Tale of two companies shows banks' hard line on loans

Bruised and kicked and left on the wayside, mortgage lenders have probably gotten more sympathy than they deserve the past year.

It only takes stories of banking misbehavior to dry up the tear ducts. The irony is that it's not "little guys," the proverbial Davids, that lenders are taking advantage of. It's Goliath, as long as Goliath has deep pockets in his loin cloth.

If you're one of thousands of homeowners in default in the Tampa Bay area, banks are curiously incurious about your status. Sure, they'll file the obligatory foreclosure paperwork against you. But homeowners can wait a year or more before First United Bank of Default gets around to pressing its cause to conclusion.

But look what's happening to businesses whose bread and butter is real estate. Just the past week, Tampa's Kearney Construction Co. filed for bankruptcy after 53 years. A big lender called the company's million-dollar-plus business loan when in the past it was keen to extend or refinance.

A day later we learned that Marc Rutenberg Homes, a luxury home builder based in Trinity, got dunned by its bank. The South Carolina lender demanded repayment of $2.66 million that had financed waterfront lots in Palm Harbor.

Owner Marc Rutenberg had been diligent about making his monthly payments. He demanded to see the latest bank appraisal of the land. It came in at about $4 million. Things got a lot clearer in Rutenberg's mind. The land was worth more than the loan. No wonder it was so eager to close out the loan. Sympathetic bankers told Rutenberg they had "marching orders" to get out of Florida real estate.

Kearney is trying to hold on through bankruptcy. Rutenberg vows to hang on until the housing market improves. Combined, the companies employ hundreds directly or indirectly.

I'm aware I'm being unfair to the fine bankers out there who would cross a bubbling lava field for their customers. But imagine you've got a $185,000 mortgage on your house. You pay religiously. The bank's making tons of interest over the life of the loan. Now imagine that the bank decides you've got to pay that $185,000 pronto. You'd lose your home, your cars, your livelihood, maybe your marriage. Unless you had a rich uncle, bankruptcy would be a near certitude.

I oversimplify. These real estate businesses knew they were taking on short-term loans. They knew the loans had to be repaid in 2009. But it had been customary, if not outright bank policy, to extend terms as needed.

So we've got quite an irony: Homeowners stiff their mortgage lenders for a year and continue to live in luxury until the foreclosure cases wend their weary way through the courts. Business people stay up to date and get the Pay Up or Suffer the Consequences treatment.

But you know the reason why. Rutenberg's land was worth more than the loan, a profitable bright spot in the miserable banking environment. Most of our foreclosure families live in stucco and clapboard boxes worth less than the loan amount. What's the hurry?

Such a two-faced policy is great for homeowners. But it's a hard kick in the pants for the businesses that employ them.