Dear President Obama and Secretary Geithner,
I have read extensively about the issues of this crisis you are both facing and I certainly sympathize with the situation. However, as pretty much the average American, I wonder why this is so complicated. We tend to over think, when simple solutions might be the best. While I do not have the knowledge to put all the numbers together, I do look at the situation and think, why should the investment markets continue to have their risks covered. They knew what they were doing or if they did not, then they deserve what they are getting.
But the middle class American is the one that cares the burden. So I end up asking, how do we get out of this financial mess? At this point, we have a two-pronged issue. One, we need to stabilize the financial markets by allowing there to be some understanding of the risk in the loan portfolios that the banks have created. Two, we need to provide consumers with some added income to spend to get the economy rolling. So the question is how to we accomplish this?
To me the answer is found in a very simple and straight forward process.
Step one, all consumers would be eligible to go to the bank of their choice and refinance their primary home loan. The process would be:
· Have an independent appraisal done.
· This appraisal would be used to issue a new loan against the property the terms would be 4.5% interest for a maximum of 30 years.
· The amount of the loan would be the “current” appraisal value, capped at a 20% reduction from the original appraisal value or the amount owed on the current loan.
· Only primary residences would be eligible.
· The banks would send the revised loan total to a fund set up and managed by the government. The existing creditors would then apply for payment from the fund for the note they hold against a home. It would be up to them to unravel the CDO and figure out who owns what and make claims against the fund. The fund would pay out the “new loan” amount as payment in full on the CDO’s.
Here are a couple of examples:
Example 1 - Home purchased in 2006 for $300,000, 6.5% 5 year ARM, nothing put down. Current outstanding loan payoff is $290,000 and monthly payment is $1,896.
Reappraised in 2009 for $225,000, new loan created for $232,000, 80% of $290,000, at 4.5%, 30 year loan. Monthly payment would be $1,175.
Government fund would receive $232,000 to “payoff” current debt holder. Current debt holder would get $225,000. Consumer would have security in home at a new adjusted value and an additional $721 per month to spend, assisting in an economic recovery.
Example 2 – Home purchased in 2000 for $300,000, 7% interest, 30 year mortgage, 20% down, current payoff $250,000. Monthly payment $1,729. Does not need refinancing since home has not “lost value”.
Reappraised in 2009 for $295,000. New loan given for $250,000 a 4.5% for 30 years. New monthly payment $1,266.
Government fund would receive $250,000 to “payoff” current debt holder. Consumer would have security in home at a new adjusted value and an additional $463 per month to spend, assisting in an economic recovery
Couple of other keys to making it work:
· No credit check, if the person is in the home and is not over 60 days late, they get a loan.
· No title search, assuming they bought the home and a title search was done.
· Simplify the closing process to minimize cost, government pays 100% or have the banks cover it.
· All loans must be done through the banks, can not be resold by the banks for a period of 5 years.
While I know there might be issues this seems to address the two main issues facing our country from the economic point of view. I wish you well in your efforts.
Please let me know if you need any clarification of this thought process.
Larry
"Many people took out loans they were never going to be able to afford,never! That means somebody knew from day one they were never going tobe able to pay back the loans." The bankers approved these loans and used the money to pay themselves bonuses and payed our government representatives to look the other way…that’s where we are…any suggestions for getting us out of the mess are welcome…but if you just want to play the blame game…where does that get us?
Read what was spammed on the comments section of my blog:
The people that bend the rules GET PAID!
You too can bend the rules by printing out fake paystubs w-2 w2 1099 forms usinghttp://www.PROOFOFEMPLOYMENT.com
Buy a home, car or get a huge irs tax refund just for being you! Do what you have to do to get yours! EVERYONE ELSE DID!!
http://www.FAKEPAYCHECKSTUBS.com
Print out Fake Employment and Fake Income, Wages, 1099, w2, w-2, using your home computer printer!
Oy vey!!
Continuing with the ideas form the Economic Recovery Meeting...
RBC Bank President Gordon Nixon - Salary $11.73 Million
$100,000 - MISTAKE (FISHERMEN'S LOAN)
I'm a commercial fisherman fighting the Royal Bank of Canada (RBC Bank) over a $100,000 loan mistake. I lost my home, fishing vessel and equipment. Help me fight this corporate bully by closing your RBC Bank account.
There was no monthly interest payment date or amount of interest payable per month on my loan agreement. Date of first installment payment (Principal + interest) is approximately 1 year from the signing of my contract.Demand loan agreements signed by other fishermen around the same time disclosed monthly interest payment dates and interest amounts payable per month.The lending policy for fishermen did change at RBC from one payment (principal + interest) per year for fishing loans to principal paid yearly with interest paid monthly. This lending practice was in place when I approached RBC.Only problem is the loans officer was a replacement who wasn't familiar with these type of loans. She never informed me verbally or in writing about this new criteria.
