Did You Vote on GM Purchase of AmeriCredit?
July 25th, 2010As a taxpayer you own part of GM. You own your share of the $45 billion you helped give GM to bail them out. They have $30 billion in cash. Until they go public, you will continue to own part of GM.
Did the Financial Reform Act give you the option to vote on big transactions GM makes? Of course not.
GM announced they will spend $3.5 billion of your tax dollars to buy Americredit, a company that makes loans to sub prime buyers. Here we go again. The government had to bail out GMAC, the former financial arm of GM because they made bad loans, not only to car buyers, but to home buyers. Now GM plans to make leases and loans to sub prime car buyers. They won’t be allowed to make mortgages, but don’t despair, the FHA, which you also own, is doing that at a stepped up pace. The FHA has replaced Freddie and Fannie, which you also own, as the company that learned least from the housing meltdown.
Your car company is going to sell cars to people who can’t get loans elsewhere with this great new acquisition.
You and I can write the future outcome of this today. We know GM will be drowning in bad paper in no time. Just as it was an entitlement for every American to own a nice house, it is still an entitlement by your government for every American to own a Cadillac.
The government mortgage bailout, the deal where you help your neighbor who can’t pay the mortgage, pay the mortgage, isn’t working. The few who qualify are mostly behind on their refinanced mortgage.
We have a government that is out of control. The government that can’t run anything, is running GM. That government will repeat the mistakes of the past. That government voted for you and your tax dollars and approved the GM acquisition. Now, you have to vote that government out of office and replace them with rational people who will not let GM orbit out of control and maybe, just maybe, help you get some of your money back from the GM bailout.
Tags: AmeriCredit, Fannie, FHA, Freddie, GM, GM purchase of AmeriCredit
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Democratic Bait and Switch
May 9th, 2010Magicians perfected it. Get the mark to watch a diversion and they don’t see the trick. Marketers use it. Sometimes it works, sometimes it doesn’t. Get the mark to come in for a sale item and sell them a luxury item. Years ago Sears tried to upgrade the brand. Jewelery, furs, etc. When Bubba brought Stella in to buy his new wrenches, Stella was supposed to talk Bubba into bling. It didn’t work, Bubba just stopped bringing Stella to Sears. Real bait and switch is illegal, but seldom prosecuted. If it were, there would be even more politicians in the penal system. Nobody does it better.
These maestros are giving the country a classical bait and switch symphony right now. Here’s the real problem congress needs to be addressing. Freddie and Fannie are still out of control, as is the FHA. The FDIC fees are putting regional banks out of business. The people who control these institutions are the real culprits in the housing/credit crisis, but they have chosen to keep the same system in place that has already failed. So, to keep from addressing these problems and admitting guilt in an election year where most of them are going to lose, they bait and switch you.
Pass a bill regulating Wall Street. Lay charges on Goldman Sachs and run a hearings circus. Demonize others to keep the real demon under the bed.
Freddie and Fannie, at the end of 2009, have debt of $8.1 trillion, either loans outstanding or loans insured. The FHA is adding a few trillion to that number. Quickly, since the FHA raised the limit on their mortgages. So far, the government has dumped $126 billion into Freddie and Fannie. Between 2001-2006 Fred and Fannie spent $123 million to lobby congress. Only the National Chamber of Commerce spent more. Franklin Raines, Fannie’s former CEO received $91 million in in compensation from 1998 through 2003.
These were the tools government used to try to make owning a home an entitlement. A failed experiment that has yet to be flushed out of the system. Freddie and Fannie will require several billion more this year to stay afloat. Without their guarantees, there would not have been synthetic CDO’s for Goldman Sachs to peddle. Estimates have been made projecting the final bailout for Freddie and Fannie to be a trillion. The FHA, which has stayed out of this for the most part, is like the iceberg that sunk the Titanic. They have a huge portfolio of bad mortgages and may be adding more as I write.
As the bait and switchers have your attention on the center ring of the circus of Goldman hearings, the real problems rock along ready to grow and create more problems down the road. You see, they can’t be fixed. To do so would require truth in lending. The real culprits in congress who let these instututions do this would have to testify. They would have to admit they made mistakes. One, Chris Dodd, has already decided he is unelectable. Others, like Barney Frank, Dick Durbin, and Charles Schumer might find themselves unelectable. It is far better to let the problem go on and postpone the damage than to become unelectable. That is why this won’t be fixed until the guilty are no longer there and new people with no finger prints on the crime can fix the problem.
