Bankers are Poopy-Heads

Two years ago I applied for a loan modification on my home mortgage. My home had lost almost half its value, and I had recently lost my job.

The Bank of America enrolled me in its Making Home Affordable program, gave me a trial payment amount, and told me the modification process would take three months.

Well, after FOURTEEN months, my loan still wasn’t modified, and I had accrued 14 months worth of interest on my mortgage at over EIGHT PERCENT.

I had heard stories about people who waited over a year for a modification, only to be denied and then foreclosed upon by their bank.

I was worried that might happen to me, so in frustration, I wrote to my state’s attorney General about the problem. He said I should file a complaint with the OCC—the office of the Comptroller of the Currency—a banking regulatory agency.

So I did, and lo and behold, within a week I got a call from the office of the president of Bank of America, saying that of course they would be happy to modify my loan.

I was really relieved, and grateful to my attorney general for pointing me in that direction.
So this is where my story takes a strange turn. The bank modified my loan all right-- to the lower interest rate available at the time, but instead of reducing my principal with the bail-out money they got from the government, they ADDED tens of thousands of dollars onto the principal of my loan—making my new mortgage more than double what my house is worth.

This huge fee they tacked onto my loan was interest they FORCED me to accrue at 8 percent by dragging out the modification process for over a year.

They didn’t even give me credit for the 14 months’ worth of trial payments I had faithfully made. All that money seemed to vanish into thin air.

When I complained about this to my brother, a real estate agent, he said, “Well of course! Banking executives have a very short-term outlook. Their bonuses are based on the assets the bank holds.

“If a bank has on its books large mortgages,” he continued, “their bottom line is higher, and their bonuses are larger. Never mind their bottom lines are bogus because the houses aren’t worth near what the mortgages say they are.

“So the banks would rather kick people out of their homes and hold onto the foreclosed properties instead of short-selling them, because that would decrease the assets on their books.”

"Yeah," I said. "They were getting ready to foreclose on me before I put pressure on them with the OCC."

My brother lives in Las Vegas, and he said there are THOUSANDS of foreclosed homes sitting empty, not even on the market, deteriorating because no one is taking care of them. But the bankers don’t care. If they can sit on that property for a few years and collect $10 or $20 million in bonuses each, they’re set for life. Why should they care if their bank implodes in a few years because of phantom assets? They got theirs!

So now I understand why the bank tacked on all that inflated interest to my mortgage. It makes sense when you see the system is set up that way.

I remember watching the heads of the big national banks insisting to Congress that no rules be attached to the billions in bail-out money they were getting. They said it would be “punitive” to require the banks to follow guidelines as to how to use the money.

Well, they got their way—they completely snowed the government. Either that or the politicians are in their pocket. But homeowners ended up being the ones who were punished by the “no oversight” decision. Along with the entire American middle class—while the bankers whistle all the way to the, well, bank.

My only question is, how long will it be before the entire banking industry comes crashing down? Those phantom assets can’t hold them up forever.

And what will happen then?

[To see this scenario illustrated in a Rapid Vizual, go to http://www.youtube.com/rapidvizuals#p/a/u/1/jSizHUlh_ME