Tuesday, December 9, 2008

No Hunt for the Guilty?

Now that the economists have agreed that we have been IN A RECESSION for ONE YEAR, I am dumbfounded that there is no cry to punish, not bail out, but Punish the bankers and mortgage people who have fueled the "crisis" that is pushing us closer to the financial abyss than we could ever have imagined. Not to mention the folks behind $140 a barrel oil and $4 a gallon plus gasoline prices!

I am still reeling from the daily posting of financial destitution and lost jobs that the media show at every opportunity. There must be some justice for us, or are all these GW Bush's cronies and supporters, getting their last big hit before the democrats take over the reins of government?
It is shocking that there is no public outcry other than "wow, gas is under 2 bucks a gallon!".

Are we that shallow, after witnessing the Auto companies CEO parade swoop into Washington (on corporate jet$) with their tin cups out, begging for a bailout or else calamity will ensue? (note that Toyota, Nissan, and BMW did not join that begging party).

Seeing some backbone in Washington would be really nice, as I am fed up with artificial gas prices, lost job opportunities, and no punishment for the guilty parties who foisted this scam on us, allegedly the greatest country on the planet.

Next time you meet an elected official, thank them for keeping the status quo - Not only have we not cought Bin Laden, we have not gotten the criminals behind the gas prices, the mortgage mess, and the job crisis.

I hope you remember this, and keep it in mind at the next election.

Thursday, November 13, 2008

Spotlight on the Bailout

News sources today reported that the government bailout is NOT targeting 300 Billion for the egregious mortgages that have been tormenting Americans, but going to the banks and the financial markets directly.
This is a SLAP IN THE FACE to our fellow citizens who have adjustable, over-value, or just plain crippling mortgage payments.
Now that the automakers (and others) are joining what is becoming the great American bailout carnival and handout festival, Washington is changing the rules once again.
Economists (usually with book deals and teaching jobs) and Regulators (who want consulting jobs in the industry when they finally get their due) are quietly supporting their position in the media.
I have written in previous posts that the core problem is the bad paper (mortgages) that plague the economy, and this will not be fixed by a handout to the people who MADE THIS PROBLEM in the first place.
Write to President Elect Obama, your Senators, and Congressmen, to let your voice be heard before we get to watch big money doled out to everyone but the people on Main Street, who really need it.
Note that AIG got money as more of a Grant than a Loan. Personally, the Government should give those guys an adjustable loan with penalties and interest going to the US Citizens!
Make your voice heard!

Saturday, October 11, 2008

OK, Who is at fault?

Well, It's almost official - We are in a recession, and the Financial Crisis of '09 is in progress!
Every day, we can see the carnival of finger pointing as the hunt for the guilty is embracing the media.
Last week, it was "oil speculators".
Then it was those rascally CEO's - taking carloads of cash out of their failing companies, as their managers were escorted out with no severance.
Next it was the Mutual funds, holding on to all their cash, waiting for the markets to bottom so they could buy all the solid companies for pennies on the dollar.
I can't wait for the news on Monday, as we find the latest bunch of potential scapegoats for the financial crisis! (brought to you live by all the news stations, if you can still afford Cable).
The sad part is that the ones who shamelessly enriched themselves, selling complex and unworkable mortgages to suckers like me, running companies into the toilet while being secure in their assured severance packages, and making indecent profits selling carloads of "bad" mortgages to Wall street and their minions.
Hoping this finds you outside of someones cross hairs, -Alan.

Thursday, October 2, 2008

Email to President Bush

Please note my Email to President Bush.

Please vote against the Bailout bill as it is.
The bill Should include relief for those already in foreclosure or approaching it, and those Americans who are buckling under high prices (gas, food, fuel oil, etc.). It should also include payoff provisions for the physically sick, as medical bills are a leading cause of home loss and financial devastation. I own two homes in Florida as well, and both of those are now worth 1/3 of their purchase price, and there is no "bottom" in sight for this market.
In the current system, you can only short-sale a home to a third party. Make it possible to short-sale to the current owner, preserving the property, converting the bad mortgage to a performing one, and norming the value of the mortgage to the current value. This will allow people to pay for their homes, buy cars, food, pay college loans, and contribute to the future well being of the economy. Otherwise these homes will fall prey to abandonment, communities will be blighted, and only investors with good credit will acquire them at "fire sale" prices - forcing the current owners into welfare, tents, or homelessness. DON'T ALLOW THIS TO HAPPEN.


Republican from NY – Homeowner in Florida

Friday, September 26, 2008

The REAL way to fix the Financial Mess

The Problem with the current Bailout plans:
If we keep the structure as it is, and just "prop it up", people will still lose their homes, and the bailout money will go to investors who will "gobble up" real estate at fire-sale prices. The former homeowners, with limited funds, credit, and means, will not qualify for the new loans, and may not be creditworthy to even rent an apartment. This means people living in tents, under overpasses, and worse.

