TEAMBLOG

Dear Friends,

I was about to write today's blog by providing details which would have included dates, statements and past events where lawmakers provided opinions and secured legislation during the various stages leading up to the denouement of this nations' financial crisis. This information would have provided a timeline where one can view the decisions, prevailing concerns and the temperament of the main players during this period.

I decided it would be best not to name the characters that have contributed to this financial meltdown. Recriminations of a specific lawmaker in regards to actions or speeches on a particular subject relating to the current financial mess, is an unhealthy exercise I have no desire to become involved with. To my chagrin however, I've come across numerous instances where public officials have placed their proverbial foot in their mouth in discussing the financial problems we are currently suffering. 

In my research and in my past experience regarding the issues pertaining to the mortgage industry, it is obvious to any observer that many lawmakers in Washington were incompetent in their ability to grasp the serious aspects and consequences of unregulated financial instruments.

There was a philosophy among many lawmakers to help families unable to purchase homes. This is truly the American Dream for all of us to attain. While this noble cause is commendable, the relaxing of underwriting guidelines by FannieMae and FreddieMac in order to meet this goal has had disastrous consequences.

There were different and exotic loan programs offered by banks and financial institutions which included option arm loans where the start rate of 1% was a teaser for negative amortization, 100% financing for those unable to provide a down payment for a home purchase, loans devised for sub-prime borrowers and stated income/stated assets loans where one would jot down an income to qualify. These loan programs with the approval of the federal government and orchestrated by the banking system, flooded the mortgage market. In its attempts to lower lending guidelines and requirements, many borrowers took advantage of a system encouraging this behavior. Human nature notwithstanding, almost anyone could apply for a loan, be approved and handed the keys to a new home in record time!

The commingling of this abuse with the perturbance of greed and corruption on Wall Street provided additional fuel to the fire when real estate values began to skyrocket.

Due to the abuses of our financial system, it is disconcerting to witness the exact same players devising a rescue plan to eliminate the disintegration of this nations' economy. While the participants of the negotiations for this bail out are incapable of being compared to the high ideals and character of the framers of the Constitution - there's not a Jefferson, Franklin or an Adams in the bunch - our hodge podge representatives in both houses of Congress and its leadership, need to end the vitriol of partisanship and provide a plan to end the scourge of distrust which they ultimately helped to create. It's time these inept personalities rise to the occasion and save our financial system from ruin.

Plan Recommendation

There are a few principles which must be adhered to in any PLAN the government devises. There must be independent oversight of the manner in which monies are to be spent in purchasing these mortgage securities. Once these assets are owned, the subject properties must be sold in a gradual manner respecting the current financial climate, in order to realize a profit for the Treasury and in turn lowering the risk for the taxpayer.

There has to be a mechanism for homeowners facing foreclosure to end the timeclock. The lender must be willing by law, to have an accommodation or a negotiation in good faith with the mortgage holder to modify the current loan, lower the rate if the loan is an adjustable and/or be given the time to sell the home. There has to be a moratorium of at least 6 months afforded to the homeowner so one of the several options mentioned can be implemented.

The taxpayer should not be burdened by the errors in judgement by Wall Street brokers. The PLAN can lend the monies to these companies in order to end their liquidity problems with a specified rate and length of time for repayment.

Stress Levels

While the events in Washington and New York took center stage, there has been a noticeable devolution in the demeanor, substance and attitudes displayed by our population during this election year and in this financial crisis.

In previous blogs I've mentioned the gradual and systemic cancer of cynicism, greed and vice plaguing this country. The cohesiveness of our society as a union is becoming unraveled. The propensity of harm which is manifested in all forms of communication is destroying the soul and the purpose for this country's existence. The long and drawn out political primary season and our current economy, has elevated a discourse of hate, anger and contempt by all facets of American society.

I will dwell on these factors and provide solutions to raise awareness, to be our best, in our next TEAMBLOG.

Mortgage Madness

There was a time in this country where a face to face meeting employing eye to eye contact and a handshake were all that was needed in order to consummate a business transaction. This goodwill meeting of the minds is no longer evident in today's world where virtues are no longer deemed relevant and where mistrust and greed is accepted as a viable alternative.

Just a few days ago, MoneyTeam secured a purchase money loan APPROVAL for our buyers. Our clients sat down with the owner of the mortgage company, signed loan documents and monies were wired to escrow for closing costs. All of the protocols of a business transaction were well received, the mutual understanding between the parties was evident and the handshake sealed the deal. We were to close the transaction within a day or two until our office received an apologetic telephone call from the mortgage company stating they've decided to 'pull the plug' as the value of the property can no longer be evaluated!

