Chair vs. Country

 

There is nothing that compares to the power of the chair

Whether a king, or a queen, you fall for it without care

It seduces, it attracts, challenges you to a dare

It snatches your soul, even God doesn’t know where

The chair has attacked members of congress

It’s taken over what once had made sense

16 million unemployed, country in big mess

The chair keeps winning, causing us stress

The pain is growing, hurt is everywhere

Markets are falling, you can turn nowhere

We’re getting fired; their jobs ‘ still there

People have regrets handing them that chair 

No Cost Stimulus Package___ Believe It! I’ll Prove It.

In The Next 5 Minutes I’ll Show You How My Stimulus Package Costs Nothing to Implement, Raises Real Estate Values, Creates Jobs Almost Instantly, And Makes Money for the Banks and the Government in Less Than One Year.

We all know that without the revival of the Real Estate market the economy cannot improve as much as we would like it to. Being a Real Estate and Mortgage Broker for the past 26 years I have come up with this solution that benefits almost everyone. This may be the biggest transaction of my life, without pay, but it will help the economy and the country.

1.       Underwater Properties:  an underwater property is a property that its owner owes more on the property than the property is worth, but, he or she wishes to keep the property, still has a job but has suffered a reduction in income, can afford a modified loan and wishes to occupy the property as his/her personal residence. Sample property:                      

Home value                                                      = $150,000

Combined loan amount on the house 

(the sum of 1^st, 2^nd, or even 3^rd mortgages)      = *$200,000

Underwater amount                                           = $ 50,000

Solution:

a.       Refinance: Banks to Streamline Refinance the entire $200, 000 @3.75% annual interest rate payable interest only for 10 years and then convert into a 30 year amortized loan.

b.      Trust Fund: Establish a Mortgage Insurance Trust Fund where insurance premiums are deposited.  Government to insure the underwater amount plus 20% of the total loan by imposing a one-time fee equal to 2.75% of the loan amount as an insurance, like the mortgage insurance companies did. This fee to be paid by the bank to the government and be added to the loan not to burden the borrower to come up with it in advance.

Example: Loan amount          $200,000

Property Value                         $150,000

Underwater Amount             $  50,000

Mortgage Insurance= 2.75% of $50,000 + 2.75% of $40,000 (20% of $200,000) = $2,475. This formula insures the Mortgagee the Underwater amount plus a 20% to compensate for the 20% down payment ordinarily required during a purchase transaction.

c.       Personal Guarantee: Borrower signs a personal guarantee for the loan for a 3 year term, after the 3 years have passed the property remains the sole collateral for the loan.

d.      In the event of the borrower’s default, this insurance pays for the difference and covers the bank’s losses.

e.      The amount that the government pays to the bank, if the borrower defaults within 3 years of the refinanced loan, becomes a personal loan to the defaulting borrower, a personal loan that survives bankruptcy, just like student loans.

f.        Assumption: The new loan to be an assumable loan to qualified buyers. The Bank may charge 1% of the loan amount as a transfer fee, plus a set $500 Combined Processing and Funding fee and  0.5% of the loan amount for escrow and Title fee. The bank may (at its own discretion) ask for, accept, or reject a physical inspection report showing an acceptable condition of the property to the lender.

g.       Prepayment: The loan to have a no prepayment penalty clause.

h.      Credit Report: As an additional incentive, finance companies or banks must remove derogatory credit from credit reporting agencies for borrowers who qualify and obtain such loans at new terms.

Annual Interest rates to be fixed at 3.75% for conforming and 4.125% for jumbo loans.

2.       Foreclosed properties: Foreclosed properties are properties that the owners ultimately had no way of refinancing, and not enough income to support their mortgage even if and when modified. They chose to let go of the property.

These properties are a major burden on the banks that had the financing for these homes and the real estate market in general because they are causing a major over supply of properties which, in turn are devaluating entire neighborhoods.

Solution:

a.       Government to purchase foreclosed property from bank at loan value. This will clear the banks from their books to allow for new financing.

b.      Offer said property for lease with the following conditions to promote and incentivize potential tenants:

1.  Offer the property on lease with an option to buy at a predetermined price which should equal the total of the cost of the government purchase of the property from the bank plus 10%, for example: property cost the government $200,000 to own, the price for the tenant to pay in the event tenant wishes to purchase this property within the 3 year term offered to him will be $200,000 + $20,000 (10% of $200,000) = $220,000.

2.  Credit all lease payments made by tenant towards the down payment if tenant chooses to remain in the property and eventually purchase the property within 3 years. Tenant forfeits this right if he chooses not to buy property within the 3 years period and all money paid remains past or paid rent.

c.       The term of the lease to be 3 years or less to qualify for the credit.

This will guarantee that government money is not lost; actually, it is making money and taking a lot of inventory out of the market while helping owner occupancy.

 3.       Damage To property due to foreclosure:

Any borrower, who leaves or abandons his or her property, or lets his or her property go to foreclosure, must hand over the property in a normal wear and tear condition. No additional damage should be made to the property blaming the bank as the cause for the foreclosure and that revenge is in order, such as: pulling drywall from the walls, pulling out appliances, causing plumbing damage, inflicting roof damage, or doing anything that is out of the ordinary. The government will be authorized to place a personal lien on the owner who caused these damages whether the bank or the government end up fixing it to bring the property to its normal condition. Damages charged to borrower are to survive bankruptcy protection.

  

Excess money in borrowers’ pockets will incentivize him/her to spend more. This spending will cause businesses to hire more employees and get the ball rolling. The demand created will tighten supplies which, in turn will generate a moderate inflation, increase asset valuation, and eventually lead to higher rates and increase the GDP (Gross Domestic Product).