OK, so Congress doesn't get it, so what do we do?

My thoughts:

1. Write down ANY mortgage on a home by 75%, with the balance written as a new 30 year note. Homeowners would have to apply, and not all homeowners would take advantage of this, it is really for the ones who are "under water".

2. Have the banks take it on the chin, and give them tax breaks, incentives, etc., to help cover the losses.

3. Have conditional requirements on the write-downs; no additional lending without some sort of review, no immediate sale without review and a percentage of profit returned to the bank.

How this will Help:

Once the mortgages are back in line with incomes and more realistic home values, the homeowners will be able to support a lower mortgage payment, and even have some money left over each month. This will stimulate the economy with PURCHASING POWER. They need cars, home repairs, Health care, insurance coverage, vacations, (I think you get the picture).

This will give the ailing banks PERFORMING mortgages, and the homeowners can buy cars from GM, Ford, and others so the economy can rebound.

Are you listening, Washington?

Please feel free to forward this to your elected officials. I AM.

Thanks for reading, now do something!!

Sunday, September 21, 2008

Forget Wall Street - Bail out MAIN STREET!

This week has been an amazing journey for Wall street - The government is arranging a trillion dollar bailout for those poor Wall Street firms that bought the packages of worthless mortgages based on our TRUMPED-UP home values! What a relief - Wall street bonuses and CEO compensation is secure, more firings will be done to help them out, and we, the taxpayers, get to fund the whole show!
There is a sad underside to this, and the truth is that the people who financed homes (like me) have no bailout. Rather than shore up the foundation of the American lifestyle, home ownership, our government is choosing to shore up the businesses that sold us these special loans and programs because there was no one watching the store!
It is time to let these damaged, collusive, and greed companies fold their tents, and use the bailout money to help people stay in their homes, letting the banks write down the loan amounts to a proportion of the current home value. While I will not shed a tear for those poor Wall Streeters, I am saddend that my financial security for retirement and helping my family has been eroded by these very companies that will benefit from our tax dollars. Would you have bailed out Enron?
Every day I meet someone affected by this, and we need to band together and pressure the government to do something for US for a change.
Write your representatives and let them know this is unacceptable. you know I am.

Tuesday, September 16, 2008

Mortgages and Gas prices

Well, I just wanted to chime in on two items near and dear to our hearts.
First, the mortgage crisis is continuing, and has captured the attention of our presidential candidates, who want to adjust the defaulted mortgages to current home values. Obama had commented on this crisis, and McCain has stated that the faulty mortgages should be "rolled back to the current house values" (assuming the borrowers could still pay a mortgage, even at the reduced value).
This is a wonderful sign of progress, and I wish our candidates well in the quest to give true and earnest relief to the borrowers saddled with an unpayable mortgage loan.

Secondly, I have discovered a "Gas Club", where you can save 20% on your gasoline purchases with a prePaid gas card, backed by Visa. The founders of this business come from the prepaid phone card business, which was put out of business by free internet phone service. The site is www.gasclubnow.com - and I have joined to start putting 20% of my gas cost back in my pocket. The catch is that you can only buy $300 worth of cards each month. They told me it isn't for fuel oil, but I would start a "fuel oil club" in a New York minute.

Hoping this finds you warm and well, Alan

Friday, August 8, 2008

Perfect storm – Rough Times now and coming…

When we observe the conditions that are forming our current political and financial situation, many people refer to the movie, “The Perfect Storm”. In this movie, a fishing boat captain, who needed to get his catch to market, ran through a juncture of several storms in the north Atlantic, which combined to make a “Perfect Storm” with larger waves, currents, and winds than any normal storm could generate.
Today, we have several storms that are converging upon us;

1. The Iraq War
2. The Energy Crisis
3. The declining value of the Dollar
4. The mortgage crisis
5. The Job crisis
6. Corporate profiteering

Any one of these is bad; 2 or 3 are rough, but all 6? And a recession looming? Now you see why I am concerned.
The next President and his cabinet have a lot of work to do. Our country is at risk here; our Lifestyle – under attack! And our future is something WE need to get under control. There is almost no one that I meet today who is NOT affected by these issues. Especially people who want to heat their houses this coming winter.
The bad news is that it may get worse before it gets better. Mortgages are still adjusting (until 2010). The war in Iraq and Afghanistan will take years to resolve, with a horrific cost of American lives.
Our Dollar continues to buy less.
The mortgage crisis has shaken the banking industry, and Wall Street.
Unemployment claims are at an all-time high, not counting people who have lost benefits.
And we still see the incredible CEO incomes and buyouts continuing, while real wages decline and jobs get outsourced.
This needs to change. Obama and McCain, Are you listening?
My voice is just one; we need to articulate this to all our elected officials. The time for “lip service” and condescension is over; we need action and real solutions, not proposed by Lobbyists, but by our elected officials and educational institutions. So pass this on, add your comments, and make our pain be heard by our government. The time for action is now.

