Tuesday, July 28, 2009

Is the American Dream Dead?

Now that the Banks and automotive companies have got their bailout monies, and the DOW hit 9,000 (causing many market manipulators to declare the depression/recession is over) it is timely and appropriate to bail out the people at the bottom of this financial debacle.
Current laws and banking institutions love nothing more than foreclosing on homes. When there is no "adequate" foreclosure defense, the Bank's foreclosure engine chugs into action, seeking to collect anything they can from the oppressed homeowner, and rebuffing any modification applications that get them less money or slower payments. Banks readily concede that modification does not work - since their one-sided modifications are nothing more than an interest reduction, or forbearance agreement - many of which are offered as a "debt collection mechanism", which ultimately benefits just the banks.
The courts need to enforce a new remedy for foreclosure, and that must recognise that
1- Even late payments damage a FICO score enough to keep a formerly good payer from refinancing (especially under today's tightened rules).
2- Credit scores damaged by foreclosures, job loss, and bankruptcy will keep that person from getting any job where the credit score is a hiring consideration - regardless of the cause (no employer will openly admit this, fearing a lawsuit) - they only say they have hired a candidate "who's qualifications are better suited for the job".
3- If foreclosure is successful, there is yet another house boarded up, with uncut lawns and temptation for vandals and scavengers.
4- The property will go at auction or bank sale for a reduced amount, especially if it is abandoned or boarded up by the bank.
5- The American Dream, embodied by home ownership, will fail.

It is very clear that our government, with it's bailouts to financial and auto markets, does not have the best interest of the homeowners in mind. The "help for homeowners" program was, and continues to be a bust because it was created by BANKERS!

Let's let Washington know that the Lobbyists and special interests are not the only ones that count here.

Make your voice heard, send emails, USE YOUR VOTE.

My Name is Alan Chenkin and I vote, I own a home, and I am frustrated by the lack of concern for us little guys and our friends facing job loss, home loss, and worse. Let's keep the American dream Alive.

Tuesday, May 26, 2009

Financial Armageddon when both spouses are unemployed

Recent articles in the news have stated that there are many homes in default or foreclosure because not one but BOTH of the primary wage-earners are currently unemployed.
when you couple that with the current economy, where jobs are extremely scarce and pay scales have declined, we have a recipe for more financial Armageddon in our midst.

I am concerned about this because unemployment, and the financial collapse of a families finances affect all of us, and cause our own worth to diminish as the crisis escalates.
Among professionals, a drop in credit score (caused by a home in default or late payments on credit cards and loans) can make you a "risky" hire, and you would never know why, they would just pass on hiring the person with a low credit score (sucks if that's you). If they told the applicant the truth, they would be open to a discrimination lawsuit.

You also need to be aware that all the "workout, Debt-Settlement, and modification packages" are "attempts to collect a debt", and the lenders want to get paid, and are sympathetic to your plight but not so much that they will actually reduce payments, lower interest rates, or otherwise assist the debtor. In fact, their reporting of late or missed payments and subsequent "penalty interest rates" put additional hardships on the unemployed, and can further jeopardize the employable status of someone who is unemployed and in debt. Many of these people take jobs where they are under-employed, or making barely more than minimum wage. After the phenomenal years we have had, many of us have stacked on debts that are more than pocket change; They need thousands of dollars a month to break even, and must start to pay down the debt or risk further financial destruction. This is made more difficult when there is additional costs to save money - returning the leased or mortgaged car; cancelling certain contracts (cell phone, satellite TV, etc.), and selling the second home (if it is not underwater financially). There is alos a tremendous emotional cost, as these people suffer from isolation, depression, and other maladies where treatment may take months - and they may not have adequate health insurance!

This is important to us for many reasons. If this segment of the population fails financially, it will continue to drive employment, home prices, salaries, and business opportunities to levels that will drastically affect every neighborhood in America. THE AMERICAN DREAM IS AT RISK, and major change has to occur in the way debts are managed so that these people can re-group and find their way to earning again.

Wednesday, May 13, 2009

Piracy on the High Seas - a Solution

As a student of history, and a recreational boater, I find the situation in Somalia of great concern. Somali pirates are seizing vessels by force, and charging multi-million dollar ransoms for the return of the ships.
President Obama's response to the situation was welcome, as Piracy is an unacceptable profession in today's world, except in Disney Movies.
My solution is this:
Conscript the pirates into the Somali Navy! Paint their boats in Somali colors, and give them uniforms. They are already decent mariners, and this gives them a form of recognition and a "regular" job. Second, have the merchant vessels pay for a formal escort by Somali Navy vessels through the (formerly) pirate-ridden seas. This will cost far less than ransoms, and give the Somali pirates an opportunity to join the world of commerce as defenders of the seas instead of scorned plunderers! And they will have regular pay to squander on Rum and Wenches when they return to port.

Sunday, May 10, 2009

Credit card regulations don't go far enough!

I am rather upset by the weak credit card laws proposed this past week. It is like the paid lobbyists from the credit card companies are writing the legislation!

