Posts Tagged ‘foreclosure’

The latest “good idea” to come out of DC regarding solving the housing crisis and credit crisis would be to allow a government fund to buy troubled mortgages from the banks.  Funding would be done jointly from Uncle Sam and Vulture/Hedge Funds.  Thus, rewarding those entities for taking the risk and effort to recover value and make fortunes on the backs of the troubled homeowners!!!!

No one is a bigger capitalist and supporter of the free markets than me, but the perversity of the ideas coming out of DC and celebrated by those still with cash is absurd.

A Wall Street Journal article this week indicated that these funds would by the mortgages at $0.05 to $0.20 on the dollar of “face value” thus putting a market value and theoretically some liquidity into a market that has had a dearth of players (folks willing to buy or sell at a mutually agreed upon price).  The thought is that by adding government dollars and some guarantees against loss to these vultures and speculators, that things would then get better for all!

This is inane!  Once again, the most aggressive investors/institutions will be treated as rolyalty and “protected” by those suffering under situations created to make money from them!

The best idea still and one that I have discussed in the past and will continue to support is the following:

Allow the borrowers to buy back their outstianding mortgages and outstanding credits at the same rate as Uncle Sam is proposing they be sold to Vultures.  Provide government financing and guarantees to allow the refinancing of the principal and accrued interest at “pennies on the dollar” to those suffering, with deferrals on payments until income levels have rebounded to facilitate repayment of the reduced amounts.

Why should the Government entice vultures to buy on the distress of the public, and then profit on their further distress?  Why not have the Government be the instrument for settlement of the sources of distress?  Why not have the individual families receive the benefit from their own recovery?  Reduce the levels of sources of profit to 3rd parties and institutions?  Foster a benevolent solution, rather than dumping the paper in the hands of vultures and collection agencies to further harass those facing hardship and eviction?

Enough raping of the populace by the Wall Street Titans and Banking Giants!!!  We have see that quarterly profits and earnings for shareholders rewarded by temporarily higher stock prices is a recipe for disaster!

A change is needed. A reason for hope!  Let us hope the new administration sees the light and makes positive things happen for our society!

Also check out http://alphainventions.com/ a great website for all new posts!

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Citi yesterday agreed to “cramdowns” for resetting mortgage amounts and rates for troubled borrowers.

Politicians all across America declared that this was a breakthrough, etc.

One would not think it at all surprising though, given the $45 billion pumped into Citi by our great Uncle, and our Uncle’s willingness to absorb more than $300 billion of future Citi losses.

Socialism clearly has some benefits. With a tight leash (like Citi is on), the master can dictate many things.

Today’s Wall Street Journal had a small article buried within the paper which once again demonstrated how screwed up our American Government/Financial Systems are.

See http://online.wsj.com/article/SB123094029211850265.html

Fannie Mae announced on Monday that it is raising its fees to lenders for guaranteeing or buying certain mortgages. The article notes that the fees will increase to 3.25% of the loan amounts after April 1st, from the current 1.25%.

At a time when our Federal government is spending billions to buy up mortgage paper with the effect of lowering market rates for conforming mortgages, the two agencies now under conservatorship have the gaul to raise the fees. This has the same impact of adding 2 points to a mortgage or stepping the rates back up.

The Federal Housing Agency spokesperson has stated that they will review the public’s objections to the rate increase.

Crazy, but believable…………… Help us Barney Frank!!!!


Congrats to Chip for taking such a dire subject and injecting a sense of humor and a bit of hope.

From our perspective at MoneyAssistant.org there is a ton of pain ahead. In addition to expected spikes in unemployment and further underemployment, tightened credit and higher interest rates, and expected deficits at all levels of government, housing and other asset values are continuing lower.

With an expected $2 trillion of consumer debt defaults over the coming year, many of us will either be in various modes of workouts with our lenders, creditors and governments.

There is much to fear out there in the business community. This is evidenced by continued severe tightness of credit markets, recent bond issues by some fairly solid companies at rates between 13% and 16%, the bond markets pricing in default levels of 12%+ (more than 1 in 10 large companies are expected to go bust), and corporate valuations that are at 60% of values just 12 months back.

Thankfully, Uncle Sam has put bailouts, restructurings, recapitalizations, and HOPE into the current language of our economic chaos (I refer to it as the Red Plague.) If they will expand the circle from Wall Street, Banks, Detroit, to include Main Street and its small businesses and the consumers/homeowners, we may all survive and be in better shape at the end of this ordeal.