Friday, August 1, 2008

The Chenkin Mortgage Crisis Solution

As of this writing, over 10 million Americans own homes which are mortgaged for more than their appraised value; They are at risk of losing their homes and (with impaired credit, etc.) may be "out on the street" or worse (Living in tents).

The banks, who foreclose and sell on these properties, frequently take 50% of the value of the mortgage as a "Short Sale" price. This is because the property either is vacant, likely in disrepair, or the former owners need to be evicted, or worse. These houses are a blight on our neighborhoods, attracting vandals, vagrants, and crime. The speculators who buy forclosed houses frequently rent them out or hold them, sometimes vacant, until the market improves, not adding a lot of value to the community.

These discounted homes reduce the comparable values of the other homes in the neighborhood, and force homeowners who are not in foreclosure to accept less for their homes, or wait until the market "recovers". With Sub-prime loans adjusting through 2010, There will be plenty more "at-risk" homes added to the market for the next two and a half years.

Government Bail-outs, like the Bear Stearns event, DO NOT HELP THE HOMEOWNERS IN TROUBLE. They are a financial means to keep the banks afloat, usually with Federal guarrantees.

Here is my solution, and reasoning:

1. Have the banks "write-down", or discount the at-risk mortgages to 50% of their face value - before a Short-Sale or foreclosure. The banks created the artificial runup in home values, with relaxed rules, predatory lending, loosely regulated mortgage brokers, and restrictive mortgage terms. At 50% of the mortgage value, Most homeowners can keep their property, Make mortgage, Tax, and Insurance payments, and maintain the integrity of the family and neighborhood. Remember, a short sale may only give the bank 50% of the mortgage anyway, and take many months, paperwork, and angst.

2. Have specific rules in place to prevent homeowners and the banks using the plan for unjust enrichment or speculation; This is not intended to be a solution for over-leveraged investors with many properties in foreclosure.

3. Put more programs in place for Jobs, Economic development, and community development. People with reduced mortgages can be required to do specific community service, depending on their situation.

4. Require life insurance (not mortgage insurance or PMI) for the borrowers, to pay off the debt and free the property for the children/heirs of the borrowers.

This is a proposal to get the mortgages Performing again, keep people in their homes, and preserve community values. If you agree, Please pass this on to your elected officials and friends, and urge them to help your neighbors stay your neighbors, to preserve your property values.

Thursday, July 31, 2008

Energy Independence for America

The following is my opinion, and if you agree, feel free to bookmark or pass this on.

Gasoline dropped .25 cents a gallon in the past 2 weeks, and it seems it is the “thank you” from the oil companies to congress and President Bush for allowing them to drill offshore. Trump and Kennedy stopped the wind farms off their prospective turfs (Jones Beach state park in NY, and Hyannisport, MA), but seem oddly quiet about the prospect of big oil rigs in the distance. Perhaps they are too far South (Florida, Texas, etc) for them to care.
While Wall Street is rallying, I must confess my distrust of this action – The oil companies sell Alaskan oil to Japan, and our offshore oil will most likely have a similar fate – although China and India seem to be the likely customers.
The real solution is clear – We MUST stop importing $700 BILLION dollars worth of oil into this country every year. Fellow Americans, the oil supply is going to be USED UP. Our dollars are not helping American industry, but oil Sheiks and corporations who are using part of their profit to finance terrorism and religious extremists. ENERGY INDEPENDENCE, using Solar, Wind, Tidal, and Geothermal technology to replace oil is an idea that has come. This winter the average home will use $4,000 to $10,000 worth of energy, oil/gas/or coal. We need, as a people, to start using conservation and alternative fuels immediately.
After the November Presidential election, when the Oil lobby continues its shameless pursuit of unfair advantage (Oil company subsidies, tax advantages, etc.) we should be prepared and un-surprised when oil continues to hit new highs.
I urge you, and your friends, family, and colleagues, to push, write, endorse, and shout to our elected officials that OUR needs HAVE to be met; The VOTORS and all the people of this country need relief in the form of an ENERGY POLICY FOR SELF SUFFICIENCY.
WE ARE 50 YEARS BEHIND IN BATTERY TECHNOLOGY. We are years behind in Solar and Wind technology. Our Nuclear technology is old and needs rethinking, and the political and technical hurdles must be overcome for these tools to be updated and brought to the forefront of our thinking.
Enough grandstanding for the Oil companies, they got their offshore drilling, “what’s in it for us”?


Alan Chenkin has a Master’s Degree in Public Administration, and a Bachelor’s in Political Science. His thesis was published in 1979 on “Solar Energy and the Federal Government”. He is an expert in document imaging and workflow technologies, and is concerned about the current state of our economy with regards to Energy, Jobs, and the lack of responsibility in Government and Corporate America.