One town's anti-bank statement
Even before protesters began "occupying" Wall Street last year, at least one American town decided to divest from a big, government-bailed out bank to protest the bank's slow pace assisting delinquent mortgage holders to get back on their feet financially. Tony Guida has the story.
"I was waking in the middle of the night thinking when we'd have to leave the house," said Maribel Toure of Hempstead, Long Island.
Like millions of Americans, the Toures are struggling to keep their home. The family income took a hit two years ago when Mamadou Toure lost his job as an architect. Maribel Toure's salary as an X-ray technician couldn't keep up with their mortgage payments.
"You know, when you are trying to save your house, I was trying to spend as many hours at work, to make extra money to make overtime," Maribel said.
The Toures appealed to J.P. Morgan Chase bank to get a mortgage modification. The bank said "No" . . . twice.
In Hempstead, a quarter of the homes are "underwater" - meaning the mortgages are higher than the houses are worth.
After hearing dozens of stories like the Toures', Hempstead Mayor Wayne Hall got angry.
"We always felt that our president had bailed out the banks with our money, so why aren't the banks bailing out our residents?" Hall said.
Last April he decided to pull the town's money - more than $12 million - out of J.P. Morgan Chase.
"These big corporations, they don't pay attention to the little guys, and so we had to help the little guys. We spoke for them," said Hall.
When the Toures first applied for mortgage relief two years ago, J.P. Morgan Chase was offering only 30 percent of its delinquent homeowners nationwide a chance to lower the cost of their loans.
The bank says that rate has doubled, to 60 percent, helping prevent 700,000 foreclosures.
"We're doing everything we can at our level to keep folks in their home," said Chase's Patrick McGovern.
But a recent Treasury Department report concluded that J.P. Morgan Chase still needs "substantial improvement" in assisting homeowners, and is the slowest bank at locking in deals for qualified borrowers.
"Are we working fast enough? I know we are putting every effort to do a better job on a daily basis," said Chase's McGovern.
Mayor Hall admits closing the town's account was largely symbolic. But after the village took action, the Toures finally got their mortgage modification. With the interest rate cut in half, the payment was reduced by a thousand dollars a month.
"Chase has improved its modification rate, and you can't ask for any more than that," said Hall.
One thing both sides agree on: Nobody wins when there's a foreclosure.
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