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September 26th, 2008 8:58 PM


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



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Posted by Jesse Dorado on September 26th, 2008 8:58 PMPost a Comment

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