See https://guruatmoneyassistant.wordpress.com for additional comments and thoughts.
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Read the Article at HuffingtonPost


Great article.
Lots of risk and parallels, but fortunately (hopefully) different due to FDIC protection of depositors and fast government intervention.

See additional thoughts at https://guruatmoneyassistant.wordpress.com
Read the Article at HuffingtonPost

Today’s Wall Street Journal cites the anticipation of looming “mortgage cram-downs”, as a result of the failure of government’s steps to cease the increase in foreclosures.

The article notes that there are 7.5 million homes underwater currently and that foreclosures are expected to exceed 8.1 million over the next four years!!!! It also notes that Congress was hoping to help 400,000 homeowners through its latest program, “Hope for Homeowners”, but only 357 have applied for the program to date.

Sounds like one of the pillars we discussed yesterday on this blog is still not being secured!!! Unless action is taken, we will see the Red Plague sweep the homeowners and consumers downriver, like the banks and Wall Street firms were washed away this past year.

Unfortunately, the free market and refinancing will not solve the liquidity crunch paralyzing the homeowner/consumer pillar and the small business pillar.

Some insight and real hope are desperately needed. And fast!

Now that the government has bailed out Wall Street, the Banks, the insurance companies, the auto makers, and countless others, the real question is “Is it enough?” What needs to be done to get our economy back on track? Are we on the verge of being “back on track”?

The latest Forbes magazine refers to the “Depression on the Fourth Quarter” and is cautiously optimistic about improvements possibly already underway. They refer to their Chirps Index and are hopeful.

See http://www.forbes.com/forbes/2009/0112/037.html

The index referred to above is a great index. Its optimism is refreshing and encouraging. We all hope that things get better from here.

After all the government assistance and economic support, there are two pillars of our economy which are still faltering. One pillar is comprised of the over-leveraged homeowners and consumers who have no option to refi their mortgages at today’s attractive rates due to excessive declines in the values of their homes or in their credit scores.

The other pillar that has seen no support from political or economic leadership is the small business owners. Millions of small businesses were decimated in the Mini Depression of the 4th Q, due to revenue fall offs of 10-90% and the drawing down or elimination of available credit by those “saved” by Uncle Sam. Many of these millions of small businesses, employing between 1 and 10 employees are on the verge of closing their doors, filing personal and corporate bankruptcy and becoming wards of the economic state. As the US economy and its economic growth over the past 20 years has been powered by our small businesses, their mass genocide due to the economic environment will be costly and painful.

There is an estimated $2 trillion of potential defaults and write-offs that could result from further deterioration of the remaining two pillars.

Hopefully, new leadership in DC will force the hand of the beneficiaries of the government’s handouts and cheap money to assist (1) the homeowners and consumers and (2)the small businesses of America.

If these two pillars falter then the “Chirps” the new index is hearing are just echoes of chirps from the past.

The following was written by a friend. I thought it unfortunately appropriate for this holiday…………

Christmas eve… All the presents are wrapped and hidden from the kids. All, meaning one for each kid. For me, I hope I do not get anything. Not that I do not want anything, but because I know the money would be better spent on food or gas or books for the kids over the next week or two.

This is the first Christmas without money, without credit, without cash…. It feels horrible. I know we are not alone. That helps a bit, but still…. It is Christmas, a time for gifts and joy.

Holiday sales are a great opportunity to buy some gifts, but only if I had spare money. The money I have I need for food and necessities, not toys and games and things to throw away. As I look through our local paper this morning, I see many advertisements for 50% to 75% off. So what…. Even if it were 90% off, I would not buy do to the reasons noted above. Yeh, they can give it to me for free, but I am not a charity case, just someone impacted by the economic collapse of 2008 and the credit crunch.

I am sure tomorrow will be filled with joy and Love. The kids will really appreciate the few gifts they receive. Maybe even more than in past years, as they now understand how tight the money is.

We do have much to be thankful for, and that is really what we will focus on… Fortunately, good health, smart and good kids, a regular paycheck (though it is way too small), and health insurance…. plus much more, I am sure.

It has been a very different holiday season, and tomorrow will be a very different Christmas. It is all part of life. Struggles, success, failure, agony, money, no money, abundance and famine, etc… I am hopeful for the future, not necessarily tomorrow, but maybe the proverbial “day after tomorrow”. We can only be hopeful, and also thankful…..

God bless.

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If the world is literally flooded with dollars, why is it near impossible to refinance a home or refinance and restructure outstanding consumer credit?

Merrill Lynch is offering a Libor based adjustable rate mortgage for up to $2,000,000 for the current rate of 2.375% with NO POINTS!!!! How many are applying? Very few.

