Stan Brody ... As I see it

Stan Brody ... As I see it: Real Estate Stabilization Act

2011-06-26T13:35:00.000-07:00

Stan Brody ... As I see it: Real Estate Stabilization Act

Real Estate Stabilization Act

2011-06-26T12:46:00.000-07:00

The proposed Real Estate Stabilization Act of 2011 (RESA 2011) is a tri-party collaborative proposal mandating cooperation from lenders, government and homeowners that will stabilize the real estate markets, enabling a full economic recovery. This presentation represents the short form plan.

Overview

Legislation to require the holder of any note or portion thereof, said holder having received funds through EESA, TARP or any other relief/economic stabilization program, secured by 1-4 unit residential housing; the beneficial interest thereof obtained in any manner including, but not limited to origination, purchase in the secondary markets or acquisition of another institution, shall be required to offer loan modification.

Statement of Facts

Since the onset of the economic crisis, in California alone there have been over 3.5 million REO re-sales and Short Sales, with the resulting loss in real estate taxes exceeding $9 Billion (the projected deficit being $9.25 Billion). In addition there are another 2.5-3 million homes with negative equity; plus some 400,000 bank owned vacant properties that have yet to impact the real estate tax base. As the crisis that the states find themselves is caused by a banking crisis, and thus under federal regulation, they have no direct control over their financial destiny. The only options available, cost cutting, mostly through lay-offs and curtailing of services are by their very nature counter productive, actually worsening the downturn. Using the current FHA/HUD actuarial of 4% appreciation for the next 20 years, left unchecked, the real estate crisis will prevent an overall recovery until, at the earliest, 2022.

Lender Contribution

1. Existing mortgage to be written down to the current fair market value of the property

2. New mortgage loan to be written 5 year reset with a 50 year amortization.

3. Initial interest rate to be the lesser of 4% or 1 % over the

current yield of the 10 year treasury note, with an adjustment margin of 2.5%.

4. Rate cap each 5 year period shall be 2%+/-, with a 5% lifetime cap.

5. The note shall be assumable and carry no pre-payment penalty.

6. No traditional debt-to-ratio qualifying.

7. In instances where the homeowner is currently unemployed, 1 year Principal-Interest to be calculated and added to the principal amount due. However, borrower to fund the tax a insurance escrow account.

Federal Government

Contribution

1. Employing current loan-loss guaranty formulae, lender to be reimbursed for loan write down to 80% of the original principle, plus any accruals.

2. Lender to receive additional tax incentives to offset the write down.

3. Lender reimbursement to be treated as a loan to the homeowner; and repaid through the waiver of the mortgage interest deduction.

5. On a dollar for dollar basis, lenders to be relieved of loan loss requirements for all modified loans. Caveat being that loans must be made for the easing. "Lend it or Lose it".

Homeowner Contribution

1. Waive the mortgage interest write off on federal and state tax returns.

2. In the instance of an existing foreclosure, a forbearance agreement to included with the note, and

recording documents.

3. Waive any reduction in real estate taxes

4. Establish an escrow account for taxes and insurance with the lender at 0%.

5. Should the homeowner fail to fund the escrow account, the lender shall be relieved of the terms of

RESA; and free to proceed with alternative methods of relief including deed in lieu,

foreclosure or short sale.

6. Government contribution to be a personal indebtedness. May be retired through the sale of the

subject property and/or the mortgage interest waiver in #1 above

Benefits

1.Stabilizes the housing markets, halting the current free fall in values.

2.Halts the dramatic erosion of the real estate tax base, thereby aiding in the financial recovery of the various states, and local governments.

3. Retains citizens in their homes.

4. Prevents the erosion of neighborhoods and communities.

5. Provides the confidence required for consumer spending needed to fuel the recovery.

6. Government contribution (stimulus) will result in greater overall confidence and consumer spending thereby fueling the recovery.

Uprising In Washington

2011-03-14T10:52:00.000-07:00

Has the time arrived for every person in the US who has or is going through the months long, excruciatingly abusive and demeaning process of attempting a loan modification... been lied to by numerous bank representatives... been passed around from one agent to the next... to the next...always getting the same treatment...even with proof of delivery is provided, has repeatedly been told that documents that have been sent were not sent... been told that the bank will not even consider a loan modification when you are current, compelling you to become delinquent, and in default, only to eventually have been rejected due to the Treasury dept. agreement with the banks, allowing them to use the mysterious Net Present Value (NPV)... thereby denying any form of mortgage relief... without which there can be no real truet economic recovery.

