A friend of mine has been in an epic struggle with his mortgage processor and his experience tells us a lot about the state of IT. It started in October of last year when my friend met with his loan processor (Bank of America) to inquire about a loan modification. The loan is actually owned by Freddie Mac. He turned-in all the required paperwork and followed up with an income statement when requested two weeks later. The meeting took many hours mainly because all of the original documents were imaged and put into his electronic file. In late December he was told that his modification was completed, given a new mortgage payment and told to wait on the paperwork.
Nothing happened.
Fast forward to September and guess what? He has had to restart the process three times now. Exactly why the process broke no one can determine. So three times he sent in his tax returns, bank information, income information and forms totaling over 100 pages only to have them disappear, again and again. Each time the process was a little different but the end result was the same — nothing. Process improvement at work yet no change in outcome.
What’s wrong with this picture? I see two possibilities: 1) a conspiracy theory in which nobody actually gets loan modifications, and: 2) that the IT systems are broken. At this point normally I would illustrate a series of events that may or not involve Steve Jobs, reactions to new federal regulations, cost accounting, breaking federal laws, or perhaps even Bill Gates.
But for something entirely different — I vote for IT as the culprit. My guess is they just do not have the IT systems in place to process the applications and then modify the loans while following federal law. B of A may claim to have such systems, they may even think they have such systems, but my friend’s experience involved lots of banker eye-rolling but nobody saying “Well this has never happened before.”
It happens all the time.
And I’d say it sucks to be their customer.
These types of issues have plagued business and it’s customers since IT was an infant in punch cards. It might be a B of A issue, but more likely it is an issue between B of A and Freddie Mac, with Freddie probably screwing-up yet not really caring enough to fix anything.
The reason this has risen to the top of the pile right now is because I see it as a basic issue at almost every company I visit. Companies either have it – IT that is – or they don’t. Some outfits will make it based on duct tape and bailing wired systems. But in the end — often literally the end — this has to be one of the top reasons for failure of any business.
Hanlon’s Razor: Never attribute to malice that which is adequately explained by stupidity.
Lost paper work three time? At some point though malice will be involved, as you can only be incompetent for so long.
Hanlon didn’t know our modern bankers. In my opinion it is far more likely that scenario 1 is what’s happening. We *are* talking about one of the banks that, along with Henry Paulson, held a gun to the head of Congress and threatened to blow up the economy if the taxpayers didn’t fork over $787 billion to bail them out, and this after our biggest banks causes the problems in the first place by betting CDOs to the moon. And what did they do with the money when they got it? They paid themselves lavish bonuses while the middle class got the finger from everyone involved.
You guys are far too trusting. Bob knows lots of tech people. He very obviously doesn’t know the likes of vampire squid bankers.
Indeed. I happen to be going through a house purchase right now due to a new job/relocation. The bank is dragging their feet and delaying the loan as long as possible! I have great credit and over 33% to put as a down payment, yet the bank wants to go over my financials over and over again, questioning every deposit into my account for the last 90 days… “what was the source this $246.22 deposit sir?”
In a nutshell: They’re soaking up “stimulus money” and just sitting on it.
Meanwhile my new employer will be putting us (family of four) in a hotel for at least a month as my kids have to start school next week, but the house won’t close now for who knows how long because of further bank delays.
I too have been trying for a loan modification. Please do NOT give BoA the IT “excuse.” After eight months of trying to get my documentation to the right person, that means sending all of it to three different people at three different places, I was finally told that my materials would now go to the underwriters to see if I qualified. I was then told that it might take as long as 8 more months before they could tell me. In 2001, when we applied for the mortgage, we heard back in days that we were qualified.
All this delay, confuse and evade is not related to any IT difficulties, but to BoA calculated effort to discourage applicants from pursuing this option. In my case, I had my U.S. Senator’s office involved and calling, talked to two different people at BoA’s Office of the CEO and two others who were “handling my application.” Still nothing but roadblocks. They divide and conquer by having the documents sent all over the country and by requiring applicants to talk to different people in different offices in different states. And nobody knows what anyone else is doing!
In addition, I had one person from BoA’s office of the CEO tell me that BoA representatives were FORBIDDEN to communicate with loan modifications applicants via email. Of course not! No documented trail of communication that way. Convenient.
These people are slick, clever and powerful, and they answer to no one.They can and do employ the best and the brightest in order to their dirty work. IT difficulties? Don’t kid yourself.
