SIMPLE SOLUTION TO ECONOMIC & HOUSING CRISIS

July 23, 2009

Solving the current economic crisis has become just an opportunity for corporate and banking/financial institutions to grab as much taxpayer money as possible. Many of the financial/banking and insurance institutions receiving taxpayer money were actually responsible for initiating this crisis. So why are these concerns being helped when those who they destroyed (i.e., homeowners) are being destroyed?

There would have been a pretty simple solution, which could have been enacted 6 months ago, that would have resolved the current situation almost immediately. Why wasn't it considered? The answer is simple, it would have required holders of mortgages to reduce the principal owed and to then sell their "toxic" paper to the Federal government at the new adjusted prices. These greedy, criminal "financiers" could not conceive of being on the losing end of the proposition and heavily lobbied Congress, the Federal Reserve and the Treasury Department to ignore this option.

Here's exactly how it would have worked and what the result would have meant to homeowners and the Country's economy.

• The Federal government nullifies all "no doc" mortgages, unless the "homeowner" can now produce the proper required documentation that proves they can afford the property. Otherwise, the Feds allow those properties, purchased by people who couldn't afford them to go into foreclosure and the proceeds are returned to the Federal Treasury to assist in funding the remainder of the plan;
• The Federal government then requires all holders of residential mortgages to allow a unbiased panel of real estate experts to reset the principal owed to realistically reflect the collapse in housing values;
• All mortgages are then sold to the Feds at the new adjusted prices;
• The Feds turn these mortgages, many initially ARM-types, into 30-year fixed obligations;
• The Feds pay all outstanding property taxes directly to the State on any homes that have delinquent property taxes and adds this amount to the mortgage's principal;
• Life continues and people can again see a chance to live without the constant fear of loosing their home to the same criminals that took advantage of the lack of governmental regulation and oversight to pocket huge profits at the expense of all American taxpayers.

Arguments against this plan will complain that some homeowners will receive more help than others and point to homeowners who have already paid off most of their note. This is true, but a tax credit or outright tax-free payment to anyone receiving less than what the average homeowner received would bring the playing field level and should have resolved this issue.

Positives of this plan are huge. Not only would it have totally resolved the foreclosure nightmare overnight, it would give homeowners hope. Homeowners would now have an opportunity to immediately begin growing equity in their home, instead of waiting 20 years and worrying the whole time that they'll never recover their initial investment. State governments would receive back property taxes that they desperately need to balance their budgets. Banks shouldn't need any additional funds from taxpayers to pad their already bulging wallets. People will feel more comfortable buying again, auto makers would see a turnaround in sales and other retail concerns would benefit from consumers having a brighter outlook for the future.

The cost? Less than a trillion dollars. How much have we already thrown away to make sure greedy bankers/brokers and insurance companies had funds available to pay themselves huge salaries and bonuses? The actual amount already wasted and the amount still to be thrown away is difficult to determine, but this plan would have easily cost less. In fact, it would probably have been less than what's already been given to the crooks that call themselves bankers, brokers, financiers, etc. If you think my figures are wrong, check them yourself. The median value of the American home according to the National Assoc. of Realtors is $202,000 with the average being $245,000. It's estimated that there are approximately 50,000,000 homes with outstanding mortgages. That would be about 1.2 trillion dollars if everyone owed the full amount of their original mortgage. Have we handed out and plan to hand out this amount yet? The answer is YES PLUS! But obviously not everyone owes the full amount of their original note, so the dollars needed to completely resolve this crisis would have been far less and if we hadn't also paid off the money boys to the tune of 2-3 times (and higher multiples in many cases) their initial investment, well I think you see my point.

Ok Washington, so what's your 5,000 page plan to waste more taxpayer money?

OBAMA'S CABINET IGNORES PRESIDENTIAL DIRECTIVE

July 20, 2009

Ninety days ago, President Obama directed his Cabinet Secretaries to cut a "mere" $100,000,000 from each of their combined multi-trillion dollar budgets, and to submit their cuts to him in, wait for it, 90 days! Although seen by many as small, insignificant budgetary reductions, I applauded his effort to cut waste and, like Mr. Obama said, "overall, it adds up to some real money".

Well, his deadline is here and not only has this directive been basically ignored, but there hasn't even been any indication that they're working on it! They probably could have complied with the directive by simply purchasing cheaper paper clips!

We were told that by electing Mr. Obama there would be significant "changes" in Washington. Many voters were all too ready for change and the country needs it, apparently now more than ever. Voters were told that the old games would not be tolerated, that there would be transparency, lobbyists wouldn't be considered for White House appointments, proposed legislation would be posted on the Internet to allow for an appropriate review and debate, and the list of proposed "changes" goes on and on.

Have there been ANY significant "changes" since Mr. Obama has taken office? The answer is NO! Not only have there been no changes for the betterment of the country, the current majority has flaunted their situation by such actions as complying with a requirement for proposed legislation to be read on the Senate and House floors prior to voting by actually employing a "speed reader" to fulfill this obligation. Former lobbyists are in more White House positions than ever before. Proposed legislation from Mr. Obama's party is routinely submitted with no time for review, let alone debate. We also don't remember Mr. Obama mentioning that he intended to bypass the "advise and consent" function of Congress by appointing his personal "Czars" to perform the duties of the Cabinet. These are not problems passed on to Mr. Obama by Mr. Bush, which has been the current administration's favorite excuse to date.

Voters wanted a change from the games played in Washington. Looks like we got a change, a different political party, but the same old games remain basically unchanged. The players may be different, and that may be enough for some. But, to taxpayers who actually care about results rather than personality, it's beginning to look like the current Administration may be in way, way over their heads.

