Press banks on mortgages

Press banks on mortgages

San Jose Mercury News: As if clusters of vacant, deteriorating houses already blighting parts of America aren’t enough, additional thousands moved toward early stages of foreclosure in July — 14 percent more than in June and a 90 percent increase from the previous July.

This raises the question: Are banks that have benefitted from billions in federal bailouts doing enough to stem the foreclosure crisis? A Treasury Department report indicates many are not.

The $50 billion program begun in March to help as many as 4 million homeowners salvage their houses has had dismal results. Some banks are restructuring 25 percent of their loans, but the average is just 9 percent, and some major lenders have done almost nothing. Bank of America and Wells Fargo showed up on the low end, although both said they already had renegotiated many loans before the Obama plan kicked in.

If the nationwide numbers don’t improve in August, Congress should look at building more accountability into the program.

Stability will help everyone. Nobody benefits when homes sit vacant, fall into disrepair and then sell at a fraction of what might have been their value had they remained intact. These homes drag down whole neighborhoods.

Banks that have taken fortunes in taxpayer dollars have an obligation to help not only individual borrowers but also the communities in which they do business.