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Support My Petition: Revive the Real Estate Market with This “No Cost Stimulus Package” at Change.Org

Nov 17

Posted by America in America, Economy, Jobs, Politics, Real Estate | Comments off

foreclosure shortsale

Foreclosure-Short Sale

I just created a petition entitled Revive the Real Estate Market with This “No Cost Stimulus Package” , because I care deeply about this very important issue.

I’m trying to collect 100 signatures, and I could really use your help.

To read more about what I’m trying to do and to sign my petition, go to:Petition
It’ll just take a minute!

Support My Petition: Revive the Real Estate Market with This “No Cost Stimulus Package” at Change.Org

Once you’re done, please ask your friends to sign the petition as well. Grassroots movements succeed because people like you are willing to spread the word!

Whether we like it or not, we have to be realistic and accept the fact that any block, town, or city we live in when it becomes infested with a big number of foreclosures, short sales, and/or abandoned properties, the value of our property will be affected negatively and it will lose value. This will happen regardless of how prompt we are in making our mortgage payments and how well we are maintaining our own property.

It is also true that burning a hostage taker’s hideout, while he is in custody of the hostage, only endangers the life of the hostage more than it achieves the goal of punishing the hostage taker. I think the smart thing to do is to rescue the hostage first and then deal with punishing the hostage taker. In this case, the hostage is the property owner and the hostage takers are the banks. Saving the property owners and their property values should take priority over punishing the banks, and then, once that has been achieved, we can, in pursuit of justice, begin prosecuting the people responsible causing the big mess.

The idea of “homeownership is not important” and the argument that “people need not have to own a property” is wrong. Throughout history property ownership has been as important as food. People have fought for it, have declared wars for it, and in many cases they have died for it. Property ownership provides people a goal, a purpose, a sense of pride, achievement, security, their privacy. Taking that, Homeownership, away from people is not only taking away the American Dream, it is taking away any human’s Dream.

It is no Secret that when the Real Estate Market improves, the Economy improves. There is a way to revive the Real Estate Market without costing the tax payer any money, without a costly bailout, and it can be implemented almost immediately. Details:

In The Next 5 Minutes I’ll Show You How My Stimulus Package Costs Nothing to Implement, Raises Real Estate Values, Creates Jobs Almost Instantly, And Makes Money for the Banks and the Government in Less Than One Year.
We all know that without the revival of the Real Estate market the economy cannot improve as much as we would like it to. Being a Real Estate and Mortgage Broker for the past 26 years I have come up with this solution that benefits almost everyone. This may be the biggest transaction of my life, without pay, but it will help the economy and the country.

1. Underwater Properties: an underwater property is a property that its owner owes more on the property than the property is worth, but, he or she wishes to keep the property, still has a job but has suffered a reduction in income, can afford a modified loan and wishes to occupy the property as his/her personal residence. Sample property:
Home value = $150,000
Combined loan amount on the house
(the sum of 1st, 2nd, or even 3rd mortgages) = *$200,000
Underwater amount = $ 50,000

Solution:
a. Refinance: Banks to Streamline Refinance the entire $200, 000 ( @ ) 3 dot 75% annual interest rate payable interest only for 10 years and then convert into a 30 year amortized loan dot

b. Trust Fund: Establish a Mortgage Insurance Trust Fund where insurance premiums are deposited. Government to insure the underwater amount plus 20% of the total loan by imposing a one-time fee equal to 2.75% of the loan amount as an insurance, like the mortgage insurance companies did. This fee to be paid by the bank to the government and be added to the loan not to burden the borrower to come up with it in advance.

Example: Loan amount $200,000
Property Value $150,000
Underwater Amount $ 50,000
Mortgage Insurance= 2.75% of $50,000 + 2.75% of $40,000 (20% of $200,000) = $2,475. This formula insures the Mortgagee the Underwater amount plus a 20% to compensate for the 20% down payment ordinarily required during a purchase transaction.

c. Personal Guarantee: Borrower signs a personal guarantee for the loan for a 3 year term, after the 3 years have passed the property remains the sole collateral for the loan.

d. In the event of the borrower’s default, this insurance pays for the difference and covers the bank’s losses.

e. The amount that the government pays to the bank, if the borrower defaults within 3 years of the refinanced loan, becomes a personal loan to the defaulting borrower, a personal loan that survives bankruptcy, just like student loans.

f. Assumption: The new loan to be an assumable loan to qualified buyers. The Bank may charge 1% of the loan amount as a transfer fee, plus a set $500 Combined Processing and Funding fee and 0.5% of the loan amount for escrow and Title fee. The bank may (at its own discretion) ask for, accept, or reject a physical inspection report showing an acceptable condition of the property to the lender.

g. Prepayment: The loan to have a no prepayment penalty clause.

h. Credit Report: As an additional incentive, finance companies or banks must remove derogatory credit from credit reporting agencies for borrowers who qualify and obtain such loans at new terms.

