#2. They Can Repossess Your Home Despite Telling You Otherwise
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Even the most trustworthy person can fall on hard times and miss some mortgage payments. Luckily, the banks know that it would be foolish to kill off a decent cash cow for a momentary setback. That's why, in cases like this, they sometimes offer you a short-term mortgage modification option that helps you get through the rough patch, instead of straight up taking your house.
Or, they can tell you they're working with you on the mortgage, then randomly sell your house out from under you while you're doing the paperwork.
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"The paper's made of wood from your dining table."
That's what happened to a Minnesota woman who initiated steps for mortgage modification in 2012. The bank was totally cool with it: She only needed to wait until she was behind on payments, then fill out some paperwork and wait for them to accept her request. All along the process, the bank gave her friendly smiles and enthusiastic thumbs-ups, even taking the time to tell her not to worry about all those foreclosure notifications she kept receiving in the mail -- they were totally just automated routine notices. And then, out of the blue, she found out that her house had been sold at a sheriff's auction. The bank had given her no notice whatsoever that the house was repossessed and sold to a stranger -- she found out when she called the bank to check up on the mortgage modification request. Two guesses as to whether it was ever approved.
The reason this happened is because in most states, banks are legally allowed to continue foreclosing on your home no matter what else they tell you. Regardless of the fact that they are technically working with you to let you keep your place, they're totally cool with selling your home out from under you while you're too busy with the paperwork to notice if they happen to think that will bring an extra dime into their vaults. The practice is called dual tracking, and, unsurprisingly, banks abused the shit out of it during the mortgage crisis.
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It was the only way they made money in 2008.
Last year the government finally jumped in and created new rules demanding that banks actually wait until the loan modification has gone through before seizing and selling the house, although it doesn't apply to all banks (only large ones) or borrowers who waited too long to ask for the modification. But at least they didn't settle for writing banks a strongly worded letter.
#1. Their Staff Is Obligated to Actively Screw You
There are precious few chances to deal with a human being when banking these days, and pretty much every single one of them involves a teller. The bare minimum of civilized interaction banks offer in the middle of all the bureaucracy is welcome: Sure, the tellers are working for the bank, but at least you know they're regular Joes and Janes like you -- schmucks earning a paycheck. They're just delivering the orders of the giant money machinery; it's not as if they're personally screwing you over.
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If you prick them, do they not bleed? (Do not try this.)
Bank tellers are constantly, actively attempting to talk customers into meeting with various consultants and signing up for services that A) they probably won't ever need and B) can in fact be harmful for the customer's financial situation. The practice is known as cross-selling, and tellers are often motivated with cash prizes and other incentives to do as much of it as they humanly can. For example, in 2010, the government made it illegal to automatically sign customers up for those pesky "per transaction" overdraft charges we mentioned earlier. Unless, that is, someone specifically opts in. Cue your teller, who, aided with some handy marketing tricks, can and absolutely will convince people to opt in, using such convoluted language that more than half of the customers who choose these newly branded overdraft "protection" fees actually have no goddamned idea what they signed up for.
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"Debit card protection fee" = "Cash gift from you to bank"
To be fair, though, it's not as if the tellers have too many options themselves. One teller says her bank not only set strict cross-selling quota requirements, but sent over 50 emails a day demanding that they be met. And if they're not, that's too bad for the employee -- the bank tellers' base pay is so laughably insufficient that a third of them are on welfare. Yes, on top of everything else, your tax dollars are helping pay the bank's labor costs, which it uses to hire employees whose job it is to screw you. Gosh, we really do wonder why banks have such an awful reputation.
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Related Reading: While we're on the subject of evil banks, did you know BCCI has their own SWAT team. It's enough to make us not feel bad at all about insane heist stories. And by the way: screw debt collectors.