It’s the Banks, Stupid

You’ve probably been reading all the news stories about how we’ve turned the corner, the economy is rising, everything’s going to be just great. Don’t believe it: Buried in the small print, it’s the same old same old, business as usual on Wall Street.

A Treasury report Tuesday says less than 10 percent of borrowers eligible for loan restructing under Obama’s program to stave off foreclosure have got any help. The big banks just won’t budge:

Under the program, J.P. Morgan Chase has modified 20 percent, or 79,304, of its borrowers who have missed at least two payments. Saxon Mortgage Services, which is owned by Morgan Stanley, has modified 25 percent of its eligible delinquent borrowers. Citigroup has modified 15 percent, or 27,571, of its delinquent borrowers.

But other large banks are lagging. Bank of America has modified 4 percent, or 27,985, of its delinquent borrowers. Wells Fargo has modified 6 percent, or 20,219.

I have a friend who lives in Easton, Maryland. He is behind on his house payments because he borrowed on the mortgage to start a small business. The business went deep six, and he now faces foreclosure on the house because he can’t meet the payments. Wells Fargo, unfortunately, holds the mortgage. So what happens? One representative from the bank tells him the house will be listed for auction this month. Another official–I hate to call these bums officials, but better stick to the etiquette–tells him not to worry, they’ll work something out. Result? He’s scared and confused, and doesn’t know where to turn for help. That’s because there is no help.

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