Bankophobia: Don’t Let the Banks Give You a Bad Deal

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It seems I’ve developed a bad case of bankophobia lately. Clients are screaming about their miserable experiences trying to refi. Experts like William K. Black on Bill Moyer’s Journal, a formner regulator, reveal the Big Bankers are actually fraudsters and they know it. Almost everything I’m reading about the bailout of these pernicius institutions is making steam come out my ears.

Really, I  am a naturally optimistic person.  I rarely think ill of anyone without, of course, proof positive. I do exempt  Bernie Madoff, naturally; he’s pretty clearly nothing but a thief. Then, there’s Ken Lewis, CEO  of Bank of America–he’s a regular snake. Not only does he grab all the dough he can get from the tax payers, but he turns around, giving billions in bonuses to his cronies all the while trying to pull the rug out from regular working Americans who might try to level the playing fied by joining a union. That really steams me! These–hogs is the only term I can think for them–can never have enough for themselves, but they put up every barrier they can think of to prevent others from even having a steady income or a potential retirement. Maybe we should bring back the guillotine…Just kidding.  Then, there’s John Thain, lately CEO of Merrill Lynch, who gave out billions to his cronies with the connivance of Ken Lewis just before B of A took over his company.

This whole affair is sickening. The little that the present administration is doing for actual citizens includes The Making Home Affordable Plan offering 105% refis. These loans are now available and even some in the Southland could take advantage of the now amazingly low rates to do a refi. Don’t bet on it because these very same banks who received bailout money apparently don’t want you to get any advantage whatsoever. Sounds to be like Ken Lewisism gone amok. Here’s just a few examples of how hard they are making it.

First, many banks are applying super-tough appraisal conditions so homes don’t qualify.” Nope–we see your home as worth $310,000, not $312,000 so you don’y qualify. Next.”   Then, there’s the private mortgage insurance premium sticking point. Got PMI? Lenders like Wells Fargo and Countrywide won’t touch your refi. Together, they probably have half the loans in the country. Maybe later…they say.

If you have PMI with MGIC and it’s one of the biggest, if not the biggest PMI company, then you must refi with your current lender. That’s MGIC’s rule, not the program’s. Don’t like your current lender? Tough tiddlywinks to you. MGIC owns you.

Loan fees–be sure to get a GFE–good faith estimate–in writing because some banks are making hay while the sun shines–what else is new?-and charging exorbitant fees. This is a federal law, so if  you can’t or don’t get one right away, walk right on by no matter how good the deal seems. Because–it isn’t. This is one of the oldest tricks in the lending business: promise them everything, but never put it in writing.

Here’s another sticky wicket: HELOCs–equity lines of credit. Either the bank issuing the HELOC refuses to subordinate, though it’s already subordinate, or the new bank says, “Oops, with the new loan combined LTV [loan to value] is too high. Can’t do it.” This is a variation on the appraisal gambit.

Then, there’s credit. You don’t have a 740 FICO? You’re out. And, you better have a job because you will have to qualify and you will have to reveal your entire financial picture. These last are not so bad to mymind. Now, at least we’re returning to sanity and trying to lend only to qualified borrowers. Trouble is Obama’s program is supposed to be helping”potentially troubled”  homeowners stay out of trouble.

Last but not least is the most infuriating and frustrating aspect of the whole process…Actually, this one has two intertwined parts. The first is the incredible voice maze you must navigate to talk to your bank. The unconscionable hold times we are all subject to these days. And, then, after waiting 45 minutes on hold, you get to speak to Joe Moron who tells you all kinds of false and crack-brain stuff–“You must be behind in your mortgage to do a refi”–Huh? “We’ve never heard of Obama’s plan. Making Home Affordable Plan? Never heard of it? We live on Planet Pluto.”  Sometimes you get to chat with a dingbat in the Phillippines or maybe Bangalore–always nice, always out to lunch.

If all else fails–somehow–you get disconnected.

These are a few of the reasons I’ve developed a bad case of bankophobia.

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Why We Need Stronger Unions

The Employee Free Choice Act is again up for a vote. This bill passed the House last spring and was tabled in the Senate. Here’s why I think we should all be supporting this bill.

We need strong trade unions. It’s that simple. Before the passage of the National Labor Relations [Wagner] Act in 1935, workers were at the mercy of employers who, if left unchecked, will do anything to strengthen their own position and profits at the expense of employees. That was true then and it’s true today.

Then excessive employer power  had disastrous consequences for the nation as a whole,  resulting in economic polarization, and the formation of a ruling aristocracy. Today, with many of the hard-won employee protections whittled away by 30 years of  anti-union ideology, we see the very same imbalance as well as a much-remarked-upon formation of a ruling aristocracy.  The great dichotomy of income we have now is nothing new:  it’s due mainly to letting our laws, regulatory agencies and vigilance over the rich and powerful lapse.

Labor unions provide a more level playing field. But, the rich and well-connected will always have the edge.

Unions are vital to supporting the strength of those who work for a living. Today, that includes not just the stereotypical trucker, steel worker or auto assembly line worker, but teachers, including college professors, nurses, doctors, state employees, retail workers–indeed, anyone who can be exploited by those they work for. As we have seen in this country, when we had no unions, we had the same conditions we so decry today in other countries–child labor, indentured servitude, no overtime, unsafe working conditions–you name it. Unions helped remove these egregious conditions.

