I was interviewing Mr. Bruce Norris for my radio show on KTIE 590AM http://www.590ktie.com/ (You can listen to me from 5am to 6am Mon, Tu & Wed.  Write and tell the management you like Roger and I.  They’re a small station so they get very excited if you write in!  ienewshour [at] ktie590 [dot] com ) and he said something that is very true.  People are getting upset because the government keeps getting involved and not allowing the market to correct itself and by doing so and by helping people that may not have acted responsibly, we’re delaying things and causeing more and more people to consider walking away from thier mortgages.

Look, for the purpose of this post, we need to recognize this; if the comments below from Bloomberg’s article come to fruition, people who are paying their mortgage are going to get upset.  At some point, even I’m going to begin to feel like an idiot paying my mortgages from my dwindling savings.  I can prove a hardship.  Not a problem.  If we’re now going to offer principle reductions and continue to delay a recovery, I might as well jump on the band wagon and follow my governments advice.  Fall behind, box yourself into a corner, do the math and determine that it will be your grandchildrens 18th B-Day before you have equity again and walk away.  Or, at least threaten to.  For sure, I need to stop making my payments.  Once thats done, they actually pay attention to you.  Then if we all hold out, we may get a principle reduction.  However, this will most likely lead to a financial meltdown, but why should I be the only idiot paying my mortgage?

There is a HUGE difference between those who have had an illness, a death, a job loss and someone who took out 300K, lived high on the hog and stopped making their payments.  Yet these are the ones that keep getting a modification or principle reduction.  Why?  Because there is no fairness to this process.  I’ve watched too many who are struggling in their small homes get nothing and just as many who are upside down 300 to 600k get a break.  If we don’t stop this madness I assure you there will be greater challenges ahead.

Here are a few soundbites from Bloomberg today:

For HAMP to succeed, the program will have to be changed to include principal reductions on mortgages to offset value declines, according to Karen Weaver, global head of securitization research at Deutsche Bank AG in New York, and Laurie Goodman, the New York-based senior managing director at Amherst Securities Group.

Principal Reductions

In its current version, HAMP lowers mortgage payments to about a third of borrowers’ income by reducing interest, lengthening repayment terms and deferring principal repayments.

“If the other measures in HAMP aren’t working, the government will have to look at principal reductions,” said Brian Bethune, chief financial economist at IHS Global Insight in Lexington, Massachusetts.
One in Four

One in four U.S. homeowners holds a mortgage with a balance higher than the property’s value. The number of borrowers with so-called negative equity reached 10.7 million, or 23 percent, at the end of the third quarter, according to a Nov. 24 report by First American CoreLogic, a Santa Ana, California-based real estate research firm. Government programs to help underwater borrowers exclude jumbo mortgages that aren’t eligible to be purchased by Washington-based Fannie Mae and Freddie Mac of McLean, Virginia.
The government spent $230 billion to support HAMP and other housing programs in the 12 months ended Sept. 30, according to the Congressional Budget Office in Washington. The Federal Reserve has pledged to spend $1.25 trillion buying mortgage- backed securities in an effort to reduce fixed-mortgage rates. That program is set to end this quarter.
Currently, 6.5 million households are either in default or at least one payment behind on their mortgages, according to the Center for Responsible Lending based in Durham, North Carolina.

If enough of those are seized by lenders, it could lead to a “double-dip recession or at least to a slower recovery,” said Julia Gordon, senior public policy counsel for the research and policy group, in testimony before the House of Representatives Committee on Financial Services last month.

Chris Miscellaneous

Its a mouthful and its intended to continue to create stability in the Residential Mortgage Backed Securities Market as well as the Comercial MBS Market. I believe the performance of this Private-Public venture will be a potential sign of things to come and therefore I am watching the results. Of course, today, they are not good. However, in fairness, this is no surprise and the strategy is to buy and hold. Nonetheless, we should pay attention to these reports as a potential early indicator of things to come.