The "experts" state that there are some 20,000,000 plus homes underwater in the United States... "We the People" were told that the banks were "too big to fail"; and we bailed them out. These rare the very same banks which are now refusing any form of mortgage relief... without which there can be no real true recovery for the economy... it must be that our congress believes that "We the People" are too small to save...

Perhaps the time has arrived for a peoples mortgage uprising in Washington... Perhaps if a million or millions people protest on the Mall, congress might.... just might correct this massive injustice...

More Wells Fargo Lies

2011-01-07T12:07:00.000-08:00

This a letter I wrote to Congresswoman Barbara Lee ,CA 9th, seeking assistance in loan modification for a young couple in her district. For privacy, I have removed their names.... so, the bloodbath and lies continue...

January 7, 2011

Representative Barbara Lee

2444 Rayburn HOB
Washington, D.C. 20515
Via Fax: (202) 225-9817

RE: Ramona Ave., Piedmont, CA 94611

Dear Congresswoman Lee;

I am writing on behalf of the above referenced couple, residents of your district. They purchased the above captioned residence five years ago at the peak of the real estate boom. Using what the mortgage industry refers to as a piggy-bag loan; a first mortgage combined with a second or Home Equity Line Of Credit (HELOC) the home was financed by Wells Fargo Bank. This financing package was structured by the bank’s representative as a 7/1 Fixed ARM first loan, and a 5 year balloon second lien. Frankly, in my almost thirty years in the industry I cannot recall ever having seen this sort of “dangerous” financing funded by a major bank. As it absolutely would require a refinance, this sort of financing arrangement could only be deemed self serving by the bank and broker involved; while at the same time place their client at the complete mercy of the market.

Last September, realizing that the loan was coming due, the (name deleted) contacted me seeking a possible refinance. They have managed their personal financial affairs in a manner that, as parents, would make you and me proud. Credit scores exceed 800, excellent job history, they have some reserves, and easily qualified for the financing required. All payments have been timely. However, as you know, both the property and applicant must “qualify”; and in this instance, due to the real estate crisis, the appraisal was returned at a level not adequate to provide the required Loan-To-Value.; leaving them with only two options, a loan modification or a short sale.

They then contacted Wells Fargo seeking a loan modification in ONLY the term of the loan... they are “OK” with the 7% interest rate... they are NOT seeking a principle write down, ONLY a common sense modification in the term of the loan! A very common sense business approach to this situation, enabling them to keep their home and credit intact; and Wells Fargo to keep a performing asset on their books..

Yet, WFB is virtually refusing to cooperate... refusing to honestly consider making this sensible business decision. To the contrary, as the course that that Wells Fargo is now embarking upon, a course destined to make a shambles of a hard earned credit history.

Despite what the banks are telling members of congress, from my firm’s first hand experience, the lenders are refusing to even consider any loan modification until the homeowner first becomes delinquent. for a minimum of sixty days; an act that reduces a credit score by some 140-180 points! The bank’s analyst is following the industry “MO”, by delaying, losing documents, failing to return calls and or writings; and in general guilty of bad faith dealing. On Monday the 10^th of January, their grace period runs out; and the process of destroying this couple’s credit commences.

This past week Wells Fargo issued a press release announcing that it was going to “voluntarily” modify a vast number of the Wachovia/World loans that it had acquired through a purchase from the FDIC. We both know this act was strictly for the media, and to indicate to congress that the management of Wells Fargo wears a white hat as it drives the stage coach! By their very actions, and benefiting from the loan loss guaranties provided by the FDIC insuring the bank a substantial profit (on the backs of those homeowners) this announcement is a pure sham.

I write you, pleading with your office to, in any way, in any manner intercede on behalf of this young couple. They deserve a better fate than that being thrust upon them by a bank, which has, is and will continue earning huge profits in no small part through the generosity of “We the People”.

Thanking you in advance for whatever assistance you may offer, I remain

Very truly yours,

Stan Brody

Reading the Constitution

2011-01-06T08:19:00.000-08:00

Interesting... the country is going broke.... millions of us losing their homes... some 18 million of us out of work, and the House is wasting OUR TIME and treasure reading the constitution... a document that each member ought to have been well-informed of before having been elected!!! Had they taken the same approach to reading the legislation that they vote on, we might not be in this financial abyss!!!

What Will Congress Do About the Deficit

2011-01-04T08:43:00.000-08:00

The mid-term elections are over, resulting in a real shift of power in Washington. Questions are being raised as to how this new "fiscally conservative" congress will address the deficit. Congress is at fault for the financial straights we are in.... by looking the other way and doing their bidding, Congress is a codependent with the banks actions and failures... the same is true of Wall Street... the crime here is that, with the members of congress full cooperation it is the lobbies for these industries who actually lay the groundwork of new legislation that is supposed to "regulate" those very same industries... they are already at work crafting any changes to existing law designed to minimize the effect of that new legislation.