Want to be a patriot? Too old to serve your country in combat? Tired of writing letters to elected officials and getting form letter responses? Don’t want to send more money to the RNC so Steele’s guys can spend it in strip clubs?
Here’s a thought. Unelect those who really created the mortgage/credit crisis mess so it can be fixed. Maybe, just maybe, the November elections will change the composition of the committees that have this responsiblity so there is honest disclosure of the bait and switch game we have been seeing, or not seeing, depending on your perspective.
Don’t you know by now that magician really didn’t saw that pretty lady in half?
Tags: barney frank, Chris Dodd, Dick Durbin, FHA, Freddie and Fannie
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Barney Frank is Barney Rubble
October 17th, 2009Skating free of all the debris he creates Barney Frank should be called Barney Rubble. He may be slightly smarter than Fred Flintstone’s buddy, but he can turn everything he touches to rubble.
Barney set out to make housing a social issue. He believes every American has a right to own a house. The common sense practicality of this leads one to think that’s impossible. Common sense and Barney Frank don’t jive. William Buckley once said he would rather have government made up of the first 2,000 names in the Boston telephone directory than from the faculty of Harvard. Barney, a Harvard man, makes one think Buckley had something.
Barney forced Freddie and Fannie to guarantee sub prime loans. Without those guarantees there would not have been mortgage brokers and greedy bankers. There would not have been bad loans put into commercial paper and spread all over the world. But, Barney, who does look a little like Barney Rubble, stands in the midst of all this carnage and gets none on him.
Now, Barney is putting his slimy hands all over the FHA. Unlike Freddie and Fannie, this is not a public corporation, this is our government’s own little toy. Once again, with Barney’s mandate they are making sub prime loan guarantees. When this comes crashing down, and it will soon, who will old Barney blame this time? No greedy bankers in this one. No AIG, no Lehman Bros., no Bear Stearns, no Merrill Lynch. Just old Barney making mischief again, trying to chase his dream of every American owning their own home.
Another mess made by Barney Rubble, I mean another pile of rubble made by Barney Frank. Accountability, don’t expect any. Any attacks on Barney and he might play the gay card. Nothing sticks to old Barney. Isn’t it fun to see a man who can destroy so much and still thrive?
Tags: barney frank, Barney Rubble, FHA, Freddie and Fannie
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Alarm Bells
August 17th, 2009As the housing crisis was bubbling to the surface, I had a conversation with a young man who was a risk manager for a bank that went down in the mess. He spelled it all out for me. What was coming, when it was coming, and who would go first. I learned one thing from that experience, you aren’t going to get any alarms from conventional sources. The media is off duty. They are still on honeymoon with the new president. The responsible parties in Washington are the same ones that kept the housing crisis under wraps until it blew. Can you say Barney Frank, Chris Dodd, Charles Schumer, or Dick Durbin?
So,now I dig harder to anticipate problems to protect my future. There are a couple of areas that scare me right now. There was an obscure article in the WSJ that a top guy at Ginnie Mae was resigning. Remember, all the rats left the ship early at Freddie and Frannie. It was the parade of rats that started to get people’s attention. Remember the Enron evacuation? Skilling ran quickly.
Well, if you research Ginnie Mae you will find they are adding to debt. They added a record $43 billion in mortgage-backed securities in June. The president, Joe Murin announced they expect to top $1 trillion by the end of next year. Double the amount in 2007.
Where does Ginnie get it’s business? From the FHA. The FHA now insures $560 billion in mortgages, quadruple the amount in 2006. So, as the FHA takes on more risk, Ginnie Mae gets the job.
Certainly after the previous mortgage mess where sub primes were given to people without jobs, the FHA is not taking risks, right? Wrong. They back low down payment loans to buyers with poor credit and have little if any oversight. Whoa, isn’t this just the same old sub prime mortgage mess all over again?
According to the Inspector General the default rate is now 7%. That’s double the private sector default rate. The reserve fund for the FHA is now 3%, putting leverage to 33 to1, which is what Bear Stearns had.
Surely, the people in Washington with oversight responsibility are watching this. They are. They just approved keeping the max on mortgages at $729,750. The down payment is still 3.5%. Plus, the buyer can finance closing costs and use the homeowner tax credit to apply to costs.
What does this mean? If the housing and job markets don’t pick up soon, we taxpayers could be on the hook for another $50-60 billion in mortgage defaults from the FHA and Ginnie Mae. Plus, the post office needs $7 billion to get through the year. And, the FDIC says there are still 300 banks on the watch list that could go down this year. They will need more money too.