Here is a link to the report:
http://www.financialstability.gov/docs/External%20Report%20-%2012-09%20FINAL.pdf

Chris Miscellaneous

…then you should take twenty minutes and read this testimony from your Treasury Secretary. Wow! It is revealing, powerful stuff.
I often wonder why people simply allow stuff to happen to them without asking why and attempting to understand what is going on around them and what they can do to have some semblance of control. Our understanding of just what happened, at one of the most financially vulnerable times in our history, may just be the impetus we need to get involved and vote for those who believe we need to cut spending and reign in the unadulterated greed by those in charge.
Here is a link to the testimony;
http://www.treas.gov/press/releases/tg514.htm

Chris Miscellaneous

In a Wall Street Journal report this morning (1-27-10), the CBO (Congressional Budget Office) reports that we are already too deep in debt and even with the best case scenerios, going to get far deeper. 

As an expert in underwriting criteria, if I took the Country’s credit rating and looked at the debt of America as a borrower, based on Fannie Mae and Freddie Mac, as well as the very liberal underwriting criteria of FHA, I would be forced to turn America down for a loan.  In fact, I would even need to suggest credit counseling with a HUD Approved credit counselor in order to discuss were and how America could cut its spending.

I find this ironic.  I have talked to numerous borrowers who have been subjected to having to listen to some 20 year old tell them that if they want to keep their home, they’ll have to stop buying as much pet food as they currently are buying ( I swear, true story.  A 70 year old women had three cats), they tell borrowers to give up their cable TV, get rid of their car and take the bus, etc…   

I say we need to take all of the HUD Approved counselors and send them on a tour of our government offices and take a look at each offices budget.  I would then want those same counselors to use the same criteria they are taught to use on individual borrowers and apply it to said office/department.  Once this is done, then I would believe the homowners should listen.  At least then, the counselors could speak with conviction when they say;

Counselor: “Look, all of the government is living well within its means, why can’t you?  Stop spending money you don’t have!” 

Homeowner: “But my children need the private school to get ahead”.

Counselor: “I’m sorry, but if you want a modification, we need to demonstrate to the bank that you are being fiscally responsible and cutting wherever you can”.

 Next Homeowner: “My pets are all I have and I need to feed them”.

Bank (True story): “You need to decide whats more important, your pets or your house”.

If that moron at the bank, who told this 70 year old women she needed to decide what was more important, actually realized his bank had just received billions in tax payer money so his bosses could pay themselves record setting bonuses, I’d have to get a rope and a posse and hunt him down! (Kidding.  Please, no letters)  However, I don’t actually believe he put two and two together.  This 70 year old women got it and it UPSET HER, a lot!  She was livid.  “How can they ask me to sacrafice the most important thing to me and all the while, they are getting away with financial murder?”

Me: “I don’t know”.

Folks, if you’re struggling and wish to keep your home, fight.  Retain the services of a great HUD Counselor, or attorney if you can afford one, do your research on them and ask for their success rate.  Demand proof that they are actually good at what they do.  Even if they are a HUD  Approved agency, that does not automatically mean they are all created equal.  This is your home, interview them and get a good one who matches your personality and then follow their direction.  Don’t wait until the last minute to seek help.  Know this, this will be a long and arduous process.  In the end, if it is not meant to be, hold your head high and rent.  With proper guidance, you’ll buy again in as short of time as three years. 

Anyway, here is the story,  Read this and take action.  This is your country and locally the County and City belong to you as well.  All of us have to remember that we have reaped a great harvest for decades.  Now, its time to plow the fields.  I believe in America with all my heart, I believe our best is yet to come.  Being fiscally responsible and living within our means is what we owe to our children.  As Americans, we can’t ask our children and other countries to follow our lead if we are setting a terrible example.  Please get involved and demand your elected leaders do what is necessary to get America back in a position to qualify for a loan under her own guidelines;

From the WSJ: 

The CBO said the government will run an aggregate deficit of about $6 trillion during the next decade, a level that many economists worry could lead to currency shock, inflation, crippling interest rates or other economic maladies.

