She had seen the advertisements for the new government program offering relief. She had heard President Obama promise that help was on the way for homeowners like her, people who had lost jobs and could no longer make their mortgage payments.(H/t to CJR)
But when Eileen Ulery called her mortgage company — Countrywide, now part of Bank of America — the bank did not offer to alter her mortgage. Rather, the bank tried to sell her a new loan with a slightly lower monthly payment while asking her to pay $13,000 toward the principal and a fresh $5,000 in fees.
Her problem was that she did not yet present a big enough problem to merit aid.
[snip]
A Treasury spokeswoman, Jenni Engebretsen, confirmed that homeowners like Ms. Ulery — current on their mortgages yet grappling with a hardship like unemployment — were eligible for loan modifications under the program. She said mortgage servicers had offered to modify more than 100,000 loans since the department announced the program.
[snip]
A spokesman for Bank of America Home Loans, Rick Simon, confirmed that the bank offered Ms. Ulery refinancing and not loan modification. The bank is now focusing on modifications only for those borrowers “who are already in severe threat of foreclosure,” he said.
[snip]
“I don’t think the government gets it,” [Ulery] said. “These are the same people you couldn’t trust before.”
Wednesday, June 03, 2009
The most popular business story on today's NYT
...has clearly been selected for how infuriating it is.
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1 comment:
That's moral hazard at work. Essentially the banks need to plunder anyone with any money to return to health, while simultaneously helping those that cannot pay.
Seems a bit like modern day Robin Hood it seems. Steal from the middle class to help the poor(modified loans) and repay the wealthy(bonds).
It seems there is an undeclared war happening and one side doesn't realize it.
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