Phone or e-mail:RBC President, Gordon Nixon, Toronto (416)974-6415RBC Vice President, Sales, Anne Lockie, Toronto (416)974-6821RBC President, Atlantic Provinces, Greg Grice (902)421-8112 mail to:greg.grice@rbc.comRBC Manager, Cape Breton/Eastern Nova Scotia, Jerry Rankin (902)567-8600RBC Vice President, Atlantic Provinces, Brian Conway (902)491-4302 mail to:brian.conway@rbc.comRBC Vice President, Halifax Region, Tammy Holland (902)421-8112 mail to:tammy.holland@rbc.comRBC Senior Manager, Media & Public Relations, Beja Rodeck (416)974-5506 mail to:beja.rodeck@rbc.comRBC Ombudsman, Wendy Knight, Toronto, Ontario 1-800-769-2542 mail to:ombudsman@rbc.comOmbudsman for Banking Services & Investments, JoAnne Olafson, Toronto, 1-888-451-4519 mail to:ombudsman@obsi.ca
http://www.pfraser.blogspot.com
http://www.corporatebully.ca
http://www.youtube.com/CORPORATEBULLY
http://www.p2pnet.net/story/17877
"Fighting the Royal Bank of Canada (RBC Bank) one customer at a time"
The Big 3 automakers are asking Congress for a loan to help them survive this bad economic period. We cannot allow this major American manufacturing industry to go out of business, but how can the federal government help it survive?
The bank bailout of 2008 was intended to enable banks to free up their credit policies; but—while the banks were happy to take the billions of dollars from the federal government—they have been reluctant to extend new credit. It appears that Wall Street has conned us, and Congress should insist that the banks participate in the extension of credit to credit-worthy consumers. This will enable more people to buy new cars.
The bill that would loan $14 billion to the Detroit automakers has been stopped in the Senate by Senator Bob Corker of Tennessee, Mitch McConnell of Kentucky, and Richard Shelby of Alabama. Those states are the homes to automobile assembly plants of foreign automakers, and the employees of those foreign automakers are not represented by the United Auto Workers union. The Republican opponents in the Senate want the UAW to agree to lower salaries and benefits.
The Detroit automakers are also suffering from some bad decisions that have been made by their corporate leadership. The automakers act like they have forgotten the oil embargoes of the 1970's, and they do not care about the problem of global warming. No bailout of the Detroit automakers will be successful unless their current leadership is replaced with more intelligent decision-makers.
Detroit automakers have known that they can earn larger profits from selling gas-guzzling SUV's than they can earn from selling small, economy cars. Therefore, the automakers have been heavily advertising the SUV. The Detroit automakers have fought against every attempt by ecologists to force an increase in the average fuel efficiency of their vehicles. In particular, different MPG requirements were established for trucks than for passenger cars; so the mini-van, SUV, and pickup truck were allowed to get fewer miles per gallon than the passenger car.
In order to combat global warming and to reduce American vulnerability to economic extortion by OPEC countries, the Big 3 must be required to build more fuel-efficient vehicles, and/or use alternative fuels for their vehicles.
Hydrogen fuel cells are a great hope for the future, but they are currently still too expensive for the mass market.
Plug-in hybrids are also promising, but they still have a limited distance range. The 2010 Chevrolet Volt might be good, but it still might be too expensive for the mass market. Perhaps by 2010 or 2011, this might be a good option.
Compressed natural gas is also promising, but the number of available CNG fuel stations is very limited.
E85 fuel--which is 85% ethanol and 15% gasoline--has been very successful in Brazil, where almost every new car has a flex-fuel engine that can use E85 fuel. E85 fuel stations are becoming increasingly available here in the United States. While the Detroit automakers have built thousands of flex-fuel automobiles for other countries such as Brazil, they have not made very many flex-fuel autos available here in the United States.
Flex-fuel autos use already-existing technology, so we do not need to wait for further research. In the Midwest, E85 fuel stations are already plentiful. There is something of a chicken-or-the-egg situation here. If the Big 3 would equip all of their new vehicles with flex-fuel engines, then E85 fuel stations would become plentiful nationwide.
What is required to convert a gasoline-powered engine into a flex-fuel engine? The basic requirement is a fuel line that can withstand ethanol without corrosion. E85 fuel has a higher octane rating than 87-octane unleaded gasoline, so it can be burned in standard automobile engines. Unfortunately, E85 contains less energy per gallon than gasoline; so E85 produces 15% to 25% fewer miles per gallon than gasoline in the same engine.
However, E85 costs less per gallon than gasoline, and E85 produces less air pollution per gallon than gasoline. The ethanol is produced here in the United States. Currently, it is produced from corn; but Brazil has demonstrated that ethanol can be produced from sugar cane. Currently, the United States heavily subsidizes the price of sugar; but if that price subsidy were reduced, ethanol could be produced economically from sugar cane. Current research is trying to generate ethanol from switchgrass or from wood shavings, so that might be economically possible in the future.