The Obama administration is proposing freezing non-discretionary spending as an effort to tackle the deficit. The News Hub panel discusses the possible political fallout.
At the end of 2009, debt held by the public exceeded $7.5 trillion, or about 53% of GDP (Gross domestic product), the CBO said in the report. By the end of 2020, “debt is projected to climb to $15 trillion, or 67% of GDP,” CBO director Doug Elmendorf said on his blog post. “With such a large increase in debt…interest payments on the debt are poised to skyrocket.”

The CBO estimate is almost certainly an understatement of the deficit problem. For example, the CBO is assuming that annual spending will rise with inflation, but Congress in recent years—even before the recent recession—has been boosting spending at higher rates. And President Barack Obama and many lawmakers in both parties want to extend at least some of the Bush-era tax cuts that are set to expire at year end, though the dire CBO estimate could give ammunition to those who want to extend the tax breaks only on a temporary basis.

Now, I ask you, is this a great time to discuss additional government programs?

Chris Miscellaneous

Hi, We have our 1st Mortgage with Ocwen. Our payment went to a super high payment over $3,000 due to an adjustable mortgage. Since we were not able to make the high payments we started working with Ocwen on a loan modification. We sent over the requested package about 3 maybe 4 times. Following up with weekly calls. This process has been going on for over a year. One night a person showed up at our door to tell us that we had been foreclosed. Is this possible? Can they just foreclose while we are trying to modify? We had been advised not to give any payments till the new loan mod was ready and they are now foreclosing us. Is there anything that we can do to save our home at this point? Please advice. Thanks in advance.

Chris Miscellaneous

Chris,

Hi Its been a while and as we spoke before the holidays about using my system to record still stands…….the reason I am writing is you had a an open session at a church not long ago in corona I believe and this woman called me about Loan Modification…from the website ..I spent an hour and about 15 min with her at my office and the story was horrific. I don’t fake it… or pretend to have the knowledge you have but I believe I helped her on her trek as she said I did but I don’t have what you have ……the knowledge………experience ….and hands on practicality of these various scenarios. ..I want to be clear… How do you do this??? its like doing funerals…or being the officer at the door to deliver the bad news …..How many people you talk to with the sadness and out right anger of the corruption and intentional misgivings of information that you have to listen to? It must where you down. As I was wore down tonight. I just met with one lady. I want you to know I am going to really start praying for you for strength as the time I spent with this woman “************” drained me of my energy and out right broke my heart. I don’t know how you do it when people line up to see you…… May God Bless you and you’re “Ministry” This is what you have; you may not intended to be in a ministry but boom…..it is. . You may get paid some but I know its not enough and I know you take time on the blog and I got the e-mail to assist and my answer was I don’t think I am good enough and would be afraid of saying the wrong thing…I am sorry Chris I don’t feel I am anything close to you and the words you share..I am afraid of hurting someone more than they already are. As I read on one blog and incoming…bang Jory got hit hard and we know his integrity and intentions are all good it’s the people that are hard pressed angry and want the right answer right now……. And the help they need to do what it is they want to do need to do or cant do .. and even so what they may want may not be “Ethical or right” And you have to tell them the truth.

Bless you and if you ever have some one who wants to be listened to as I know the blog can be hard for some and absolutely need to talk to someone….. I volunteer to listen and meet with them and in some cases even pray for these folks. I know what I did tonight was good as I listened and asked questions and educated this woman to the best of my ability.

Still you have the weight of the world on you I pray for strength of the Anointed One to help you in your burden.

Sincerely,

Derek W. Thesier

Chris Miscellaneous

I read a lot. One of the guys who can often cause me to smile and at times, laugh out loud, is Martin Andleman. He can take a terrible subject like loan modifications and actually point out the absurd, in such a way that causes many to laugh out loud.
I cut and pasted a section of his recent post because I was a bit depressed and frustrated after talking to a few homeowners who, after six plus months, were turned down for their modification. They did everything they were told to do, but it didn’t matter. What mattered to me was that they spent money they didn’t have and they shouldn’t have been offered false hope.
Anyway, I opened up Martins e-mail and I laughed out loud at this portion of his blog. I hope you get a smile as Martin points out just how ridiculous all of this is…

If you’re interested, the weather in India is really quite lovely this week. The humidity’s low, there’s no wind whatsoever, it’s sunny and in the low to mid 80s. I’m not thinking about going there or anything, but it does sound like lovely golf weather, I’d say.

