Thought it was an excellent breakdown of the bailout madness, although after reading it, I am so angry that our govt. is continually lying to us about the true state of the financial system!!

WHY is no one in Congress asking these questions and DEMANDING ACCOUNTABILITY, especially regarding the crapp collateral accepted??

Mr. Mtg., do you care to comment?? Would love to get your two cents….

Here is a snippet–

Outcome 3 is the most fascinating area of departure from the classic Ponzi scheme. Legal authorities have, indeed, examined the books of these firms, except for one area we’ll discuss later. They found worthless assets along with debts hidden off the balance sheet instead of real depositor funds. Instead of arresting the perpetrators and shutting down the schemes, Federal authorities have developed their own new schemes and pumped over $2 trillion of taxpayer money into propping up the firms while leaving the schemers in place.

Equally astonishing, Congress has not held any meaningful investigations. This has left many Wall Street veterans wondering if the problem isn’t that the firms are “too big to fail” but rather “too Ponzi-like to prosecute.” Imagine the worldwide reaction to learning that all the claptrap coming from U.S. think-tanks and ivy-league academics over the last decade about efficient market theory and deregulation and trickle down was merely a ruse for a Ponzi scheme now being propped up by a U.S. Treasury Department bailout and loans from our central bank, the Federal Reserve.

If you have a chance to do some more videos, that would be great!

Thanks,

Darrell

http://www.AlwaysMakingMoney.com
——————
Learn From Experts, Increase Your Wealth

Isn’t it insanity to keep doing the same thing over & over and expect a different outcome?

This time it’s different…;)

Scenario:
Family of 5, total annual income of family is $100,000
Family bought a 2700 sq ft home in Northern California for $565,000 (2005 or 2006′ish)
10/1 I/O @ 6.25% for $435,000 on the 1st – $2800 /mnth (Interest & escrow)
P&I 15yr balloon @ 7.25% for $100,000 on the 2nd – $675 / mnth (P & I)

$535,00 outstanding in mortgages

Total monthly payment about $3475

Now say there is $40K in CC debt – $950 / mnth payment(s)
Lease payment on a bimmer: $450 / mnth
Monthly unsecure debt: $1400

Monthly Income: 8333
Monthly combined debt (Mortgage / Unsecure): 4875

DTI: 58%
Mortgage DTI: 41%

Scenario: House is only worth $385,000 as of today, value still in decline

What resources on the Net are available to explicity explain what the outcome of this family will be?

Knowing that the family should contact a CPA, lawyer and possibly the cali gov assistance program(s) for help.

Also, are the outcome for this family different if the family lived in Florida, Nevada, Washington State, New York or Arizona?

By my made up statistics, there are at least 450,000 families in this scenario at this moment in time across our nation. That is 2.25 million people that the lies have affected over the last 8 years and that us taxpayers are forced to bailout.

We get a huge wasteful package like this 300 billion mortgage bailout that provides no jobs and ensures that we will be kicking asset recovery down the road at depression price bottoms. At the same time, they wont throw 25 billion at the auto industry. Granted that throwing 25 billion at the auto industry is kicking THAT CAN down the road, but in this instance, kicking and giving the a time out could have been the head and shoulders play. Congress might be taking the right approach to the auto industry, but not at this critical moment in history. Here is why.

This is what is on the American mind: Am I going to have a job? Am I going to get a pay cut? Is everything going to be OK?

This is the American economy: Consumerism is 70% The economy is thus determined by the buying mood of the public.

The right play in this situation then is not whether bailing out the auto industry has merit in the business sense, but which choice will boost consumer confidence. The right decision in my mind is which choice puts us closer to “Everything is going to be OK”. In this sense congress failed by pushing off for a decision to December 8th….and maybe if then.

Why is stalling a decision right now wrong from a timing perspective? We have now negatively impacted the start of the Christmas shopping season. Not only is it the start of the shopping season, but it includes Black Friday, often the busiest shopping day of the year. Now why is that important? Because right now people are paying close attention to the economy. People, the actually really important people in American society (consumers and business people) will be judging this critical first week to evaluate the future of the Christmas season. That my friends means how much money people will spend and whether employers should follow through with layoff plans.

What is Wall Street going to do? Wall Street is going to look at first week numbers and say Sell!, Sell!, Sell!, Sell!, Sell!. What is the consumer going to do? They are going to look at Wall Street numbers and say OMG, things are even worse than we thought, and then they are going to tighten their wallets further! Is this what we need in these tough economic times? Are we not creating and snowballing our own fate? Instead of plugging a hole in the dyke, Congress just inadvertently strafed the face of the dyke with a 50 caliber machine gun.

