Uprising In Washington

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

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

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

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

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

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...