Bank Bailout: Axelrod vs. Geithner

A SAD TALE THAT NEVER SEEMS TO END

Analysts predict that the number of nationwide foreclosures for the year 2008 alone will reach one million. Meanwhile, Credit Suisse predicted that there will be 8.1 million foreclosed properties within the four-year period from 2009 to 2012.

I owned and operated a small business in Palm Beach County, Fl for 13 years. In our best years, we employed 15 people. Things started getting slower at the company a few years ago and the economic downturn finished the job. My company is out of business and the building I purchased approximately 5 years ago (for my business) is in foreclosure. The current principal mortgage balance is $499,000. The building has been on the market for over 2 years and the only offers ever received are listed below.

I have received three cash offers to purchase the building from October 2008 to present. My bank had rejected the first two offers and the third offer has been submitted and is pending. In October 2008, we received a cash offer of $350,000. The bank rejected this offer after having the building appraised. The bank claimed to have two appraisals, one at $460,000 and the other for $480,000. I informed my real estate broker that the offer was rejected and about the appraisals. The broker found another buyer in December 2008. The buyer was made aware of the banks appraisal and made a cash offer of $460,000. During the buyers due diligence period, the buyer requested the banks appraisal for $460,000.I requested the appraisal and the bank denied my request. My attorney requested the appraisal and the bank denied that request. The bank would not release the appraisal and said it was an internal document for the banks use only. The request for the appraisal continued until the buyer cancelled the contract. A new cash offer from the same buyer in March 2009 for $370,000 was received and is pending at the bank. If the bank accepts this offer, they will have caused themselves to needlessly lose $90,000. They will certainly sue me and my wife for the shortage. If the bank rejects this offer, they will foreclose on the property and sue my wife and I for the full amount owed. Since my house is cross collateralized, they will also foreclose on my home. It isn’t acceptable for any financial institution or company to make decisions like this. They’re turning down money but still asking for tax payer money (bail out). I believe this is common practice as these financial institutions have company policies that aren’t changing with our new economy. If there are 1,000,000 foreclosures and banks turned down $90,000 each (my scenario $460,000-$370,000), that would equal $90,000,000,000.

How can we provide tax payer bail out money to companies that are so mismanaged?

They’ll be back for more money unless the economy turns around fast or they change their internal practice of loan resolution. As the man who needed a heart was heard to say to his doctor, “Get me the heart of a banker, i

Paul Schlanger of FL 7:04AM March 12, 2009