While Congress has suddenly zeroed in on a tree to show “tough on spending taxpayer dollars” and mircroing in on tin cup and private jet issues, they inadvertently just tossed a dozen incendiaries onto the forest! This is the part where I stand back in amazement. They could have chosen this critical moment to throw some water on the fire of the US economy. Instead, they just fanned the flames of negative US consumer sentiment.

So while we have these issues that US auto makers make crappy cars, that auto workers are overpaid, that the big three will fail anyway, there is the other side to the issue. The other side is millions of jobs, how consumers feel about future, employment prospects, how that translates into consumer spending and the American economic engine. If the American economy was running on six out of eight cylinders, we might have just started a chain reaction that is going to chop it to five.

Americans would have probably have been OK with it if congress had recognized this “critical slice of time”, agreed to fund the autos into the Obama administration and thrown that onto Obama’s first 100 days.

Now lets go back to the tough stance on spending tax dollars on the autos (real jobs and lots of them) verses the no jobs and mortgage help banker plan. The banker plan includes other liens to get paid off, seconds. Does this also include equity tap credit cards? If it does, I am really pissed! What about those no down payment 20% seconds that the banks FOOLISHLY did? If we are going to do that, lets wipe out 100% of the common shareholder of the banks first. After all, the shareholders elect the BOD who elect the CEO’s of the banks. If the shareholders did not elect the right BOD that was going to look out for their interest, too bad for the shareholders. Is Wells Fargo a Buffet play? Too bad for Buffet huh?

If we are going to be paying off stupid banker seconds, OK but wipe out the common holder of the banks first, wipe out the bond holders second, and then after everyone who foolishly invested in a bank has been exhausted, then handle second payouts in a mortgage mod plan. If the bankers took that risk, the cost has to be 100% passed off to the bank until all avenues are exhausted and then tap the pocket of the taxpayers, not before.

If I could draw a cartoon right now this is what it would be. A burning forest in the background labeled “economy”, three autos with a tree growing out of the roof, and three blindfolded congressmen throwing buckets of water on the autos. A fourth congressman would be chopping down the tree labeled consumer sentiment.

Thus we conclude yet another chapter of the way things are, as viewed from the eyes of Bertdilbert.

http://www.fdic.gov/news/news/press/2008/pr08117a.pdf

Ok-Here goes the facts:
Remember these are just a limited few of the golden nuggets this thing includes.

1) FDIC states banking institutions can set their own guidelines on LTV’s, as to which collateral valuation method they are required to use. Approved methods are Appraisal, AVM, or Tax Assessors Opinion.

2) FDIC states qualifications for thos performing collateral evaluations can be lendding professionals, real estate salespeople, and forresters. PDF p.32

3) Although NOT REQUIRED, an institution may use a state certified or licensed appraiser to perform evaluations.

Conclusion: The new requirements and lending guidelines are being put into the banks hands for their own internal evaluation methodology and quality control. Firrea was changed to eliminate the requirement that ALL real estate transactions would require an appraisal completed by a state licensed/certified professional. Add all these new statements, opinions, and the current lending environment changes together and I will let you draw your own conclusions. Accurate appraisals will only hurt this program and will be eliminated totally in the next 6 months. See HVCC agreement between Fannie and Freddie. this whole mess came on us by banksters putting the screws to honest appraisers and now you get 3rd party appraisal vendors ordering ALL appraisals as of Jan. 1,2009. These 3rd party vendors keep 50% of the appraisal fee and now you will have the least qualified professionals evaluating your biggest asset. Honest appraisers cannot make a living at $125 per order. Honest appraisers cannot do more than 1 appraisal per day and do a good thorough job. Thats $15 per hour with NO subsidized office lease, NO 401K, and NO Benefits. Most appraisers have to make $15-20K just to cover the cost of data, E&O/Health Insurance, and the IRS. Thats 160 orders out of 300 working days. That leaves 140 days to make $17,500 in profit. I will be finding a new career and the Gov’t and banks will be getting what they are willing to pay for. $hit Work…..That’s what they have been wanting for the past 10 years anyways. See Country Wide, Golden West, Indy Mac, and more at Mortgage Lender Implode-O-Meter.

This is why I always have believed that the bankruptcy “cram down” is essential for avoiding some of the terrible economic inefficiencies of foreclosure. We have to endure the pain of deleveraging, but some foreclosures may be avoidable. The threat of a bankrupcy could help many borrowers, even if they don’t actually file. The servicers, as we have seen, will be unwilling to get serious about workouts unless they are compelled.

Can you comment on the recourse vs. non-recourse situation? What fraction of US mortgages are recourse loans? Are California lenders making attempts to proceed in such a way that they can obtain default judgements when proceeds are inefficient?