Reality Check on The Housing Crisis

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

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

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...

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