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.
Sunday, January 24, 2010
Haitian Relief... and US Jobs
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.
Friday, January 22, 2010
Housing & Jobs Versus Health Care Reform
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
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
Thursday, January 21, 2010
The Massachussetts Election
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
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
Saturday, January 2, 2010
More Media and Government Lies
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…
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…
Sunday, November 22, 2009
Health Reform Smoke and Mirrors
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...
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...
Sunday, August 30, 2009
GM invests $293 Million in China!
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
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
Saturday, August 22, 2009
Health Care "reform"
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...
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...
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