Banks have failed us again

Banks have failed to redeem our economy in past crises and seem to be continuing to do so.

In the late 1890’s Andrew Carnegie, the titan of wealth, collected our richest countrymen on his yacht offshore of New York City and held them hostage until they agreed to release funds to make banks stable. The collapse of our economy was a small worry to these billionaires, but a redistribution of wealth was essential to save America. The fate of our nation demanded loosening the purse strings of wealth. This has never changed.

In the 1930s, at the beginning of the Great Depression, an aggressive prosecutor uncovered bank mismanagement allowing the richest bankers to give themselves interest-free loans while charging high interest to their investors.

Today we have the sub-prime mortgage fraud and banks judged “too big to fail” are bailed out with taxpayer dollars. I am very concerned because shortsighted money managers who created the problem they are charged with fixing now control my tax money.

Too often banks fail to inform homeowners that losing one’s residence can be forestalled or prevented because it is actually a two-step procedure. The first step is foreclosure on an unpaid mortgage. Here, the bank takes ownership of the house. Then, homeowners usually believe that they must move out immediately, and become homeless.

This is not the case. Homeowners are not required to vacate their home until a judge has signed an eviction notice.

After repossessing one’s home, the bank needs to resell it quickly, often at a value ½ or less than the unpaid mortgage. It should become a policy and practice that bank repossessed foreclosed homes, revaluated for resale in today’s market, first be offered to the occupying homeowner before he or she is evicted. Then, if homeowners cannot pay this much smaller mortgage, allow them to affordably rent their former home.

Bankers must no longer be allowed to mismanage economic relief. As owners of bank “bale outs” American taxpayers must insist that bank managers assume responsibility for curtailing the homelessness they created.

Bob Olson, Bellevue