The action by the owner of this mortgage company is an example of the frustration many serious and reputable Americans are going through and will be subjected to, until such time this country's financial house is in order.

Investors Needed

Due to the previous example of HIGH ANXIETY in the mortgage markets, we've decided to ask investors for their help in providing the financing on several projects we are currently offering. We are eager to fund these loans and your help is truly needed. Please check our site for more details.

Thanks Again

Dear Friends,

The forces of cognitive dissonance has now infiltrated the psyche of the US Congress and has allowed the loss of 777 points on the Dow. The Keystone Cop leadership of the US Congress has come back to provide an Oscar worthy performance by berating each other in pathetic terms for all of us to witness. The scorecard is being tallied by the media and the ultimate loser is none other than the American taxpayer. While the shindig continues unabated, there may be temporary relief in sight. Hopefully, the Jewish New Year on Tuesday could become a celebration of sorts as a temporary stop gap measure, in the midst of horrific stock market losses totaling billions.

Congress comes back for another attempt at maturity on Thursday. A decision by both Houses is needed to end the hysteria. It is blatantly clear most of this country's leadership lack the courage and foresight required to save our economic system. The petulant politicians of our day have unwittingly provided the entire world a command performance by its refusal to make a decision on our future and supporting efforts to continue the destruction of America's credit and global markets.

The main problem we all face is in regards to the credit markets. Without the ability of companies to secure credit for their respective businesses, this reality will bring about the dissolution of our economy. Massive layoffs, additional foreclosures, bank failures, inadequate funds for government infrastructure projects, the inability of consumers to apply for an auto, student or a mortgage loan, are just several of the consequences we will face if a bipartisan plan is not approved by Congress. A run on money market accounts and a bank panic on deposits are scenarios scheduled to occur next. A total Depression similar to the 1929 crash is on the horizon. During the past several days, we've seen the end of Washington Mutual and Wachovia purchased at firesale prices by competitors. The game is on!

While greed, corruption and incompetence placed us in this awful mess, we need to act with deliberate speed to end this crisis, once and for all. The 700 Billion price tag is enormous. Most Americans are reluctant to have the government control such an amount without independent supervision. That's understandable. However, this plan can be beneficial if it provides provisions to end the foreclosure timeclock.

This can be accomplished by providing an open, transparent ability to modify all mortgages currently in foreclosure or for loans adjusting to a higher rate and mortgage payment. There must be a moratorium or a forbearance on all foreclosure activity for at least a 6 month period so the homeowner and the lender can decide the best way to solve the problem. This 'bail out' of Wall Street does not solve the inherent problem of stabilizing the mortgage market if these recommendations are not taken to heart. 

The US Government needs a refresher course in history. The leadership needs to reacquaint themselves with the factors which led to the Great Depression and the wit & wisdom of the much beloved voice during the era, Will Rogers.

There were numerous quotes attributed to him. There are 3 that stand out and are in need of resurrection.

 "Democrats never agree on anything, that's why they're Democrats. If they agreed with each other, they would be Republicans."

 "Be Thankful we're not getting all the government were paying for!"

 "Chaotic action is preferable to orderly inaction." 

Thanks Again

Dear Friends,

This weeks' events in the financial markets could have driven anyone to drink to excess or by inadvertently adding pounds to one's constitution, by munching on 'comfort food'. In order to alleviate the chronic stress of this Wall Street madness, many of us had no choice but to indulge in such discordant habits. The roller coaster we've been on for months has finally crashed and the consequences has created injuries and casualties in its aftermath.

How does someone begin to decipher the trillion dollar headache the US taxpayer will have to pay, in order for confidence and trust in our financial institutions begins to take effect? The government bail outs of FannieMae, FreddieMac, AIG, IndyMac and Bear Stearns among others, has created a cottage industry where corporate greed and incompetence has been elevated to a diffusion of responsibility under the newest definition of accountability. These corporate giants with an accommodation of numerous entities in the financial sector and the US Government, has placed in bankruptcy the future of this country by providing 'imaginary' funds for a problem that has a solution not to our liking.

In order to solve a problem and to have the capability to discern the factors which created it, one must have the ability to look to the past to avoid the pitfalls created in the present. Home grown common sense is sorely lacking in this country as we've become a nation of denial merchants unwilling to grasp the excesses of credit, the urging demand of covetousness and the horrors of an economic system devoid of responsibility.

With that said, our financial house has to be restored at all costs. There was no room to maneuver. Of all the government players in this crisis, Treasury Secretary Paulson took the bull by the horns and helped end the eventual destruction of our financial system by conceiving of a plan to purchase devalued mortgage paper of US financial institutions. Due to the current situation, the likelihood of a full blown global recession or depression was halted.

