From the “there but for the grace of god go I” file comes the story of one GMAC debtor who can’t catch a break from the company that is catching breaks left and right. The New York Daily News profiles the plight of Chastity Strawder, an unemployed schoolteacher who is falling behind on lease payments for her Pontiac G6. Having leased two G6s (after all the usual credit checks), Strawder developed health problems and lost her job. Now falling behind on lease payments, Strawder is being treated to a series of angry phone calls from GMAC who want their freaking money, man. And Strawder seems to believe that since she and GMAC are in the same boat (“can’t make ends meet”), they might treat her with the same generosity that she (as a taxpayer) is showing them. Apparently not. $6b of public funding or not, GMAC is still in it for GMAC. Or is that Cerberus? Either way, the moral of the story is that bailouts won’t weaken the world’s most powerful force: compound interest.
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First comment ever and I’m getting all Bibley. There’s a parallel here.
“Then the master called the servant in. ‘You wicked servant,’ he said, ‘I canceled all that debt of yours because you begged me to. Shouldn’t you have had mercy on your fellow servant just as I had on you?’ In anger his master turned him over to the jailers to be tortured, until he should pay back all he owed.
http://www.biblegateway.com/passage/?search=matthew%2018:21-35
Seriously?
I am pretty sure Bank of America, Chase, and all the other lending institutions that received TARP Money arent giving their borrowers a holiday from their payments.
Just crazy!
They loaned her money and then expected her to pay it back! How unAmerican.
The government should just give everyone a million dollars and the problem will be solved. Such a simple obvious answer. No longer would people need to work hard for their money.
@gamper
This Bailout-mania is even scarier than the Twilight Zone – Is there anyone with brains in charge anymore? I guess not…
The Fat Cats that some are defending – you know, the ones that just got a pay day they couldn’t earn by selling better products – aren’t extending the same sympathy they’ve been shown to their customers who are in a similar bind.
GM and the rest are giving more ammo to those who all along said the D3 losers shouldn’t get a nickel.
Why would anyone lease two G6’s in a row on purpose? They certainly are easy enough to find on the used car market for dirt cheap.
Blunozer :
The real question is… Why would anyone lease two G6’s in a row on purpose?
Even better, her and her husband each leased one! That’s 2 at the same time!
“GMAC had approved her for two new 2007 Pontiac G6s, which she and her husband leased at the dealer’s urging.”
bbbbbut the dealer said I could afford them!
The mind, it boggles…
gamper:
Be happy that the failed, bankrupt Detroit automakers and their failed, bankrupt financing arms have been put on life support.
Tens of thousands of companies that are better run and more deserving than the Detroit automakers will go bankrupt this year without the government giving them welfare.
Also, as scruffylooking points out, GMAC is not following the word of the bible. And you thought the southern politicians were being tough on the Detroit automakers before.
I would advise the woman in the article to just give the mediocre, not-worth-keeping cars back to GM, hopefully that will have some small effect on tanking GMs horrible residual values even more.
She can buy a used Toyota or Honda when she is back on her feet.
The purpose of the TARP program was not to bailout the companies that receive the money, but to prevent the credit system from failing and allow borrowers to borrow. The companies are just a means to that end, not the end in itself.
The money should come with strings attached that serve the greater mission of propping up the system and consumers. One of the missions should be debt forgiveness and loan modifications, at least in some cases.
There have been plenty of complaints about banks hording their TARP money instead of lending it. GMAC is not alone in being on the receiving end of criticism.
These companies need to be reminded why they are getting the money. If it all disappears into a black hole, then the feds need to be more aggressive.
I know this is just silly of me and certainly not the way we do things but…
I think that unless you have fallen to a serious medical issue that has caused you to lose something of significant value to you, you shouldn’t be allowed to comment on a story like this.
“bbbbbut the dealer said I could afford them!”
It’s highly likely that she could afford them at the time (before she became ill).
I’d be willing to bet that the reason most of us here are not sharing her fate is purely a matter of luck.
gamper:
Have you seen Weekend at Bernie’s? GM is dead, not down, and there is a lot of anger that $100 billion+ is going to be wasted by the government to create a shell of a company that will eventually be sold off to China and India, just like British Leyland.
The blatant hypocrisy of GMAC begging for government money as it is days from when it would (and should) become bankrupt but then trying to shake down a customer for getting behind on payments is newsworthy.
Let’s be clear about this: now that GMAC is on the federal dole, they’re in a lose-lose situation. They either keep putting the screws to people like Ms Strawder and invite criticism of a double standard, or they don’t and fail, making our tax dollar investment $6b of pure waste.
I don’t like either outcome any more than GMAC does, but if you want fail with some dignity you go to bankruptcy court. Period. As far as I’m concerned, any company that sees itself as being above the laws that other firms follow and begs for taxpayer-funded handouts deserves whatever criticism can be thrown at it.
They either keep putting the screws to people like Ms Strawder and invite criticism of a double standard, or they don’t and fail, making our tax dollar investment $6b of pure waste.
Nothing bars them from renegotiating the lease terms.
The whole point of the TARP program was to provide infusions that could trickle down to people such as Ms. Strawder. If it doesn’t do that, then there was no reason to give them the money.
gamper said:
if it doesnt result in a GM/Ford/Chrysler bankruptcy, it must be wrong….a dumb idea.
