Things Are Better - So It's Getting Tougher To Get Help

This is anecdotal evidence, but I have no reason to doubt it as I heard it from two independent sources.

The economy, in the opinion of the banking industry, is starting to improve. And that means the big lenders are resisting cutting any deals in an effort to head off foreclosures.

Here's what I heard:

An attorney who has dealt with several of the large lenders, including the former IndyMac, says he's not taking on any more loan modification or refinancing cases. He has two reasons. First, it was a nightmare. He spent hours on the phone with little result. Second, lenders aren't working with the borrowers anymore.

"They're seeing things improve, and they're not willing to make any deals now. They're not even agreeing to short sales. If a customer manages to sell his house but it's worth less than the mortgage, they're letting the sale go through but demanding the customer make up the difference. Loan modifications? They won't even talk about it.

Wasn't that mandated for banks that took federal bailout money? Aren't the rest of them being strongly encouraged to do it?

Another person I spoke with used to be a mortgage broker. She knows the housing mess first hand - her own house was on the market for more than two years and she nearly filed for bankruptcy. She's finally managed to sell for less than she paid for it. In her opinion, the biggest mistake she made was trying for so long to keep up with her payments. Now that she's at the end of the process, she says she could have saved herself a lot of worry and saved a lot of money if she'd just defaulted. The end result would have been the same. She saved her credit, but she's not sure it was worth it.

So this is how the big banks are going to play it? Cry for help, beg for money, agree to do whatever they can to help their customers, then play hardball the second they see an inkling of an economic upturn?

They should all be shut down. There's no sense of fairness, no acknowledgement that they were stupider on a much larger scale than any of their customers were, and no acceptance of the responsibility they agreed to when they took taxpayer money to stay afloat.

It's time for the peasants to fight back.

Signs of Recovery

I am no expert. I am just a writer who covers the news and gets to hear a lot of different points of view. And I'm hearing a common theme: Believe it or not, things are getting better.

If you've lost your job, if you're losing your home, if you're awake nights worrying about the future, understand that I'm not minimizing your situation. I'm just as scared as you are. But the fact remains, there's evidence that the economy is starting to breathe on its own.

Let me tell you what I've heard.

1. From the editor of a business publication that covers New York's Hudson Valley -
"Businesses are starting to make some very cautious plans for long term growth. Small businesses are still starving for credit but it seems like nobody's hiding under a blanket waiting for the storm to pass. They're coming out."

2. From a writer in Pennsylvania who's working on a book on the rush to drill for natural gas - "The gas companies disappeared for a few months there. They were rescinding leases, not taking out any news ones. I think the money for those leases were coming from the stock market and there just wasn't any. But in the last six to eight weeks, they're back. They're buying up leases again. It was such a relief when they were gone, but I guess it's a good economic sign that they're able to afford to get back to snapping up drilling rights."

3. From the New York State Association of Realtors - Sales of single homes in New York were up 14% in March compared to February - and prices seems to be creeping back up. Ulster County in the mid-Hudson Valley, had an eye-popping, jaw-dropping increase in homes sales of almost 67% from February to March.

4. Solar manufacturers are opening up facilities - three of them in the Hudson Valley in the past couple of months. There's a new wind energy project underway as well.

5. From a friend who works at a major radio network - "We're told the layoffs are over. They've cut as much as they're going to and now they're going to be trying some new ideas to market what we do across the country."

6. That business journal? It's starting up a new paper to replace a group of community papers that shut down when the Journal Register went bankrupt.

7. Banks are lending. They're darned careful and you'd better have all your ducks in order and have the money to back it up, but they're lending. That may seem unfair, but those stricter standards were the only ones that ever really made sense. It's a reality check.

8. Sonic is opening a new restaurant near me. Yeah, yeah, big deal you say. But this is in a town that recently saw its Friendlys Ice Cream shut down. It's lost Boston Market, Linens 'n Things stands vacant, Ann Taylor packed up and went home and Lazy Boy got off his recliner and hit the road. But Sonic's moving in. Not only that, but there are about half a dozen new gas stations all owned by one obviously very optimistic guy.

This is just one small corner of the globe, but we're not an isolated pocket. If things are getting better here, it's getting better in other places as well.

And what's really encouraging is that this damned uncomfortable time has resulted in some noticeable changes. A local town is organizing a massive cleanup day where over a hundred people have volunteered to go out and pick up the trash. And they're planning to do it again in the fall. A local realtor reports she's got customers who are moving to the country, deciding that if they have to change careers, they want to find work that contributes something to society.

We're not out of the woods, but maybe the trees are thinning. Hang on.

And if you've got any other signposts that indicate we're on the road out, share them here. We all need to hear.

***UPDATE***
A report on http://moneymorning.com speculates that a sharper than expected drop in the GDP can be considered good news as well, though you've got to squint to see it, in my opinion. An economic advisor in Pennsylvania says it's good/bad news - that it means companies are running as lean as they possibly can and any increase in demand at all is going to have a major positive effect. Okay. I'm willing to consider the idea.

But I've also been told some consider all this a bull trap. I wasn't familiar with the term - I thought it was a typo for something else. But a bull trap, I'm told, is a slight improvement which suckers any leftover cash into the market, only to have it rush down the drain with a sudden whoosh. Kinda like the dead cat bounce.

It's all speculation, people. Anyone who says they know for sure is blowing smoke because the one thing you cannot predict is confidence - and that's what this is all based on.

But it is interesting to see the signs and I admit to wondering what would happen if everyone started pointing out the bright spots in the darkness. Might we all pull out of this sooner?