Today I was just wondering around on the news sites. On one of our local news sites I found an article about unemployment benefits and banks that raised my blood pressure. What is it with banks that they seek every way they can to get their hands on the people’s money? In many ways it is getting close to stealing. Go here to read the article. Here is an excerpt:
For hundreds of thousands of workers losing their jobs during the recession, there’s a new twist to their financial pain: Even as they’re collecting unemployment benefits, they’re paying bank fees just to get access to their money.
Thirty states have struck such deals with banks that include Citigroup Inc., Bank of America Corp., JP Morgan Chase and US Bancorp, an Associated Press review of the agreements found. All the programs carry fees, and in several states the unemployed have no choice but to use the debit cards. Some banks even charge overdraft fees of up to $20 - even though they could decline charges for more than what’s on the card.
“It’s a racket. It’s a scam,” said Rachel Davis, a 38-year-old dental technician from St. Louis who was laid off in October. Davis was given a MasterCard issued through Central Bank of Jefferson City and recently paid $6 to make two $40 withdrawals.
If you think about it, the less money a person has the more they will have to pay for everything. A rich person pays the least for stuff. A rich person can purchase whatever he or she wants with cash, and often even get a lower price because of having that cash. A person without money on hand to buy something will need to take out a loan to purchase stuff, like houses or cars. The less money they have, the more they will have to pay for the item. Often this “more” is in the form of interest payments. The poorer you are, the higher the interest rates, and the harder it is to make the payments per month. In some ways it can seem to the poorer person that the lender is determined to make them fail by charging every fee possible, and raising the interest rates whenever possible, until the person finally loses all together. At which point, the lender can take it back. The poor person is then made to feel like a criminal. It is a crazy system.
In regard to the new Housing Plan, there is some concern because the lenders are going to have so much control over who gets helped. As it says on the MSNBC site:
Despite the government’s pledge to standardize the process, the decision to modify a loan to make it more affordable still rests with individual lenders, loan servicers and investors. That means that two homeowners in comparable situations dealing with different servicers may get two different outcomes.
and…
Servicers who modify loans say they risk getting sued by investors, who may claim the changes in terms cost them money. The Obama final plan did not include earlier proposals to offer servicers legal protection from those lawsuits.
It is unnerving to know that the plan depends on lenders and servicers who can have a different agenda. Tradition tells us that the root of evil is the constant pursuit of money. Some people just can’t seem to stop themselves from constantly seeking more and more money. It becomes the thing they live for, the “work” they do — not to produce anything for anyone, but just to gain more money, and more money. Their creativity and talent are channelled toward making money. It is what they do. And they are blinded by the money and cannot see the consequences of their actions to get it. While the carrot is in the plan to encourage servicers to modify loans, the fear of losing money through being sued still exists. Which side of the equation will win? In any case, servicers are gearing up for a large number of people to come looking for modification of their mortgages after the details are published on March 4th. It will be interesting to see if the lenders cooperate with the Housing Plan.
There is a growing list of those who favoring Nationalization of the banks. You can find the list here. I’m not sure how I feel about such a thing, but it is very interesting to me that Alan Greenspan is on the list.
On local real estate note, our office is beginning to see more activity. We are getting a few more walk-ins who are starting to look around at houses again, and more phone calls. Some sellers, who have been sitting on their properties unwilling to list are now deciding to put their homes on the market. So, from our small corner of the world, even while we hold our breath to see if things are really starting to move again, at least it is starting to feel like they are. We are hoping this new action is not just a temporary blip for the week.
