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Banks Still Foreclosing On Pittsburgh Homes, Despite Getting Bailout

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  • Banks Still Foreclosing On Pittsburgh Homes, Despite Getting Bailout

    http://www.thepittsburghchannel.com/...24/detail.html

    Team 4: Banks Still Foreclosing On Pittsburgh Homes, Despite Getting Bailout
    Paul Van Osdol Investigates
    POSTED: 5:29 pm EDT March 26, 2009
    UPDATED: 7:02 pm EDT March 26, 2009

    PITTSBURGH -- A Team 4 investigation: Banks getting billions of taxpayer dollars, foreclosing on people right here in our area, and banks forcing Pittsburghers out of their houses despite promising to help them save their homes.

    The following is Team 4 investigator Paul Van Osdol's report, which first aired March 26, 2009, on WTAE Channel 4 Action News at 5 p.m.

    Just this week, the Obama administration proposed spending half a billion more to bail out banks. Our investigation focuses on the $350-plus billion that's already been spent.

    The leaders of bailed-out banks have told Congress they're using some of the bailout money to help people avoid foreclosures, but people we talked to on the front lines of the housing crisis tell me they are seeing little evidence of that in western Pennsylvania.

    Times might be tight, but for Allegheny County Sheriff's Deputy Dan Macioce, business is brisk. His job is serving legal papers for sheriff sales and foreclosures. The hundreds of billions of taxpayer dollars poured into banks has done little to slow him down.

    Van Osdol: "Have you seen any change in the number of papers you're serving since the bailout?

    Macioce: "Not really, no."

    Also, no change in the emotional devastation for those getting his legal papers.

    Macioce: "Sometimes you just see people, and they're defeated and deflated."

    People like Tony and Doris Haywood, of McKeesport. We talked to them just hours after Macioce stapled the sheriff sale notice to their front door.

    Van Osdol: "What went through your mind?"

    Doris Haywood: "My heart started pounding and everything. I don't want to lose this house and everything."

    They ran into hard times when Tony lost his job last year. Now he and Doris are both working at McDonald's.

    Van Osdol: "What would happen if you didn't have this house? What would happen to you?"

    Tony Haywood: "Be on the streets, looking in."

    After the Haywoods bought this house, their mortgage was packaged with thousands of others and sold to investors -- a common practice on Wall Street.

    Their mortgage ended up with a subsidiary of Morgan Stanley, which received $10 billion in taxpayer bailout funds last year. But the Haywoods say none of that bailout money has trickled down to them.

    They've tried to redo their loan with Saxon Mortgage -- the Morgan Stanley subsidiary.

    Van Osdol: "Have they offered to help you at all?"

    Tony Haywood: "Nope, nothing. Called them yesterday to see if we could get a loan modification. Turned us down because not enough income."

    Saxon declined to comment on the Haywoods' case. A Saxon spokeswoman says the company "is committed to working with qualified borrowers to structure solutions so they can remain in their homes."

    The bailout did not prevent Morgan Stanley from giving its top executives millions in bonuses -- only, they're not calling them that.

    Listen to what company president James Gorman told top managers in a conference call first obtained by The Huffington Post:

    Gorman: "There will be a retention award. Please do not call it a bonus. It is not a bonus. It is an award."

    Gorman: "I think I can hear clapping from here in New York, but I'm not sure about it, but you should be clapping because, frankly, that is a very generous and thoughtful decision that we have made."

    U.S. Rep. Jason Altmire, D-Pa., says bailout money should be helping people like the Haywoods, not Wall Street executives.

    Altmire: "The fact that they're using bailout money -- taxpayer money -- to pay bonuses when they are, in a large part, responsible for why we find ourselves here in the first place -- that's an outrage."

    A Morgan Stanley spokesman says the bonuses -- or retention awards -- total about $2 billion, but they are not being paid with bailout money.

    It's not just Morgan Stanley.

    Team 4 reviewed properties sold at Allegheny County sheriff sales the past two months. Most of the homes sold -- more than 100 of them -- had mortgages held by banks that have gotten bailout money.

    That comes as no surprise to housing activist Maryellen Hayden, of the Association of Community Organizations for Reform Now.

    Hayden: "There are about six housing counseling agencies in Allegheny County. Everybody is swamped. Everybody's phones are ringing off the hook, and people are losing their houses."

    It's not just homeowners suffering, but also tenants like Tammy Wittmer-Bagby.

    Wittmer-Bagby: "I grew up in this house. My dad actually passed away. He took the first of four heart attacks in my arms, in the bedroom."

    She's being forced to leave the McCandless home where she grew up because JPMorgan Chase, which got $25 billion in bailout money, foreclosed on the owner -- her mother.

    Last month, appearing before a congressional committee, JPMorgan's CEO defended the firm's use of its bailout money.

    James Dimon, JPMorgan CEO: "JPMorgan is committed to keeping borrowers in their homes by making sustainable, properly underwritten loan modifications -- in some cases, even before a default occurs."

    Van Osdol: "What was your reaction when you heard JPMorgan was getting all these billions of dollars in bailout money?"

    Wittmer-Bagby: "Nausea. Wanted to throw up, that they're actually getting paid for not caring about the people."

    As bad as the economy is, western Pennsylvania has not been hit as hard by foreclosures as many other areas. But the sheriff's deputy we talked to says he has seen an upsurge in foreclosures in the last couple months.

    People in foreclosure who are not able to work things out with their bank do have one other option to save their house -- bankruptcy. That's the step the Haywoods in McKeesport have taken. Of course, that is not an option that most would desire.

  • #2
    Originally posted by Lostinoz View Post

    Tony Haywood: "Nope, nothing. Called them yesterday to see if we could get a loan modification. Turned us down because not enough income."
    Not enough income to qualify? They at least HAVE an income.

    Originally posted by Lostinoz View Post
    Saxon declined to comment on the Haywoods' case. A Saxon spokeswoman says the company "is committed to working with qualified borrowers to structure solutions so they can remain in their homes."
    Qualified borrowers? Sounds like they're saying: "You don't make enough money to qualify for a way to keep paying us money"

    Originally posted by Lostinoz View Post
    The bailout did not prevent Morgan Stanley from giving its top executives millions in bonuses -- only, they're not calling them that.

    Listen to what company president James Gorman told top managers in a conference call first obtained by The Huffington Post:

    Gorman: "There will be a retention award. Please do not call it a bonus. It is not a bonus. It is an award."


    A Morgan Stanley spokesman says the bonuses -- or retention awards -- total about $2 billion, but they are not being paid with bailout money.
    That's like spending your paycheck at the bar, and buying groceries with your credit card. You can't accept $100 from a friend to help you with your bills when you spent $100 on drinks at the bar.
    "Reject the basic assumptions of civilization, especially the importance of material possessions." "The things you own end up owning you"-Tyler Durden

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