Friday, June 21, 2013

The U.S. Government Should Put Bank Of America Out Of Business.

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The Basics: Bank Of America’s lying to homeowners about foreclosure and loan modifications should be the final straw in a long series of acts of corruption that should give the government the final push it needs to put the company out of business.

As I write this and for the last week, news has been breaking that – surprise of surprise – Bank Of America lied to homeowners who had mortgages with the company about foreclosures, refinancing, and the status of their loans. As a direct attempt to counteract the government’s Home Affordable Modification Program (one of the undeniably good attempts by the U.S. Government to actually save the homes of low-income borrowers), Bank Of America lied to the U.S. Government and homeowners. After years of real estate-related financial crimes, this should be the last act of a company that deserves to die.

Given that home ownership is one of the essential components to creating wealth, stability (community, economic, and cultural), and an investment in the country, mortgage companies should be held to a higher standard or actually held to the same standards every other business is held to. The idea of a business that is too big to fail is a cheap cop-out used by government and big business to not shut down the worst offenders in the marketplace. For all of the complaints reactionaries have about the size of government, effective government oversight can translate to actually benefitting the citizens of the nation the government supposedly represents. For that reason, the government should shut down Bank Of America and other mortgage companies that lie to the citizenry.

For all of the issues with shutting down Bank Of America, the economic impact should be the least important one. With the destruction of a multinational conglomerate like Bank Of America comes the opportunity for local businesses to take advantage of an opportunity to enter the marketplace. Innumerable loans that end up with giant companies like Bank Of America, Citimortgage and similar companies actually start at local mortgage companies. They approve new borrowers, then sell the debt to the giant companies that can afford to buy the debt. Lacking big companies to buy the debt, smaller mortgage companies will hold the debt, but they become vastly more invested in the localities in which they invest in order to work with borrowers to make their loans work. Yes, sometimes local is better.

What follows is government oversight. A slightly larger government bureaucracy that actually does its job could much more effectively monitor and regulate the smaller mortgage companies than a smaller bureaucracy that tries to monitor giant multinational companies. You know what small companies don’t have when their money is tied up in loans? Money to bribe government oversight workers. You know what else they don’t traditionally have? Accountants and workers hired entirely to obfuscate records and lie to government personnel.

Bank Of America should die and it should be put down now. The idea that Bank Of America lied to borrowers includes a component yet to be broken by the media. Mortgage crisis after mortgage crisis for the last decade may be mundane to the general populace, but it is exceptionally important to borrowers and the lower classes, working poor, and first-time homeowners, all of whom have borne the brunt of these scandals.

The data that has not yet been correlated and revealed is the most human element of the story. Money problems account for some of the most intense and prolific fights in relationships today. It is naïve to think that with foreclosures on the rise and borrowers denied refinancing that there have been no marriages that have suffered (in a material way) or suicides. While suicide is usually the result of an inherent mental illness – depression, biochemical imbalance, etc. – there is almost always an initiating incident that pushes the suicidal individual over the edge from thought to action. If even one suicide could be attributed to a financial transaction like foreclosure or mortgage refinance denial that came from Bank Of America lying to the individual who killed themselves, then the nature of the crimes Bank Of America is guilty of changes.

Mobsters are prosecuted by the United States government for manslaughter when their criminal actions result in deaths and charging their organizations with criminal conspiracy tends to get traction when there are deaths involved. But for every idealistic idea that argues against giant corporations, the idea that – especially if deaths are involved – Bank Of America and other giant mortgage companies ought to be shut down by the government, this idea actually has a very actionable and practical public action that could dramatically change the way business does business in the United States.

Shutting down Bank Of America, especially if examples can be found where their corruption cost human lives, translates to very easy and practical political change. Congressional oversight is a matter for the House Of Representatives, a body that is exceptionally hard to change, but people are given the opportunity to change every two years. It would seem like it would be easy to raise a grassroots movement to stand against those in Congress now who stand against dismantling businesses that make people homeless and lie at the cost of human life. And it is easy to take a stand in favor of supporting communities by promoting local businesses like local mortgage companies that Congress would then oversee.

Regardless of all of the variables and conditionals, Bank Of America has lied to the U.S. Government and cost citizens homes and their basic financial security. Given that all other actions the government has taken so far, there seems to be no end to the lengths of corruption these mortgage companies will attempt or execute. If Bank Of America is allowed to survive, all existing evidence and precedent indicates that it will continue to do lie, cheat and work against the best interests of the nation. As horrifying as the potential is of deaths resulting from their actions, perhaps discovering that there are life and death consequences to the company’s corruption will be the impetus the government needs to finally shut down unyieldingly corrupt institutions like Bank Of America.

For other articles on business and philosophy, please visit my articles:
Why Shark Tank Is The Most Dangerous Show On Television
It Is Time For Politicians To Throw Patronage To The Young
Why Your Initial Mortgage Company Does Not Matter

© 2013 W.L. Swarts. May not be reprinted without permission.
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