And, isn't it amazing that the very issue that started the economic collapse (housing) is being totally ignored. They've thrown out a few "programs" to assist distressed homeowners. However, to a large extent, the only ones that these programs help are homeowners who didn't deserve to obtain a mortgage 3-5 years ago.

Homeowners who properly qualified for their mortgages (down payment, proof of employment, proof of income, credit worthiness, CITIZEN, etc.) and who have been paying their obligation every month for years are ignored. These homeowners, many close to retirement, have seen a huge part of their net worth evaporate. Many have no equity left in their home and most now owe more than their house is worth.

How does the Administration think these homeowners have a chance to recoup their losses? They know it can't happen and it's probably the main reason for keeping it quiet. If more taxpaying home owners realized that their home's value is now in a negative equity situation and, most importantly, that there is virtually no chance of recovering that money, at least not during their lifetime, they'd want somebody's head on a stick!

Everyone else is being "made whole", but the average homeowner is expected to simply rollover for the betterment of big banks and the "disenfranchised". For the most part, the "disenfranchised" are those too lazy to work, to incompetent/stupid to hold a job, too weird to be hired, illegal aliens, and those who have embraced the generational "welfare state" we've created. This is a great group to subsidize in an effort to make them feel better about themselves - this has been our Country's biggest concern over the last 10 years and this mindset is about to destroy our economy. We're all for helping those who deserve it, but to simply give away the farm to make an illegal alien with a rap sheet feel better about themselves is total stupidity.

So, if you're close to or over 60 years old and you're underwater in your mortgage, walk away en masse. You'll never recover the investment in your home, forget about your credit rating and start socking away the money you'd be paying to the bank to stay in the red. Federal and State taxes should be withheld until these clowns can be trusted to spend OUR money wisely. Apparently, nothing else will get their attention.

Meanwhile, most Americans are content to either hide their heads in the sand. Sad.

$100 MILLION PER DAY INTEREST ON STIMULUS MONEY

July 20, 2009

As President Obama's job approval ratings slip, and big troubles surrounding his "universal health care plan" seem to be growing, it was announced today that it is costing the U.S. Federal government $100 million per day in interest on the "stimulus" money. That's the money that was supposed to keep unemployment below 8%, create thousands of new related jobs and turn around our collapsing economy. The "stimulus plan" isn't working. TARP funds, initially approved by Congress to purchase the toxic mortgages, were instead used to help their banking buddies continue to pay huge salaries and bonuses to themselves!

At a $100 million/day in interest on money that hasn't even been released yet, you have to wonder how many homes could have been saved from foreclosure from the interest alone.

The American public had better wake-up and soon! How crazy is it to continue ignoring the housing crisis (yes, it's a crisis), especially when American's were fraudulently taken advantage of by banks and mortgage companies. This was CRIMINAL and the American people want those guilty punished and for the government to resolve this crisis in the home owner's favor NOW!

There should be no consideration for potential losses by banks, etc. holding these toxic mortgages - engage in criminal activity and pay the price. The banks are reporting huge profits from the last quarter, after just receiving billions from taxpayers to "rescue" their personal piggy banks.

It was the Federal government that allowed these banking criminals to instigate their scam and their reason was to give low income families to live the American dream and to purchase a house. It didn't matter if the low income applicants could afford the home, didn't matter if they could prove ANY income, on and on. Helping out the "disadvantaged" by instituting these programs destroyed our home values. Now, they're asking us to help them again by insuring everyone. Will anyone help the majority of homeowners that had been paying their mortgages for years and now find themselves underwater because of these follies?

It's time the Federal government stop this nonsense and the continued gifts of billions in tax dollars to their buddies! Help the homeowner or the consequences will be very ugly. Those involved in this scam should be very, very worried.

The extent of the scam is enormous, but we're doing our best to identify at least the biggest players. We will be reporting their names and any personal information we can uncover as soon as possible. If the Federal government won't take action, well....!

HOMES PRICES CONTINUE TO FALL - HELLO, WASHINGTON!

July 8, 2009

When you see real estate prices falling in Manhattan, you know things are bad. Two years into a total collapse of residential home values, our elected officials in Washington continue to ignore the herd of elephants in the room. These bureaucrats continue to treat this disaster like they initially handled the destruction from Katrina. At least eventually the Federal and State government woke up and decided the pictures of homeowners living on their roofs was poor PR.

Well, to date, our representatives in Washington are still dozing, while housing values continue to sink below the rising waters of taxes, corporate bailouts and growing deficits. When are our officials going to put some effort into addressing this issue? It still comes down to the banks, hedge funds and insurance companies would need to take a hit to resolve or at least arrest the decline and those greedy players are convinced that this won't happen. Their lobbyists are doing a great job keeping the bunch in Washington from tackling the problem. Until one of our elected officials takes up the fight, we intend to lump the all of them into one ineffective group interested only in protecting their political lives.

Can someone in Washington take charge of this critical component of our economy? We immediately need an independent group charged with reviewing all pending foreclosures and stopping those who can prove income and a reasonable potential to fulfill a new fixed-rate mortgage commitment. Those who were speculating and obtained mortgages via "no doc" loans either go to the end of the line or would be ineligible to participate, just let them walk with no credit penalty and take over the property. The "no doc" loans were a huge part of the problem and most were in way over their heads right out of the gate.

New property values must be established when re-negotiating the new mortgages, and this is where the banks and mortgage companies dig in their heels and the accountants start ripping their out hair. That's too bad, but if an economic turnaround is going to happen in most of our lifetimes, they're going to have to deal with it. We've made this point before, but the pain needs to be shared and so far, the homeowner is the only one feeling it!

This would be a fantastic opportunity for one of our Congressional representatives or maybe the Republican minority to generate huge constituent support. Mr. Boehner, Mr. Cantor, Mr. Bachus let's address this crisis NOW!