Where are we going and why are we in this hand basket?

One Hundred and ten pages of a bill in front of a vote today. Did you read it? Are you going to buy in? Do you have a choice? How high are your taxes already? Who are we helping? Is it unconstitutional? How did we get here? Take a look at The Community Reinvestment Act”. First under Carter and then then under Clinton where the opportunity to help low income and moderate income individuals and families borrow so they could own a home. Very noble. But by relaxing the standards where people need not show income or even a social security number is the foundation of all of this mess. The pressure was on to maintain the growth of what we now call TOXIC loans. Regulation or no regulation, over site or no over site, this was a law that should never had passed.

I have three big problems with this bailout.

First, is that stupid law being revoked in all of this?

Second, the Bad Paper we are buying. Not all of it is toxic. But let me tell you, I talk with people, homeowners, every week who can’t make their next mortgage payment and they ask me to list their house to sell. The advice I can offer some is to sell short. A Short Sale. I have had tremendous success with these where a home owner gets out from under with out going into foreclosure or bankruptcy. There credit is not nearly as impacted. Yet I see how half-assed the banks handle the closings on these and it scares me. They have taken up to 6 or more MONTHS to accept an offer because they are drowning in the amount of short sale packages. Do you think our government can do a better job or just add more red tape to the issue by accuiring these notes? Here’s the bad paper I was talking about. Most first loans are getting about 70% of the amount owed. The home is being sold at fair market value even though the note is for far more because of the decline in the price of houses. Second liens are getting nothing or, at best, 15 cents on the dollar. I want to know what is the total value of what we are buying for $250,000 then $100,000 then another $350,000. Is what we are buying going to yield us a break even or profit? Has Congress assessed what looks like a good risk only by the fact that the payments are being made on a lot of these loans or do they know how many of these loans are going to be in default. Have they looked at that? Are they speculating what may go into foreclosure

Finally, they say we will profit from this when the economy bounces back. OK. Who profits? Do the taxpayers get their money back in a rebate? I take mine in three installments.  The Government?  National Debt? Where does that so called profit windfall go? If we actually ever see one…

So here we all are in this hand basket, e pluribus unum.