Annual Interest rates to be fixed at 3.75% for conforming and 4.125% for jumbo loans.

2. Foreclosed properties: Foreclosed properties are properties that the owners ultimately had no way of refinancing, and not enough income to support their mortgage even if and when modified. They chose to let go of the property.

These properties are a major burden on the banks that had the financing for these homes and the real estate market in general because they are causing a major over supply of properties which, in turn are devaluating entire neighborhoods.

Solution:
a. Government to purchase foreclosed property from bank at loan value. This will clear the banks from their books to allow for new financing.

b. Offer said property for lease with the following conditions to promote and incentivize potential tenants:

1. Offer the property on lease with an option to buy at a predetermined price which should equal the total of the cost of the government purchase of the property from the bank plus 10%, for example: property cost the government $200,000 to own, the price for the tenant to pay in the event tenant wishes to purchase this property within the 3 year term offered to him will be $200,000 + $20,000 (10% of $200,000) = $220,000.

2. Credit all lease payments made by tenant towards the down payment if tenant chooses to remain in the property and eventually purchase the property within 3 years. Tenant forfeits this right if he chooses not to buy property within the 3 years period and all money paid remains past or paid rent.

c. The term of the lease to be 3 years or less to qualify for the credit.
This will guarantee that government money is not lost; actually, it is making money and taking a lot of inventory out of the market while helping owner occupancy.

3. Damage To property due to foreclosure:
Any borrower, who leaves or abandons his or her property, or lets his or her property go to foreclosure, must hand over the property in a normal wear and tear condition. No additional damage should be made to the property blaming the bank as the cause for the foreclosure and that revenge is in order, such as: pulling drywall from the walls, pulling out appliances, causing plumbing damage, inflicting roof damage, or doing anything that is out of the ordinary. The government will be authorized to place a personal lien on the owner who caused these damages whether the bank or the government end up fixing it to bring the property to its normal condition. Damages charged to borrower are to survive bankruptcy protection.

Excess money in borrowers’ pockets will incentivize him/her to spend more. This spending will cause businesses to hire more employees and get the ball rolling. The demand created will tighten supplies which, in turn will generate a moderate inflation, increase asset valuation, and eventually lead to higher rates and increase the GDP (Gross Domestic Product).

It is Not a Secret that When the Real Estate Market Improves the Economy Improves.
*How to calculate your savings if your payment is converted into a 3.75% annual interest rate, payable interest only:
Take loan amount e.g. 200,000 multiply by .0375 then divide the answer by 12. $200,000 x .0375= 7,500 take the 7,500 and divide by 12. $7,500/12=$625 your payment will be 625 dollars a month for the next 10 years. For your own personal loan, replace the $200,000 by your total loan amount and check the answer. That will be your payment. Deduct this from your current payment.

Marc Boyajian Featured
Support My Petition: Revive the Real Estate Market…
November, 2011 @ 1888PressRelease.com
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Response to The White House Deputy Chief of Staff for Policy

Nov 7

Posted by America in America, Economy, Jobs, Politics, Real Estate | Comments off

Goal: What do we, as a nation, need to focus on in order to get our economy back on track?

Making America Great Again and Preventing Her from Becoming another Empire that Grew so Big that if It Falls It May Prove to Be Fatal.

I have been writing, for some time now, about the ills of the country and how to solve them. That is why I will refer you to an itemized list of publications I am sure you will find useful. They come from the heart of a person who had to face snipers, pirates, bombs, cross over dead bodies used as check-points, and travel under extreme difficult conditions to make it to the country he loved since childhood.

I don’t want this country to become like the country I left behind.

Federal Actions: What actions should President Obama take right now to help achieve the goal mentioned above?