I thought it was incompetance at first but now know its closer to criminal. They don’t want to modify anyones loan. Its been 12 months and probably 10 copies of documents later and they say they think I might have been rejected but no one is sure. They rely on people giving up or going broke. They are BAD people. (Other words are more accurate but can’t be written).
Or it could be totally purposeful, as the banks make extra money by starting modifications and then denying them. Check out these stories:
http://news.firedoglake.com/2010/08/23/portrait-of-hamp-failure-it-makes-your-financial-situation-worse/
http://news.firedoglake.com/2010/08/24/portrait-of-hamp-failure-destroying-credit-ratings/
http://news.firedoglake.com/2010/08/25/portrait-of-hamp-failure-banks-rule-borrowers-pay-the-price/
http://news.firedoglake.com/2010/08/26/portrait-of-hamp-failure-strangled-by-the-bureaucracy/
This sounds more like human incompetence than an IT failure to me.
Complete loss of paperwork more than once is a corporate systems failure with little to do with IT: it takes a person to lose track of paperwork. If there is no audit trail for the paperwork and related IT processes then the fault is with whoever designed such a slovenly business process and the management who signed it off.
Failure to investigate what happened to the previous applications is a sign of poor management in one or both organizations.
That’s only half of the story.
I was personally responsible for technical management of the project to implement the “Obama mods” at my former employer. What your story misses is that the regulations surrounding these programs are so onerous and change so frequently that no servicer is in compliance with the program guidelines. Due to political pressure the initial project goal was simply to be in the first list of servicers that could process HMP mods. Insufficient resources, topped with regulations that neither the business nor the program manager (FNMA) understood leads to these kinds of failures — even if there was good IT.
I have heard of this same issue happening with many, many other people. Given its not in a banks best interest to do these modifications it may be a case of willful incompetence.
The Banks failed because of the corrupt management. Banks were lending money to their CDO customers so they would purchase the banks’ worthless CDOs assets.
This corrupt behavior was motivated by the commissions (and bonuses) that were a byproduct of these transactions. The behavour artificaly bosted the demand for the CDOs:
https://www.propublica.org/article/banks-self-dealing-super-charged-financial-crisis
“It worked like this: A CDO would buy a piece of another CDO, which then returned the favor. “
These stories are so common because of how standardized MBAs are. An MBA teaches you to manage an industrial process and they try to apply that to software development and it fails miserably.
Companies that do not directly sell the software they produce view IT services as a cost center and therefore try to minimize its resource spending as much as possible. It’s thinking like that that gets you mediocre programmers (which are the only ones that stay since good programmers don’t like being viewed and treated as an inconsequential replaceable cog), not enough resources to implement projects that are too vast in scope.
It isn’t malice so much as a systemic failure of management in the entire IT industry. The day software managers realize software programming isn’t even close to related to rivet punching on an assembly line is the day large corporate IT systems might start working with some sort of regularity. Not a day before.
re: comments by Guillaume Theoret and AnonymousITWorker
Yes, both are true and more. The opportunities for large corporate IT to produce crappy solutions are vast and varied. There are many competent IT folks who strive to “do the right thing” and influence their managers and their clients (the “Business”) to create good, solid solutions, neither of which can think (or are allowed to) outside of their “funding model” and the ever present pressure of “minimizing costs”. The concept of generating “technical debt” (not paying for systems to be correct and sustainable, admittedly an expensive proposition) rings consistently on deaf ears. “Tomorrow may never come” seems to be the overwhelming philosophy along with ‘let it be someone else’s problem”. Well, tomorrow is here, and it’s EVERYONE’S problem.
Having done a lot of consulting work in large banking institutions, I can hardly say I am surprised.
I continually meet incompetent IT workers who remain in their jobs because no one ever actually seems to be responsible for anything ever. Back end system is a complete disaster? Nevermind, here’s your year end bonus. Systems fall over unpredictably? Well, you look busy, you must be working hard.
People expect bad IT and they get it. IT Departments are often not held responsible by the Business. IT exists and is (almost) beholden to no one.
What actually surprises me is how often these large Banks continue to do business and make money in spite of their IT systems actively* trying to prevent it
– a frustrated IT Worker
* = ok, slight exaggeration, but sometimes not by much.
What exactly is the link between this event and IT? Your ‘vote’ and your ‘guess’? I get the idea that IT screws up with some frequency, but this posting is pretty thin gruel when it comes to facts.
