Herman Cain: Banks 'Want To Help People, They Really Do'

Republican presidential candidate Herman Cain said on Wednesday that banks want to "help people" renegotiate their mortgages but that government regulations prohibit them from dong so.

"Most bankers would want to renegotiate with people on their mortgages, but I'm telling you that there are restrictions that are government-driven that is keeping them -- I've had bankers telling me this, they've been giving me lists of things that can be done. They want to help people, they really do. But it's the threat of government regulations and the threat of the Dodd-Frank bill and rolling it out," he said on CNN's "American Morning" Wednesday, following the GOP debate in Las Vegas Tuesday night.

In Las Vegas, over 80 percent of homes are underwater, and one in every 39 housing units received a foreclosure notice in the past three months.

"I would get the government off the backs of the banks, that's one of the reasons we have so many problems," Cain said. "Many of the banks can't do some of the things they want to do to help folks. A lot of the problems have to do with regulations or the threat of regulations coming out of Washington D.C."

While the Dodd-Frank bill was enacted last year, regulators are currently in the process of writing rules for the legislation.

The Huffington Post's Arthur Delaney reported that the Home Affordable Modification Program instituted by the Obama administration has resulted in fewer than 700,000 permanent modifications, while nearly a million modifications have been cancelled (the administration had hoped to modify 3-4 million mortgages). Banks have modified about 2.5 million mortgages on their own accord.

Cain's rhetoric isn't unique for the GOP. Mitt Romney said Tuesday, "Don't try to stop the foreclosure process. Let it run its course and hit the bottom," he said. (Letting the foreclosure process "hit bottom" would likely cause home prices to fall even further.) "Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up."

Rep. Michele Bachmann (R-Minn.) took a different approach in the GOP debate. "When you talk about housing and foreclosures, you're talking about women who are at the end of their rope because they're losing their homes," she said. "President Obama has failed you on this issue."

 

 

Comments

[whitakerpoc1]

01:06 AM on 10/27/2011

I wonder which bank or banks paid him to say this

[ponderingtoo]

12:20 PM on 10/24/2011

Do a little digging into publically available information from the FDIC and you see the reason why banks are afraid of regulation. They paid out billions in bonuses to executives when it was not financially sound to do so in 2010. Looking at reserve and charge off info available at the FDIC website is enlightening. Here's some of it:
Net charge-offs as a % of loans (End of Year Figures)/ Net charge-offs in absolute $s:
2006: .41% $23.495B
2007: .62% $38.133B
2008: 1.32% $88.789B
2009: 2.60% $174.486B
2010: 2.67% $175.791B
Amount Charged Off/ Amount Reserved for Future Charge Offs:
2006: $23.5B
2007: $38.13B $57.31B
2008: $88.79B $152.52B
2009: $174.49B $231.3B
2010: $175.79B $145.97B
With the exception of 2009, the banks did not reserve enough to cover the following year's charge-offs (and the 2010 charge-offs are low because of moratoriums on foreclosures due to robo-signing issues). Then, in 2010, they cut their reserves hugely (making them appear profitable) and started paying dividends and bonuses. Add to this Debit Valuation Adjustments and you see that "profitable" banks are anything but that.

The new fees and the BofA capital injection by Buffett are being done to bolster a balance sheet made woefully inadequate by executive bonuses.

[markdolph]

09:35 AM on 10/21/2011

Oh brother...

[emphatico]

03:41 PM on 10/20/2011

This guy is a real sIave......to the most corr,upt elements in America.

[election2012]

11:18 PM on 10/19/2011

"it's the threat of government regulations and the threat of the Dodd-Frank bill and rolling it out."

Now Cain claims it's the threat of the Dodd-Frank (Wall St. Reform and Consumer Protection Act) that's causing foreclosures? He's really a master of misinformation.

[Hope4]

05:29 PM on 10/19/2011

Cain’s 9-9-9 plan eliminates the tax on capital gains taxes so instead of WBuffet paying 15% on 90% of his income he won’t pay any taxes on 90% of his income, ZERO. TPRepublicans fail to see if the extremely wealthy people are not paying their fair share in taxes someone will need to make up the difference. Who do they think that will be?

[Mark Button]

05:20 PM on 10/19/2011

Cained and unable, clearly.

[dsb1252]

05:19 PM on 10/19/2011

His ignorance to what is happening in the real world absolutely stunning.

[Deschris]

05:18 PM on 10/19/2011

Banks want to help people?You have got to be kidding me then why can't we get a 0% loans and reworked mortgages at say 2% at the current value of the home ?

[Deschris]

05:07 PM on 10/19/2011

Since when?Do you call a $5 a month fee to use a debit card on your own money as helping people.Get lost fool.

[bampiesdude]

05:00 PM on 10/19/2011

Then they need to make these regulations that are hindering them know to the public and in a way that the average person can understand. Otherwise, BULL

[biskitdaddy]

04:59 PM on 10/19/2011

Message to cornbread cain: put the crack pipe down. You put your money in a bank and they loan it out at 5-6% interest and you're lucky to get a 1% return.

[miketothad]

04:48 PM on 10/19/2011

The GOP won't have a leg to stand on by X-Mas.

[RBet]

04:30 PM on 10/19/2011

Odd. Banks are businesses, ergo they want to make money. And big banks want to make money for their stockholders. I've never seen a big bank hold an investors meeting about how to help people. Herman Cain appears to live in a different world than I do.

[Jeff Szyperski]

03:48 AM on 10/20/2011

Then why aren't all private industries being demonized? A hotel chain wants to make a profit, a hardware store wants to make a profit, a hot dog stand wants to make a profit, a telecom wants to make a profit. One could just as easily argue that ,"No, they don't want to help people. They just want to make money for the investors in that enterprise, whomever they may be" Why does a company "care" for a customer? It is because that company believes that, in one way or another, that gesture of goodwill will ultimately result in more future business, THUS helping the stockholders more. If you get down to brass tax, that is how all companies work. The bank is no exception there.

That being said, the fact that they look out for shareholders doesn't make them EVIL. In most circumstances, if a company wants to be profitable in the long term, they WILL have a more human, honest relationship with the customer, and provide their good or service well. Sure, some don't, but they usually don't last. Because in a free market, who wants to stay with a "mean" bank, when other more "helpful" ones are out there? The individual would decide, without the interference imposed upon the banks by Washington.

[RBet]

06:55 PM on 10/20/2011

Some industries are more leech-like than others.

[Jeff Szyperski]

11:36 AM on 10/24/2011

My father is also CEO of a small bank, and they regularly contribute lots of money to the local Boys and Girls Club, the local hospital, the local shelters, and the March of Dimes. Sure, some companies can not give ANYTHING back, but at a certain point, don't they have the right to decide that for themselves?

[Jeffrey Ely]

04:27 PM on 10/19/2011

The problem is reg-a-lations - reminds me of nukular!