The answer to my question is, as "we the people" have little to say, congress will act in its own best interest (raising campaign contributions) and only reduce the deficit in ways that can only hurt middle America. We the People will get the mookey end of the stick yet again...

Online Sales Tax

2010-12-17T10:31:00.000-08:00

There is controversy surrounding the avoidance of sales tax from our on-line purchases. Thanks to the utter failure of congress in dealing with the real estate crisis, the states are in a financial abyss that they have zero control over... It is now acknowledged by the "experts" that real estate values, and along with them, real estate tax revenue, will not again reach 2006 levels before 2022-2025! California alone has experienced over 3,500,000 foreclosures and short sales... with more than double that in "the pipeline"... thus to date, the state has lost over $8,750 Billion in real estate taxes. Thus the states desperately require keeping/collecting whatever sales tax revenue they are due...

A simple national online (only) sales tax, of say 5%, might be in line. The retailer would collect this tax, forwarding them as a separate line item in its already mandated quarterly reporting, to the treasury. The only additional forms being, a simple source of funds record sorted by the first two digits of the zip code identifying which state generated the sale (no specific mailing address allowed). .The treasury would then retain a 1% "collection fee" and forward the balance due to the various states. The various states would be required to accept these taxes as payment in full, waiving the right to seek any differential from the purchaser. These funds would be separate from, and not subject to any other legislation or the whim of congress. Granted, the states will receive less than their normal tax rate, they would also be relieved of the high cost of chasing down and collecting the tax.

We keep hearing that the "rich" ought to pay their fair share of taxes...With an online sales tax, we all pay our fair share of taxes due... at the same time avoiding the hypocrisy of "getting the wealthy"...The online tracking firm, Comscore.com, estimates that there were over one-billion dollars in online sales for cyber-Monday alone! At 5%, this equates to $50 Million in revenue.

Reality Check on The Housing Crisis

2010-09-26T08:38:00.000-07:00

The time to damn people "who got in over their heads" passed three years ago... what do you say to the person with an 800 FICO score, worked hard for his or her adult life... still has "7 figures" in a retirement plan, has the Suze Orman "Gold Star" for having been perfect with their finances... and even, in 2005 bought that $500,000 dream home with $200,000 cash down... problem... that home is in Stockton, CA,... Las Vegas... Phoenix, AZ or any number of other hard hit areas... and is now, on a really great day, valued at $175,000?... The simple fact is, the "20%" took down 100% of the real estate markets... "We the People" bailed out the banks and Wall Street... effectively shunting all of the losses onto the homeowners... without a halt to the real estate crisis, the states will continue to sink into an ever deepening financial abyss... this is not just a moral decision... but a common sense business reality...

The Argument for Cram Down

2010-09-20T05:20:00.000-07:00

It is a fact that there is a loan loss guaranty protecting banks from residential real estate loan losses... WaMu, Wachovia, Downey and Indymac were either seized or forced into selling to Chase, Wells Fargo, US Bank and OneWest Bank... Each buy/sell agreement contained a loan loss protection condition.

Thus, even though the bank's assets (loan portfolio) was sold in the range of 55-70% on the dollar, the treasury (you and me) guaranteed to cover any losses... based on not the purchase price, but instead 80% of the ORIGINAL loan amount, PLUS any delinquencies, thereby guarantying that the acquiring banks would turn a profit... AND that in the vast majority of instances they would refuse to cooperate in loan modifications... there is far more profit for them... which bodes the questions why not use cram down, forcing the banks to modify loans in principal, rate and term... and still give them the guaranty dollar amount...

Net result to the bank is identical... with the plus to the community of keeping people in their homes... stabilizing real estate values AND most important of all end the hemorrhage in real estate tax revenues... a true win - win compromise...

Anti-Mulsim Hysteria

2010-09-12T08:41:00.000-07:00

To understand just how ignorant, how stupid, how dangerous this anti-Mulsim hysteria (fueled by a media seeking to create the news) one merely needs to look at post WWI Germany and what happened to not only the Jews, but any person "not fitting the mold"... post Civil War United States and what "WE AMERICANS" did to the Irish and Chinese immigrants... how "WE AMERICANS" in the pre-WWI 20th Century... treated the Italian immigrants ("WE AMERICANS" created the slur WOP)... How "WE AMERICANS" ostracized eastern European immigrants and let's not overlook what "WE AMERICANS" did and to some extent continue to do our Black Americans post Civil War... Look what "WE AMERICANS" did to our Japanese Americans during WWII...