Hard to take you seriously lately.
Back in February of 2010, I wrote a check for about $2,000 and it cleared before the end of the month. Imagine my dismay to discover that it was cleared AGAIN in August!
Fortunately, I have a ‘paper trail’ that showed it had been cleared in Feb. and the bank promptly put the money back into my checking account. However, they refused to explain to me how this happened.
I worked as a teller at First Union, back in college. Every once in awhile, someone would find an old check behind a desk or under a terminal and a lot of time, the teller would just run it through as if it was a fresh transaction. But hey, we were being paid $8/hr so yeah, folks were on top of things.
This happens because of Check21, which mandated that all check clearing be done electronically, within 24-72 hours. So, when you write a check to somebody, mail it in, or hand it over, what they do is run it through their handy dandy credit card clearing machine and the routing info, account number and amount gets transmitted, entered into the Federal Reserve Bank system, and then the funds are deposited into their account.
The checks are then supposed to be transported to the bank, where they would get imaged and cleared.
Sometimes however, companies don’t transfer the checks to the bank, maybe due to the type of account relationship they have. So, a couple days, a week, or two months later the check might be ‘found’ again and reran through the machine.
This type of problem can only get worse when more and more banks start allowing people to deposit checks via computer or smartphone, as some already do.
Not for the first time, but I spent more than a decade in Financial Services programming (not banks directly, but their kin). FS was among the first to outsource to India, is among the first to never, ever build the Second Version (it’s still 30 and 40 year old COBOL with a pound of java pixie dust), the leader in praising the Emperor’s New Clothes every year (but never, ever updating that 30 and 40 year old COBOL code; it still runs doesn’t it) giving us the likes of SOA, EJB, xml monstrosities. They’re also the ones who bought the Quant story.
It’s a heads I win, tails you lose game. And the Right Wingnuts bray that the problem is that unfettered capitalism isn’t allowed to blossom. Yeah, right.
Bob you and I have the same friend, except their loans are from different banks. In my friends case it’s Citibank.
My friend has had his paperwork lost up to 6 times now, and just one copy of what they request is the size of 2 phone books. He’s been paying his temporary loan mod payment for a year now, even though it was supposed to be converted after successful payments lasting 3 months. Every time he calls the bank he gets Mike from India who claims they don’t have his paperwork.
My friend is pretty well known in the area and got ahold of a high ranking bank person and threatened to go public to 20/20 on what’s happening to him. Here was the description of the bank’s policy he got as a reply:
The loan mod program was never meant to actually convert loans. When the economy collapsed the banks panicked since so many people completely stopped paying. To get people to pay ‘anything’ they stuck the carrot out which was the loan mod program. Nobody ever gets their loans actually converted, they get this paperwork runaround. In my friends case after pushing hard to get the loan converted by the bank they ulimately denied the loan mod and he’s now losing his house. This isn’t an IT problem, this is money and dirty tactics by the banks.
Please tell your friend I’m sorry, his loan mod is never coming. Might as well stick it back to the bank and stop paying your mortgage right now.
“The loan mod program was never meant to actually convert loans.” This seemed the most reasonable explanation to me until I began to wonder whether anyone has ever had their loan modified. Many must have succeded or we’d have heard about it in the news. Perhaps loans are only modified for those who are not a credit risk. In other words the bank makes more money the more you borrow and the longer you borrow it for, if and only if, you are not a credit risk.
…or maybe not.
https://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7kYntqozaKo
only about 15% of the people applying actually get a modification.
That article is a year old but still believable. Once the government announces it’s going to give away money everyone gets in line. I’ve owned my home for about 30 years so it’s undervalued for property tax purposes. Yet I’ve been told I should apply for a government reassessment since “home values have decreased lately”. So everyone applies for a loan modification and clogs up the system for those who need it most and are simultaneously the poorest credit risk.
As a reader of The Daily WTF, and from many IT systems that I have personally seen and worked on over the years, the surprise is that anything works at all!
There are so many instances of bad coding and bad processes out there that it is a very real concern as whether the growth/ageing of IT systems will bring many companies to their knees.
Sounds like he should keep those docs pre-scanned and ready to email at a moments notice. Or better yet, someone should setup a broker service to deal with hassle on his behalf.
I suspect you’re being understandably naive. ‘They couldn’t possibly be that evil, could they?’
