Frank Louis
Yes, government out of housing market: now... OUT!
By Frank Louis
February 10, 2011

Larry Kudlow, I agree with you. Get the government out of housing... along with the other crooks, criminals, and intellectuals who fill the ranks of this industry.

And, Ben Bernanke, I agree with you too. I read this week where you "told lawmakers they need a "credible program" to reduce the nation's growing deficit." How do you propose they do that? With still more "exotic financial mechanisms" as you call them? A little QE2, maybe with sprinkles on top? Do me (and this nation) a favor. Design video games. Get you and the government out of this crisis that you created at our expense.

Stop creating more and more of these new avenues for fraud. Give Americans their money back from the housing crisis you helped create, give them back their hard earned credit scores too while you are at it. Quit robbing Americans with "complex financial practices" that even the people who write them cannot understand much less predict will work.

And, you know, Ron Paul was also right this week... On Kudlow's program this week he said that these economic "strategies" are "delusional." Ron, you are correct! Ron, I bet you agree with the "short keep" too. Good man... read on my friends!

Each month it gets more and more difficult for me to sit down and write about the total combined (synergistic) arrogant ignorance of those in the banking, mortgage, legal, financial and media when it comes to understanding what is happening to the American on the Street during this economic disaster called the "housing crisis."

Sometimes I am actually glad that I am a fairly busy person who can only spend so much time a day focusing on this issue -the demise of our nation- which is happening in front of our very eyes.

Our Constitution is based on some basic principles, taken from the Bible as a matter of fact. A book no truly sophisticated banker, lawyer, or other crisis related "professional" would dare to quote these days I would bet. Yet it is the foundation of our nation's laws and principles. The Founders of this nation would be sick to their stomachs as well, I am sure if they were hear to see, as they realize that of the Scriptural study they put into the drafting of this nation's formative documents has become, perhaps even outlawed. Ignored. Why, might you ask, do I always bring this Scriptural stuff back to the forefront of this discussion? I will tell you; it needs to be addressed!

You can't turn to any news media outlet and not read or hear, within minutes; just how hard hit the national economy is as a result of the "housing bubble." There is really not much more room here for any more fraud is there? I mean the real estate prices at the peek got there through fraud. Would anyone argue that point? The mortgages that got us to this point were filled with fraud, correct? The secondary markets in which these loans were resold, the securities in which they were packaged, the "straw buyers," the realtors, the appraisals, the liar-loans, the "foreign investors;" what aspect of these was not wrought with fraud in this process, in this disaster?

If you do not understand what I am basing this diatribe on, read my past articles, do some objective fact seeking. It's all facts folks, all facts.

So, what does this have to do with the fact that the Founders prayed before writing the Constitution, the Bill of Rights? Everything. If the Christian values that founded this nation, if the Biblical wisdom which is the basis of this nation is all ignored, then what have we to base our knowledge on? Some professor somewhere who taught us some financial double speak? Some Larry Summers, some Tim Geithner? Is that the answer? Some Fed Chairman telling us we need to read more of his articles more closely? I don't think so. Check the facts in this crisis and you will see. These people are all about hypothetical and very little about reality. We, here on the streets, live in reality, not a Petri dish. These guys need to design video games, not our means to survive..

No, today, in these "important roles" we are replacing knowledge for foolishness just as the Bible speaks of and we are too dumb to see it. Many people are, as I had heard it put once "educated beyond their intelligence." Seriously, I do not think that there is one thing anyone can say that would counter this statement. Too "generalized" you say? Perhaps, generalized but true. Very true, and this needs to be addressed now.

Tell me, does a one of the several "professionals" we hear from have any clue as to how to solve and stop this crisis? Their solutions, if you ask me, are just designed to create yet another layer of complexity (that they make money from and is of course over our heads) around something that is very simple. Which is: People were lied to. Give the people who were lied to their money back. Simple. Those loans were faulty; based on the fraudulent appraisals that were based on fraudulent sales. These loans are like toasters that do not work; return them.

