Aiding struggling homeowners

Sunday, Aug. 9, 2009 | 2:06 a.m.

Banks have no problem turning aggressive when it comes to foreclosing on homes, collecting overdraft charges and tightening credit. But asking them to help Americans during the economic crisis our nation faces today has revealed just how quickly banks can become lazy and inactive.

It is bad enough that financial institutions and their reckless behavior played a central role in the devastation that has caused many people to lose their homes and jobs through no fault of their own.

After the federal government began bailing out banks with the intent of sparking an economic recovery, there was an expectation that the financial behemoths would exercise transparency in how they were spending the money and would loosen credit for businesses and consumers. Those things haven’t happened to any significant degree.

That’s why it is not a surprise that some banks, especially major bailout recipients Bank of America and Wells Fargo, have let down Americans again when it comes to participation in a federally funded program that was designed to allow financially strapped homeowners to modify mortgage loans.

The Treasury Department on Tuesday released its first progress report on the $75 billion Making Home Affordable program, which began in March. The report disclosed that only 9 percent of eligible homeowners — those who have missed mortgage payments for at least 60 days — had received modified loans as of the end of last month. Wells Fargo had modified a paltry 6 percent of its eligible loans and Bank of America fared even worse, at 4 percent.

We strongly recommend that banks step up their efforts to modify eligible mortgage loans to help put an end to foreclosure rates that have spun out of control, as has occurred in Southern Nevada. We also urge the Treasury Department to apply pressure on financial institutions to place a higher priority on loan modifications.

If banks would be as aggressive in fulfilling the goals of the program as they have been in repossessing homes, our economy could be in better shape than it is today.