Of course they could.
The things banks are allowed to get away with is pretty scary. I don’t know my problems with Chase were all IT related, certainly they could be. I was told their systems simply weren’t capable of handling these payment plans & mods, so they just did them with a simple “notes” field on the account. No paperwork. No accountability. My story is pretty frightening.
I was unemployed for 14 months, from November 2007 until January 2009. I had enough savings for about 8 months… Not enough. I kept up my mortgage payments for 11 months, while accruing about $20K in consumer debt, paying all my bills with a credit card and saving my cash to keep up my mortgage.
I was behind 90 days, and even when I finally got a job, it was going to take a while to get caught back up — I’m making about 65% of what I was making at my last job. So the bank worked out a “payment plan” with me to get me caught up. This was going to require 9 months of extra payments on top of my mortgage. 9 months of sending Chase about 75% of my take-home pay. Can’t sell my house either, I’m upside down.
Well, Chase wanted me to pay every month on the 28th. “Why?” I asked, my mortgage is due on the first of the month. Plus, I get paid on the last day of the month, so I asked if it could be the last day of the month. They said fine.
I asked for a PDF or paper copy of this new “payment plan” for my records. They refused. They would not provide me a copy. I said, “OK, where do I send the checks?” They said I could not send checks, or use the web site. I had to *call them* on the last day of every month… Not a day early, not a day later, I paid them by phone, with $20 “convenience charge” of course. And every time I called, they asked me for the entire balance to bring my account current, plus about $1500 in late charges and fees. Every time, they knew nothing about my payment plan. I had to remind them that I had a “secret payment plan”, they’d do some typing, then say, “Oh, sorry, I see it now.”
So I paid them every month, on time, for 5 months. Then I get a call and they say, “You’re not in compliance with your payment plan.” Which plan? The “secret” plan I have never seen and that you won’t give me a copy of? They said I was supposed to pay every month on the 28th, I said no, we agreed to the last day of the month. They said they had no record of this, of course.
I finally got caught up. Not that I’m any happier. I want to sell my house that I’ve been living in for 11 years, because I want a smaller life with less responsibility. This house is crushing me financially, but I can’t get out. Can’t sell, because I can’t break even. I’d take a breakeven deal in a second if I could get it. Even if I got someone to buy my house for what I owe, it probably won’t appraise high enough for a buyer to get a loan. I can’t get the bank to even talk to me about a loan modification, because, well, I have a job and am able to pay. They bank won’t even talk to you about loan mods until you STOP PAYING THEM. How ridiculous is that?
I am willing to accept the analysis that inadequate IT system are to blame BUT why are they allowed to remain inadequate.
I think the focus need be on this little bit “…with XXXXX probably screwing-up yet not really caring enough to fix anything”.
Why don’t they care?
Because (back to our regularly scheduled conspiracy theory) there is INCENTIVE to do nothing. If the modifications will hurt your profits, your balance sheet, your bonues, you gain by letting inadequate IT take the blame for loosing (and loosing and loosing) the paperwork. Worse there is no DISINCENTIVE. No penalties. No oversight. A little bad press — but, hey — if you’re a banker today, you obviously have gotten over caring about a little bad press. Thus you blame a symptom (the inadequate IT), and profit from the disease.
I am a firm believer that most of the large and seemingly insurmountable problems we face today could be readily solved if we focused not on dictating or legislating or even agreeing on the solutions BUT, rather, on creating incentives (and disincentives) that focused on the root problems.
I blame use-case analysis, not IT per-se.
When we tried to pin down what users do into little boxes we killed the textual user interface and removed the flex in the system.
It’s amazing when you see giant companies that don’t “have IT”. My episode was with an AT&T billing fiasco. I paid them for a few months and they somehow forgot to credit my account – but didn’t forget to cash the checks. After eight hours of hassle on the phone, talking to dozens of different people (nobody can do anything, you ALWAYS get transferred), they finally caved. But I don’t think they ever did find the money I paid them.
Highlight:
AT&T: “…sir, you’ll have to fax or mail statements to dept. XYZ”
Me: “Can’t I just call them?”
AT&T: “No sir, you must mail or fax them. You can’t reach them by phone.”