Hotel owners are walking away from their hotels in record numbers, leaving the creditors holding the bag. Distressed loans now cover 1,000 properties worth $16.8 billion. The delinquency rate is running at 4.75% but expected to go to 10-15% by year end. Why don’t we see more of the hotels closing? When the owner walks away, the lender finds an operating company to run it under a lease. This gives the lender some cash flow until it can be resold or foreclosed. These numbers don’t include casinos with hotels involved, which would add $8.6 billion in distressed loans to the total.
No doubt our government will step up and use our money to fix all these problems when they get so bad they can’t keep them under wraps. Then they will fix blame and have congressional hearings so they can be on TV and show you how they can grill a government employee.
It is inexcusable to let Ginnie Mae get in trouble on the heels of what just happened to Freddie and Fannie. We can’t let them off the hook on this one if it blows.
Tags: Fannie Mae, FDIC, FHA, Freddie Mac, Ginnie Mae, Hotel foreclosures, Post Office
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Buy A House for $1000 Down
August 10th, 2010Here we go again. Those “fat cat bankers” as Obama called them are at it again. Despite the Financial Reform Bill, it is starting all over again. Anyone with a credit rating of 640 and $1,000 can buy a house. You don’t need home owner’s insurance. And, if you are laid off, no problem, for 6 months no payments. Who is making this offer?
Chris Dodd and Barney Frank. Freddie and Fannie. It’s a replay of the need to stimulate the housing market. But, it’s really income redistribution again. We keep pouring tax dollars into Freddie and Fannie. With guidance from your government, they can’t stop taking undue risks.
Let’s say someone meets the criteria to get one of these mortgages. They get the house, they don’t get laid off, but the roof leaks. Whey does the money come from to fix the roof?
What percentage of these bogus mortgages will go bad? Fifty percent, seventy-five percent?
Here’s a step by step plan for the state of Illinois. A state that is broke.
•Step 1
To get the assistance through the State of Illinois the first step is to understand the program and what assistance is available. The program is called Illinois Home Start Program and it offers up to 3% of the purchase price of your new home for down payment and or closing costs when you are buying your new home. Illinois does not lend you money but they give you the assistance. The loan comes from a participating lender and the loan is based on the FHA guidelines. The complete guidelines are listed on the Illinois Housing Development Authority web site.
•Step 2
Understanding the benefit of free down payment assistance and how you can purchase a home that you might not have been able to because you did not have enough money to close, now you contact a participating lender who will pre qualify you to purchase a home under the FHA Guidelines. The Illinois Home Start Program has 2 additional guidelines that most who qualify for a FHA loan today will meet. First you must have a minimum credit score of 640 and secondly your debt to income ratio can not exceed 43%. Your loan officer can help you determine if you qualify based on these factors and can pre approve you to receive the assistance.
•Step 3
After you have been pre approved and before you close the loan. You must take a first time home buyer class through a HUD certified agency. This class will help you understand the basics of buying and keeping your home. It is highly recommended for all first time home buyers even if they are not seeking down payment assistance.
•Step 4
Once you have been pre approved to get the FHA loan and down payment assistance, then you and your realtor go out and find a home that you like to based the amount that you have been approved to purchase. Once you have found a home and have an accepted contract your loan officer will register in Illinois Home Start so you can receive down payment assistance.
•Step 5
Finally, the lender closes your loan and at closing you are credited 3% of the purchase price toward your down payment. One last thing to note you must have a minimum of $1,000 as your investment in your home. That is a good deal. For as little as $1,000 you can buy your first home by getting down payment assistance in Illinois for First Time Home Buyers under the Illinois Home Start Program.
Read more: How to Get Down Payment Assistance as a First Time Home Buyer in Illinois | eHow.com http://www.ehow.com/how_5647926_down-time-home-buyer-illinois.html#ixzz0vszIZex3
Someone has to stop this insanity. That someone is you and me. The momentum is building.
These bums are so arrogant they think they can do whatever they want. They don’t answer to anyone but themselves.
Remember when Bush let the Democrats take the Congress? The next day a contingent of Republican leaders met with Bush. He was told he had to fire Rumsfeld. He was told he wasn’t calling the shots anymore. They and the Republican party leader were. He had done all the damage he would do to the party.
That same conversation needs to take place with Obama in November. The bloodbath in November must put the same fear of God into the Democratic leadership. They need to put the leash on Obama and stop him from further destruction to the party.
It’s the best hope we have until 2012.
Tags: $1, 000 down for a house, Fannie, FHA, Freddie, income redistribution
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