Siding with the big banks

Updated: Saturday, August 3 2013, 12:38 AM EDT
Siding with the big banks story image
KALAMAZOO, Mich. (NEWSCHANNEL 3) - The Michigan House and Senate will soon be acting on new legislation to reduce the time people whose homes are in foreclosure have to find ways to hang onto their property.

Tonight, in Tom's Corner, Tom Van Howe says if the legislation passes, Michigan will be the only state in which the government stands in lock step with big banks against failing homeowners.

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Let's see, here.

Point one: major financial institutions in this country routinely told people making $15 dollars an hour that they could, yes indeed, qualify to buy a $200-thousand dollar house. And they handed out mortgages in ungodly numbers to people who simply couldn't afford what they were buying.

After all, the banks—the very people who know the ins and outs of these things—said they could pull it off.

And why would someone who's just been told—by the ultimate authority--that he, too, can take part in the American dream not believe it?

Point number two: I'm not talking about the smaller, independent credit unions and community banks who did the best they could to dispense sound economic advice.

I'm talking about gigantic private lending companies—the Fannie Maes and Freddie Macs, and the Banks of America, Wells Fargo, Chase, Citibank, and so on—who told people the sky was the limit. Who wrote bad mortgages by the millions and then bundled them up and sold them as securities.

They were bad securities.

And the banks knew it.

They actually started buying insurance to protect themselves from their own bad banking practices.

How do we know they knew it? Over the past year, 10 major banks paid out nearly $9 billion to settle complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes. The Bank of America paid out nearly 12-billion dollars—all by itself—in an effort to make up for unethical behavior.

They admitted to forging signatures on foreclosure documents, mishandling paperwork, and skipped who knows how many required steps in a concerted effort to get people they loaned money to out of their homes.

I think "unbridled greed" would be an okay way to describe their behavior.

Even though the so called "housing crisis" is settling down, in Michigan—with manufacturing jobs in ashes—there were still 70,000 foreclosures between March of last year and March of this year.

And as those on the front lines will tell you: you can't imagine the heartache and sense of failure caused by losing a home. This is tough stuff.

But as far as Michigan Republican Senator Darwin L. Booher, from Evart, is concerned, banks are taking it on the chin. So he's the guy who filed the bills to make it harder for people to hang on to their property.

Right now people have six months to find a way out of foreclosure—which in this state is triggered by nothing more than a notice in a newspaper.

Senator Booher wants to cut that time period to a paltry 60 days. He says six months only gives people more time to trash their homes.

Give me a break. Two months is more than enough time to trash a home if hopeless people are so inclined to do that. But its  usually not enough time for people to make things right.

The Traverse City Record-Eagle says Booher's proposal is a solution without a problem. But would likely be a big bonus for banks.

And it does make you wonder whether Senator Booher's forty years in the banking business, with Citizens Bank and Bank One, before getting into politics, has anything  to do with his desire to crush whatever hope and dignity people have left.

Maybe he's confused about whether he's a lobbyist or a lawmaker. Can anyone say conflict of interest?

In any case, this is bad and unnecessary law. And one can only hope our Republican legislature can see it for what it is, cast  votes from their  hearts instead of down the party line, and say "no." A big, fat, resounding "no."

I'm not holding my breath.

In this corner, I'm Tom Van Howe.Siding with the big banks
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The Labor Department says the four-week average of applications, a less volatile number, rose 4,750 to 316,750. The four-week average fell two weeks ago to its lowest level since October 2007, two months before the recession began.

Applications can be volatile around Easter, because many school systems temporarily lay off bus drivers, cafeteria workers and other employees during spring break. Some of those workers file for unemployment benefits.

Despite the volatility, applications have generally been declining in recent months, a hopeful sign for the job market. Three weeks ago, applications fell to 301,000, the lowest level in nearly seven years.

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The Commerce Department says that orders for durable goods increased 2.6 percent in March following a 2.1 percent rise in February. Those back-to-back gains followed two big declines in December and January which had raised concerns about possible weakness in manufacturing.

Demand for core capital goods, considered a good guide for business investment plans, rose 2.2 percent in March after a 1.1 percent drop in February. It was the best showing since a 3 percent rise in November.

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A Japan-U.S. deal is seen as crucial for talks among the other 10 countries participating in the U.S.-led initiative to move ahead.

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The Peoria, Ill., company says it now expects 2014 earnings of $6.10 per share excluding restructuring costs. That's up from its previous forecast for $5.85 per share.

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