Think about it. If people were provided a meaningful way out of this crisis that they did not create (the people who are upside down in their mortgages because they were defrauded), they would no longer see walking away from their mortgage as the viable solution to their personal situation. The foreclosure crisis would stop immediately. However, as this is not about to happen as far as I can tell, things will worsen. People with multiple properties become entangled in an even larger downward spiral and find that they cannot hold on to anything. So they buy a new microwave or Sony product instead of pay their mortgage and the stock market goes up. Just wait. Really, it is happening. It is called wealth redistribution and, as I have written before, this real estate crisis was just another hit taken at the American working public. Just tell me, anyone, what possible motivation is there for an upside-down property owner to work at a short sale, a modification? I can tell you, none.

But back to my original thought. Here are a couple recent episodes in the media that, I believe, even further support my thesis (about ignorant experts and their ignorant and shortsighted opinions).

There is a radio program, a national program: "Handel on the Law." Recently he had a caller on who asked why don't banks just let someone keep their property in a foreclosure (much in the form of the Frank Louis Thesis and "Short Keep" plan we have introduced for over 2 years now) rather than sell it to someone else for a fraction of the loan amount?

Do you know what his answer was? To avoid "fraud." WHAT??? To "avoid fraud?" What is that about? How many times a week do you read about some new housing fraud being perpetrated on people who are trying to modify their mortgages? Fraud from lawyers no less. Really Mr. Handel, Get a life. Think about just how dumb this is. Then he gave that same sound advice to another caller any lawyer will give; "hire a lawyer." Of course, and when the callers reply that they can't afford a lawyer he agrees chuckling something about how one is "not going to find a lawyer to work for free." Boy, is that good advice, and sincere. How many lawyers have we heard of who have been nabbed for fraud in this crisis? Better yet, how many have gotten away?

No Mr. Handel, the solution is just let the people who have been robbed of their life's work and savings by fraudulent lawyers, realtors, appraisers, financial liars, etc have their money back. They were defrauded. Letting them keep their property for what it is actually worth would not be fraud, especially if they put a down payment on the property. Yes, no lawyer, no realtor, no other commissions made off of the backs of Americans who paid down payments on their real estate investments only to learn they were lied to; "defrauded." No, letting these people keep their property is not fraud; you are the fraud in this advice, in this point of view. But, it would be work and no respectable lawyer is going to do anything for free. You are correct. Even if it is right.

Lawyers, financial experts, etc, you have all decided you all know so much. Of course you all know it all because you all made it all up. PhD, so what? This entire crisis is a result of PhD level experimentation in our economy. You are all so smug. Need another example" Read my past article on Dr. Lawrence Summers, Treasury Dept, Harvard Business School. Read about his contributions to the economy.

The founders, when they prepared their research to draft our founding documents, prayed. That does not mean that they recited several choruses of some prewritten prayer. This does not mean that they made some outward acknowledgement to a statue for a media op. No, they read scripture, pondered the words, and took the words to heart.

So, just how would the Founders have proceed after reading 1 Corinthians 3: 19 "The wisdom of the world is foolishness with God"? Do you think they would pass half of the laws they pass today after pondering that simple passage? Impossible!

The Book of Job warns of "vain knowledge." Doesn't it strike you that this radio lawyer, these talking heads on CNBC, the Fed, and from the recent big American Securitization Forum Conference in Orlando this week, don't they need to understand just when knowledge is "vain?" Perhaps even stupid?

Another total cool-aid drinker, Dianna Olic from Realty Check and CNBC reports from yet another meeting, the American Securitization Forum Conference, of economic professionals and educated experts on the subject. They discuss the "Qualified Residential Mortgage standard." A fancy term for putting 20% down on property. Hey, wait a minute; many of us did do that. We put our hard earned $100,000 down on property the banks assured us were worth $500,000. We now owe $400,000 but the bank is going to foreclose on it and sell it to someone else for $100,000 or less. And you tell us it would be somehow "fraud" if we keep it for that amount, for our down payment? The value of the property was fraudulently represented to us in the first place.

