. Spank your bank!

I'm amazed when I find out that a homeowner trying to get a loan modification still has their accounts at the bank giving them the run around! Can you say "glutton for punishment"?  These homeowners should Spank their Bank!

How about showing some support for family & friends? If someone you care about is getting jerked around by their lender, spank that bank by making sure you close any accounts you have there.

Now, who wants to start making, "Spank the Banks" t-shirts and bumper stickers?  

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In addition to real estate lending, consulting and investing, Drew Sygit writes & speaks about the mortgage & real estate industries. He holds mortgage industry designations CMPS, CMC, CRMS, CMLO, CALO, has an MBA and is an approved industry instructor. He's presented, spoken and/or written for HUD, Financial Planning Association, Financial Planners Association of Michigan, Michigan Association of CPA's, Institute of Continuing Legal Education, Oakland Real Estate Investors Association, North Oakland County Board of Realtors and numerous industry publications. For speaking engagements and questions he can be reached at dsygit@TheLendingEdge.com. He also publishes his own blog: http://drewsmortgagenews.blogspot.com.