Frank Louis
Housing crisis: solutions
By Frank Louis
This nation was founded on some very basic principles. Among these are the freedom to own property, freedom to pursue happiness and the freedom of religious faith. The founders looked to Scripture for inspiration in drafting the founding documents of this nation. This practice seems to have become lost and many of our freedoms appear to be going by the way as well.
Would you ask those in the sex trade to draft moral codes? Then why would one ask a realtor or mortgage banker, much less the government, how to solve the housing crisis? It is not logical! So read on and let me explain two potential solutions that I call the "Short Keep ©" and "Cash for Keeps ©." Just perhaps, if the banks and realtors who perpetrated this Ponzi Scheme in the first place would consider these options rather than the short sale, foreclosure, or the cash for keys program in ending the downward spiral that is killing our economy our nation may have a chance. In this, the first in a series of articles, I will lay out the basis for a logical, much over due proposal, that would end the crisis overnight.
As I sit here and listen to Barney Frank, Tim Geithner and other politicians wonder what legislation they can write. Larry Kudlow (CNBC) comments on how "out of balance the entire system is." "There is no confidence in the market" says Diana Orlik (CNBC) and she mumbles on about how people need to "believe in their mortgages again." They all agree that Fannie and Freddie were a direct cause of this meltdown... I would go a bit further and add that realtors, appraisers, and mortgage brokers selling properties and writing loans to people who never intended to make even one payment while often getting tens of thousands of dollars back at "closing" just may have helped in creating the crisis as well... not Americans who put 20% or more down.
If you are upside down because you put no money down, and had a "no doc, no income verification" loan, then tell your house "good bye," even if you live there; you over-bought. Unfortunately, it seems that every government program out there intends to prop these very people up. If you sold them this house or mortgage you should probably be in jail. You need, at minimum, to return your commissions... and give the stolen down payments back to those who bought earnestly.
Let me ask you "How can you trust anyone you see discussing this topic in the media?" Have you noticed that on just about every radio / TV show those discussing this topic are either a realtor, mortgage broker, or a politician? I am not any of these! I am just one of the millions of property owners who have watched as our entire life savings evaporated in just a very few months; and not because Americans "overbought." Do these "industry professionals" have our best interest in mind or do they have making more commissions in mind?
America's economic crisis is the housing crisis. There is not one talking head that disputes this fact. Some say it will be 40 years or more before property values return to their highs, if ever. Banks continue to foreclose, short sale, think up programs like "cash for keys." The spiral of the housing continues in a downward direction with growing momentum. These practices may work in normal times but this economy is uncharted territory. Currently, 1 in 5; 20% of properties are upside down in value with more to follow. The housing market has not been worse since the depression; don't these people who debate the solutions recognize this fact? Standard solutions are not working and will not.
There may be a blip on the screen. Some "professional" in the real estate industry on the air will tell us that the problem is subsiding but it is all smoke and mirrors! Foreclosures are "rationed" by the banks in a strategic systematic way to keep the glut (appear) under "control." If you bought after 2002, your house is probably already underwater and when you go to sell it or when you die, and the value is gone you (or your estate) may be in debt for the difference, credit score destroyed, and you are finished economically (unless you are perhaps under 30). And it does not matter if the house next door to yours is an investment property or not. More and more people are "walking away" from their properties and this does not help your home value. The forecast is that the number of houses upside down in value may reach 50% before year's end.
The solution to this crisis is an obvious fact that is evidently not within the vocabulary of those in the housing business or in the media: the "Short Keep ©," and the "Cash for Keeps ©" program. Both of these concepts will make properties again cost effective to own. And the best part is: "No commissions!" No one in the business of selling real estate and mortgages stands to make a dime. Heaven forbid. The only end that will result is that property values will stabilize. People will keep their homes and investment properties. The economy will turn around.
In the Old Testament, Nehemiah 4: 14 is a mandate that states "Remember the Lord which is great and terrible and fight for your brethren, your sons and your daughters, your wives and your houses." In this series of articles, that is exactly what we will do; "fight for our houses." I will present several points that will support the concepts I have outlined. We will see without a doubt how most people who own underwater properties could easily keep them should their mortgage balance be brought to the same level that the banks will realize from a short sale or foreclosure. For rental properties, values will stabilize, monthly payments will be lowered and so will the rents that need to be charged. If you want to learn more, tune into the Frank Louis radio show every week on WNRI, 1380 AM. The show airs every Monday morning at 9:30 Eastern.