Mutual funds, mortgages and other financial instruments are now and will be insured by the Federal Government. The complexity of this problem was truly global in scope. While this was a historic week as a crisis was averted, the consequences will be felt for years to come. It is my understanding the Federal Government will purchase non producing, devalued mortgage assets and bundled securities from financial institutions at a negotiated price. The government will sell these assets in the open market, similar in concept to the actions of the RTC or the Resolution Trust Corporation. The RTC you may recall, sold  many of the assets of bankrupt Savings & Loans during the early 1990's.

Congressional leaders from both parties with the guidance of the current administration will provide a new agency to oversee the purchase and the eventual sale of these assets.  I recommend these assets should be sold responsibly, in effect, when the economy stabilizes and when the subject properties themselves begin to appreciate. To 'dump' these properties on the open market at this time, would destabilize the real estate market considerably. There has to be a gradual and concerted plan to sell these assets at the right time for the right price. These actions would help lower the burden and the costs for all taxpayers.   

In our next TEAMBLOG, I will discuss the historical circumstances which generated this crisis and the actions which need to be implemented to avoid another debacle of our financial system. 

Mortgage Rates

Rates went down dramatically during the  beginning of this week. By Friday, the rates climbed and were positioned similar to last weeks. The Bond Market had a wild ride due to the Governments' financial plan of providing billions of new dollars to buy junk mortgage securities from ailing banks and financial institutions. This solution helped reassure the markets. Please check our current mortgage rates and call our office at 323-936-3232 for more details.

Flags In Malibu

Last Saturday morning September 13th, something came over me and I decided to get out of the house and took a drive to the beach. I ended up in Malibu and noticed the display of American flags on the grounds of Pepperdine University commemorating the events of 9/11. I remembered seeing a report on the news the week before, showing one of the organizers placing the flags on the grounds.

There are no words to describe the view in Malibu nor thoughts to ease the pain of the images and events on that sad day in New York. Our nation still grieves.

At The Movies

I circled the date on my calender, September 18th as I was eager to see one of my favorite films at the Aero Theater in Santa Monica, "Harold & Maude".

This film was first released in 1971. I was a freshman in college in 1973 when I first saw the film. Ever since then, I've seen this film numerous times and always came away with a feeling of euphoria!

The plot consists of 2 eccentric characters, meeting by happenstance in the most unusual circumstances with a tremendous age disparity and gradually falling in love. Irrespective of the handicaps imposed by traditional modes of conduct by society, our beloved Harold & Maude bring out the best our gifted souls can muster, in a world of complacency and derision. The music of Cat Stevens injects the spirit with hope, that life is truly worth living to the fullest!

Thanks Again  

Dear Friends,

Today, September 11th, marked the 7th anniversary of one of the most devastating events in our nations' history. This is a day similar in destruction and importance as the attack on Pearl Harbor, December 7th, 1941. Both days 'will live in infamy'.

President Roosevelt's forceful words to the American people in front of a joint session of Congress changed the priorities. America became a mighty and respected bulwark of democratic principles and decency in this world by destroying the affirmations of evil by the Axis powers. Men of moral substance and intense character rose to the occasion by understanding the circumstances and the consequences once our freedom was placed in jeopardy. The statesmen of the era, British Prime Minister Winston Churchill and Presidents Roosevelt & Truman, employed a preeminent determination in their resolve to insure victory to end such tyranny.

From 1941 through 2001, there have been momentous events that have highlighted the character and the destiny of this country. This 60 year period provides a dramatic historical timeline of profound proportions and sacrifice which has shaped all avenues of thought, direction and destiny. Any student of American history can appreciate the challenges, the heightened elements and the intense changes of a country in evolution.

During the past 7 years since the attack on the World Trade Center, America's mission and its focus to infiltrate the devious temperaments of terrorism, has startled the country by elevating an acute awareness of a philosophy of hate and religious fanaticism eager to destroy the beloved ideals of freedom in our modern society. Collectively, Americans have become graduates of a civics lesson and a simple course in geography, where we can point on a chalkboard the nations willing to do us harm at all costs. This is truly a dangerous world.

We must be fortunate and grateful that our government for the past 7 years, has been diligent in its efforts to thwart the numerous conspiracies focused on efforts at destroying this country. Common sense underscores this premise, as we have not witnessed a terrorist attack on American soil since 9/11/01.

In every generation there are citizens devoted to the resurrection of ideals as espoused by our Founding Fathers. There is no political affiliation required to bestow gratitude to members of our government and the individuals involved for keeping our homeland safe. This patriotic responsibility is saving the freedoms we all hold so dear.