It is Not a Secret that When the Real Estate Market Improves the Economy Improves. 

*How to calculate your savings if your payment is converted into a 3.75% annual interest rate, payable

 interest only:  

Take loan amount e.g. 200,000 multiply by .0375 then divide the answer by 12.

$200,000 x .0375= 7,500 take the 7,500 and divide by 12. $7,500/12=$625 your payment will be 625

 dollars a month for the next 10 years. For your own personal loan, replace the $200,000 by your

 total loan amount and check the answer. That will be your payment. Deduct this from your current

payment. 

The Day Terrorism Lost and America Won!

September eleven year two thousand one

The day terrorism lost and America won

Three thousand died, markets lost a trillion

The buildings came down, but America won

It was a bad day, a very sad time

Panic for many, confusion for some

Target was designed to hit everyone

 Whether Jew, Muslim or they were Christian

No matter how unfortunate this event might have been

The country stood tall, vowed not to give in

Held hands together on the March to win

Against intruders; even Bin Laden

America’s Silver Platter

America's Silver Platter

It is no secret that the United States of America is the most generous country in the world. We are the first to send help when a disaster strikes anywhere in the world. We are the first to send money wherever a disaster hits. We give and give and there is nothing wrong with that. The reason we could give however was that we had jobs; we had companies that generated jobs and income for the country; we had the best education system and we produced very smart graduates to join the workforce. We knew how to utilize our resources and we had a military that was very well trained, equipped, and that it, our military, was strategically diversified and distributed. We had the dollar that was worth something, and a service industry with an impeccable reputation. We used to work hard to secure a nice future for our next generation.  Unfortunately, we slowly, but surely, put all that we had on a Silver Platter and offered it to our competitors for free. We are slowly losing our MOJO, so to speak. If we keep this up, soon we won’t be the country we used to be.

As a proud American any one of us would wish to reclaim our place in the world and bring all those lost on that silver platter back for our kids’ sake. We are reaching a critical state in this great country of ours, and if we do not take care of this problem soon enough, we will be forced to put our kids and mothers on that platter too to survive. I don’t want to do that, do you? 

Our ship is sinking!!! What are we going to do in order to save it?

In today’s world of globalization, each and every country must navigate through the waves of change and adaptation by using all the skills of a knowledgeable, smart and experienced captain and crew, along with the careful participation and alertedness of its passengers. In our country, neither the captain nor the crew are at the controls.  As for the passengers, they are either busy surviving  by hanging on to whatever they can, or are completely clueless and only focused on their social pursuits. The captain was handed the Titanic after it crashed into the iceberg. The crew has changed in the middle of the ship taking water in the turbulent sea.  Most of the incoming crew is so new and inexperienced that they are ignoring the consequences of digging more holes in the ship may do.  It is ensuring that the ship will be sinking faster, with more vigor, and  with no possibility of rescue.

Luckily, this ship was built with democratic principles. The passengers have a big say on how the captain and the crew perform, and who can direct them to make the right decisions and take all actions that are necessary. My political wish is that these passengers take a moment to wake up and realize that our ship is sinking and to take action before it is too late and we hit bottom.  A bottom that is so low that the pressure will keep us there for a very long time, leaving the world to the emerging countries to benefit from what our predecessors died to secure for us. Neither the crew nor passengers can worry about party affiliations while the ship is sinking; the only worry should be how to get above water and fast.

Where Have the Jobs Gone? The Seven Sins and What We Can Do to Bring the Jobs Back!

We keep wondering where the jobs have gone and why we cannot bring the Unemployment rate down from the advertised rate of 9.1 or 9.2 %, or the actual rate of 17-19%. In reality we all know where the jobs have gone: out of the U.S. and almost everywhere else, but here. We also know why the jobs have gone and it is due to the following:

1.    We want to pay less for the products we buy;

2.    We want the employer to provide us with all types of benefits for the same jobs other countries do without;

3.    We do not devote any time to guide, discipline, educate or support our children, teachers and schools;

4.    Our Education and Labor Departments offer no help in providing research, studies and guidance as to which fields will be in demand and which will be oversupplied for securing jobs for the future generations;

5.    We have taken the easy way out by allowing our children to be busier on social media sites and at social events than prepare for their future well-being;

6.    Our corporations have divorced themselves from corporate citizenship and surrendered to corporate profits to satisfy shareholders on one hand, and try to satisfy our need to pay less for merchandise and services on the other hand. They invest in other countries and create jobs in those foreign countries;

7.    The leadership in our country has become so childish in regards to dealing with the country’s affairs and so preoccupied with securing a seat in lieu of securing the country’s interests, that it has severely damaged consumer confidence and trust.

The political wish may seem obvious in this case, but it is worth repeating. I wish to see the following:

1.    Remove sales taxes on American made products temporarily (a year or two);

2.    Offer tax incentives (a year or two) for employers offering benefits;

3.    Parents, teachers and government officials to make a commitment to find time for their kids and spend at least an hour with them, tend to their needs and concerns while guiding them;

4.    It is no secret that jobs and education are related issues. The Education Department can work with the Labor Department to learn which jobs will be in high demand, where the trend is going and offer that information to potential students for them to know what to do;

5.    Social Life or Social media is a great thing if it is used for the right reasons.  However, spending hours and hours daily on them instead of studying is not the way to go. So, we need to find a way to monitor time spent on those outlets, or at least make those arenas more useful in educating the participants;

6.    We have to offer corporations’ incentives to bring their businesses back to the U.S., and offer them incentives to bring money earned outside back to the U.S. on the condition that they hire more U.S. Employees;

7.    Our Leaders grow up and do the job we hired them to do or take away their seats and hire a new team. Any employer would fire an employee in a heartbeat if that employee did what our leaders are doing, so why can’t we?