© Frank Louis
This nation was founded on some very basic principles. Among these are the freedom to own property, freedom to pursue happiness and the freedom of religious faith. The founders looked to Scripture for inspiration in drafting the founding documents of this nation. This practice seems to have become lost and many of our freedoms appear to be going by the way as well.
Would you ask those in the sex trade to draft moral codes? Then why would one ask a realtor or mortgage banker, much less the government, how to solve the housing crisis? It is not logical! So read on and let me explain two potential solutions that I call the "Short Keep ©" and "Cash for Keeps ©." Just perhaps, if the banks and realtors who perpetrated this Ponzi Scheme in the first place would consider these options rather than the short sale, foreclosure, or the cash for keys program in ending the downward spiral that is killing our economy our nation may have a chance. In this, the first in a series of articles, I will lay out the basis for a logical, much over due proposal, that would end the crisis overnight.
As I sit here and listen to Barney Frank, Tim Geithner and other politicians wonder what legislation they can write. Larry Kudlow (CNBC) comments on how "out of balance the entire system is." "There is no confidence in the market" says Diana Orlik (CNBC) and she mumbles on about how people need to "believe in their mortgages again." They all agree that Fannie and Freddie were a direct cause of this meltdown... I would go a bit further and add that realtors, appraisers, and mortgage brokers selling properties and writing loans to people who never intended to make even one payment while often getting tens of thousands of dollars back at "closing" just may have helped in creating the crisis as well... not Americans who put 20% or more down.
If you are upside down because you put no money down, and had a "no doc, no income verification" loan, then tell your house "good bye," even if you live there; you over-bought. Unfortunately, it seems that every government program out there intends to prop these very people up. If you sold them this house or mortgage you should probably be in jail. You need, at minimum, to return your commissions... and give the stolen down payments back to those who bought earnestly.
Let me ask you "How can you trust anyone you see discussing this topic in the media?" Have you noticed that on just about every radio / TV show those discussing this topic are either a realtor, mortgage broker, or a politician? I am not any of these! I am just one of the millions of property owners who have watched as our entire life savings evaporated in just a very few months; and not because Americans "overbought." Do these "industry professionals" have our best interest in mind or do they have making more commissions in mind?
America's economic crisis is the housing crisis. There is not one talking head that disputes this fact. Some say it will be 40 years or more before property values return to their highs, if ever. Banks continue to foreclose, short sale, think up programs like "cash for keys." The spiral of the housing continues in a downward direction with growing momentum. These practices may work in normal times but this economy is uncharted territory. Currently, 1 in 5; 20% of properties are upside down in value with more to follow. The housing market has not been worse since the depression; don't these people who debate the solutions recognize this fact? Standard solutions are not working and will not.
There may be a blip on the screen. Some "professional" in the real estate industry on the air will tell us that the problem is subsiding but it is all smoke and mirrors! Foreclosures are "rationed" by the banks in a strategic systematic way to keep the glut (appear) under "control." If you bought after 2002, your house is probably already underwater and when you go to sell it or when you die, and the value is gone you (or your estate) may be in debt for the difference, credit score destroyed, and you are finished economically (unless you are perhaps under 30). And it does not matter if the house next door to yours is an investment property or not. More and more people are "walking away" from their properties and this does not help your home value. The forecast is that the number of houses upside down in value may reach 50% before year's end.
The solution to this crisis is an obvious fact that is evidently not within the vocabulary of those in the housing business or in the media: the "Short Keep ©," and the "Cash for Keeps ©" program. Both of these concepts will make properties again cost effective to own. And the best part is: "No commissions!" No one in the business of selling real estate and mortgages stands to make a dime. Heaven forbid. The only end that will result is that property values will stabilize. People will keep their homes and investment properties. The economy will turn around.
In the Old Testament, Nehemiah 4: 14 is a mandate that states "Remember the Lord which is great and terrible and fight for your brethren, your sons and your daughters, your wives and your houses." In this series of articles, that is exactly what we will do; "fight for our houses." I will present several points that will support the concepts I have outlined. We will see without a doubt how most people who own underwater properties could easily keep them should their mortgage balance be brought to the same level that the banks will realize from a short sale or foreclosure. For rental properties, values will stabilize, monthly payments will be lowered and so will the rents that need to be charged. If you want to learn more, tune into the Frank Louis radio show every week on WNRI, 1380 AM. The show airs every Monday morning at 9:30 Eastern.
© Frank Louis
The views expressed by RenewAmerica columnists are their own and do not necessarily reflect the position of RenewAmerica or its affiliates.
(See RenewAmerica's publishing standards.)
