Editorial: Bernardston senior has tough lesson to share on finances

  • 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. Recorder Staff/Paul Franz

Saturday, March 10, 2018

It’s almost Dickensian in its pathos: Senior citizen borrows against his home, gets sick and cannot work, falls behind on loan payments, loses home to out-of-town bank.

That is the tragedy of 73-year-old Bob McCollum of Bernardston, a self-employed carpenter. As the auction gavel fell on his long-time home, now owned by the Bank of New York Mellon, McCollum said to the Greenfield Recorder from his hospital bed at Baystate Franklin Medical Center on Tuesday, “I feel embarrassed and ashamed. This is the worst tragedy of my life.”

He went on to say, “I hope some good will come out of it, and maybe it’ll help somebody else and expose the banks for what they’re really doing.”

So what are the banks really doing and 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 often times not nearly as easy to pay it back. In the best of all possible worlds, the borrower will make money, get a raise, receive an inheritance or sell the home at a profit and pay back the loan. When, conversely, the stars don’t align, the borrower gets sick, has to turn down jobs, loses his business or job and goes into default, triggering a long, sad process of foreclosure and eventual eviction.

Local versus out-of-town banks

Local Realtors will tell you they hate dealing with out-of-town banks: the paperwork, for example, might get farmed out to an independent contractor working from home half-way across the country and if it isn’t completed in time, the bank simply delays closing — disrupting the best-laid plans of buyers and sellers. Simply put, the accountability just isn’t there. Local banks, on the other hand, have a reputation to protect in their community. Thus, the thinking goes, they are more likely to counsel prospective loan clients against a bad outcome.

It would seem that Shellpoint Mortgage Servicing, the mortgage lender used by the Bank of New York Mellon, has no stake in working with McCollum. “I attempted to pay off this loan,” McCollum says in a suit, “with help from family and friends. They wouldn’t allow me to do a pay-off. I asked the lender for documentation, but the lender was unable to provide it. I don’t think this is correct.”

They wanted the house and now they’ve got it.

The power of community

Throughout the process, McCollum has been assisted by his longtime friend and elder care advocate, Al Norman of Greenfield. Norman staved off the foreclosure for some seven months and recently filed a civil rights suit on McCollum’s behalf in U.S. District Court in Springfield on Monday. The hope is that this suit might disrupt or delay the bank’s ultimate end game, which is to evict McCollum. Norman called the foreclosure an act of “faceless people enforcing their very real demands to take away this home. It’s pathetic that you have people who won’t even identify themselves.” In the meantime, Norman will begin to raise money for McCollum’s legal fees.

Cohn and Company Real Estate’s Mark Abramson has been trying to help McCollum sell his house. Abramson said he has not been able to get a buyer because of the price, set in part to help pay for that outstanding loan. “I think it’s a sad day if in fact his foreclosure goes through,” said Abramson.

The good to come out of this

McCollum deserves credit for exposing his predicament in this public way, and he has already helped other people by calling attention to the perils of debt.

Moreover, his predicament has hammered home the importance of national banking regulations like those spearheaded by Sen. Elizabeth Warren, the Massachusetts Democrat who worked with the Obama administration on banking industry oversight after the 2008 housing market collapse — oversight which the Trump administration is doing its best to dismantle.

The U.S. Senate is debating a bill that would scale back some of the 2010 laws, known as Dodd-Frank, that were meant to prevent future abuses in the financial system. Sen. Warren warned on Tuesday that Congress has forgotten the “devastating impact of the financial crisis,” as Republicans moved closer to relaxing banking regulations implemented after the financial crash of 2008.

If ever we needed a reminder of the weakness of consumers against the power of predatory lenders, McCollum is that reminder. When it comes to dealing with faceless, out-of-town lenders, the average person needs all the help he or she can get. That bears keeping in mind when we go to the polls.