Banks bail out on loan modification

Asking for help doesn't always work, particularly when the government and large financial corporations are involved.

Upon learning of our difficulties with keeping our home since my layoff last year, some friends have suggested looking into "loan modification," which allegedly was made easier by the government bailout money and Obama administration mandates. However, as it turns out, loan modification is more of a myth than a solution for the overwhelming number of folks who are trying to save their houses.

It appears the money that the government spent to help the economy and us "little guys" is nowhere to be found, as others have told of similar stories of how they've been shortchanged or ignored entirely. Meanwhile, the banks did pretty well in collecting all that bailout cash. The government doesn't seem to be following up to see if that money is actually going back into the general economy. No one from the Obama administration contacted us to see how the loan modification process went. Where is the accountability?

In our case, we were denied loan modification by Wells Fargo because we were current on our mortgage payments. I told the Wells Fargo people that we eventually weren't going to be current unless they modified our loan (and dropped our PMI) or I found a job that paid comparably to my former position at USA Today. Modification would have involved either lowering our interest rate by at least one point or extending the length of our loan. We were not asking for any handouts, just a bit of relief so that we wouldn't have to wipe out our savings while paying our monthly mortgage. Well Fargo did nothing and opened up the door to future problems for us, which is why we are on the verge of selling.

Unfortunately, selling doesn't solve all our problems. There is nowhere to go in Northern Virginia that's affordable without a decent job or two -- certainly not in Loudoun County.

Like many regular folks, including small business owners, I am disappointed that the bailout money has not gone to helping the people who did nothing irresponsible to end up in this mess. We have a reasonable fixed-rate mortgage that was more than affordable when I was working. In fact, real estate and mortgage people tried to convince us to buy a more expensive house when we were home shopping eight years ago. We resisted. We wanted a bit of a cushion in case things went bad. We didn't expect the economy and my profession to crash for this length of time. Now we need that little extra, meaning we need a current interest rate without having to refinance.

The money allocated to big business does not appear to be trickling down, as unemployment is about 17.5 percent according to the U6 number (includes those who have given up on trying to find work) and more people are losing their homes. The latest wave of foreclosures includes people who were not victims of mortgage scams and who are generally responsible people who have lost their jobs due to companies downsizing.

More and more bloggers, alternative commentators and some radio personalities are talking about this stuff but the politicians don't seem to be listening. If you rely only on the NBC Nightly News or front pages of your newspaper, you aren't getting a clear picture of how bad the economy is and how little the government is doing to fix things.

Maybe we need a million-man-style march on D.C. to get the middle-class message across to those in power. Maybe elections once a year aren't enough. And maybe the banks need a not-so-gentle reminder of who exactly bailed them out in their time of need.