Real Estate: No Cost Stimulus Plan to Revive the Real Estate Market http://bit.ly/pGv3UZ

Loan Modification: Why the Loan Modification Program is not working http://bit.ly/nJRtSt

Congress, Health Insurance, Immigration, Outsourcing: http://bit.ly/uLxvfM

Jobs: Where Have the Jobs Gone? The Seven Sins and What We Can Do to Bring the Jobs Back!  http://bit.ly/vMGtme

Self Preservation: Self Preservation, Patriotism or Protectionism? What the Government Can’t Tell You, I Will http://bit.ly/iNGVIM

Education: who’s Minding Your Seed? http://bit.ly/rpCpel

Consumer Confidence: Consumer Confidence and the Lawyer in President Obama  http://bit.ly/qSkLD3

Community Actions: What can community groups, non-profits, state and local governments, companies or  individuals do to help achieve this goal?

Everyone, government officials, community leaders, priests, reverends, preachers, teachers, parents and media should encourage the public to calm down and discuss solutions and sacrifices they can make instead of this bickering that keeps going on and on, blaming each other, instigating divisiveness instead of unity.

Refer to:

America’s Silver Platter: http://bit.ly/ozET7k

Chair vs. Country:   http://bit.ly/pb5czz

We’re “F”ing Our Country:  http://bit.ly/qsKddq

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Attack Them Where It Hurts the Most

Nov 1

Posted by America in America, Economy, Jobs, Politics, Real Estate | Comments off

Attack Them Where It Hurts the Most

It’s not Occupy the Streets, it’s Paving the Road to Fairness

 

As one person out of the 99% who is sick and tired of the current economic and political situation the country is in, I am of the opinion that the following will have a much quicker, bigger and productive impact:

  1. Impeach Congress: If any of us doesn’t do a job bestowed upon him/her efficiently and in a professional manner he/she will not last two days in that job, he/she will be fired. Our congress, both houses, hasn’t done its job for years and we keep re-electing the same people hoping things will change. They won’t. So we have to fire members of both houses and bar them for a term or two from participating in elections, and hire some new faces based on their resumes not based on their connections. Why wait another thirteen months to re-elect the same people and wait another several months for them to start blaming each other again for not doing what we hired them to do in the first place.
  2. 2.       Close your account when you find out that the customer service of the company you are trying to reach has its customer service outsourced to another country, and take your account to a competitor that is not outsourcing its customer service.  If you can’t find a competitor that is not outsourcing its customer service then we are in a more serious trouble than we think we are in. Companies outsourcing to other countries haven’t reduced their prices to benefit you; in fact, in many instances they have raised their prices more than the inflation rate. Outsourcing has raised their, the Companies, profits by cutting jobs here and hiring cheap labor in those foreign countries.
  3. 3.       Don’t buy anything that is not MADE in AMERICA. Companies manufacturing outside the U.S. have not cut their prices and they have not passed the benefits to you, they have raised your cost and raised their own profit margins by cutting jobs here and hiring cheap labor in those foreign countries.
  4. There can be no economic recovery without fixing the Real Estate market. Check out this “No Cost Stimulus Plan to Revive the Real Estate Market”.  Details @ http://bit.ly/nywP8S and see if it benefits you, if it does, make sure your representative hears from you.
  5. Illegal immigration. Most every country in the world, even countries with minimal resources, has, can and is able to protect its borders and control the immigration flow.  We, the United States, go out of our way, thousands of miles across and put our kids’ lives in danger, spending billions of dollars every year, to protect some foreign country’s borders, or build their nations, ignoring our country’s needs. We should bring the troops (or at least most of them) home and have them join hands with the National Guard and protect the borders, all four, and free the country from drug dealers, illegal immigration and rebuild the country, Our Country. Also, offer all illegal, undocumented immigrants currently living in the country a path to citizenship by putting them on probation, with the understanding that anyone who has or does commit any crime it is cause for automatic deportation. Anyone who is working an honest day’s work and is providing for his/her family with good behavior may apply for a permanent visa. Let’s be realistic; we cannot deport 10-20 million people, it destroys the U.S. economy.
  6. Health insurance: Everyone should be entitled to be treated when struck by an illness, or suffers from an injury.  But no one should pay for another’s unwillingness to participate in providing for his or her own healthcare needs, unless that person is incapable of producing income whether due to age or a permanent disability. Anyone who prefers to avoid the purchase of health insurance coverage and finds himself/herself in need of health care services must pay in cash or sign a document authorizing the government to garnish a portion of his/her wages or income until the bill for the healthcare services provided to him/her are paid in full including interest at a predetermined rate.  If the person using the services is incapable of producing income for legitimate reasons or that person is a permanently disabled person (with proof), his/her bill to be paid by charity foundations first, and any shortage in funds to cover all expenses should be covered by the government. It’s the human thing to do especially for a rich country like ours.
  7. Infrastructure: We have the world’s best engineers both in the army (The Army Core of Engineers) and the private sector, yet we have the most deteriorated infrastructure in the developed world. We should be able to rebuild our country and provide jobs both to the military coming back home and the private sector.  We need to build bridges, highways, public transportation, airports, railroads, etc. and we have to stop the enormous mismanagement of funds. Example of mismanagement: Gasoline taxes and the DMV fees collected that are supposed to pay for road repairs and maintenance are spent more for administration than the actual road repairs. We have to ask our government to manage the funds better.
  8. Not occupy Wall Street, have Wall Street behave better.  I don’t think any one of us wants to occupy anything, we just want fairness. We can accomplish a lot if we attack them where it hurts the most, and where it hurts the most for anyone is taking the job, the home, the business and the clout they have away from them. If we can do that, we probably will have our jobs back. Remember if we don’t have a job, eventually no matter where they outsource to, manufacture in, how many homes they build, we won’t be affording any of it. It is not only us who will lose, all the countries that are providing the outsourcing or manufacturing will lose also because they won’t have anyone to sell to. We simply won’t be able to afford it. Even China cannot grow without the American buying what it produces. Ultimately it will prove to be a lose-lose situation for all.