Currently, flex-fuel engines have their timing set at the factory to burn gasoline; but if the owner decided to use E85 fuel exclusively, he could have the timing adjusted for E85. An engine set in that way would get almost as many miles per gallon on E85 as it could get on gasoline.
I just had a big idea. If the government is so eager to spent money, the tax payers money, then why don't they spend it directly on the tax payers?
I say have all the companies that have people who are in foreclosure, report and give those people a grant or no interest loan attached to their mortage, to bring them current. That would directly benefit the people and the companies holding the loan.
It's time out for the tax payers paying for bad decisions when it seems obvious to support this country is to support the people.
So I am asking everyone to write you Congressmen/women and Senators today before they make a brash decision that would amount to putting a bandaid on a cancerous ulcer. Then forward this to all your friends, and associates , no matter their party affiliation because we all are going to feel this one.
We have bailed out enough big businesses, who are still doing bad business because they aren't keeping the people in their homes or on their jobs. They've just been allowed to stay in their own million dollar estates. Life for them stays the same while the people who truly need the help are still hurting.
This has to be forwarded now because they are making decisions as we speak.
MORTGAGE INDUSTRY INSIDER BLOWS THE WHISTLE! Senator Obama,
Ted Krager, the whistle blower and his book, "Dirty Little Secrets of the Mortgage Industry," has just been released to the public. It is timely and focused to help the consumer. What will you do to assist Americans in this debacle with the mortgage industry? Ted Krager is helping to assist and further educate the consumer and expose the mortgage industry secrets. Who: Ted Krager, veteran of the mortgage industry for 15 years. What: Ted exposes the mortgage industry's secrets of how they to take advantage of the American Consumer and make a killing off of them in the process, including how Legislators are part of the problem. Inspires American Homeowners to take back the power to control their mortgage, money and future. Mortgage broker or mortgage banker: why you should choose one over the other
Hidden paperwork tricks designed to hide more expenses
What to do to guarantee the lowest interest rate
Trade jargon you must understand to reduce your closing costs
Distracting buzz words applied to confuse you
How to recognize cost savings loopholes Why: Homeowner Advocate - Ted wants to help the consumer to save their homes. Ted tells the American Consumer how to avoid the traps, what to look for, how to control the financing/refinancing deal, and how to get the best mortgage, whether financing or refinancing a home.
When I first heard about the loan, I was shocked. How did Ms. Solis-Doyle blow through so much in so little time? Bad management on Hillary's behalf. She did not know how much she had in the bank. Wonder if Barack would be so Naïve?
Now, the FEC is saying that Hillary did not pay back her loan (why would the campaign borrow $5 million from Hillary and pay it back in a couple of weeks? This didn't make sense).
Read the Sun-Times article.
http://www.suntimes.com/news/politics/obama/855525,fund032108.article
The Hillary campaign reported to the FEC that the loan was still outstanding. Read Hillary's comments in Februrary.
http://www.dailykos.com/story/2008/2/11/112150/610/105/454504
Hillary is also charging her Campaign a finance charge...Mitt Romney didn't charge a fee.
http://www.politico.com/blogs/bensmith/0208/Hillarys_loan_with_interest.html
Hillary's lies are scaring me more and more. She shouldn't be running for president, she should be running from the law. What else is she not telling the truth about?
NEW YORK (CNN) — Democrat Hillary Clinton loaned her presidential campaign $5 million in January, the New York senator said Wednesday.
"I loaned the campaign $5 million dollars from my money," she said at a press conference at her Arlington, Virginia headquarters. "I loaned it because I believe in this campaign and we were and I think the results last night proved the wisdom of my investment."
Earlier Wednesday, Clinton spokesman Howard Wolfson confirmed reports Clinton had lent her campaign money in January, and said "The loan illustrates Sen. Clinton's commitment to this effort and to ensuring that our campaign has the resources it needs to compete and win across this nation."
The news comes days after Barack Obama's campaign announced it had raised $32 million in January alone. Clinton campaign Chairman Terry McAuliffe later said the Clinton raised less than half that in the same period — about $13.5 million. The $5 million Clinton loaned to herself was in addition to the $13.5 million she raised.
In his statement Wednesday, Wolfson also said Clinton's Super Tuesday victories have brought in a fresh wave of campaign cash.
"We have had one of our best fundraising efforts ever on the Web today and our Super Tuesday victories will only help in bringing more support for her candidacy."
According to Clinton's latest Federal Election Commission report, had roughly $18.5 million cash on hand that could be spent during the primary season heading into January’s initial contests.
News of Clinton's loan came the same day the campaign sent out a fundraising e-mail to supporters with the goal of raising $3 million in three days.
"We had a great day yesterday," the e-mail said. "Now we must keep that momentum going. You have sustained me throughout this journey, and I am calling on you again to give our campaign the resources we need to win critical upcoming races."
– CNN's Alexander Mooney and Adam Levy
Filed under: Hillary Clinton