We no longer see little children covered in soot  hauling coal buckets out of deep pits. But, employers find a way. We do still have pressure to relax oversight in coal mines or to defund regulatory agencies leading to the horrible accidents we’ve witnessed in the last few years, such as the West Virginia Sago disaster in 2006. Employers are always contrite when their cost-cutting actions result in death or mutilation of the workers, especially so  when the whole country knows about their behavior as happened during the saga of Sago.

In the last few decades as unions have been progressively defanged by a right-turning government as anti-union ideologies have prevailed. Many Americans, in fact, during this period have become convinced through relentless right-wing propaganda that that unions are bad. Bad for whom?

As an example of this knee-jerk anti-unionism, I couldn’t help but notice that during the Congressional discussion of the automakers’ bailout, many of our lawmakers seemed delighted to focus especially on the high pay and benefits enjoyed by the autoworkers as a result of their union membership.   The figure of $75 per hour was initially bandied about, said to be the sum total of wages and benefits. This soon was discovered to be false with $45 more like it.

With CEOs like John Thain, late of Merrill Lynch, redecorating his office for $1 million shareholder dollars and bestowing $4 billion in bonuses on those who tanked the company, with these very automaker CEOs arriving separately by private jet to petition for taxpayer dollars,  AIG getting $180 billion in taxpayer bailout and immediately passing that out as $164 million to its executives, how can our law makers   zero in on $45/hour pay for workers? Isn’t that what we would like as many of us as possible to make? Do they want to condemn their constituents to minimum wage jobs which I would remind them, as they probably haven’t bothered to figure it out, amounts to $6.75/hour in California. If someone gets a full-time job at this pay and we all know that most companies, including our state and federal governments, make every effort to hire just below full-time so they don’t have to pay benefits of any kind, the weekly pay is $270 per week. Who can live on that? Unions help to raise the standard of living for all of us.

We the people and our lawmakers should be making every effort to encourage unions and union organizers. Let’s put a stop to the insidious practice of out-sourcing what used to be good City jobs to private contractors who pay menial wages. Let’s stop the practice of hiring part-time even in our colleges and universities which you would think would be models of good employers. But no, there as everywhere, cost-cutting is the norm. And, the first place cut is always the vulnerable worker.

Forcing millions to work for peanuts, to scramble for crumbs, to balance precariously on the edge of financial ruin is hardly a good way to run a country. Yet, that’s what we have progressivley  done as a country during at least the last 30 years.  Employees need a way to negotiate better conditions and pay with their employers, many of whom as we have seen on Wall Street, have no compunctions about raking in everything for themselves, leaving nothing for anyone else. Protecting workers through unionism will at least mitigate this rampant greed.

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B of A Strikes Again! Outrageous

Wow, as ranted on in a previous post, these fatcats really don’t get it…

How much has B of A gotten from us the taxpayers at this point–$25 billion and then another $25 billion recently to help clean up the Merrill Lynch mess? Check out a previous post on that little detail. You remember Merrill CEO John Thain tanked his  company, sold it to B of A, ran up another $15 billion in 4th quarter losses and then, fired [laid off–what do you say when a big time CEO is jettisoned?]  by B of  A, he first made sure to dole out $4 billion in bonuses to his loyal cohorts. Can’t get too much more clueless or, more likely,  arrogant than that…

But wait, maybe it is possible…Three days after receiving  the first $25 billion from us, the unwashed masses, the inarticulate  taxpayers, the bigwigs at  B of A, along with some fatcats from AIG [remember them?] hosted a conference call with some conservative activists and business representatives. The purpose? Why to make sure that labor’s most cherished legislation would go down in flames, The Employee Free Choice Act, which makes it easier to sign up union members.

Much bushwa has been spewed about unions, mainly, I would guess, from people who don’t need one, who are already rich. The simple fact is that as union membership has declined precipitously in this country, so, too, has the middle class’s slice of the pie. We’ve all heard by now that during Bush’s years the top 400 richest  Americans paid less than 17% of their incomes in taxes while doubling their median incomes to over $2.4 million.  At the same time, middle class income has declined by a median of $2000. Without unions it’s going to go down even further because without unions workers do not stand a chance against well-heeled employers.

Most taxpayers are middle-class or poor and many of these would benefit from unions. So what nerve of  B of A and AIG, beneficiaries of the collective largesse of the American taxpayer, to urge their listeners to send political contributions against the passage of these bill as well as to “vulnerable” Republican campaign war chests. Talk about biting the hand that feeds you

Companies generally have a right to urge others to vote however they want. But, these companies are no longer private. They now belong in large part to the taxpayer. At the very least, their leaders had better shut up about which political party to vote for… How did it happen that Republicans became “vulnerable”, for instance? Even better, these short-sighted, rapacious money-grubbers should start thinking what they can do for the country that just saved their companies’ collective butts  rather than what they can do for themselves…

Anyway, I ‘m mad and I’m not going to take this anymore. B of A needs to straighten up and behave like a good corporate citizen.

B of A–bah, ptui!    images4

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