What is it with us that without exception, whenever there are economic hardships WE NEED to find someone, some ethnic or religious group that brought this hardship on us...

Understand how important the Muslim society has been to human kind over the centuries...

http://bama.ua.edu/~msa/contrib.html

Elizabeth Warren MUST head CFPB

2010-07-26T10:14:00.000-07:00

And now for the stupid, ignorant politics in naming Elizabeth Warren to head up the consumer protection agency that she invented... the question how many of the clowns of congress... Dem and GOP alike "will be bought" off by the Wall Street and Banking lobbies... aka special interests (GOP) or "focus groups" (Dem)...

Tell me, what is t...he difference between a member of congress of congress selling votes to a lobby and Gov. Blagojevich selling a senate seat?

Read this article from the NY Times: http://www.nytimes.com/2010/07/26/business/26warren.html?ref=politics

Elizabeth Warren has YOUR back... now return the favor... get after your member of congress to support her nomination...

Elizabeth Warren MUST head The Consumer Protection Agency

2010-07-24T08:45:00.000-07:00

"We the People" need someone in consumer protection to have our back... write... write... and write again to your members of congress DEMANDING their support of Elizabeth Warren to head up the new agency... Wall Street and the Banks are afraid to death and have their lobbyist working 24/7 opposing her nomination... do you require any better proof that she is "our guy"...

YouTube her... watch the dozens of interviews... LISTEN to her words... Elizabeth Warren is the ONLY person in DC actually doing the peoples business, she NEEDS to be President... which bodes the question... Is the president afraid of her too; and will not give her a better stage?

Do we get the "change we can believe in", or is it simply whatever Wall Street wants Wall Street gets...

Credit Scoring for Wall Street Investments

2010-05-16T12:08:00.000-07:00

The recent Goldman Sachs revelations are to say the least troublesome. The position taken by the Wall Street Investment Banks that the trader’s duped, were sophisticated buyers that ought to have done their own due diligence, exposes an unacceptable arrogance. The sale of the Mortgage Backed Securities that brought the financial world to its knees was based on that very same premise… caveat emptor. You make your own investment decision, but we are going to hide and disguise the facts. Further, with each passing day, and revelation, it is becoming clearer that my charge of a vast conspiracy or at the very least misrepresentation by the Wall Street banks in cobbling together and passing off as investment grade, these fraudulent and extremely dangerous products; “guaranteed” by the equally bogus Credit Default Swap (CDS) A.I.G mortgage insurance policies.

In this mid-term election season, congress is going through its usual and customary charade of asking “tough” questions for the media and electorate, and then turning around and asking the Walls Street bankers for their advice on future regulations of their industry! We had Senator Levin asking soft ball questions of Lloyd Blankfein, Goldman Sachs Chairman, and then seeking his advice on crafting legislation!… Does the coyote want the chicken coop gate to swing in, or out!

We need, and want our investment banks, and Wall Street brokerages to offer products that will generate income. Yes, these will always be risk based offerings. By their very nature this will be the case. However, in this computer age, but there MUST be openness, and without the subterfuge that has been the usual and customary business practice of the markets. Had the markets implemented the exact same underwriting criteria that are used in approving real estate loans, this entire economic meltdown probably could not have occurred?

Some 20 plus years ago Fair Isaac's created FICO risk/credit scoring. Each of us has a credit report derived from a scoring model and maintained by the three credit repositories. Borrower’s who have demonstrated strong credit worthiness are rewarded with the highest credit scores, and receive interest rate “bonuses.” EVERY mortgage originator hangs their hat on these scores; and then factor in loan to value as the deciding factor in approving each loan. History has proven that the default rate is directly related to higher the credit scores, and the lower the loan to value. The higher the score, the lower the loan to value, the lower the defaults rate. The converse is true, credit scores under 680 and loan to values exceeding 90%, yield a greater default rate.

A Mortgage Backed Security is, in effect a mutual fund comprised of real estate mortgage loans. The MBS must have an AAA or higher rating to qualify as investment grade sufficient to be offered to pension plans. Insofar as every loan placed in the pools already has credit scoring and a loan to value, the mathematical formula to arrive at a credit score for each MBS is quite simple to achieve.