First, lets get real - the credit card companies ENSLAVE people with credit card debt, interest rate hikes, calendar shenanigans that ensure people miss the due dates (so the banks can charge hefty fees), and other LEGAL and shady practices that guarantee the banks make the maximum profit from each charging customer. This is more like a war than a business, with the debtor who does not pay off his charge cards each month paying more interest and fees than the original purchase is worth.

These companies need to be reined in; not just notifications "90 days prior to an interest rate hike" and forcing anyone under 21 to have a parent cosign (remember, many responsible parents learned their lessons the hard way).

This is better for the CC companies than the debtor! A parent consignor makes the parent responsible if the child defaults. The parent is almost forced into paying off the debt, because their FICO score is affected! (Bank wins). 90 day notification just gives the banks more time to shut down somebodies credit - They have integrated reporting systems, notification tools, and other mechanisms to ensure the person who is being changed will not have a chance to move any of this debt to a lower interest card. (Bank wins).

President Obama - ARE YOU LISTENING? - This law does not go far enough. Let's send this one back for more revision, and let some responsible citizens have real input into this!

Monday, April 27, 2009

Like the Changing Tide

I sincerely hope that you have noticed that the mood of the banking industry has been changing. With Sheriff Obama at the reins, Government bailout money no longer has the lush excitement of Lottery Winnings for the banks. Especially now that the government has more restrictions, rules, and "rake-back" capability.
The world would be a nicer place with banks that recognise the changing conditions in the marketplace, and salvage their customers before putting their "tin begging cups" in the face of congress.
One of the banks I have dealings with just go cited by the OTS (Office of Thrift Supervision) for "systemic abuse of the Truth in Lending Act". This caused the bank to immediately hire 2 law firms just to whitewash their exposed behaviors. I hope the OTS keeps digging, because there may be more bad behavior that this bank is liable for.
Being a Bank customer for many years, I have always had a good relationship with lending institutions. The overt greed and willingness to "bend" the rules has made this a strained relationship with a "war of the roses" overtone.
Banks need customers; not just the "A" list, wealthy, and connected ones, but all of them. This makes for a healthy relationship, and products that meet the needs of multiple customers. When the banks (both regulated and UN-regulated institutions) lobby and win favorable changes in the rules, the customers are at risk, not to mention the effect on the worldwide economy.
I only hope the sheriff goes far enough to catch the bad guys, and put right a broken banking system. And that goes for the credit card bandits, er, banks, too!

Saturday, March 28, 2009

Where are the Hero CEO's?

Every day, as I scan the newspapers and Internet services, there are new "fallen heroes" peppering the landscape with their behavior that I would have not tolerated in my own children.
Baseball players using enhancing drugs and lying about it. CEO's making unjust profits as their publicly-held companies falter, Financial advisers padding their incomes at the expense of their trusting clients.
What makes this horrible is that it affects an audience much greater than the misdeed, and something needs to be done.
The next generation is inheriting a mess, and their empirical view may be that grasping for prosperity and the gold ring will only benefit someone who is willing and capable to steal their earnings, their future, and their dreams for personal gain.
In a publicly held company, the first duty of the management is to the shareholders - to reward their investment and confidence with increased value; raising the stock price, increasing market share and profitability, doing good works that benefit the reputation and status of the company.
Today we see top executives receiving compensation that is greater than the GDP of a third world nation. Executives paid handsomely to leave companies, and a sleight of hand with compensation that masks the true compensation with future stock warrants and "$1" annual paychecks.
Carl Icahn said that is is cheap to pay $26 million to a CEO who is destroying $1 billion of market share as an incentive to LEAVE the company. I agree, however it feels like a form of blackmail - none of my bosses would have paid me to vacate my desk for poor performance. He also said that he could get top talent to run a company for less than the fantastic pay packages granted by the compensation committees.
So here are a few ideas; when you look at the role of the CEO as a leader, look at the big picture. Are the paychecks deferred (like a stock option, where the stock is bought at today's price and the purchase is actually made in the future, AFTER the "recovery"?) making their $1 paycheck a good gamble? And is it tempered with a hefty severance package, ensuring that failure WILL be rewarded?
Keep in mind that I am only talking about compensation. To be a Hero CEO, you have to be a leader. LEADING a company that is doing what is necessary to stay competitive in the present, and show value to the SHAREHOLDERS (remember us?) in the future. Keeping their pay in line with the company's stature and growth, while minimizing the impact of the economy on their employees, those in the trenches toiling for the companies profits.
Feel free to send me any nominees for Hero CEO's. but remember, they have to be more than a an illusion or a self-aggrandizing scammer. Our children, and the world, have to see America as the land of opportunity, not the home of corporate greed and avarice towards ones workers and fellow men.

Monday, February 16, 2009

Nail-biting and waiting

Tuesday, February 17th, President Obama will sign the Stumulus package into law.

Many of you are aware how I feel about the need to fix the actual defaulted (and yet to default) mortgages, and the need to free up capital for more jobs in our country.

It is my sincere hope that this bill will actually contain some legislation that can improve our lives and make America the land of opportunity again (and not just for some crooked bankers and their cronies).

Please continue to pressure our legislators to help out the people at the most trying financial times in recent history.

Keep your spirits up and continue to press for improvements in housing, jobs, and our general condition! --Alan