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...
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...
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...
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...
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.
Explain this to me please.... congress and the media blamed the mortgage industry for writing what was called sub-prime financing... to people with feces for credit and little or no cash in the transaction... and then blame mortgage brokers for the entire melt down... and soooooo here we go to the Fannie Mae HomePath web site... seems that they have those REO's to sell off... http://www.fanniemae.com/homepath/financing/index.jhtml
Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
You may qualify even if your credit is less than perfect
Available to both owner occupiers and investors
Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
No mortgage insurance*
No appraisal fees
Also eligible for HomePath Renovation Mortgage
HomePath Mortgage financing is available from a variety of lenders...
Guess when the government does it all is good... do as I say not as I do...
I wrote on February 18, 2008... warning that this would occur...from the NY Times... "Ex-Leaders of Countrywide Profit From Bad Loans" http://www.nytimes.com/2009/03/04/business/04penny.html?_r=1&emc=eta1
The Housing and Economic Reform Act as well as EESA gave the Treasury Secretary UNLIMITED, UNFETTERED authority to do with as he saw fit with the asset being purchase by the government... didn't anyone in congress read and, heaven forbid remotely understand what they were voting for... what they were giving away... this can and ought to be, but so long as there are lobbyist and campaign contributions will never be corrected...
Without proper loan modification, prior to any sale of the assets,... there will be a surge of foreclosures that may just make what we have already gone through seem like a day at the beach...
Many government official, and all of their "experts" have stated that real estate prices are still over valued and need to come down even further... but for whose benefit? I wonder which members of congress and government officials are invested in partnerships and blind funds, following in the footsteps of Stanford L. Kurland... this reeks of the RTC all over again...
Congress failed to require real, true, viable loan modification in the Housing & Economic Recovery Act as well as EESA and again in the ARRA. "We the People" have now spent or committed to spent some $2 Trillion, with trillions more to come, all without ever having addressed the root cause of this crisis.... the real estate defaults and foreclosures. In addition, proper loan modification WILL eliminate the vast majority of loan defaults that have brought about the massive increase in bankruptcy filings. Should our bankruptcy judges have the authority to modify real estate loans… most probably the answer is yes, however this is and ought to be a separate issue apart from the current economic crisis.
It has been stated that some 58% of loans that have been modified to date are back in default and foreclosure. A review of these loans will reveal that the cause for these failures has been the method of modification... the rate and terms applied in these instances have been a prescription for failure. Therefore, I suggest that congress require that any lender, brokerage, insurance company, or and any other firm that has received TARP or other federal funds, either directly or indirectly; and holds a beneficial interest in an any loan secured by 1-4 unit real estate, either directly or indirectly, be required to offer to modify all real estate loans with less than 3 years remaining to the next rate adjustment along the following lines:
WITHOUT the time consuming, meaningless process of (effectively) re-qualifying for a new loan, the existing loan balance is to be modified into a 50 year amortized loan, with a 5 year reset and an initial rate of 4%. The maximum rate change each 5 years would be +/- 2%; with a 9% lifetime cap. Loans already in default would carry a forbearance agreement added as part of the process.
This method of modification will reduce the loan payment by some 55%; while at the same time preserving the amount due to the lender. The aggregated annual savings of in excess of $150 Billion realized would, most likely, go into savings, pay down revolving debt or be spent fueling the economy through the purchase of goods and services (cars?). All of these options are positive and necessary for a cure to this crisis.
In most instances, this process would eliminate the urge to simply walk away from a property in which the homeowner has no equity. They require a home for their family; and what is better than the one that they already have. This proposal will stabilize not only the real estate and financial markets... but also the lives of these millions of Americans... while at the same time providing the knowledge and hope that, given time, they will regain the lost equity in their homes... the hope and positive attitude that my proposal brings to the table cannot be overlooked.
It is quite easy to verify that the number of families currently effected by this crisis is not, as reported 13 million, but more likely over 25 million real estate loans are in jeopardy... we cannot continue to ignore these people... as to stay on the present course, impacts every American family negatively.
Every time a homes sells as an REO or "Short Sale" the real estate tax base is reduced... the states and local governments are all reeling from these loses. This plan will put an end to this hemorrhage in tax revenue too.