Why? Loan to Value requirements have dropped by on average 20% while appraised home values have tumbled as well. Additionally, if the home is located in a state where the values are declining, then the penalty box of “declining market” is applied and the LTV limits are reduced further.

Credit card companies continue to reduce available credit. Analysts expect that the US will see credit line reductions of $2 trillion dollars in 2009. They also expect credit card rates to continue to sky rocket rather than decline in parallel with the Libor, prime and the Fed funds rate.

Hence, headlines may be deceptive.

With the further expected declines in employment levels and compensation, as well as further tightening of credit and increases in cost of consumer credit, there likely is significantly more pain to come for the consumer-class and homeowner-class ignored to this point buy the bailout plans and liquidity programs of the wealthy rulers in DC and their Wall Street financiers.

Happy Holidays!!!

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With credit lines continuing to be cut, banks not negotiating outstanding loans, and new loans only being extended to those who do not need the money, there is but ONE QUESTION: WHERE IS THE MONEY?

How can $340 billion have not have any impact? How can Paulson and Congress let the greed of the banks and institutions destroy whatever remaining confidence Americans had in the government?

As Dr. Michael Savage has said, the US has just witnessed the greatest legal theft of $340 billion in the history of the world. The only beneficiaries have been the creditors, shareholders and CEOs of those institutions receiving the $. Please show me examples of the Americans and Main Street who have benefited!!!!!!!!!!!!

Paulson, Bernacke, Bush and our favorites Pelosi, Reid, and VP Cheney are all to be blamed. The should be held accountable for the fraud they have perpetuated on the American Taxpayers. We have been duped.

Those without jobs, those who have lost and will lose their jobs and credit, will pay. Pelosi, Reid, Cheney, Bush, Bernacke and Paulson can continue to dance all day until the sun sets and beyond, while we all suffer from the Red Plague they have contributed in spreading!!!!!!!!!!!!!!!

Tell me your thoughts…………

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The biggest banks that have received the biggest free giveaway of American taxpayers’ wealth, are now stealing the life blood of every household and the economy and our government is either blessing the theft or ignoring it.  The Red Plague of losses, illiquidity and falling values and prices continues.

Traditionally, interest rates on credit cards were competitive and set based on one’s credit ability, payment history, and market rates.  Today, credit card companies are bumping their rates up to 30+% because they want to.  This is in the face of the 10 year Treasury bond below 3% and the billions in free dollars they have received to stimulate the economy from our dear Uncle Sam.

At these rates, the amounts due will double over less than 3 years. These rates are userious, abusive and immoral.  But, Mz. Nancy and Mr. B Frank ignore the issue.  This is an issue that can not be ignored.

If outragious mortgages are reset, foreclosures abayed, and homeprices attempted to be stabilized to protect the American citizens’ balance sheets and financial solvency, the system will collapse around the explodign levels of consumer debt.

The average American with outstanding balances will get eaten in userious rates and ensuing fees.  Bankruptcy and further financial chaos of the American financial system, banks, Wall Street and Main Street can not be too much further behind.

God help America from the Death Wish of America’s Financial System and Greed (and the Blindness and Ignorance of the regulators tasked with protecting us)!!!!

The biggest banks that have received the biggest free giveaway of American taxpayers’ wealth, are now stealing the life blood of every household and the economy and our government is either blessing the theft or ignoring it.  The Red Plague of losses, illiquidity and falling values and prices continues.

Traditionally, interest rates on credit cards were competitive and set based on one’s credit ability, payment history, and market rates.  Today, credit card companies are bumping their rates up to 30+% because they want to.  This is in the face of the 10 year Treasury bond below 3% and the billions in free dollars they have received to stimulate the economy from our dear Uncle Sam.

At these rates, the amounts due will double over less than 3 years. These rates are userious, abusive and immoral.  But, Mz. Nancy and Mr. B Frank ignore the issue.  This is an issue that can not be ignored.

If outragious mortgages are reset, foreclosures abayed, and homeprices attempted to be stabilized to protect the American citizens’ balance sheets and financial solvency, the system will collapse around the explodign levels of consumer debt.

The average American with outstanding balances will get eaten in userious rates and ensuing fees.  Bankruptcy and further financial chaos of the American financial system, banks, Wall Street and Main Street can not be too much further behind.

God help America from the Death Wish of America’s Financial System and Greed (and the Blindness and Ignorance of the regulators tasked with protecting us)!!!!

It is a certaintly that as the economy settles lower and lower and the Red Plague spreads, the crime rates and rates of thefts and scams will skyrocket further!  Unfortunately, it is only human nature based on Maslow’s documented Hierarchy of Needs.

