“CAUTION” Banks and their affiliated relationships.

Few people understand the impact affiliated relationships have on consumers when banks merge with other banks. Even if two banks don't actually “merge” they share information and make data available to each other at the expense of you when they decide to form affiliated business relationships. After all, when would a bank take action in a specific direction unless it serves “them”?

How, “you ask”, does this affect the average consumer? Lets just use the example that's been prevalent in America for the last two years. A family has an unexpected job loss and now has to deal with just one income. They begin to use more credit and as result increase their credit card usage. Eventually, they become stretched to pay the mortgage and are forced to consider other alternatives like Short Selling their home or perhaps Loan Re-Structuring. During the process most people attempt to do the “right” thing and are honest to a fault by completing documentation and sending all their detailed banking information to the loan servicer in a good faith attempt to apply for a loan modification. The issue comes when the bank doesn't approve the work-out due to the bank reserves they still have in savings.

Or, when the homeowner can no longer pay the mortgage and they miss one payment, the bank goes right into their bank account and takes the money. Contrary to what people may have told you, banks can do that as long as they have disclosed the affiliated relationship in the fine print which no one reads. Now you know why you get those statements in the mail two to three times each year saying that “something” has changed at the bank but you can't make heads or tails of it.

Banks are actually forcing people to deplete their savings before they will consider a loan modification. How is this viewed as help? To force people to be broke before helping them is wrong. So, if you are considering a loan re-negotiation, or if you know someone who is, you must keep in mind who your servicer is, and what bank or private investor owns your note.

EXAMPLE A: Homeowner has a first mortgage with Bank of America. They also have a second mortgage with EMC. Remember, EMC is owned by Chase so if there are any bank accounts with Chase, those funds can be taken from the bank if you're late on your EMC payment.

EXAMPLE B: Homeowner has a first mortgage with Countrywide. They also have a second mortgage with MBNA. Remember, B of A owns MBNA and Countrywide, so if there are any bank accounts with B of A, those funds can be taken from your account if you're late on either your MBNA or Countrywide payment. Here's a list of the big relationships:

Wells Fargo = Wachovia and ASC

Chase = EMC and JP Morgan

One west Bank = Indy Mac

National Citi = PNC

B of A = Nations Bank, Fleet Boston, MBNA, US Trust, Countrywide, Merrill Lynch

Contact us if you have any questions regarding this topic, we provide free advise to people everyday and do not charge up front fees. A detailed pre-qualification will help determine if you can have success with a mortgage re-negotiation and plan an appropriate strategy that protects your hard-earned money in the process. Empowered Consumers is a full service loss mitigation firm committed to preserving home ownership. Learn more about us at www.ec360.org