Lies the Financial Industry Told Me

"I believe the programs that we currently have in place will handle the majority of the default situations," Michael Gross said Wednesday during a House hearing on preventing mortgage foreclosures. Gross currently serves in Bank of America’s Loan Administration, as the Managing Director of Loss Mitigation. He bares the typical, self-assured confidence of white men of a certain age (think George Bush, but slightly more articulate).

As he, and other financial gurus, answer questions from members of the House, he shows no signs of guilt or shame. Nor does he offer more than wordy subterfuge: an olive branch for the representatives to take back to their districts. Thanks, but no thanks Mr. Gross.

Gross, along with representatives of JPMorgan Chase, American Securitization, Citi Financial, claims homeowners know they are in a position to negotiate with their loan provider. However, the increase of foreclosures presents a stark contrast to his claim. And when you look at the details of Gross’s promise to negotiate with consumers in, or on the verge of, default, you’ll see that if other credit problems exist then financial instructions rescind the renegotiation offer.

The financial institutions know the majority of Americans carry between $8,000 and $13,000 in credit card dept alone. They’re the ones that set the terms. If credit card debt, with default interest rates on credit cards standing on average (for first time offenders) as more than 18%, precludes individuals from the minimum terms required for renegotiation it seems unlikely that owner occupied homes will be saved as a result of the so called bailout.