The Palin Effect

Since becoming the nominee for Vice-President on the Republican ticket August 29th, Alaska Governor Sarah Palin has provided a maelstrom of energy which has resurrected dormant spheres of epiphanies pertaining to culture, philosophy and inherent values of American society. The earthquake manifestations of a debate long overdue, will help us define the core of America's character at this stage in our country's history.

Mrs. Palin has unwittingly become a symbol of enlightenment. She has brought about an examination of our beliefs, a personal and collective investigation of our values and the scrutiny of a nation's soul. There is a plan, a destiny and a fork in the road. We will know soon enough where America's path will lead.

The Bail Out

Last weekend Secretary Paulson with the authority of the US Government, took control of Fannie Mae & FreddieMac, the quasi-governmental mortgage providers for America's homeowners. The effects of this action was immediate.

Mortgage rates have decreased dramatically by at least a 1/2 point! The downward spiral in rates and the gradual effects of an end to a credit crunch that has hampered the economy, are optimistic predictions tied to the takeover of the 2 mortgage giants. Unfortunately, the stringent underwriting guidelines fostered in the wake of the 'mortgage mess' may still be in place, even though there will be more money flowing throughout the enconomy.

The American taxpayer, as always, will eventually pay the bill for the errors in judgment by our lawmakers and the dishonesty and fraud invoked by the active players of deceit in the mortgage industry. The continued economic breakdown of our financial institutions and the downward spiral of US commerce, is a long and drawn out chapter which will result in the loss of America's sovereignty. As mentioned in previous TEAMBLOGS, we no longer manufacture anything of value or substance. We have become a society of consumers. This transformation has created a dangerous dependency for cheap imported goods, electronics, furniture, clothing and foreign oil. America is now beholden to the likes of China and the Middle East. Just this week OPEC has decided to lower its production of crude in order to keep the price of oil over $100 a barrel. This country needs a simple course in US ECONOMY 101, where our financial freedom is jeopardized if we do not begin genuine efforts in purchasing goods made in America.

Interest Rates

Please check our rates. MoneyTeam is now offering:

30 Year Fixed at 5.500%

15 Year Fixed at 4.875%

Both Loans at 1 Point Cost

Both loans are for FULLY DOCUMENTED - OWNER OCCUPIED - PURCHASE OR REFINANCE TRANSACTIONS - 80% LTV OR LESS - FICO SCORES OVER 620

Please call our office for more details at 323-936-3232.

We Miss You Luciano!

It has been 1 year since the passing of our beloved tenor of the ages, Luciano Pavorotti! We all know he's performing for the Almighty within warm and serene clouds.

In the audience, with an army of benelovent Angels and members of our families enjoying the passionate perfection of his voice in 'Nessun Dorma', I can hear the applause from here! It's deafening!  

Thanks Again 

Dear Friends,

The economic news for this week has continued the melancholy outlook we've become accustomed to so far this year.

On Thursday, the stock market gave up over 344 points while Nasdaq lost 74 points. The unemployment figures that came out today, were troublesome. For the month of August, there was a loss of 84,000 jobs and the unemployment rate went up precipitously to 6.1% - the highest its been in almost 5 years!

While the most current financial news is uninspiring for many Americans, there is a silver lining for mortgage rates. Interest rates have come down gradually and continuously. Please check our current rates.

Every 4 Years

This is the week we are providing several memorable quotes from previous Republican National Conventions.

In 1964 the former Senator from Arizona, Barry Goldwater provided one of the most memorable quotes from a Conservative in his remarks. "I would remind you that extremism in the defense of liberty is no vice. And let me remind you also, that moderation in the pursuit of justice is no virtue."

The Silent Majority

At the 1968 Convention, former Vice-President Richard Nixon gave his acceptance speech on August 8th, 1968. "It is another voice. It is the quiet voice in the tumult and the shouting. It is the voice of the great majority of Americans, the forgotten Americans - the non-demonstrators." Nixon then went on to win the General Election over Hubert Humphrey. Ironically, on August 8th, 1974 he resigned the Presidency exactly 6 years to the day. 

In New Orleans, Vice-President George H. W. Bush gave a quote which eventually came back to haunt him by declaring "Read my lips: No new taxes" at the 1988 Convention.

On July 17th, 1980, former California Governor Ronald Reagan accepted the nomination in Detroit. His words that day included, "I ask you not simply to 'trust me', but to trust your values - our values - and to hold me responsible for living up to them." Reagan won the election in a landslide over President Jimmy Carter.

A Footnote

Alaska Republican Governor Sarah Palin is the newest participant in a political race that has shaken up everything!