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Editorial: Bank of America, do the right thing

  • Robert McCollum leans on the his truck blocking the end of his driveway while he watches his home being auctioned off on Shaw Road in Bernardston in 2018. Recorder photo/Paul Franz

Published: 6/12/2019 8:41:29 AM

It may seem Dickensian in this day and age, but people are still, literally, being put out on the street. Such is the plight of Robert McCollum, 74, of Bernardston, currently in rehab, who has lived in his log cabin on Shaw Road since the late 1990s. In 2003, McCollum took out a loan for $153,000 against the house with Countrywide Loans, which was later bought by Bank of America. Subsequently, a series of personal setbacks, including cancer and multiple health problems, interrupted the earnings of this independent home contractor and he soon fell into arrears.

McCollum said he now lives completely on his Social Security check and has had numerous health issues, including the one that recently sent him to the hospital and then rehab. Al Norman of Greenfield, McCollum’s friend and champion, has put McCollum on housing lists in Bernardston, Gill and Northfield, where he grew up, but there are three-year waiting lists. Norman said it isn’t clear if they can even find housing for McCollum if he ends up out of the house.

So where does the blame lie?

The reality is that it is (still) very easy to borrow money, especially when home equity exists to back the loan up, and it is always hard to pay it back. Loans, to paraphrase the 18th-century writer Samuel Johnson, are the triumph of hope over experience. In the best of all possible worlds, the borrower hopes to earn more money, receive an inheritance or sell the home at a profit and pay back the loan. When, conversely, the stars don’t align — because the borrower gets sick and has to turn down jobs, and loses his business or job — the long, sad process of foreclosure and eventual eviction ensues.

Countrywide Bank had an egregious reputation for making so-called predatory loans — loans in which the likelihood of failure is high or loans that took advantage of borrowers based on race or ethnicity. When Bank of America bought Countrywide Bank, part of its assets were in the form of these questionable mortgages. In fact, in 2011, U.S. Attorney General Eric Holder announced that Bank of America agreed to pay out a $335M settlement with the Justice Department for predatory mortgage lending practices. It was the largest fair lending settlement in history, and, as Bank of America would like to point out, is the result of practices at Countrywide before the bank bought the lender. Nonetheless, BofA is left holding the bag.

Local vs. national banks

Local banks and credit unions have a vested interest in lending responsibly. They live here and they answer to local boards of trustees. They want happy outcomes so they are conservative in their mortgage loans. As Norman has pointed out, McCollum “didn’t have the steady, stable income to pay back that type of loan — the bank should have seen that.” A local bank or credit union would probably never have given McCollum a loan of that magnitude. National banks such as Bank of America, on the other hand, answer to shareholders whose primary interest is profits.

Upon buying Countrywide, Bank of America assigned its mortgage portfolio to Bank of New York Mellon, which services the loans and turns mortgage payments over to Bank of America, minus their fee. But Bank of America still owns this mortgage and the ethical responsibility that goes with it.

Bank of America is not long for this town. On April 5, it announced to its customers that the BofA financial center at 208 Federal St., Greenfield is closing July 16. We implore Bank of America to leave the county on a high note and let Bob McCollum stay in his house. You will get Bob McCollum’s log cabin, eventually. In the meantime, let him continue to live there and get better, free from the stress of eviction and homelessness.

Greenfield Recorder

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