If it results in my tax dollars being wasted, it must be wrong.
BTW, don’t put Ford in the same league as GM. If GM goes under, Ford has the most to gain. Think about all the conquest sales.
beller said:
gamper you have to realize these folks let the political and personal views get in the way of pure commonsense….don’t take it personally, just keep using commonsense
beller you have to realize this is supposed to be a free country. You can do whatever you want as long as you don’t violate other people’s rights, such as robbing them of their tax dollars.
wsn….nothing in life is free
Are there no work houses?!?!
Are there no prisons?!?
There is a percentage of people who will simply defend the indefensible. Those complaining about public anger that money has been pissed away propping up failed companies sounds like something coming out of the Cerberus/GM spin machine.
It’s funny to see the apologists playing the victim card.
It’s all about jobs, they’ll say. Sure it is.
She really should simply offer to pay them $100 each for the cars for the rest of the lease. When they scoff, she should double it to $200 for a buy out. Now that they are all angry, she should point out that they will be upside down on the cars as soon as they get them back, and maybe they should both work together on a solution.
Of course, anyone who leased G6’s…
she should point out that they will be upside down on the cars as soon as they get them back, and maybe they should both work together on a solution.
That won’t matter to the company. The company is in serious trouble, so at this point, they are managing for cash flow, more so than they are for profit.
They would obviously prefer to take the car now, then auction it for a fraction of its original MSRP, than bother waiting for the payments.
That cash would go to keeping the lights on and paying the bondholders. They will also take a tax write off, which means that we will subsidize the loss if they ever return to profitability because their future tax bill would be reduced by the carry forward.
The goal isn’t to achieve profitability, it’s to generate immediate cash and avoid a shutdown. You should expect to see more of this sort of thing, not less.
Clearly PR isn’t a large issue for GMAC. But when you are a multi-billion dollar corporate welfare queen, you should instruct your underlings in the ways of diplomacy and tact.
These folks were in way over their heads – not even a repo of one of those G6s got them above water. Their credit may have been sterling with GMAC, but GMAC didn’t get to be a multi-billion dollar corporate welfare queen by exercising good judgement.
If I had paid income taxes and gotten laid off, only to find that some of those taxes had gone to my nemesis, GMAC, multi-billion dollar corporate welfare queen, I’d be even more annoyed than I am now with the whole sorry mess. As it is, my only dealing with GMAC was a more than a decade ago, when they screwed me out of an affinity credit card’s accumulated ‘bonus miles (or whatever)’. Never did buy a GM car after that.
I was of course just making a point. However, now that they are a bank, it actually is a different story. They may likely now be more willing to let her string them along as long as they can keep her loan on the books as a good one. Isn’t cash flow less important than than balances for a bank? Then again, maybe not, when they threw out the rulebook…
The real question is… Why would anyone lease two G6’s in a row on purpose? They certainly are easy enough to find on the used car market for dirt cheap.
Sounds like some of that “predatory lending” I’ve been hearing about from the politicians is at work here….tee-hee.
Gentlemen,
You may notice that I’ve deleted all the comments discussing whether or not TTAC should be covering this story. (I apologize for not emailing you all individually, but my Dell died and I’m learning how to speak Mac.)
The anti-flaming rules are clear: no flaming the website, its authors or fellow commentators. As I’ve said numerous times, meta discussions about TTAC’s editorial stance or style should be reserved for posts specifically addressing that issue. I will put one up presently.
Meanwhile, I invite your comments about TTAC’s choices at robert.farago@thetruthaboutcars.com.
The irony: The Fat Cats you’re defending – you know, the ones that just got a pay day they couldn’t earn by selling better products – aren’t extending the same sympathy they’ve been shown to their customers who are in a similar bind.
Is this a joke?
I hated the bailout, but GMAC absolutely cannot go to a “pay when you feel like it” plan.
@nonce
Agreed, but they can negotiate terms, much the same way some banks have come around to realize it’s better to have someone pay a mortgage than for a house to sit vacant with the bank holding the note.
Oh wait, they are a bank now!
Personally, I’m much more inclined toward giving money to GMAC rather than the big banks or GM. The reason is that GMAC is more likely to lend the money out because their loans are targeted directly to the sale of cars which helps GM do what it really needs to do which is sell cars. So, GM benefits, GMAC benefits and cash starts flowing (rather than going toward buying other banks). In the end even the taxpayer could stand to benefit providing things start to turn around as the Government now owns preferred shares.
>>“…The whole point of the TARP program was to provide infusions that could trickle down to people such as Ms. Strawder. If it doesn’t do that, then there was no reason to give them the money….”
The true point of TARP is to give free taxpayer money so that a small set of a few hundred people at banks do not have to be faced with the fruits of their failure, and to reward same with dignity, civility, and a whole &*^$load of cash.
Whether anything was supposed to trickle down to deadbeats is another question, but then when did Congress and the Administration spend one second during this whole mess considering the plight of the individual American citizen? Obviously none, since public opinion has been overwhelmingly against all these bailouts, TARP on down.
Funny how the news media used to constantly throw polls in our face about Obama, but now say nothing about the overwhelmingly negative poll numbers for these taxpayer throwaways. Are polls important to the media or not- and if they are, when do the media choose to publicize them, and when not?