Originators would be required to enter every credit score and loan to value for each loan into a data base… PRIOR to selling any loan into the secondary markets. Every new entry will result in a new score for the pool. Set a minimum “Investment FICO” score, say 800, to be a minimum for an AAA+ rating, 790 for AAA, 780 for AAA- and so on. Further, an MBS cannot be comprised of loans originated from any single source, further eliminating the chance for collusion. As an additional safeguard, originators MUST be required to either retain a position in every loan sold, or provide lender paid mortgage insurance in every loan sold into the markets. The originator made the loan,and must be required to retain a level of risk. Full transparency as to the quality of the loans in each pool would be guaranteed. This method would still allow a Wall Street bank to cobble together whatever garbage it chooses into lower grade loans into a below investment grade marketable security. No regulations for the Wall Street Banks, no looking over their shoulders, winking at a worthless, inept SEC.

My method would far more open… caveat emptor would still be the name of the game… however, the buyer, with proper advance “warning” would then be in the position to make an informed business decision. Congress has proven to be both incapable and unwilling to implement meaningful Wall Street regulation. The SEC has proven to be nothing more than a federal bureau designed to pay lip service to the public.

And the bleeding goes on...

2010-05-13T09:13:00.000-07:00

There are some 90,000,000 residential housing units in the United States all

of the Wall Street darling "experts"... S&P Case Shiller, RealtyTrac, Trullia, Zillow, etc.

somewhat agree that the number of homes CURRENTLY underwater is 23%... as a

percentage "not awful".... but in a real number it is 20,700,000 homes in trouble...

For the better part of three years I have warned that these very same "experts", who

at that time estimated the number of problem loans to be around 5-8 million, were

off by a factor approaching 100%... I was wrong... by their own numbers, they

are off by about 150%...

AND, based on my no less expert analysis the number actually, currently underwater

or in trouble is closer to 25,000,000... then add that to the number that have already

been foreclosed upon or sold as a short sale, and when this is done we will have run

through over 50,000,000 homes... 50 million families devastated... ah, but Wall Street is

doing just fine...

HAMP will miss its numbers

2010-03-23T21:30:00.000-07:00

The simple facts are: 1) lenders are still DEMANDING homeowners first be no less than 60 days delinquent (a 180 point credit hit). 2) The process takes at least 7 months. 3) even when successful, the modifications put in place are not conducive to long term compliance… just the opposite. 4)IRS code makes it more profitable for lenders NOT to cooperate, and foreclose on homes…

There are no less than another 3-4 million Option ARMS (100% of the WaMU, Wachovia and Downey portfolio’s) that are underwater… cannot remotely be refinanced. with modification being the ONLY answer… Case Shiller, RealtyTrac and the rest of the “experts” are off by a factor approaching 100%… by the time that this bloodbath ends, in no less that 3-5 years, 23-25 million homeowners will have been devastated…

The Fraud of the House Health Care ...vote

2010-03-21T11:23:00.000-07:00

In order to get the anti-abortion Democrats to go along, there is language in the bill that appears to ban federal funding of optional abortions.... the pro-choice Democrats are up in arms... soooo what do Speaker Nancy... Senator Reid... and the president do... OK folks. altogether let's wink... wink...wink... Guys, just pass the bill... and then the the president will issue an an executive order authorizing on demand abortions... Now everyone can go home and lie to their constituents with a straight face... If this not a fraud, then tell me what is...

November 2, 2010 cannot get her fast enough... but will you put down the remote control and at least send in an absentee ballot... naaaahhhhh ... easier to send the same clowns back to congress ... you probably really love getting screwed... without getting kissed...

Throw The Bums Out

2010-02-06T10:02:00.000-08:00

Due to their allegations of gross mis-management congress forced Rick Wagoner, GM CEO to resign... back doored Ken Lewis, Bank of America CEO into quitting... yet not one CEO of even one of the Wall Street firms that created the bogus investment instruments that gave us this economic crisis has been forced 0ut by congress... A.I.G wrote fraudulent, yet legal!!!, "insurance" policies for those instruments, thereby proving that two wrongs do not make a right!...Yet no one at A.I.G has been charged with anything stronger than double parking!

However... Congress, in accepting campaign contributions from the very industries that it is RESPONSIBLE for regulating. has been bought and paid for... it has done the bidding of Wall Street, Insurance and Finance industries...it has removed Glass-Steagall and the majority of laws designed to prevent this catastrophe. It is guilty of the very same gross mis-management of the finances of the United States... how much and from who has your representative taken?

Take a look... http://www.opensecrets.org/ If the purchasing manager of your company was taking kick-backs from vendors what would you do? Are campaign contributions any less than kick-backs?

It is about time that "We The People", put down the remote control, get off our butts, go out and vote... THROW THE BUMS OUT.