 

 

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Why the Loan Modification Program Is Not Working

Oct 11

Posted by America in America, Economy, Politics, Real Estate | 42 Comments

If you are wondering why the Loan Modification Program is not working here is the answer:

1.Underwriting:  using underwriting guidelines that are obsolete, e.g.

When calculating COMMISSION income you should not use the same method that was used before the economic collapse (taking the two year average, or the year to date average). In this type of economy you should use the average of the last 3 months and allow for another 10% decline in commission income from that, until we are certain the economy is improving.

When modifying a loan, many do not qualify because when their income is calculated on a year to date income, their debt to income will look lower than it actually is. Even though their commission income is decreased the average income will show higher than the actual current income.  This is how:

If you were making $3,000 salary plus $4,000 commission per month the first 3 months of the year your paystub would show $21,000 which is the equivalent of an average income of $7000 per month. But, in April if the company lost clients due to the economic conditions, and your commission has now dropped to $2500 instead of the $4000 you were used to earn, your paystub at the end of June (6 months) will show 6 x $3,000 + 3 x$4,000 + 3 x $2,500= $37,500 for the six months, which makes it $37,500 / 6 = $6,250 average monthly when in reality your actual income now is $3,000 + $2,500= $5,500

Those lost clientele will not come back when the economy is in bad shape, things will get better only if the economy gets better.

How does this effect a loan modification?

For the Government to approve a loan modification your housing to income ratio has to be over 31%. Housing ratio is the total of your monthly mortgage payment(s) plus your property tax, plus home insurance, plus home owners association (if any), plus Mello Roos (if any) over your monthly income.

e.g.

Mortgage payment

$1,670.00
Property tax

$165.00
Home insurance

$45.00
Mello Roos

$55.00
Total

$1,935.00

If we take this housing and divide by the old way of calculating income $1,935/$6,250= 30.96% your housing ratio will be 30.96% which is less than the required 31%. This means you can’t qualify for the Loan Modification. But we know your income is not the same as it was 3 months ago, now it is $5,500 instead of $6,250. In this case, if they use your actual current income the result would be: $1,935/$5,500= 35.20% which is higher than the 31% required for qualifying for the loan. So your loan should be modified and your mortgage payment has to come down to $1,450 from 1,670$ per month.

2. Attitude of Employees: Although there are a few employees who treat the borrower with respect and understanding, many of these lender employees have no clue that their job is to help these borrowers and that by helping these borrowers they are actually helping their banks, their employers.  They treat these borrowers with an attitude, forgetting that many of those borrowers were and are much smarter, educated and more successful in some instances than they will ever be, it is just that they became victims of circumstances beyond their control, circumstances in most cases created by the very financial institutions they are working for.  Most of these employees have no clue or are lost in the number of programs there are and have no idea of how to match the borrower with the right program.

