When the lights are out politicians often attach to bills various pet projects that would stand little chance of approval if scrutinized in the light of day. With cameras rolling, the accidental statesman, Illinois Senator Roland Burris, swore that everything was above board, only to later admit questionable fundraising attempts on behalf of that state's disgraced governor when no cameras were in sight. And before armies of reporters, Bank of America chief Ken Lewis joined other banking executives in voicing support for the Obama Administration's plan to stem the steady rise in home foreclosures. But when reporters went home, the beneficiary of a massive $45 billion dollar taxpayer bailout has resorted to business as usual.
Here's an apt illustration: In late February a lawyer representing a distressed Nashville homeowner named Molly Secours received a call from her mortgage lender, Bank of America-subsidiary First Franklin, notifying them that a planned foreclosure on Secours' home had been called off. You may recall Molly Secours. She is a Nashville based filmmaker responsible for a well-received documentary titled "The Faces of TennCare: Putting a Human Face on Tennessee's Health Care Failure", which touches on the double calamity that impacts households hit by health and financial crises and the concomitant effect on local communities. A year and a half ago Secours was diagnosed with uterine cancer. Although she was in no position to work, with the generosity of friends and strangers she managed to cobble together monthly mortgage payments on her modest home. It was toward the end of her treatment that Secours began inching behind on expenses.
She tried contacting the lender to negotiate for more time, but First Franklin Loan Services' reputation for predation was matched only by a reputation for non-communicativeness and for hiding in the shadows. http://themortgageinsider.net/mortgage-servicing/first-franklin-loan-services-review/
After dozens of emails, telephone calls, hanging on the line and hang ups, Secours says she finally reached a human being. But she was not able to convince the B of A owned lender to refinance her loan at a lower rate.
So she was relieved when she got the call from her lawyer, which came in the midst of heightened media attention to the plight of distressed homeowners around the country, who were either upended by the general economic tsunami or were among the millions of non-traditional borrowers who inadvertently helped spark it.
Americans were hammering Treasury officials about the double standards of rescuing banks, giant insurance firms and auto companies, while the poor and marginally-middle class were left to sink or swim and clinging precariously to what's let of America's ragged safety nets. Many were already deep underwater. 700,000 foreclosed homes and businesses were on the market from Maine to New Mexico to California.In this atmosphere President Obama announced a program to help 9 million people refinance their mortgages and stay in their homes. Ken Lewis and other titans of the banking community nodded their approval. Many lenders did indeed boost foreclosure-prevention efforts, but not nearly enough for many homeowners, who increasingly have fallen into delinquency. Molly Secours' story was reported by a Nashville television station, local newspapers and by the on-line Wall Street Journal. Bank of America also seemed to have taken notice and put the brakes on the impending foreclosure. But just when she thought it was safe to hope, Molly Secours received a letter on March 27th, notifying her that she had less than 30 days to settle with the bank or face being tossed out of her home. In a subsequent appeal to President Obama, Secours wrote:
"I was told to wait to hear from them. And so, I did. Today was the first day I received any communication--a notice of impending foreclosure. No offer to refinance or to modify. Just 30 days to respond to pay the loan in full--and with lawyers' fees attached."
That was the same weekend that banking officials met with President Obama at the White House. At the close of that meeting the executives, led by B of A's Ken Lewis, stood before a dozen or more journalists to talk about the outcome. His message was brief: There were positive signs that the mortgage refinance business was improving and that they (the banks) would endeavor to slow the rise in home foreclosures.
But across the country millions of middle and working class people are shouting at the top of their lungs that promises from bailed out financial institutions are not translating into real help. The bailout, at least in part, was intended to incentivize banks to help distressed homeowners like Molly Secours. Secours says she can pay the mortgage and is now gainfully employed. But the interest on her mortgage is nearly 10 percent, while the average rate on 30-year fixed-rate mortgages have dropped to 4.78 percent, a rate that Secours and millions of others could well afford if allowed to refinance. That bears repeating. Thirty year fixed interest rates have dropped to as low as 4.78. So why are capable homeowners like Secours still being asked to pay exorbitant interest, especailly in light of the $45 billion dollars Bank of America has received thus far; the $3.6 billion in bonuses B of A extended surreptitiously to Merrill Lynch executives just before their merger; and the $5.2 billion B of A received from A.I.G, which A.I.G took from its own bag of bailout money?
Now Ken Lewis says it is premature to state whether B of A plans to return government funds it received under TARP, because, he says, banks are still undergoing government-administered "stress tests". But many would argue that there could be no worse "stress tests" than the madness of the American economy, which has been exacebated by arbitrary interest rate determinations piled on top of hard working, but down-on-their-luck-home owners.
If Bank of America presdient Ken Lewis wants a tangible example of a stress test, it could very well result from the email messages pouring into his in-box: firstname.lastname@example.org
or from the calls to Bank of America Corporate headquarters, 704-386-5681,
on behalf of Molly Secours and millions of other American consumers, taxpayers and desperate homeowners, who are fed up with double standards for banks too big to fail and our failure to help people in our nation who are too small to protect.