Me: “But aren’t you…the PHONE company?!?!”
the bottom line on this stuff: doing the IT for a new project takes 1-1/2 to 2-1/2 years, and typically the guys who sold this bill of goods at both the vendor and the corporation are long gone. then the grunt work gets outsourced, and you lose half a year there. then FinWizCo gets bought out by MegaRam and you lose your vendor side experts. then MegaRam drops the product, so you’re fighting uphill a year back with outdated software, support consists of “have you rebooted yet?” and this has gone up and down the flagpole four times.
the customers pre-sold on the plan are coddled along under the desktop by one or two clerks, until they are laid off or quit to get health care working at McDonalds.
there’s your seven-month-old mortgage refi plan.
paid all the bills off yet with the savings?
neither have the banks or the treasury.
funny how that happens.
I’m with Guillaume Theoret on this. I would also add that far too many managers are too ignorant about IT to even realize how many incompetent employees live in their IT departments. This creates almost irreversible morale problems which create their own set of issues.
BofA is systemically incompetent. My mortgage modification went through this year, but it was painful, with similar problems. Faxes were lost. Emails were lost. I had to explain the difference between .pdf and .jpg and suggest methods of accessing these files. I had to follow up by phone after every email to make sure it was opened and routed to the person who needed it. Changing government regulations can only be exacerbating the problems. Solutions were primarily due to the intervention and short-circuiting of the very competent (and overworked) loan processor assigned to my file.
As someone who’s struggling with unemployment, I have to memorize dozens of passwords and logins (password rules are rarely consistent.) Furthermore, 99% of hiring, in a more difficult climate, are based on nepotism. The only answer to every single question I’ve asked since I returned to North America has been “it’s online.” Which either means f%ck off or screw you, we’ll hire my cousin’s boyfriend, but we’ll make you jump through all the hoops anyway. After spending hours with “careerbuilder” all of my job notifications are now set for “Edmonton” (I live in Calgary) and Monster routinely sends me jobs which are at least over a month old. I am biologically related to one person in Calgary and I lived overseas from 2002 to 2009, however, foreign transcripts and references are apparently more valuable than those of a citizen and resident of over 30 years. “It’s online” has replaced “We’ll call you…” and both have always meant “f%ck you.”
When “IT” fails.
Here’s a great fail, London Drugs told me to register and so on, online. Never heard of London Drugs? It’s a chain which ONLY exists in B.C. and Alberta. I diligently filled in the required fields. They had a very interesting field, they wanted to know what my salary requirements were, in literally hundreds of different currencies. Am I supposed to conclude that London Drugs, which only operates in western Canada, will pay in South Korean won? What would I do if my paycheck was paid out in Canadian dollars? Would I complain to HR? Every single employment website lists from a very standard list of countries, are these firms being inundated with resumes from Andorra? Are millions of current and prospective employees demanding to be paid in Albanian Lek? Why on earth do we have these fields? Why do I have to spend countless hours specifying, after filling in my city, province and country of residence/ citizenship am I confronted with a web page demanding to know what currency I wish to be paid in?
Or, is it necessary obfuscation to frustrate those who are not and will never be hired?
Wow, the US mortgage market is so totally screwed up so as to make the UK scene look postively idyllic.
With such onerous processes and hopeless back office support, no wonder things don’t get done.
A personal note:
We wanted to modify our mortgage a few months ago so phoned our lender who discussed our options over the phone. 15 minutes later we had an agreement in principle which we then confirmed in a second phone call the next day…and that was it – some capital was deposited into our account within days and our payments duly increased next month. Simple.
A professional note:
I work for an BPO company specialising in inbound document capture so am pretty well versed in the processes and technology employed in a modern FS mail processing centre. It’s a fair bet that the failings are not technical per se, but are really just poor management.
I can compare two of the larger clients we process here, both FTSE 100 companies.
One took the plunge and started with a relatively clean sheet when they moved to their current technology platform about a decade ago. They employ reasonably skilled UK-based operators who perform the final stage of categorisation/indexing before onward processing once we pass them the scanned images and associated metadata. This makes the inbound processing job relatively straightforward so we are able to concentrate on where we can add value – by optimising the mailsort, scanning & indexing processes, free of having to have train our staff to have intimate knowledge of the client’s business rules. This means documents invariably end up where they should be within SLA, leading to a positive customer experience.
The second client is clinging onto the model they had in the 1980s when they first introduced document scanning when each department owned their own inbound process. Sure, they have refreshed the technology platform a few times, but their structure is a legacy of the many organisations the company has absorbed over the years and as such they have an inordinately complex set of indexing rules which means it is 100% guaranteed that at least some of the doucments end up routed to the wrong department. Such systemic failures are often very hard for us or the client to resolve.
