Download Mike Reagan Mug Photo Michael Reagan, 4/24/2012 [Archive]

Backward Banking

Backward Banking

Making Sense, by Michael Reagan

I don't know if it's Dodd-Frank. Or if it's Barney Frank and Christopher Dodd themselves. Or if it's just the big bankers.

But the reality is, our banking system is completely screwed up when it comes to getting a home loan.

The problem used to be that the banks, in collusion with a federal government, made bad loans to bad people. That's what helped bring us the housing bubble and the inevitable bust that followed.

Today the problem is reversed. The banking system is so nuts it won't even allow banks to make good loans to good people. An example of our new backward banking system in action is what's happened to the daughter of a friend of mine.

She's a 29-year-old schoolteacher. When she was 24 she went out and bought herself a townhome that a bank had ended up owning after a foreclosure.

The bank was buried in the townhome for $560,000. The schoolteacher got the house for $360,000 and put $110,000 down. Her interest rate five years ago was 6, percent.

Today the townhome is worth more than what the teacher paid for it and now she wants to refinance and get a low-interest loan. But she's just been told by Big Bank that she doesn't qualify for a 3 or 4 percent loan. They've even told her she shouldn't have been able to qualify for her original loan.

Think about this: Here is a teacher who has never missed a house payment. She has her monthly mortgage payment taken out of her bank account automatically. She's never missed paying her taxes. She's never missed paying her homeowner's dues.

Yet she is treated as though somehow she'd suddenly stop making her mortgage payments if the bank gave her a new loan at 3 or 4 percent. The schoolteacher is looked at by the bank as if she was a future criminal.

I come from a generation where people were allowed to have a personal relationship with their bank. I used to be able to go down and talk to my local banker about a loan.

I'd tell him what I wanted to do and how much money I needed. The banker would say, "Mike, I've known you for 30 years. I know you're good for it."

Now there's no such thing as a personal relationship with your banker.The "local" bank is owned by a bunch of international mega-corporations and the management changes every 3 minutes.

Dodd-Frank has created a situation where only the large banks will survive. Small banks are essentially being outlawed. That means our ability to ever have a personal relationship with a banker is also being outlawed. And one bad result of that will be to create more people who become upside-down on their mortgages.

If we want to bring the U.S. economy back to life we have to do it through the housing industry.But there's no way in hell housing is going to recover if banks are no longer even giving good loans to good and rightful people.

The big bankers and politicians co-produced the meltdown of the economy. They're the criminals, not the honest schoolteacher looking for a better interest rate on her mortgage.

If we're going to bring this country back, the Dodds and Franks of Washington are going to have to rewrite the laws so we can have personal relationships with local banks again.

Michael Reagan is the son of President Ronald Reagan, a political consultant, and the author of "The New Reagan Revolution" (St. Martin's Press, 2011). He is the founder and chairman of The Reagan Group and president of The Reagan Legacy Foundation. Visit his website at www.reagan.com, or e-mail comments to Reagan@caglecartoons.com.

© 2012 Mike Reagan. Mike's column is distributed exclusively by: Cagle Cartoons, Inc., newspaper syndicate. For info contact Sales. E-mail Sales@cagle.com, (805) 969-2829.

Download Michael Reagan's color photo - Download Michael Reagan's black and white mug shot photo
Why not run a cartoon with the column? We recommend the cartoons below as a good compliment to Michael Reagan's topic.
Click on the thumbnail images to preview and download the cartoons.

Related Cartoons

 Lib  Liars Poker
By: Pat Bagley

February 9, 2012

 Lib  Liars Poker
By: Pat Bagley

February 9, 2012

The New Responsibility
By: R.J. Matson

November 17, 2011

The New Responsibility-COLOR
By: R.J. Matson

November 17, 2011

The Tortoise and the HARP-COLOR
By: R.J. Matson

October 26, 2011

The Tortoise and the HARP
By: R.J. Matson

October 26, 2011

Your Friendly Neighborhood Realtors
By: Taylor Jones

November 16, 2011

Your Friendly Neighborhood Realtors - COLOR
By: Taylor Jones

November 16, 2011

Mortgage Settlement
By: John Darkow

February 10, 2012

FHA Loan Fees
By: Gary McCoy

March 31, 2012

FHA Loan Fees COLOR
By: Gary McCoy

March 31, 2012

 Con  Franks impact
By: Eric Allie

November 30, 2011

 Con  Franks impact COLOR
By: Eric Allie

November 30, 2011

Bank Robbery
By: Jim Day

April 4, 2012

Bank Robbery
By: Jim Day

April 4, 2012

We do not accept and will not review unsolicited submissions from cartoonists.
Sales & Information: (805) 969-2829 sales@cagle.com
Billing Information: (805) 969-2829billing@cagle.com
Technical Support: support@cagle.com

FREE cartoons for your website if you're already a paying print subscriber!
Artwork and columns are copyrighted by each creator. All Rights Reserved. Unauthorized reproduction prohibited. [Privacy Policy]