Fueling the Occupy Movement

By now everyone has heard about the Occupy movement sweeping the country with their radical activities and their disorganized antics.  From what I can see, this group is made up of a mix of people from all walks of life.  The most notable of the members are those that are pushing for socialism, fueled by the democratic party.  This small sect is demanding that government take care of them, cradle to grave, by taking money from the rich and giving to those who refuse to do their part - thereby balancing out the classes.  The people in this group have no idea what their message is or what their goals are.  They just shout their mantra about punishing the rich.

There is another group within this movement who we do not hear much about. These are the people who have worked hard their entire lives and are now being victimized by government and the banking industry.  Unfortunately, this group will not be successful within the Occupy movement because they have been overshadowed by the socialist radicals who have pirated the organization.  It is this group though, which has a true gripe against the "system" as the banking industry has transitioned over the past 20 years from a friend of the community, into a much darker, more punitive industry; not unlike the IRS.  That is, they will gladly take your money, but do not expect anything more!

There was a time when your neighborhood bank would work with you through hard times, assisting with financial planning, loan repayment and so forth.  Those days are gone.  Over the past several years, the federal government has provided the banking industry several tools to assist homeowners with mortgage modifications.  The federal reserve has allowed banks to borrow money for free, and recently announced that they will continue to allow banks to borrow money for free.  That means the interest and fees banks charge you for the loan will essentially flow to their bottom line.  Now, try to modify your mortgage.

In my case, a business sale gone bad (because of government restrictions) had resulted in me assuming a significant amount of debt. The government's role in this was that I could not legally require proof of citizenship or residency from the buyers. When the buyers skipped out on the business and the lease, my attorney informed me that I could not take action against the buyers because they did not have legal authority to be in the US. The debt is now legally mine.  As a responsible, albeit, pissed off American, I have been paying the debt and will continue to pay the debt until I die.

The banks role in this mess is when they refinance my home, which was almost paid off, at a rate of 7.75%.  They did not require any proof of income, tax forms, nothing, just a signature. In hindsight, at the time the house was worth far more than the loan so the bank had little risk. While I question the banks ethics in the process now, I accept responsibility for signing the paperwork back then.

Today, times are tougher, bills are higher and values lower.  At the end of the month the bills just barely get paid and debts are not being reduced.  The high mortgage payment is what seems to be causing the problem, so I assume, if I can modify the mortgage, I can work toward reducing my overall debt.  Now I should add, I do not live extravagantly - basic cell phone, no home phone, no air conditioning, 1000 sf home, 1 car (paid off), basic cable/internet ($24/mo. combined). 

So I call my mortgage company, which is also my bank and request to apply for the home loan modification.  They ask me if I would consider selling my home?  I explain that this has been my home for 20 years and I do not want to sell my home.  They ran some numbers and told me I cannot afford my home even under the home loan modification program, that my only choice would be to sell my home.  I told them that their answer was not acceptable - I know what I can and cannot afford.  I have not missed a payment, though I have been a week or two late, but have never missed a payment.  Then I was told that my only option was to sell my home or eventually face foreclosure - again, never missed a payment and now they are threatening to take my home. 

This is the banking industry hard at work for it's customers.  After all, why would they want to modify a loan which they are collecting almost 8% on? My question is, with the millions of foreclosed homes in their inventory, why would they not be willing to take a little less each month if it will keep on less home from being foreclosed? If they truly care about their customers, why would they be so willing to put a person out of a home they have lived in for 20 years? If their Actuaries can tell me today that I cannot afford my home at my current income, why couldn't they tell me this 5 years ago when I refinanced and was making 1/3 of the salary I am making today?  Does the banking industry not have a fiduciary responsibility to protect their customers financial interest?

There was a time when the banking industry assisted their customers reach their financial goals.  There were personal bankers who spoke to the customers with $10 in their accounts the same way they spoke to their customers with $10,000 in their accounts.  Over the years this has changed and the banking industry has become not only a collector of debt, but a significant creator of debt.  Where they at one time would provide cashiers checks for free to their customers, they now charge $5 or more.  At one time they would use discretion when charging overdraft charges.  I actually was charged $35 for overdrawing my account by 35 cents. 

If banks cared about their customers, why don't they provide classes to teach people how to create a household budget?   Why don't they provide free Quicken software?  The provide free Turbotax software, but that is only so their customers will direct deposit their refund checks into their bank.  If they cared about their customers, why don't banks take more of an interest in helping their customers out of trouble during hard times rather than punishing them? 

I find it sadly amusing how banks treat their customers no different than the government treats the American taxpayer.  Interestingly, the government does not treat the banks the same as they treat the American taxpayer.  In fact, the bank I have been dealing with would not be in business today if the government had not provided them a significant bailout a couple years ago.  Think about it...the bank went to the government and said, "I cannot make my payments, can you give me money so I do not lose everything?"  The government said, "sure, how much?"  This past weekend, I went to the bank and said, "I can make my payments, but it is becoming increasingly difficult, can you work with me to make it easier?"  The bank said, "Take a hike!"

I would like to say that it was my tax money that bailed them out, but in reality because of my losses I have not paid much in taxes for the past few years, but there are many, many taxpayers who had paid in to the government so Bank of America can be around to put more hard working people out of their homes for another day.