Wednesday, May 13, 2009
Help Me Howard: Bank & Rent
In these tough economic times there are a few businesses to be in. For example, banking. Think about it, the government is giving you billions to bail you out and you can break leases, refuse to pay your rent and the government makes it all legal for you. Don't believe it? Neither did a South Florida couple, so they called Help me Howard with Patrick Fraser.
WSVN -- From the air, it's a big piece of property, but the people who oversee Turtle Run Shoppe's in Coral Springs just call it a local community center.
Kami Churba: "We have restaurants, we have insurance businesses, we have a post office in here. We have a very busy preschool, great businesses."
And one more business that is still on the sign out front, a bank: Washington Mutual.
Kami Churba: "They were good tenants up until a couple of months ago when they decided to stop paying."
Washington Mutual was one of tenants Kami and her husband managed till the federal government took the bank over in September and sold them to JP Morgan Chase.
Kami Churba: "JP Morgan Chase decided to close some of their non-performing branches. This was one of them."
After they shut down, Kami kept getting rent checks, $13,000 a month in October, November, December and January. Then, Chase Morgan sent this letter basically saying they were not going to honor the last two months of the lease.
Patrick Fraser: "They paid almost $13,000 a month, so you are out almost $26,000?"
Kami Churba: "Correct."
Patrick Fraser: "Does it surprise you that a bank won't pay their rent on a building?"
Kami Churba: "Absolutely, absolutely. It's terrible."
But while JP Morgan Chase was refusing to pay the rent, the federal government gave the bank $25 billion dollars in bailout money to help them through their hard times, and when Kami asked why that taxpayer money couldn't be used to pay their rent, Chase referred her to the FDIC.
Kami Churba: "Well, JP Morgan Chase is claiming they didn't purchase their liability, simply their assets. They direct us to the FDIC who then says, we can't help you at this point."
But can the federal government, funded by taxpayer dollars, take over one bank and sell it to another, and then allow that bank to break its lease and not pay a taxpayer? Howard?
Howard Finkelstein: "The one thing every American should know, the federal government can do almost whatever it wants. It can allow Chase to break a lease. It can give Chase $25 billion, and then it can tell the taxpaying landlords, tough luck and it's all legal because the government writes the rules."
When I contacted Chase, they told me, "Our agreement allowed Chase to elect not to assume certain leased branch locations." They said the FDIC is responsible for the rent payments still owed, but it's not that simple.
The FDIC insures deposits that claims like broken leases go into a receivership run by the FDIC, that Kami needs to file a claim and will get paid... if and when the money becomes available. Then I asked how many people like Kami that are owed money by Washington Mutual have been paid? I was told no claims have been paid, that the process takes years and they may never get paid.
Fortunately, some good news for Kami and Jay. They have a new tenant who is turning the building into a banquet hall, a new tenant who will pay their rent and let them forget about their banking nightmare.
Kami Churba: "It's going to be beautiful, absolutely beautiful. We are out of the banking business. Hopefully, it's a good thing."
Patrick Fraser: "As Kami has learned, the bank takeover is a very complicated process and very painful for the little people who aren't given billions by the government."
Don't understand Washington? Gee, the feeling is mutual. Don't chase down your answers, just bank on us to deposit a solution with you.
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