Of course, the aim of such a front-loaded process is so that they can employ cheaper offshore staff to do the back office processing, but such an approach means our staff are expected to have detailed client business knowledge – not playing us to our strength.
Such an approach lacks customer focus and actively contributes to a poor experience in many cases, and despite our best efforts to simplify and straighten these processes during our contract term, the reluctance to adapt and client team infighting means that nothing really changes. They haven’t had the balls to overhaul the process which would truly improve their customer service levels and this sadly means that situations like your friend finds themself in are all too common.
Any attempt to fix this problem with technology will only fail – the real problem is the structure and inertia of the cleint organisation.
Sounds like BoA is in the latter camp to me.
For shame. As the spouse of a real estate broker, you should be aware what a failure the loan modification business is, specially but not just HAMP. It’s all based on getting someone with insufficient funds to agree to pay more longterm for a home whose value has crashed and not expected to ever rise to the purchase price. The dirty little secret of the so-calledsub-prime crisis is lenders not only lent to the undeserving but lent too much based on completely bogus home valuations.
It’s this kind of ineptitude or dishonesty — opinion is more important than facts or reality — that gives Bob the reputation he has. Unless, I guess, he’s to be treated not as a journalist — he’s wrong too often for that — but just as entertainment.
I deal with the fallout from the collapsed housing bubble daily. Bob, on the other hand, maybe should have interviewed Mrs. Stephenson for this piece….
Dont just blame IT, I’ve been an IT Architect for a long number of years and the blame is thick enough to be spread in a lot of places.
1) Crappy business processes are usually a good place to start
2) Business units not wanting to spend enough money to put a proper system in place
3) Overwhelmed IT department who brings in consultants who are incompetent
4) A pragmatic approach to just “get on with it” instead of doing the proper detail work required which results in corners being cut and cloppy implementations
5) A general; lack of accountability on both the business and IT sides
This list is just what I would consider the low hanging fruit!
Blame IT. Bought a new Toyota from AutoNation dealer. Excellent deal. And then the walk back to the finance people. Wonderful high tech system. Found out a week later, from the bank, not Autonation, that they totally screwed up my paperwork and payments. The computer said the recalls on my car had been taken care of months ago when I signed the papers. Got a ‘Courtesy Recall’ last week. They need to check. Computer may not be ‘up to date”. They made me an appointment. I was listed when I showed up but the ‘computer paperwork’ for why I was there wasn’t up to date. Please leave the car for 3-4 hours while they figure it all out. The service writer mumbled a lot about what was or was not done.
So now I hope the computer trail will show they sold me a car with outstanding recalls that they claimed were fixed at the time of sale. NTSB are you listening.
And they are so proud of their computer system.
Freddie Mac doesn’t have to worry about failure. They’ve got the taxpayers backing them up. That’s why they don’t care, and that’s why they screwed it up, plain and simple.
Oh yeah, let’s not forget that Bank of America doesn’t have to worry about failure, either. They’re backed by the taxpayers too. Both Freddie Mac and BofA can be as incompetent as they want to be, and it doesn’t matter.
Welcome to the world of outsourcing. Someone in India (or is it cheaper China now) knows what isn’t happening.
And remember, they use Americans (who know their jobs are gone next month) to “train” their direct replacements who are here in the U.S. on “high skills not locally available” visas.
Do you want some severance or shall we fire you right now?
Where’s the article about all the tech M&A activity?
I’m shocked no one has pointed out that your friend could have just kept paying the exact mortgage that he contractually agreed to pay. His options under that legal contract are to 1) pay the mortgage until it is paid off, or 2) stop paying and lose the property secured by that contract (and likely impact his future ability to borrow from someone else.)
IT systems and BoA ineptness aside, the fact that borrowers think the bank owes them a refi or principal reduction “just because” is at the heart of what is wrong with borrowers. There are many sins on the part of big companies and banks in particular, but the bottom line is your friend entered into an agreement for a highly leveraged purchase of a physical commodity. He bet wrong and deserves to pay off the loss as much as he would deserve to reap the winnings should he bet correctly.
No, not “just because.”
