Feb

6

The solution to the mortgage crisis is so simple it is almost ridiculous no one has yet to propose it. We have 350 billion ear marked to be spent. This money is more than sufficient to deal with this problem and then some.

The current mortgage crisis really stems on two important facts:

1) Homeowners are upside down on their home and as such cannot qualify to refinance in todays market?

2) Mortages on ARM’s are adjusting to rate the homeowner cannot afford, or mortgages were written on a balloon that is coming due.

MOST of these homes are owned by people with the means to pay the mortgage at a refinanced rate. All the government needs to do is guarantee the upside-down portion of these peoples homes in order to qualify them for a refinance rate they can afford. In return the government would get an equity position in these peoples homes. Assuming a 30% stake in an average home, 350 billion would buy a stake in 6 or 7 million homes which is more than enough to solve this problem. 

 

 

Oct

24

In the past few months I have watched finance experts, …and cork balls like Bill O’Reilly claim ignorance to our recent meltdown.

Wait a minute… are you kidding? What a bunch of revisionist doof bags (when they can actually remember)…

On January 19th I wrote a blog titled “The Great Mortgage Debacle” http://everydollarmatters.com/blog/2008/01/19/the-great-subprime-mortgage-debacle/

Here is an excerpt…

“Housing market is so hot…
 - People can flip houses in weeks, making crazy profits without even lifting a finger.
 - To get into a house you have to offer more than the asking price
People with credit so bad they cannot qualify to move into most apartment complexes are given loans for housing they cannot afford at terms that are outrageously unfair
… Absolute Insanity …

I guess since it has been a while since the .COM insantity we needed a new means of losing our minds.”

I certainly was not the only one crying wolf back then.

I must say I am so glad to here all the experts now telling me what anyone with a lick of common sense back in Q4 of 2007, and Q1 of 2008 already understood.

 

 

Jan

19

Live Within Your Means

We have created quite the mess with this subprime debacle. We want to blame business,  business wants to blame the government, wall street is reeling.

Happy times

Unfortunately I think the slide has just started. Lets take inventory…

… Absolute Insanity …

I guess since it has been a while since the .COM insantity we needed a new means of losing our minds.

If you really think about it this has been nothing more than the old cliche “if it too good to be true it probably is”. The sad thing though is people actually made a great deal of wealth while many are now losing what little shirt they had to begin with. “I want it now, I’ll deal with the consequences later”.

Fact, is subprime lending has been going on for years. I remember when I was young, poor, and just starting out having a loan with HFC for a stereo and paying 25% interest.

Subprime lending for those of you that only know the buzzword is the market for those with “less than stellar” or “lack of” credit history. In exchange for outrageous interest rates and fees lenders will give money to people that have a poor record of paying it back.

Don’t get me wrong. Anyone, even the most disciplined person, can fall on financial hard times. The subprime market can be a means of re-establishing ones credit. But subprime lending became sheer insanity that now has us heading into the crapper.

The exposure by major financial institutions into the housing subprime market is just staggering. It is hard to identify these institutions until they report staggering losses.

According to CNN state by state going back to 2005 the entire Puget Sound (Greater Seattle/Tacoma/Everett and surrounding suburbs) had a 22% exposure. Much of California (25% statewide) and Florida (30% statewide) deeply buried in a sea of subprime lending.
http://money.cnn.com/magazines/fortune/storysupplement/subprime_statebystate/

And here we stand today in all this chaos. All because people are not willing to live within their means. All because of the greed of business. All because our government turned its head because at the time the alternative was a slowing economy.

I think we should ammend the “if its too good to be true it probably is” to “If you have the means to get in during the bubble and out before the burst you can exploit and profit at the expense of your fellow man”

I think maybe Countrywide and a few others waited too long. Eh?

Jan

19

Payoff your house 7-8 years early the ad proclaims. All you have to do is front $100.00 and pay a monthly fee of $10.00. For this price you get to make 13 mortgage payments a year instead of 12. Here is a newsflash. You can make 13 house payments on your own, save the up front and monthly fee and still accomplish the same thing. Stay away from these programs, they are a waste of your money!

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