For the past few weeks we have heard about how the banks were being given all this money to bail them out. The media then started telling the story of how the banks aren't giving any of the money out, how lending has not picked up. Well, that is only part of the story. I just got off the phone with the owner of my house...CitiMortgage. The gentleman listened as I told him I wanted to put my two loans into one so as to decrease my monthly payment. After explaining to me that it could not be done, he explained why. First he began by saying that Citi Bank had gotten $38 Billion in bailout money but had lost $41 Billion in just California...so the money being given so they could loan is not entirely true. He said the main reason the money had been going to the four largest banks, was to keep them from failing. He also explained that since I had originally taken the risk of a 100% loan, I would have to accept that risk now because no one is giving them out. Even if they did, I would need PMI (Personal Mortgage Insurance) which would actually increase my payment and not be tax deductible. Even though I did not like the answer he gave me, I found the explanation very helpful. Now that Obama has thrown all this money at the banks and economy, maybe he should try coming up with how to actually make it work. No wonder he can't fill his cabinet, no one wants to try to tackle this monster.
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