The Economic Numbers Confirm It
As I have stated for months, banks are not doing enough to help distressed homeowners and it is driving up the foreclosure rate in America to record highs.
Government data released yesterday, affirms what I have been writing for months regarding the aforementioned matter, as it has been revealed this week, via national figures, only 9% of eligible homeowners have been helped by the billions in bank bailouts, funded by U.S. taxpayer money, which is a disgrace.
Banks are holding on to the money, investing it in other endeavors and not helping the American people, whose homes are at stake. Hence the higher foreclosure rates.
Had the banks held up their end of the bargain, in accepting enormous sums of taxpayer money and actually used it for what the funds where earmarked for, the economy would have experienced a better quarter.
As I have also stated for months, the government cannot play nice with a lot of these banks, as they do not understand that sort of language and conduct, interpreting it as weakness.
We see the end result of that this week, as the numbers confirm, banks have been audaciously hording taxpayer money. It is the equivalent of one's car breaking down, sending an assistant to buy a container of gas, they return with the gas purchased with your money and state, "I'm only going to give you 9% of the gas in this full container, bought with your money. It really won't get you very far, but that's your problem."
Side Bar: If I were head of state anywhere in this world and had to deal with an unruly banking sector, when I called them together in the aforementioned meeting Obama convened a few months ago, I would have let them talk their butts off then simply stated, "Thank you for coming here today. Let's cut to the chase. If I don't see a massive drop in fraud, a sizeable reduction in unjustifiable bonuses and more legitimate consumer loan modifications of a fair and sustainable nature, I'm going to start locking your employees up and I cannot guarantee it won't reach your personal executive office."
Then, I would offer them some coffee, as business people like that after they've been given soul shaking news. It aids in calming their nerves and temporarily helps them not to think about the human lion that's about to figuratively maul them, if they run amok at the taxpayers' expense (grin).
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U.S. Effort Aids Only 9% of Eligible Homeowners
Published: August 4, 2009 - WASHINGTON — The Treasury Department said on Tuesday that only a small number of homeowners — 235,247, or 9 percent of those eligible — had been helped by the latest government program created to modify home loans and prevent foreclosures.
A report released by Treasury officials identified lenders who had made slow progress in offering more affordable mortgages, naming Bank of America and Wells Fargo as among those failing to reach large numbers of eligible borrowers.
While 15 percent of eligible homeowners have been offered help through the mortgage modification program, the low rate of actual mortgage reductions has frustrated administration officials.
Michael S. Barr, the assistant secretary for financial institutions, said in a news conference that there were “significant variations” in performance and that some institutions had made “an infinitesimally small amount” of progress.
“I think it’s safe to say we’re disappointed in the performance of some of the servicers,” Mr. Barr said. “We expect them to do more.”
The release of data showing the progress of individual institutions is part of a Treasury effort to push banks to modify loans faster.
Under the $75 billion program, homeowners whose monthly mortgage payments are more than 31 percent of their gross income are eligible for modified loans, with interest rates as low as 2 percent.
Bank of America has modified only 4 percent of the eligible mortgages, and Wells Fargo has modified 6 percent.
Citimortgage, a unit of Citigroup, fared better at 15 percent, while JPMorgan Chase was among the most successful, modifying loans for 20 percent of eligible borrowers. All four institutions received federal bailout money...
Stocks Slide on Worse-Than-Expected Jobs Report
On Wednesday the focus was on a report showing that the number of private-sector jobs fell by 371,000 in July, according to payroll company Automatic Data Processing and Macroeconomic Advisers. That was slightly worse than analysts were expecting and indicated that employers continue to slash jobs, though at a lower rate than earlier this year.
The data "suggest the unemployment rate continues to rocket and household cash flows continue to fall. Not a great outlook for spending, we'd say," said Ian Shepherdson, an economist for High Frequency Economics.