Not only that, but the economic conditions in India, while they’re not what they were a year or more ago, are still not that bad. Jobs are pretty easy to come by and the young people are generally optimistic about the future. It sounds like a pretty nice place to visit, although I’m pretty sure I couldn’t live there. I’m a U.S.A. kid and it’s hard for me to be out of the country for more than a month. I start craving American crap; McDonald’s even… so, sue me.

Outside of the occasional disaster, terrorist attack, a disagreement with Pakistan, or something about man-eating tigers, I never really give India a second thought really… until today when I had the most interesting cultural experience. I met someone from India… not in person, mind you… but while on the phone. That book was right… the world truly is “flat”.

It was totally unexpected too, which made it all the more interesting. When I dialed the number I was calling, the last thing I expected was to meet a nice young Indian man named Ashmi; I think that was his name anyway, it was difficult to be sure. When I couldn’t make out his exact name, he said I could call him Sam, which I thought was very nice of him. My name’s Martin, but he was having trouble with that as well, so I said he could just call me “Mark”. Close enough is good enough in matters of international relations, I think.

So, I bet you’re wondering how this whole thing happened. Funny story… I was actually trying to get my mortgage modified and since President Obama announced that there was now a fabulous government help-line phone number I could call, I thought I’d give it a go.

And that’s how I met Sam… I mean Ashmi… or Assme… or Eshmi… I’m not trying to be insensitive here… I’m really not sure. The connection wasn’t bad, but I’m not all that familiar with certain Indian dialects, so it was difficult for me. Other people would do much better, I’m sure.

Anyway, Sam was very interested in helping me with my “loone mode,” was what I think he called it. He couldn’t tell me whether I qualified or not, or what the process would entail, but he was certain that my president had created something very wonderful and was quite taken with Mr. Obama. He asked me if I knew when President Obama might be visiting India and I told him I wasn’t sure, but would check and get back to him.

I asked him about my LTV and DTI ratios, and I told him about the hardship I’ve endured and he was very sympathetic, although he did say that over in India things are much worse. Apparently, and I did not know this, the average wage in India is around $1750 a year in American dollars… I think. The conversion process was cumbersome and I’m not nearly as up on the Rupee as I should be, for which I apologized. Again, other homeowners are probably more familiar with things like that, so by no means am I claiming to be a representative example.

After a while I realized that he wouldn’t be able to help me with much more than filling out a form and getting a reservation… at least I think that’s what he said he could do… don’t hold me to it. He might have been saying something about American Indians having to live on reservations, or something about his new revelations or relations… it was part of a conversation that was moving quickly and I was struggling to keep up. I said that I’d like to sign up for help and he took my information so now I feel a lot better about saving my house from foreclosure. I just hope that my local Post Office can read between the lines because instead of “Martin Andelman,” I’m pretty sure he’s going to be mailing stuff to “Marck Antlermon”.

It’s not really a huge problem, however, because he said someone might also call me back, and I’m almost positive he got nine of the digits right in my ten-digit phone number, so whew… dodged a bullet there.

So, I guess my government has leapt into action on my behalf and as of today… I have to tell you… I’m so relieved. After spending the last several months working around the clock to keep up with my mortgage payments… trying to hold on until President Obama’s housing rescue plan was ready to go, tonight… I’m going to sleep like a baby.

Thank you, President Obama! I agree with Ashhmii… no, it was Aeshemi… never mind, Sam… you really are proving to be everything the American homeowner could have wanted and more. Our prayers have been answered. I’m so glad I didn’t pay that law firm the $3500 they wanted to handle the loan modification negotiations with my bank. This way I don’t have to pay a dime, and I’ve already learned a lot about India, so I’m ahead of the game already.

