TARP Money and Credit Card Debt: The $700 Billion Elephant in the Room

If you're a bank, things are looking up! The $700 billion from the Troubled Asset Relief Program (TARP) has largely gone to buoying up financial institutions with some help to the struggling auto industry as well. So if your name is Bank of America, Citigroup or GM then congratulations are in order. In fact, over $25 billion have been eagerly repaid by those institutions who are stockpiling funds and do not want to have any government oversight of their business. Go banks!nnBut—if you're a homeowner or a potential homeowner, an average American, or a small business then the news isn't all that great. From where I often sit behind the desk of a real estate radio show and podcast, it looks pretty discouraging. The real estate system is starting to move homes, but lending requirements are stricter than ever, and even high FICO and truly qualified buyers are not getting approval. It seems like we've created a system in which no one is deemed qualified. Brilliant.nnTARP Funds should help those in need!nnHow needy are the banks? Frankly, the banks are posting great profits. They are benefitting from government funds, and even Treasury Secretary Geithner has stated that most banks now have more money than they need. That extra infusion of bailout money to repair the financial system seems to have worked—for the banks. What about the consumers?nnLoan programs are increasing, interest rates are low—but credit continues to deteriorate! Job losses continue as many businesses scale back on staff and are forced into layoffs. If you're one of many working Americans who has lost a job or lives in fear of a job loss, then the success of Bank of America doesn't do much to feed your family or put a roof over their head, does it? They still won't give you a loan.nnAnd Bank of America is just one striking example of how the bailout funds are working for the big banks and against average Americans. Bank of America posted a $4.2 billion profit in the first quarter of 2009, yet they have $1.3 billion in credit losses. Doesn't this point to a huge problem that no one is addressing?nnCredit card debt is the elephant in the room!nnThere's about $110 billion left in the TARP funds. Where is it going to go? I hear all this talk about bolstering the financial industry and getting credit flowing again, but no one is looking at the credit situation from the buyers' end! Nothing will start flowing until qualified buyers can actually get loans!nnCrazy Ringmasters and Hoops for Home LoansnnHome values are down and the real estate market is showing signs of improvement; but folks who can finally buy are forced to jump through double hoops. It's like the banks are crazy ring masters!nnEvery day I hear from folks who are forced to go through a pre-qualification procedure with one bank, even though they already have a loan with another bank. Why? Banks that have foreclosures don't even want to do loans on their own foreclosures, so you have to get pre-qualified by the first bank's loan reps to get a loan with another bank. That's crazy!nnWhy don't those banks open the doors, loosen credit and make loans on their own bank foreclosures to the people that want to buy? If they make the terms better and easier to qualify they can stop the foreclosures, keep buyer paying the loans, and help to unclog the housing market. Everybody wins!nnSo why isn't anyone talking about the credit card and qualifying situations? These are the issues I get calls about on my radio and podcast shows every day. Want to buy a home? There are thousands out there that banks, lenders and homeowners need to sell. It's too bad that no one seems to be qualified to buy them.nnWe've got a $700 billion elephant in our nation's financial living room. Maybe we should start talking about it.nnMoratorium? Is that still on?? I see everyone got quiet!!