Part 7 – Ok I was just checking because I thought this was a story about all the mortgage backed securities that were going under. It started at the top and it worked its way down. The reality of it is that people were buying homes, not reading what they were signing, not understanding how it worked and shame on the people who were putting it in front of them, knowing that they didnt know and we all need to take a little responsibility here for this past crisis. It is not just the Wall Street firms; its not just the mortgage companies and banks, the brokers have little in fact to do with it, we didnt create the loan products that people were buying, we were merely disseminating it to the public. I am glad to say I was not a part of any of that. I was able to stay away and do traditional, conventional type financing for people. So luckily I didnt have a lot of clients who got stuck into that nightmare.

Speaking of that nightmare, Dan when we talk about the people who have had foreclosures, their lives have been turned around, turned over and they think that there is no where for them to go. One of the nice things about the Federal Housing Administration loan, the FHA loan, thats the first time home buyer type loan, the minimum down payment loan, its only 3 years after you have had a foreclosure that you can qualify to purchase a home again. So it is important if you have had a foreclosure, you need to point your future away from the flame, you need to save your money, do your best, work as tightly as you can on a budget and look forward to that time when you can go back out and buy a home again.

Property values are going to be up from where they are today, but there is still going to be plenty of great value out there and there are not going to be loan products that are going to get you in trouble again. They wont exist. What really caused the great inflation in home values starting in about 2002 was the financing was just getting crazy. I wont get into a whole lot of technical stuff about mortgage backed securities and all that, but the lenders were creating products, selling them off their books, thinking that they would never have to worry about them again. They sold trillions of dollars worth of these loans and those are the ones that are going bad.

Ones that were toxic in the first place: the stated incomes, the option ARMs, all those loans are all gone now. I was saying earlier today that we are back to where we were in financing in 1992-1993, back when the median home price was $75,000. Now I dont think we are going to go anywhere near that again, I think at $130,000 we are getting real close to the bottom of the market and what I was thinking was when I got into the business in 1995 and you were in at about the same time I was, and I remember talking to a guy who comes into our office to sell us loan programs, now this is the very beginning of the really crazy stuff, and he was saying we can do 70% no doc loans.

We go, what do you mean? If somebody puts down 30% they dont have to verify anything, they dont have to verify their employment; they dont have to verify taxes, anything. We were absolutely floored, but by the peak of the market we were doing 100% no doc loans. If you were breathing they gave you a loan and the credit scores didnt have to be that high, I think I saw them as low as 600… http://realestatemarketingthisweek.com

Duration : 0:5:36

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Duration : 0:2:59

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To help you out, here are the lyrics to help you sing along.

TOUR GUIDE: To your left, folks, is the Washington Monument, to your right, the White House. And over there, just beyond the Capitol, is the National Debt!

TOURISTS: Oooo! Wow!

There’s something huge
Red, white, and blue
That’s grazing in D.C.
It’s gobbling up the taxes
That are paid by you and me
It doesn’t seem to notice
We really can’t afford
The billions that it’s costing us
To pay its room and board

It doesn’t roam
But seems content
To dwell on Capitol Hill
As long as trucks keep pulling up
With tons of green-back bills
We’ve got to feed the big guy
We really can’t forget
It has an awesome appetite
Tyrannosaurus Debt

TOUR GUIDE: The debt was born in 1790 when our new government took over 75 million the colonies spent in the Revolutionary War.

We’ve got to feed the monster
So it doesn’t get upset
It’s got an awesome appetite
Tyrannosaurus Debt

TOUR GUIDE: Alexander Hamilton, our first Secretary of the Treasury (he’s on the 10, you know), wanted a federal debt to provide a reason to establish taxes to support our new nation.

The debt was young, they kept it small
They didn’t know back then
In 1812 another war would make it grow again
By ’66 the Civil War had cost the nation millions
The government in Washington now had a debt of billions

TOUR GUIDE: The Civil War ran up a debt of almost three billion dollars that still wasn’t paid off by World War One.

We’re spending money we don’t have
Or so it would appear
The deficit is that amount we overspend each year
Though congressmen and senators
Make vows to cut its size
Despite their honest efforts
The debt just seems to rise

TOUR GUIDE: Now the debt‘s over 4 trillion dollars and still growing…

A balanced budget would be great
To spend within our means
To stop the monster in its tracks
Before we bust our seams
It feeds on just the interest
Its appetite is whet
It never, ever stops to rest
Tyrannosaurus Debt

TOUR GUIDE: And this is the U.S. Treasury. It sells Treasury Bonds, bills, and notes, and savings bonds to finance the debt. The U.S. government promises to pay the owner interest plus the value of each bond at a future date.

We’ve got to try to tame the debt
And bring it down to size
To let it grow unchecked like this
Is certainly unwise
The debt’s a monster problem
That we really can’t ignore
I guess we should be grateful
That it’s not a carnivore
We’ve got to keep on servicing
Our trillion dollar pet
It’s got a monster appetite
Tyrannosaurus Debt

A fiscal misadventure
With trillion dollar dentures
Tyrannosaurus Debt

TOUR GUIDE: Feeding time is ALL the time.

Duration : 0:3:2

Technorati Tags: bailout, Debt, deficit, depression, economy, Fed, federal, house, inflation, IRS, reserve, Rock, School, tax, Tyrannosaurus

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Duration : 0:7:26

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Expert: Brett Staggs
Bio: Brett Staggs has been working in the mortgage industry for the past 6 years. He has worked for a title company, a credit reporting company, and two major banks.
Filmmaker: Dana Glover

Duration : 0:1:36

Technorati Tags: afford, affordability, Bank, buy, buying, cash, cost, credit, down, estate, home, house, income, interest, Loans, Market, Money, mortgage, only, payment, price, real, Taxes

Expert: Brett Staggs
Bio: Brett Staggs has been working in the mortgage industry for the past 6 years. He has worked for a title company, a credit reporting company, and two major banks.
Filmmaker: Dana Glover

Duration : 0:1:57

Technorati Tags: afford, affordability, Bank, buy, buying, cash, cost, credit, down, estate, home, house, income, interest, Loans, Market, Money, mortgage, only, payment, price, real, Taxes

Duration : 0:4:56

Technorati Tags: barack obama, congress, Debt, gerald celente, house, lauren lyster, legal debt limit, Medicare, RT, Russia Today, Senate, Social Security

Duration : 0:5:14

Technorati Tags: boundaries, co-sign, cosign, Credit Cards, dad, father, finances, house, mom, mortgage, mother, parents, separate

Duration : 0:4:4

Technorati Tags: Bank, banking, buyer, estate, first, for, home, house, Loans, mortgage, ONB, real, sale, time

And guess who will end up paying for this “interest” given to the banks, and everything else? That’s right, you and me, John and Jane Q. Suckers!! The dumb, fat sheep!

By the way, Neil M. Barofsky is a good guy here — don’t beat up on him. He’s in immediate danger of losing his job (if not his life) becauses he’s revealing too many of the Temple’s dark secrets. Barofsky deserves our full support.

You can download Special Inspector General for the Troubled Asset Relief Program (SIGTARP) reports,testimonies and audits at sigtarp.gov. The July 20th, 2009 report, “SIGTARP Survey Demonstrates That Banks Can Provide Meaningful Information On Their Use Of TARP Funds,” is esecially interesting and can be downloaded at
http://sigtarp.gov/reports/audit/2009/SIGTARP_Survey_Demonstrates_That_Banks_Can_Provide_Meaningfu_%20Information_On_Their_Use_Of_TARP_Funds.pdf

Duration : 0:5:48

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