And Dianna, you and your experts at the ASF Conference are surprised that housing prices are continuing to go down? You use fancy terms, you discuss important concepts like "uncertainty in housing," "Mortgage Backed Securities," "Risk Retention rules," the Dodd/Frank Bill, etc ... all at the American Securitization Forum.

Yep, "Risk Based Capital," "The risks of out-of-the-money positions, collateralization and bankruptcy safe harbors," "Methods of RMBS Deal Performance Analysis," "Securitization Pricing and Valuation Tools," all set around "The Big Game." Boy, is there some greater ironic truth here. That is what all of this has become: a "big game."

Get off of your power trips and give Americans their money back. Why don't you all securitize al little Scriptural wisdom as did the Founders of this country and see the housing crisis for what it was and is? Fraud. 12 million properties do not simply go into foreclosure without "something fishy" going on, I can promise you that. This was fraud and, like any fraud, these transactions need to be voided. Now, as Ms. Olic reported, the mortgage industry is "now a game with no rules." Finally she says something I can agree with.

What would happen if 12 million faulty toasters had been introduced into our country? What about 12 million bad transmissions or 12 million faulty sets of tires? Wouldn't these be recalled? Wouldn't those who bought these be given their money back? Wouldn't they be even further compensated for damages? Wouldn't these people who had been wronged in this process most likely be part of some huge class action lawsuit? (Giving even more money to lawyers... I know, I know) At least I do not think they would have been accused of causing the crisis by "over-buying" toasters.

Property values are down again this month. This is news? Blame it on unemployment if you want but the truth of it is that people are just not going to continue paying for these properties if they know they have been defrauded buying them and that they will never be in the black no matter how many years they continue to attempt to pay. Mr. Handel, Ms. Olic, others, Think about the reality of what is happening here. Jobs or no jobs.

This week, on Fox News, it was also reported that "28% of home sales were cash in 2010." Larry Kudlow also excitedly reported this on his bank... sorry, I mean network, (CNBC owned by GE... a bank). Foreign buyers buying these... gee, foreign buyers ...

Foreign buyers... wait, aren't many foreigners "minorities"? Of course they are. Wasn't the Community Reinvestment Act all about giving no money down, no-doc loans to minorities? Something about giving them the American Dream without working for it? Didn't many of those who were foreign investors, also never make a payment but often got paid hundreds of thousands of dollars for doing the fraud along with the buyer brkers, loan originators, etc? Now you know this is true, look it up if you doubt.

Now, Americans who paid 20% down on a property appraised for $500,000 due to the bubble created by the no-docs and other "exotic" banking policies and have lost their money can now possibly rent (if they can still qualify with their new, low, credit score) from some "foreign investor" who just bought it for $50,000 or less with the money they walked away with at the previous fraudulent closing. Speculation, perhaps, generalization, ... perhaps. But I am right. Great country... or at least it once was!

Many Americans, just a few years ago paid more down than what these houses are now selling for, are now worth. They had saved, worked hard for decades; they were ripe for the picking I guess. They were wiped out financially because criminals with credentials were scamming the system; "making home affordable," making the "American Dream" a nightmare. And still, not one news/media/financial person has yet to mention the people who played by the rules, people who made their down payments, who believed the paid "professionals" who apprised and sold these properties. Have you seen one of these people interviewed, even mentioned? I don't think so. This fraudulent game will defeat any attempt at saving this economy. Think about it. You know I am right.

© Frank Louis


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Frank Louis

Frank Louis is a print and on-air commentator who offers opinions and solutions on and for the economy, social issues, and the future of this nation. In the Old Testament, Nehemiah 4: 14 instructs us to fight for our houses; something we need to be doing now. Our future generations depend on it!... (more)


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