New Orleans Reading the article in the New York Times today about families pulling themselves together by not paying “rent,” which is to say their mortgage payments, while waiting for banks to foreclose, echoed the one thing I heard over and over again in Phoenix last week. The only good thing anyone could say, was that they appreciated not have to throw good money after bad while they wrestled with the bankers in endless bad faith negotiations.

Part of what breeds such intense bad blood besides the unwillingness of the banks to right size the loans and write down the principal to real value, is the lack of transparency and good faith at every step in the process. Repeatedly foreclosure victims were told they were eligible, they were being processed, they were going to be modified, but virtually never in writing at least by most of the banks, and never ever by most of the big ones like Bank of America, Wells Fargo, or CitiMortgage. If your loan was through those institutions, it was clear that the “servicer” on the other end of the phone might promise you the stars and the moon and assure you that everything was coming up roses, but there was never any guarantee of anything, which left them with all of the options, including the lame excuses when they sold the house out from under you when you thought you had a modification secured.

The foreclosure process also stretches on and on for months and in some cases years, and you still cannot get a clear, written explication of where you stand as a homeowner and borrower. It’s easy enough for us to advocate memorializing every conversation with a lending institution in writing, but how can the government justify having set aside $75 billion for a modification program and allowing each individual bank to have different sets of procedures none of which seem to serve the borrower in getting a modification and none of which are transparent and allow the borrower to know where they really stand.

As long as that’s the way it goes, then why should anyone be paying the banks?