Sunday, October 11, 2009

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?

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.
TARP Funds
Percent Eligible Homeowners Assisted
Bank of America
$45 Billion
$25 Billion
$45 Billion
$12.5 Billion
PNC (bought National City)
$7.7 Billion
Wells Fargo
$25 Billion
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?


  1. Great post Drew..... I personally have a mortgage with a servicer that has helped 9% on your list above. I have been turned down based on a phone call several times. I have been turned down after completing a worksheet two times. I am in the mortgage business. I know the rules. I qualify for a loan modification. These banks have got to be help accountable for monies that saved their lives.........

  2. Great post Drew.... at what point to we start holding these banks accountable for the money we lent to them that saved their business.... and now consumers are the bad guys because we need help?
    I have a mortgage with Nat City/PNC... I understand what qualifies for a loan mod as I am in the business... I qualify... I have been turned down numerous times over the phone... -

    how can they qualify someone over the phone with out documentation???? I have sent in two worksheets and continue to get turned down.... They have no clue on the guidelines.... something must be done!

  3. I have a mortgage with Chase. I was told I did not qualify for a loan mod unless I was delinquent. I then skipped a payment so to "qualify". I was then told I still did not qualify - no reason stated. NOTE: This was when I was unemployed and current on the loan but unable to re-finance with a new lender.

    Since then, I have a new job and am now refinancing with a different lender.

  4. The Home owner can't win. The Lender holds all the cards on loan mods. The only way is through the courts in forclosure, because the odds are the orginal lender made a mistake, they don't have the paperwork, or the Judge wants to be fair. The banks don't want to modify any loan, They would rather sell the house in a short sale get the cash and have it off there books. There are alot of people in our business that can't make the payments becuase our business are off and they put us here, but all we can do is keep trying. They should have given the homeowner the money to bring the mortgages current and a little extra to pay them for 6 months and it would have cost less, and done more for the homeowner and the real estate market.

  5. This bail out was a sham. Here is my post about the subjest. Keep up the fight
    thank you

  6. Thank you for your interesting discussion and for bringing such outstanding points to light. This is only the beginning. Treat the peons like dirt, but use our money and keep holding the hand out for more.. I am starting the "Spank your Bank" campaing...

  7. thank you all for your comments, keep them coming! Please forward this to those you care about so that we can start making a difference:)

  8. A friend in the lending business forwarded me your blog, and I posted a link to it on my own site,

  9. Like many others before me, great post!

    I have checking and savings accounts at Huntington Bank (a regional bank which was NOT mentioned but a TARP fund recipient). Plus, I have a decent amount of stock in it, too.

    You can imagine how "excited" I was to learn that they will not even consider giving an unsecured loan to anyone with a credit score under 700. They won't even talk to you.

    This was about 4 or 5 months ago, but I remember thinking two things. First, I was disappointed that they were not using the government funds to help restart the economy. Maybe they were, but...

    Also, I smart alleck part of me noticed that they wouldn't lend to anyone just like themselves. Isn't it ironic?

  10. Great topic, Drew. Based on my experiences with Loan Modifications and particularly Short Sales, the numbers equate. The lenders that took the least TARP funds, are the most coooperative, and based on your post, have assisted the highest percentage of qualified borrowers.