The Real Unemployment Numbers

2010-02-05T07:24:00.000-08:00

Here we go yet again... the administration will tout the unemployment drop to 9.7%... David Axelrod will be on SOME Sunday spin program... mumbling his "politispeak", touting the drop in the unemployment rate as proof that the president's programs are working... oh, gee, did he forget... will any of the newsreaders ask... the far more important, far more telling payroll number dropped yet again... when that happens it tells us that fewer people are working... the unemployment rate ONLY includes people actively seeking a job... stop looking and you no longer count!!... the real, true rate is closer 20%...

Haitian Relief... and US Jobs

2010-01-24T15:42:00.000-08:00

An interesting thought... There are about 20,000 incorporated municipalities in the US. If each raised only $20,000 we could rapidly provide good manufactured housing for at least 20,000 Haitian families. The average retail price for a quality single wide manufactured home home is $24,000. Purchased in bulk, the cost would easily be negotiated substantially lower. These can be produced very fast; and provide the side benfit of creating tens of thousand jobs in the building trade here in the US. It would also have the benefit of creating thousands of jobs in Haiti for Haitians.

Increase the fund raising and more homes can be be provided, aiding thousands more; and. resulting in the creation of more jobs both here and in Haiti. The side effect and benefit of providing the humanitarian aid the situation demands, while at the same time the economies of both countries benefit. The long term benefit that Haiti requires; the hope that President Clinton has been talking about.

Housing & Jobs Versus Health Care Reform

2010-01-22T20:37:00.000-08:00

From down here in the trenches I know that a roof over a person’s head and a job are numbers 1 & 2… with heath care, as critical as it is… a distant 5th!

As of today lenders are not freely cooperating with homeowners in granting mortgage relief... It simply is not there. Despite everything that has been published in the media... despite all of the administration pronouncements, despite Secretary Geithner’s boast of success, it still is not occurring in anywhere the numbers required to halt this economic disaster. Underwriters are interpreting HUD/FHA, Fannie Mae and Freddie Mac guidelines as though they are regulation. I have had clients denied consideration because their debt-to-income ratios were too low! The self-employed need not apply.

By allowing the lenders complete tax write off of mortgage related losses the current IRS code encourages excessive non-cooperation! Despite HAMP and HUD guidelines, lenders not providing adequate relief; and then are compounding the economic crisis by demanding extended delinquency before even considering assistance, often seven or more months, thereby making it virtually impossible for the homeowner to save their home when a rejection is delivered. This required delinquency lowers credit scores by 150-180 points, followed by credit card issuers lowering credit lines to a level that causes an additional credit score "hit" of 30-40 points PER CARD! This further impedes the economic recovery by stemming consumer spending. In a matter of as short as 90 days, a superlative credit score of 800 can and will be driven down to the low-mid 500’s! Universal default was not covered in the recent credit card reforms. As onerous as the 30% interest rate may be, lowering credit lines to a level where the balances break the “75% Rule” is far more egregious.

Recently, in seeking relief for a client, after finding reluctance to assist in the process, I commented on the “presidents kinder gentler” approach for loan modification, only to receive the following quote from the representative at US Bank..."We don't care what the president has to say... he has his programs and we have ours..."

In order to provide the “incentive” for lenders to understand the harm that they are continuing to cause the nation, I suggest that the IRS tax code be amended to a) provide a 125% tax incentive* for each loan modified; and b) eliminated the tax write off on any loan unless it is verified that a proper, diligent effort to modify a loan was attempted by the IRS. Documentation would be required; and verified from both the lender and the homeowner or representative prior to taking any write down. The very nature of this procedure would be such that the lender would then be forced to forgo the write off; and then after the loss has been properly verified** seek the tax credit. The simple fact that the lender would be forced to "advance" millions in taxes; and then seek a refund/credit would act as a motivation to induce more cooperation.

As for the modification of the loan, the cause for the high recurrence of defaults has generally been the method employed, now compounded by the unemployment factor.

My proposal for modification is:

a. Modify or amend EESA to require that any holder of any note, acquired directly or indirectly, secured by 1-4 unit residential real estate shall be required to offer reasonable loan modification

1. The existing loan balance. If need be partially deferred.
2. 50 year amortization.
3. Either a 5/5 ARM, with the entry rate being the lesser of the yield of the then current 10 year treasury bill, or 4%,or
4. 50 year fixed rate loan set at 1% over the 5/5 rate.
5. Loans already in default/foreclosure to carry a forbearance agreement.
6. Homeowner waives any reduction in real estate taxes, thereby stabilizing the state and local tax revenues.
7. In the instance of an unemployed homeowner, up to one year of payments to be deferred, and added to the loan balance.
8. NO loan qualifying.