We all must be judicious for ourselves, our neighbors and our families.  Many scams will look and smell sweet, seem innocent and be presented by apparently trustworthy souls.  Caution is the watchword.

The tales of woe I hear generated from folks in the jaws of foreclosure and bankruptcy are heartwrenching.  Tales generally go something like this: Scammer will buy your house and then promise to payoff the mortgages.  Sounds great.  Unfortunately, they do take title to the victim’s house but they do not pay off the outstanding mortgages.  Thus, the poor victim has gone from a bad situation to a worse situation!

Other similar scams have to do with putting money up first, for the “lender” to assist!

I have heard that no, I repeat NO real foreclosure counselors (if they are real) will take money upfront.  (Take a look at the resources pages on http://www.moneyassistant.org   http://www.moneyassistant.org/index.php?option=com_content&view=section&layout=blog&id=9&Itemid=27    )

Also scams are becoming common place with annuities being sold door to door, by unprofessional scammers.  They can have the victim complete paperwork to make an investment or move an existing annuity investment, and the scammer can then change paperwork to benefit themselves or another party, rather than the investor.

Simple steps to take to help guard against getting ripped off include:

  • Do not make investments into annuities or stocks, etc. with a cash payment.  Always make the payment with a check and be sure to receive a detailed receipt.
  • Only deal with an advisor who works out of an established office.  It is too easy to rent an office for a day or to no have an office at all, to make fake cards, and to scram with the money….
  • Ensure you receive a copy of your annuity contract, statements, confirmations, etc. on a timely manner, direct from the insurance company or main office of the investment company.  (We have all heard too many stories of advisors printing statements on their PCs and printers!)
  • Always read statements and notices received.  Follow up immediately if it seems a payment has not been received or something is not clear.   Make sure you get good answers for your questions.
  • Keep copies of all paperwork.
  • Do not sign blank forms.
  • All insurance companies and investment companies have compliance offices and fraud offices.  If you suspect anything, call immediately.

Be judicious and cautious.  You have worked too hard for your money to give it away to a stranger, against your will.

Feel free to share your stories or comments!!!

Lots of bits of news today, most of which showing how weak the economy is, that it can get worse, and that our government is disfunctional.

Retail sales fell last month off the cliff.  If anyone owns or works in a typical store, sales volumes are horrible.  People are not spending.  Major stores are gearing up for Black Friday already. Some, like KMart, are even starting the Black Friday sales now!  With credit card usage restricted and new high, high rates in the high 20%s and 30%s, people will think twice about buying extra gifts and stocking stuffers.

This Holiday Season we will be thankful for the things we have and family and friends, rather than how big the boxes of gifts are.

The FDIC launched their mortgage foreclosure proposal, designed to save millions of homes from foreclosure.  Some are complaining the Mrs. Blair, the head of the FDIC, is making a play for a political appointment by President elect Obama.  I do not care if it is a political move.  She, thankfully, is trying to move things forward and help people, families, consumers, and many more.  Blair is playing unlike the political and football players we are seeing between Wall Street, Congress and Pennsylvania Avenue in DC.  If only they can say something and then do it, things could be better.

For the FDIC proposal, see http://www.fdic.gov/consumers/loans/loanmod/index.html

No one has confidence in DC, the Treasury, the SEC and the Fed at the moment.  Those who may have faith may rethink their bases for faith.  The rules from 6 months back are no longer valid.

Maybe with the FDIC leadership and impetus, we will see some positive moves from DC and help may be on its way.

Let me know your thoughts.

I am thrilled to be up and running with this blog. The US economy is shuddering to a trickle, the markets are continuing to fall, house values are moving lower still, and foreclosures and bankruptcies are skyrocketing. There are new and major layoffs announced each day. And, our government, including the Treasury, Federal Reserve and SEC, continue to make the situation worse rather than better.

The failure for the government to intervene consistently scares the hell out of me. I am not for intervention, but we are in such a bind, intervention is the only hope.

I will be blogging regularly on the tough financial situations so many are facing, sharing ideas and suggestions, and recommendations.

Our website, http://www.moneyassistant.org, is not fully operational, but will be within the next few days. It will be a resource for those facing challenges, including small businesses and families, and also be a place to find opportunity to find solutions. We will attract investors and lenders and others seeking solid profits on their investments.

The first iteration will be a work in progress. We ask for your patience, understanding and feedback.

Given the number of friends I have in dire situations, I am hoping that my comments and work is beneficial and helpful.

Good luck to us all!
God Bless.