See people… give Obama a chance… he’s making things happen for the middle class in this country. And if you call the government help-line, which is toll-free, by the way, and you happen to get Assmi… no, Asonomi… something like that… ask him if he goes by Sam… and tell him Marck said hello!

Signed,

One Relieved American Homeowner from Main Street U.S.A.

Chris Miscellaneous

TOO MANY CREDITORS BOTHERING YOU?

REMEMBER IF YOU ARE SUED BANKRUPTCY CAN BE AN OPTION and IS A LOT LESS EXPENSIVE THAN DEFENDING A LAWSUIT:

1. Lenders can sue on the junior mortgages as unsecured notes and they are doing just that. The bankruptcy can remove this lawsuit.
2. Bankruptcy is a form of asset protection believe it or not. It can in certain circumstances protect up to $175,000 in California and more.
4. A Chapter 13 bankruptcy may be able to remove that second mortgage and even third mortgage by making it unsecured.
5. Income taxes under certain circumstances are dischargeable in bankruptcy.
6. Under certain circumstances you can even keep credit cards.

This information is provided by Herman Thordsen: http://www.lendinglaw.com/

Chris Miscellaneous

FOR CONSUMER DEBTS YOU ARE PROTECTED AGAINST COLLECTION AGENCY DEBT COLLECTORS-SOME THINGS A DEBT COLLECTOR CANNOT DUE AS A MATTER OF LAW UNDER THE FAIR DEBT COLLECTION PRACTICES ACT
(15 U.S.C. §§1692 et. seq)

FACTS

1. They cannot contact third parties, such as your family, friends or your employers about your debts.
2. They cannot make repeated telephone calls or calls at unreasonable hours. Unreasonable hours are defined as before 8:00 a.m. or after 9:00 p.m.
3. They cannot send letters that give the appearance they came from a court.
4. They cannot request postdated checks with the intent to prosecute you if they bounce.
5. They cannot sue you in a court that is far distant from your residence.
6. They cannot make certain false representations in association with efforts to collect the debt, including the false claim that the person contacting you in relation to the debt is an attorney, falsely claiming to have started a lawsuit, using a false name, or using stationery that is designed to look like an official court or government communication.
7. They cannot threaten you with arrest if you do not pay the debt.
8. They cannot contact you once you have told them to contact your attorney and have given the information on how to contact your attorney.
9. Within five days of their first contact with you, the debt collector must send you a written notice telling you:
How much money you reportedly owe;
The name of the creditor to whom the debt is owed;
That unless you, within thirty days after receipt of the notice, dispute the validity of the debt or any portion thereof, the debt will be assumed valid by the debt collector;
That if you dispute the debt in full or in part within that thirty day period, the debt collector will obtain verification of the debt and mail it to the consumer; and
That upon your written request within the thirty day period, the debt collector will provide you with the name and address of the original creditor, if different from the current creditor.
The first notice must also include a warning which must state that the communication is from a debt collector and that any information obtained may be used to collect the debt. Except for pleadings associated with a legal action, all subsequent communication from the debt collector must also include this warning.

MORAL

The original creditor is not considered a debt collector except under very unusual circumstances. If you are bothered by a debt collector and do not feel emotionally able to handle the problem yourself, you can retain us to represent you. It is not all that expensive and in many cases the debt can go away depending on the collector, the amount and how old the debt may be. If you have questions please call me.

http://www.lendinglaw.com/

Chris Miscellaneous

State Foreclosure Prevention Working Group. The group, which includes state attorney generals and banking lawyers recently reported the following;

The ratio of modifications “in process” to completed modifications has “ballooned” from 3-to-1 in October 2008 to 7-to-1 in October 2009. The working group is concerned that 72% of completed modifications result in an increase in the principal amount of the mortgage. “Servicers routinely capitalize delinquent interest, corporate advances, escrow advances and attorney fees and other foreclosure-related fees and expenses into the loan balance when completing a loan modification,” the report says. With so many underwater mortgages, increasing the loan balance “only adds to the likelihood of ultimate default.”

And we wonder why the problem continues to grow?

Chris Miscellaneous