3. No Common Sense:  In many instances, most banks and their employees have lost their ability of identifying a make sense loan and the potential of loss of everything both for borrower and themselves. For example: a borrower who has been an excellent client of the bank and has a proven history of making his payments on time for years in the past, but has fallen victim to the current economic conditions and has had a reduction in his income; if he is willing to keep the home, and make a payment, as much as he can, per month to avoid foreclosure or a short sale; It is the banks best interest that it facilitates the situation and allows the borrower to remain in that house. The alternative is for the house to be sold in a dead market at a much lower price that does not even cover the balance of the loan.

In these situations, everyone is a loser. The home owner for losing his home, the bank for collecting less than it is owed, the neighborhood because of flooding the market with more available properties for sale for the limited amount of buyers, causing even further deterioration of the home values.

4. Government:  I don’t think I even need to tell you about the government. Our government officials are worried more about their chairs than the country, have become more hateful than constructive, more partisan than negotiators, more complainers than creators, more dependents than providers. Our competition is winning not because they are better; they are winning because they are using what they have learned from us: educating their people, building their infrastructure, caring for the weak, rewarding success, running a country; things we have forgotten

5. Know-it-all Leaders: Our leaders, regardless of what they say about listening to their constituents, feeling their (constituents) pain, understanding their situation, open to their suggestions, they all seem to be know-it-all persons. When our leaders start listening to the guy in the street who is really hurting, who knows what’s causing his pain, who knows what would help him, then we’ll have the real solutions that work because they are coming from the real source and not from some emotionless, heartless statistic that could be translated according to your party’s ideological benefits

6. Time: The time it takes for a bank to process a loan modification is so long that sometimes the frustration kills the applicant, it makes you feel like a football being tossed from this department to the other to another, repeating the same information to one person to another and another as if your information keeps changing while holding for the other person. Some people would rather give up than continue with the process. It is a shame.

The situation is very serious. I am an optimist by nature but with the ways things are now with this government, congress and upcoming elections, things are looking pretty bleak. Whether you are making your payments on time or not you are losing, if not your house you are losing its value.

 

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Where Have the Jobs Gone? The Seven Sins and What We Can Do to Bring the Jobs Back!

Oct 4

Posted by America in America, Economy, Jobs | Comments off

We keep wondering where the jobs have gone and why we cannot bring the Unemployment rate down from the advertised rate of 9.1 or 9.2 %, or the actual rate of 17-19%. In reality we all know where the jobs have gone: out of the U.S. and almost everywhere else, but here. We also know why the jobs have gone and it is due to the following:
1.    We want to pay less for the products we buy;
2.    We want the employer to provide us with all types of benefits for the same jobs other countries do without;
3.    We do not devote any time to guide, discipline, educate or support our children, teachers and schools;
4.    Our Education and Labor Departments offer no help in providing research, studies and guidance as to which fields will be in demand and which will be oversupplied for securing jobs for the future generations;
5.    We have taken the easy way out by allowing our children to be busier on social media sites and at social events than prepare for their future well-being;
6.    Our corporations have divorced themselves from corporate citizenship and surrendered to corporate profits to satisfy shareholders on one hand, and try to satisfy our need to pay less for merchandise and services on the other hand. They invest in other countries and create jobs in those foreign countries;
7.    The leadership in our country has become so childish in regards to dealing with the country’s affairs and so preoccupied with securing a seat in lieu of securing the country’s interests, that it has severely damaged consumer confidence and trust.
The political wish may seem obvious in this case, but it is worth repeating. I wish to see the following:
1.    Remove sales taxes on American made products temporarily (a year or two);
2.    Offer tax incentives (a year or two) for employers offering benefits;
3.    Parents, teachers and government officials to make a commitment to find time for their kids and spend at least an hour with them, tend to their needs and concerns while guiding them;
4.    It is no secret that jobs and education are related issues. The Education Department can work with the Labor Department to learn which jobs will be in high demand, where the trend is going and offer that information to potential students for them to know what to do;
5.    Social Life or Social media is a great thing if it is used for the right reasons.  However, spending hours and hours daily on them instead of studying is not the way to go. So, we need to find a way to monitor time spent on those outlets, or at least make those arenas more useful in educating the participants;
6.    We have to offer corporations’ incentives to bring their businesses back to the U.S., and offer them incentives to bring money earned outside back to the U.S. on the condition that they hire more U.S. Employees;
7.    Our Leaders grow up and do the job we hired them to do or take away their seats and hire a new team. Any employer would fire an employee in a heartbeat if that employee did what our leaders are doing, so why can’t we?
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