In January 2009 Bank of America said in a press release: “To help homeowners avoid foreclosure, Bank of America and Countrywide modified approximately 230,000 home loans during 2008. This year (2009) the company embarked on a loan modification program projected to modify over US$100 billion in loans to help keep up to 630,000 borrowers in their homes.”

But in October 2009 The Washington Post reported a poster at BofA’s headquarters showing Bank of America inching toward their goal of signing up 125,000 struggling borrowers for a federal program to modify their mortgages. Nowhere hear 630,000 with most of the year gone.

On March 12, 2010 the Wall Street Journal reported something quite different. Their report: “20,666 of (BofA’s) customers had a permanent Home Affordable modification as of the latest monthly report, up from 12,761 that had been completed a month earlier. Bank of America said another 22,303 permanent modifications are pending, which means final loan terms have been approved and are waiting for customers’ signatures.” Now we’re down to less than 50,000.

So much for helping massive numbers of homeowners.

And then there’s the small business loan situation, which sounds very similar, and isn’t limited to the big banks, by any means. Again quoting the Wall Street Journal, this time in the March 15 edition: “A year and a half after the financial crisis hit, the U.S. credit machine is still malfunctioning.” Said one economist, “Banks won’t lend to businesses because they’re afraid they’ll go bad, but that can become a self-fulfilling prophecy.”

Indeed.

But if you believe there are no banks making loans because your bank isn’t, think again. Lots of small banks have money to lend, even though lots of others don’t. If your bank didn’t manage their affairs prudently and are now trying to right themselves, that’s no reason for you to pay the price. Consider shopping for a healthier bank. We obtained new SVA-guaranteed financing for a client of ours only a few months ago from a healthy community bank. And if you don’t know how to tell a healthy bank from an ailing one, ask us to help.

As always, I welcome your comments.