One bank is playing Santa for 500 lucky homeowners in this season of foreclosures and sinking home values — a gesture paid in part by employees forgoing their annual office party.
ING Direct forgave $861,513.25 in January mortgage payments — or an average $1,700 per household — for the 500 customers who won the online bank's essay contest.
ING Direct cancelled its holiday parties this year, said spokesman Jeff Mirabello, partly offsetting the cost of the contest. He was not unable to provide a specific figure on how much the company usually spends on its holiday gatherings.
There was no staff vote on the decision, but employees weren't upset, said Scott Lugar, head of consumer lending, who administered the program.
A committee within the direct bank and thrift, owned by the Dutch financial services giant ING Groep NV, chose the winners out of nearly 5,500 homeowners who sent in a 250-word essay.
"We said tell us your story," Lugar said.
Not included among the winners are any of the about 250 customers now in the foreclosure process, he said. Rather the winners were those whose stories struck the committee as particularly compelling.
Christine Feterowski of East Bridgewater, Mass., got a phone call on Dec. 5 from ING Direct saying her January mortgage payment of just over $1,500 was being paid for by the bank.
"I started crying," she said. "I told them I was in shock."
She, her husband and 16-year-old son used the money to fly down to Florida for her older son's college graduation. The money comes at a good time for Feterowski, who has been unable to work because she has bladder cancer. She has major surgery scheduled for Jan. 9.
She said her husband planned to take two or three weeks of unpaid leave to care for her.
"It couldn't have come at a better time," she said. "It's been such a struggle for us the last couple months with chemo, saving up money to go down to my son's graduation."
The couple have never been late on a mortgage payment, Feterowski said.
Another winner, Matthew Botos, wrote on his blog that he was a winner of ING Direct's "own little bailout contest."
"I figured they'd get plenty of sob stories and I'm already paying $700 billion to bail out irresponsible borrowers and lenders, so my essay implored them to take a contrarian view and reward a responsible citizen," he wrote.
He posted his winning contest entry, in which he states: "I personally have lived within my financial means, made savings a priority and accepted the necessary sacrifices. My mortgage is still small; my car is old but paid off, and I've eBayed old electronics to fund new toys without ever carrying a credit card balance."
ING Direct also announced in late November that it was suspending evictions through Jan. 15 and halting foreclosure sales through the end of March.
The company said about 250 of its customers have seriously delinquent mortgages — more than 90 days past due — while 1,300 borrowers are 90 days past due on their payments.
Fannie Mae and Freddie Mac, the mortgage finance companies, have similar halts on foreclosure sales and evictions in place through Jan. 9.
Of the top 25 lenders in the country, only ING Direct, Fifth Third Bancorp and AmTrust Bank in Ohio have seen increased mortgage activity through September of this year. ING Direct has 1.4 percent of the residential mortgage market in the U.S., according to Inside Mortgage Finance, or mortgage volume of $17.54 billion. ING Direct said it had about 83,000 home-loan customers.
In October, the Dutch government granted ING Direct's parent company a 10 billion euro ($14 billion) lifeline to prevent a run on the bank. Several other Dutch banks also got capital injections.
Last week ING Direct held gatherings in its main offices in Wilmington, Del., Saint Cloud, Minn., and Santa Monica, Calif. to read a few winning entries to the company employees who had not gotten holiday parties this year.
In Wilmington, Lugar played a recording of a phone call to a customer.
"There wasn't a dry eye in the place," he said. "This is so much more fulfilling than putting on my monkey suit and drinking wine with my colleagues."