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 - 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