These people are in the homes, everyone gains from keeping them there. This plan will calm down the real estate markets, stabilize neighborhoods, and through this method of modification infuse well over $150 million back into the economy. As you are aware, 100% of the WaMu, Wachovia and Downey Savings loan portfolios are comprised of Option (negative) loans and their variations. Due to the free fall in values, the several million of this loan product are impossible to refinance, leaving only modification as the only answer. Modifications that even when successful, are taking an excruciating length of time to complete.
As noted there is no incentive for lender cooperation; and to the contrary, the “system” encourages the lenders denial of providing relief.

Without fast, effective loan modification the housing crisis will continue to accumulate additional distressed properties in numbers that will demand no less than another 3-5 years to work through. Wall Street may very well be able to survive, and indeed prosper through that timeline, but those of us down here, can not.

* i.E., for a modification resulting in a $300,000 write down, the tax credit
For the loss would be $375,000.
** Detailed verification and disclosures to be documented

The Massachussetts Election

2010-01-21T07:01:00.000-08:00

Finally, after more than two years, in commenting on the "upset" election of Sen. Brown, the NY Times finally recognized, admitted and commented on the fact the administration, while well intentioned, is completely lost in its dogma... A blind person, with an ounce of political savvy should have seen this coming! Health Care reform, without first properly addressing the housing and economic crises is a lost cause. The roof over a persons head and the ability to pay for it come first.

I believe that in order to direct our attention away from the miserably failed economic policies of Chairman Bernanke and Secretary Geithner, Mr. Obama, Speaker Pelosi and Senator Reid pushed the health care "plan" as a misdirect ploy. The housing crisis IS THE ROOT CAUSE of this entire catastrophe. From first hand experience in attempting loan modifications for clients, I can attest that none one of the programs currently in place has a chance in hell of effecting the relief that is required. Secretary Geithner boasts of aiding some 375,000 homeowners... a grossly inflated number... but even so, at the present rate, when this ends no less than 3-5 years from now we ultimately will have 20-25 MILLION homeowners needing assistance, what good is even his number!!! Simple fact, In the largest markets,every home has been negatively impacted by the foreclosures and short sales.

President Obama, Speaker Pelosi and Senator Reid, properly address the housing and jobs disasters... NOTHING is more important to Americans... then talk to us about reforming health care... We may say that we support this issue, or that issue... but we always vote with one hand on our wallets... that ladies and gentlemen is politics 101!

It's still the foreclosures stupid.... it's the foreclosures...

The NY Times Editorial: http://www.nytimes.com/2010/01/21/opinion/21thur1.html?ref=todayspaper

The Democratic Party has rarely, if ever, been a cohesive group... but this is turning out to be a real Charlie Foxtrot..... Charlie Foxtrot... Charlie Foxtrot

More Media and Government Lies

2010-01-02T05:44:00.000-08:00

The media does the Wall Street bidding.... roots on a weaker dollar.... higher crude oil and commodity prices... all of which translate to higher retail pricing... then turns around and has the temerity to go along with the exclusion of those higher prices from the inflation numbers... more slight of hand...you paid more, but you really didn't more!! Yet further proof that congress has been bought off, yet again... what is good for Wall Street, is rarely, if ever good for the real world west of the Hudson...

Go back and check the time line of the housing crisis… at the exact same time that the first rate adjustment hit the sub-prime loans, pump prices leapt to the $4 range… People simply could not afford to get out of bed and commute to work… and there they were, and still are, the Cavuto's, Cramer's, Burnett's, Kudlow's, Wall Street Journal's, CNBC's, FBN's, CNN's all doing Wall Streets bidding... the truth be damned, have to keep those advertising dollars flowing...

This crisis will not end until there is rapid, make sense (for both lender and borrower) loan modification is in place… at present millions of the self employed are being denied any form of relief… Loan modification still demands that the homeowner be no less than sixty days past due, and takes five to seven months. Even when completed, the modification provided is very often a prescription for failure, causing the high recurrence of default figures. The residential crisis IS the root cause of the impending commercial real estate crash… consumers are not shopping in anywhere near the numbers required to provide the stimulus for businesses to recreate jobs… stores and businesses (many financed by CIT) close there doors… vacant retail and office space brings in how much rent???….