If BOA and other banks had not loaned money to people who did not qualify in the first place, starting the avalanche that cost alot of us alot, like our jobs. those of us who did qualify and entered into those agreements in good faith and with appropriate resources, would have been happy and able to pay our obligations
Because tax payer money was GIVEN to them after THEY got greedy and tried to use every underhanded trick in the book to milk the market, and it blew up in their faces,hurting all of us in the process, they went whining to the government with their troubles and the government bailed them out with OUR money. But, in return they were asked to please assist homeowners in trouble, and that doesn’t seem like too much to ask, considering that those homeowners with their tax dollars, saved BOA ‘s ass.
.
Some would argue THEY did not get greedy. They were told by the government to make housing and home ownership “affordable” and told the government would back the loans. So it was lend or else.
Some would be wrong.
http://howdidthishappen.org/myths/
“Thus, 80 percent subprime loans were made by lenders not regulated by the CRA. – The CRA actually created more responsible lending. San Francisco Federal Reserve Bank President Janet L. Yellen rejected the “tendency to conflate the current problems in the subprime market with CRA-motivated lending,” and noted “that the CRA has increased the volume of responsible lending to low- and moderate-income households.” – The act was passed in 1977, well before the subprime loan bonanza occurred. In fact, the Bush administration’s weakening of the CRA coincided with the subprime boom. – Banks did not engage in an orgy of reckless subprime lending to meet CRA obligations; they did so for they same reason they always do: to make money. Only this time, deregulation allowed them to get paid not just for making the loans, but for turning them into securities and trading them […]”
Government backed ALL the loans? Was that official? And what “or else?” Loan or the big bad government would take the BANKING INDUSTRY down? Are you really suggesting that the BANKING INDUSTRY gave a rat’s posterior what the government said or wanted? Do they ever? PUH-leeze! They do what they like, then and now as they always do and for the same reasons – to make money!
Banking owns the government, silly, not the other way around.
funny baby
What a mess!
Contrast this to my experiences. I live in Canada. I applied for a mortgage, approved in less than an hour. Only needed verification employment and income in the form of a letter from my employer.
Bank Blame Game…
Bob Cringely writes how he believes that crappy programming at Bank of America that doesn’t integrate with the crappy programming over at Freddie Mac is to blame for his friend’s inability to modify his mortgage loan. I’m guess the re…
I really appreciate what you wrote, as I’m always looking for a different way of looking at things.
Why patronize these large nasty banks when there are credit unions that can handle mortgages?
Heya man. Just found this blog from Google. Thank you for the good stuff!
I have got to declare you help to make several excellent facts and probably will write-up a handful of thoughts to add on after a day or two.
Many thanks for give extremely good informations. Your internet is great.I am impressed by the information and facts that you’ve on this weblog. It shows how very well you comprehend this topic. Bookmarked this method page, will appear back for additional. You, my friend, awesome! I found just the data I by now looked all over the place and just can’t locate. What a ideal web site. Such as this web site your website is 1 of my new most-liked.I similar to this data proven and it has given me some kind of enthusiasm to have accomplishment for some cause, so maintain up the great perform!
well done
You have a very nice blog.
Appreciate you sharing, great article post.Thanks Again. Keep writing.
An insider from the banking industry customer service and IT informs me that many of these systems are archaic and are in need of some major upgrades. Technically speaking for example the data bases of some of these systems still run on a DOS based system which still works reliably but can be slow at times. I don’t know if they have plans of changing them, many may believe they are working fine so why change or upgrade. The cost benefit may not be enough for them to consider the change.
great thanks man…
great thanks man…
good thanks o/
Apple now has Rhapsody as an app, which is a great start, but it is currently hampered by the inability to store locally on your iPod, and has a dismal 64kbps bit rate. If this changes, then it will somewhat negate this advantage for the Zune, but the 10 songs per month will still be a big plus in Zune Pass’ favor.
While I was learing from this article I contrived what I’ve been thinking about before. Thank you.
Apple now has Rhapsody as an app, which is a great start, but it is currently hampered by the inability to store locally on your iPod, and has a dismal 64kbps bit rate. If this changes, then it will somewhat negate this advantage
Very nice template here! I was quite impressed with your writing skills as well. A question for you.. is this a wordpress theme? It looks pretty nice to say the least!
Buy $10 Replica Designer Sunglasses with 3-day FREE SHIPPING
[…] year ago I wrote a sad little column about my friend Ralph and his difficulty getting his mortgage adjusted. Ralph had lost his tech […]