Bank bailout does little for those who need help most

By Tim O'Callaghan

Tue, May 19, 2009 (11:13 a.m.)

lasvegassun.com

The big bank bailout does nothing for the ones who need it most.

How does that old saying go? “No good deed goes unpunished.” Perhaps more fitting for today’s mortgage crisis it should say, “No good mortgage payment history will get aid.” The more people I talk to about their mortgages, the more clear it becomes that people were confused about the bank bailout. It was never meant to assist Americans having trouble making their mortgage payments. The idea of saving the big banks was more about keeping them solvent and keeping depositors from making a run on the banks. In the minds of many Americans, it was also intended to stimulate the availability of money for banks to make loans.

It appears many banks that received the money from the government by way of John Q. Public — that would be you and I and heck, who knows how many future generations — won’t even talk to debtors until they fall inescapably behind on their mortgage payments.

I’m not surprised by the number of people telling me their balloon payment hasn’t hit or their adjustable rate hasn’t gone up yet, but will be coming in the next year. Most are unable to refinance because they are too far under water to do so. In other words, the debt on their home is greater than its value. As I mentioned in a previous column, many of these questionable mortgages were still being sold in fourth quarter of 2007 and first quarter of 2008.

One couple I know can’t refinance or get a loan, because one has been laid off and the other is expecting to be laid off soon. They are representative of our state’s double-digit unemployment rate — victims of a bad economy with very little hope in the future. This would be a good time to explore services needed in this time of distress and fill the need with a small business.

More needs to be done to help protect homeowners in bad mortgages who make their payments on time but are struggling to do so. There may be hope on the horizon for some through changes in the federal Making Home Affordable program. The idea is to give lenders incentives to modify loans to homeowners who are upside-down or under water. It’s estimated that 21 percent of homes in the United States were upside-down, loan to value, at the end of March this year.

While on the subject, I suggest reading these helpful tips on avoiding foreclosure rescue scams from Making Home Affordable.

• There is never a fee to get assistance or information about Making Home Affordable from your lender or a HUD-approved housing counselor.

• Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay — walk away!

• Beware of anyone who says he can “save” your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

• Never submit your mortgage payments to anyone other than your mortgage company without their approval.

For more information, go to makinghomeaffordable.gov.

Gas prices

On another economic front, have you noticed the price of gas is making its annual summer price hike up the charts? According to the Energy Information Administration, the average price per gallon of regular unleaded has jumped from $2.138 on March 31 to $2.34 on May 18. I have no predictions of how high it might go over the summer, but my guess is it may remain stable, because so many families are staying closer to home this year, keeping overall consumption down.

Reflective curb addresses

Last week I received an orange flier on my garage door soliciting $20 to have a reflective address number painted on the curb in front of my house.

This isn’t the first time this has happened, and just as before I threw it in the garbage. However, many years ago I did pay to have numbers painted on the curb and a couple of years after that, another group came along and painted over it, covering up the black numbers when I said it didn’t need repainting. Didn’t really matter, because we have large numbers on the front of our house, which are required by CC&Rs.

What is different this time around is not only have they painted addresses on the curbs, but they have painted the street names on the corner curbs, too. Personally, I think the painted street names are ugly as can be in the daylight, but at night they are much better than the street signs.

Heck, for $20 you can paint your own and those of all your neighbors, too.