Yes, some banks charge to cash checks -- even their own checks
Filed under: Banks
The Philadelphia Inquirer recently ran an interesting story about a musician who recently received a $150 check from his agent. It was issued by PNC Bank, and so when the musician passed by one of the branches, he decided to go inside and cash the check.That's when he learned it would be $10 for him to receive his cash.
As Steve Cohen, a professional piano player and a singer, told Inquirer columnist Jeff Gelles, "I've just never seen a bank operate that way."
The article goes onto note that PNC Bank recently upped its fee for noncustomers to cash a PNC check, from $5 to $10.
In any case, this isn't new, unfortunately. In the last few years, particularly, banks have been more aggressive about charging non-customers fees for cash checking, even if the check is made out to their own bank. The Rip-off Report Web site, for instance, is full of such tales and complaints of people wanting to tear their hair out over cash checking charges: $5 seems to be the norm.
What I find surprising is that Cohen actually paid the fee when, according to the story, he has his own bank. The column doesn't explain why he paid it, and since I've never met the guy and don't know his story, I'll assume he had a good reason. In fact, if he was far from his home, maybe he needed the money for transportation and had no choice. I'm not even sure he could have gone to Walmart, because while they charge $3 to cash checks, the checks have to be payroll and government-issued checks.
But the moment he relented and cashed the check, he just gave the bank 6.6% of his income. No wonder he was angry enough to contact The Philadelphia Inquirer. It may not be as good of an alternative as declining to get the check cashed and going elsewhere, but it's close.
Reader Comments (Page 1 of 1)
10-13-2009 @ 10:18PM
Jim said...
If you are in or near foreclosure with your bank, you should possibly get a real estate attorney to fight the foreclosure using the following information.
BACKGROUND
Mortgage-backed securities (MBSs) are simply shares of a home loan sold to investors. They work like this: A bank lends a borrower the money to buy a house and collects monthly payments on the loan. This loan and a number of others -- perhaps hundreds -- are sold to a larger bank that packages the loans together into a mortgage-backed security. The larger bank then issues shares of this security, called tranches (French for "slices"), to investors who buy them and ultimately collect the dividends in the form of the monthly mortgage payments. These tranches can be further repackaged and sold again as other securities, called collateralized debt obligations (CDOs). Home loans in 2008 were so divided and spread across the financial spectrum, it was entirely possible a given homeowner could unwittingly own shares in his or her own mortgage.
Eventually, the most desirable, qualified customers dried up; they all had homes. So banks turned to customers they'd traditionally shunned -- subprime borrowers. These are borrowers with low credit ratings who pose a high risk of defaulting on their loan. But lenders of all stripes bent over backwards in the early 2000s to get this type of borrower into homes. The no-document loan was created, a type of loan for which the lender didn't ask for any information and the borrower didn't offer it. People who may have been unemployed as far as the lender knew received loans for hundreds of thousands of dollars. Why?
One answer is that, with the introduction of MBSs, lenders no longer assumed the risk of a loan default. They simply issued the loan and promptly sold it to others who ultimately took the risk if payments stopped. And since MBSs created early on were based on mortgages granted to the more dependable prime borrowers, the securities performed well. They performed so well that investors clamored for more. In response, lenders loosened their restrictions for mortgage applicants and borrowed heavily to create cash flow for loans in order to create more mortgages. Without mortgages, after all, there are no mortgage-backed securities.
THE QUESTION
As mortgages were packaged/bundled into mortgage back securities (MBS) and sold to investors and since these MBSs were bought by investors, with some mortgages being split and owned by several institutions or people (tranches), how can the homeowner/borrower know who actually owns their mortgage? If the homeowner /borrower does not know who actually owns their mortgage, then how does the foreclosure court know who actually owns the mortgage and CAN actually proceed with the foreclosure?
The real estate attorneys representing these possible foreclosed homeowners should request that the foreclosing institution show that they ACTUALLY own the mortgage and can bring foreclosure action to court and are not just the mortgage servicer.
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