The “Great Depression” started on Wall Street, and ended fourteen years later on the deck of the USS Missouri… This crisis, caused by the actions of Wall Street, encouraged and enabled by congress, and rooted on by the media has its roots in the residential neighborhoods of Stockton, Riverside, Las Vegas, Detroit and countless cities across the county… and MUST end first where it began...The cures that have been employed to date, The Stimulus, TARP, EESA are all akin to going to the hospital with a heart attack, and being treated for an ingrown toenail… IT’S THE FORECLOSURES STUPID…. IT’S THE FORECLOSURES…

Health Reform Smoke and Mirrors

2009-11-22T09:37:00.000-08:00

FYI... per HR3962, the directive of the U.S. Preventive Services Task Force on breast cancer screaning, mammographies would have been graded as level "C", and would be the guiding regulation, PERIOD... thus mammographies would NOT covered under proposed house cutting plan... wonder if that would include the Federal Employee Health Benefit Plan too... me thinks not... I ask again, why can't "we the people" have the exact same health plan that "we the people" provide for our employees, aka congress and millions of our other employees... Will the FEHBP be considered a "Cadillac Plan" and taxed too... me thinks not again...

What's the bet that the insurance carriers will come out with a "Gap Policy" in the same manner as is offered to Medicare recipients... hase congress just paid off the insurance lobby yet again...

We need health care reform... but neither the house or senate bills are the answer... instead of reading the sports and comics this week, thy reading thse two horror books... merely 4,000 pages between them of legale/political smoke and mirrors... both written like a labrynth...

GM invests $293 Million in China!

2009-08-30T08:19:00.000-07:00

From Reuters: "...General Motors said on Sunday it has agreed to set up a light commercial vehicle production venture with major Chinese automaker FAW Group, with total investment of 2 billion yuan ($293 million)...." (http://www.reuters.com/article/newsOne/idUSTRE57T0IV20090830)

Now, I'm not the brightest candle in in the candelabra... but didn't I read recently, that GM had filed for bankruptcy... that in order to survive it required 10's of billions of cash from "we the people"... that this cash infusion was intended to keep it alive... keep thousands of Americans employed... save the industry and revitalize our economy. Make no mistake about it, these comments are not intended as being anti-Chinese... it is a country of very intelligent hard working people. One that over the millennia has contributed much to the knowledge of mankind... it is not us against them... this is a statement of what "we the people" were told... this lead coffin of a debt was required to save OUR economy... it has become more than slightly obvious that we were, yet again, mislead (lied to?) by our elected representatives...

This agreement is yet more evidence that the Chinese are far better traders and bargainers than we… make no mistake about it, these international “deals” are reviewed by or involve numerous government agencies, not the least of which is The State Department…

I have no qualms with the concept of this joint venture... HOWEVER, it takes time and money to build plants; and time and money to hire and train new autoworkers... So please, would someone explain to me why this "joint venture"... is not using the several existing modern, shuttered, assembly plants ... hiring EXPERIENCED auto workers here in the US or even Canada... shipping American made light trucks and vehicles to China... Was not OUR money intended to employ OUR citizens... to buoy up OUR economy... or did I misinterpret the words of Speaker Pelosi... Senator Reid and Mr. Obama... I never did, nor do I believe anything that comes from the mouths of Chairman Bernanke or Secretary Geithner... the heroes and champions of Wall Street...

Hold it.. hold it… the Congressional Budget Office has estimated that the cost of Mr., Obama’s nightmare health reform will cost “we the people” a mere$1.3 Trillion over 10 years… Would not this $293,000,000 be better spent providing health care for “we the people"

And so my fellow Americans... I believe that I will sit back, put my feet up, sip on a marvelous Napa Valley wine, and wait for one of you fans of Nancy, Harry and "B G & O" to provide any really good explanation this latest... sorry folks... fucking over of "We the people"...

For those of us who have any clue, and really care... the next national election is Tuesday, November 2, 2010... And none to soon... Throw The Bastards Out... ALL OF THEM...

Health Care "reform"

2009-08-22T10:22:00.000-07:00

In his ongoing effort to "sell" his government take over of health care... calling it reform ... and attempting assuage the middle to right wing segment, the President commented that his plan does not include providing health care for illegal... undocumented... unauthorized... or in legal terms, trespassers... He also states that there the opponents of his reform plan are spreading untruths about the plan...

Mr. President, the simple fact is, the category of "you are here but we don't have any record of your being here" is already receiving the finest health care in the world... in our emergency rooms... through ever increasing over billing and rising premiums, the cost of which is being spread across those members of our society who are here because we belong here and have health care insurance...

I would suggest that there can be no health care reform, without first reforming ICE and providing a temporary entry/work visa's, thereby enabling these hard working people some semblance of legal status... allowing them to stop hiding in the shadows, work in the open, pay taxes into the system that already affords them a far better life. In this manner these fine people would then be able obtain health care coverage, drive legally, carry proper auto insurance and make our roads safer too.

Mr. President, no one wishes to deny health care for those in need... but please, when you promised us "change that we can all believe in", stop playing politics as usual... for that is no change at all...