US banks are only guilty of one thing - helping Americans to realize their dreams and achieving a better quality of life.
Los Angeles, CA (PRWEB) October 30, 2010
Responding to the fact that more Americans face losing their homes to foreclosure, Richard Maize, one of the world's most successful businessmen and a respected philanthropist speaks up in defense of the banks.
"About 2.6 million homes have been repossessed by the banks since the recession began. Between January and September more than 800,000 homes were seized," says Maize.
"According to CBS News, if this pace continues, more than 1,000,000 homes throughout the US will be repossessed this year," a sad record states Maize. But then asks: "who's to blame?"
"Mr. Taylor has a nice family," says Richard Maize.
"He has a wife of 15 years and 3 kids all of school age. In 2006, Mr. and Mrs. Taylor had found the house of their dreams within the area and approximate price rage they were looking for. This could have been anywhere from Los Angeles, Chicago or New York to Detroit, Houston or Atlanta."
"They consulted with a mortgage broker that the real estate agent recommended to them. A mortgage broker who was very competent with many years of experience. He went over the available programs that the lenders offered. Very attractive to the borrower. Mrs. Taylor really wanted the house for her kids and would enjoy the great school system for the neighborhood. Mr. Taylor was willing to work the grave shift on a few days a week to continue their life style and pay for this new higher expense."
Richard Maize, who became the leading mortgage banker in the US, continues: "The Taylors, like millions of other families in America, borrowed the 10% down payment and got into the house of their dreams. Both the mortgage broker and real estate agent reassured Mr. Taylor reminding him that the real estate market is hot and will most likely continue increasing so that not only will they be living in their dream house but will be accumulating additional wealth as well. The Taylors purchased the house and were elated. They were so grateful, they sent fresh baked cookies to the lender and all of the brokers that were involved."
"Let's zero in on what the bank did so far; they helped the Taylors get into the house they desperately wanted," says Maize. "The kids got into the fine school system and the Taylors met a group of new friends from the neighborhood. The bank did exactly was asked of them. The Bank loaned the Taylors the money to buy their house."
"The only thing they did they perhaps should not have done is offer borrowers like the Taylors with good credit a loan whereby if they didn't offer a "no income qualifying" loan, their income would likely not qualify the Taylors to purchase the home. Is this act really predatory lending?"
Richard Maize says: "Now let's go fast forward".
"The economy crashes affecting almost every industry from automotive, real estate and food to travel, steel and construction. Mr. Taylor loses his second employment position which makes this very difficult for him to continue their obligation to the bank to make their home mortgage payments. On top of that, the value of the real estate property is now lower than the loan balance."
"What do the Taylors do now?" asks Maize. "They have a tremendous amount of pressure. They go to a lawyer who calls "bloody murder" of either a technical issue with the loan documents or that the bank had no business loaning money to borrowers who really did not have the means to make the payments for a long period of time and the lenders should take the majority of the downfall because they in fact made this bank real estate loan."
"The lender will now either discount the amount owed and take a sizable loss or have to take back their collateral in a foreclosure sale which now is being halted by the government so that the banks will take bigger losses by not converting their bad paper into a saleable asset."
Richard Maize adds: "Was this really a high risk investment for the lender that was making a low risk return of about 5%? The banks, from Bank of America Corp. J. P. Morgan Chase & Company and Citigroup to Wachovia Corp., Wells Fargo & Company and HSBC North America Inc. were and are being blamed for simply doing what was asked of them by US consumers and the real estate community as a whole.'
In conclusion, Maize reflects on what the banks should have avoided.
Maize says: "Not to have allowed borrowers to buy a house with no money down, not to have permitted the borrower to borrow money without being qualified, the banks should have worked with people as if they are living and breathing rather than as a number in order to meet the numbers for the month. This transaction is likely the biggest and most of their lives. and they should have helped the prospective borrower by using the bankers (or mortgage broker's) expertise and guidance as to what they can afford and what type of program would best suit them."
Richard Maize states what borrowers need to do.
"Take responsibility for their actions and stop blaming the banks. US banks are only guilty of one thing - helping Americans to realize their dreams and achieving a better quality of life."
Richard Maize adds: "The banks shouldn't be blamed for the foreclosures. At the same time I am not suggesting that the banks callously turn their backs on the homeowners who really want to keep their homes. These are good people, honest hard working borrowers that are also victims of the economic crash. The banks and the borrowers are both victims and should try to help one another other. The banks could help the borrower by providing relief in the payments and the borrowers could help the banks by paying the loan back at an agreed and reasonable date."
The Rochelle and Richard Maize Foundation is a philanthropic organization that supports and contributes volunteer and financial resources to causes locally in the community and worldwide by supporting meaningful programs focusing on art, culture, family services and health care that work to help people live more fulfilling lives.
Richard Maize has generously supported organizations and causes both locally and worldwide including the American Cancer Society, Vista Del Mar Child and Family Services, Hurricane Katrina, Los Angeles Police Foundation, humanitarian causes in Israel and Haiti, and the Cedars Sinai Board of Governors.
Richard Maize and his wife, Rochelle Maize, are longtime benefactors of the American Cancer Society, among many other organizations, and Richard Maize has been recognized for his efforts on behalf of more than a dozen charitable groups and community projects.
The Rochelle and Richard Maize Foundation supports an extraordinary number of foundations, organizations, and non-profit groups. The Rochelle and Richard Maize Foundation is a philanthropic organization that supports and contributes volunteer and financial resources to community and global causes by supporting programs focusing on art, culture, family services, and healthcare. The Rochelle and Richard Maize Foundation's efforts also help people with cancer and those who care for them lead live more fulfilling lives.
# # #