MANDELMAN’S MONTHLY MUSELETTER ISSUE 6.0
MANDELMAN’S MONTHLYÂ MUSELETTER ISSUE 6.0
HERE IT IS! Â ANOTHER RIVETING EDITION OF THE MUSELETTER THAT MUSES MORE THAN ANY MUSELETTER IN THE COUNTRY…
1. Obama Administration Touts Success in Housing Program!
Census Bureau Q4, 2009: 130.6 Million Housing Units in the US; 18.9 Million Now Vacant
The U.S. Census Bureau reported this week that 18.9 million out of the nations 130.6 million homes are now vacant.Â The Obama Administration was quick to claim victory claiming that this new data represents clear proof that the presidentâ€™s plan to stabilize the U.S. housing market is working beyond anyoneâ€™s expectations.
â€śAt this rate, our banks will have successfully foreclosed on a full one third of all of the homes in the country by 2014.Â We didnâ€™t think we could get this many people bankrupt and on the street during the presidentâ€™s first term,â€ť said Treasury Secretary Tim Geithner.Â â€śWith this kind of success under our belt, we may even try to kill a few million more jobs this calendar year, in stead of waiting until next year as we had originally planned.â€ť
2. Quotes About Goldman Sachsâ€¦ Commentary by Alice Schroeder
Sometimes I think I can say it better.Â Other times, Iâ€™ve said it enough, and Iâ€™m tired of hearing myself talkâ€¦ I meanâ€¦ think.Â (Okay, so I talk to myself tooâ€¦ so whatâ€™s your point.)Â Here are a few paragraphs written by Alice Schroeder of Bloomberg.Â I like herâ€¦
The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.
Goldman Sachs Chief Executive Officer Lloyd Blankfein also reversed himself after having previously called Goldmanâ€™s greed â€śGodâ€™s workâ€ť and apologized earlier this month for having participated in things that were â€śclearly wrong.â€ťÂ Imagine what emotions must be billowing through the halls of Goldman Sachs to provoke the firm into an apology.
No, talk of Goldman and guns plays right into the way Wall- Streeters like to think of themselves. Even those who were bailed out believe they are tough, macho Clint Eastwoods of the financial frontier, protecting the fistful of dollars in one hand with the Glock in the other. The last thing they want is to be so reasonably paid that the peasants have no interest in lynching them.
And if the proles really do appear brandishing pitchforks at the doors of Park Avenue and the gates of Round Hill Road, you can be sure that the Goldman guys and their families will be holed up in their safe rooms with their firearms. If nothing else, that pistol permit might go part way toward explaining why they wonâ€™t be standing outside with the rest of the crowd, broke and humiliated, saying, â€śDamn, I was on the wrong side of a trade with Goldman again.â€ť
Henry Paulson, U.S. Treasury secretary during the bailout and a former Goldman Sachs CEO, let it slip during testimony to Congress last summer when he explained why it was so critical to bail out Goldman Sachs, and — oh yes — the other banks. People â€śwere unhappy with the big discrepancies in wealth, but they at least believed in the system and in some form of market-driven capitalism.Â But if we had a complete meltdown, it could lead to people questioning the basis of the system.â€ť
The bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one. Goldman Sachs blew its cover when the firmâ€™s revenue from trading reached a record $27 billion in the first nine months of this year, and a public that was writhing in financial agony caught on that the profits earned on taxpayer capital were going to pay employee bonuses.
And there you have it.Â If you werenâ€™t moved, perhaps you should consider reading through it again.
3. Mortgage Daily News Reported: HAMP Waiver Eliminates Trial Period Restart Rule
Critical Home Affordable Modification Program Waiver Granted to Participating Servicers
Effective today, a new critical Home Affordable Modification Program (HAMP) Waiver is granted to participating servicers, as detailed below.
Permanent HAMP Waiver for Elimination of the 25% Trial Period Restart Rule #20091203 Supplemental Directive (issued April 6, 2009) required borrowers to be reevaluated for a HAMP trial period if their verified income (as evidenced by the borrower’s documentation) exceeded the initial income information used by the servicer to place the borrower in the trial period by more than 25%. The borrower would be reevaluated based on the program eligibility and underwriting requirements and, if eligible, would have to restart the trial period.
I wish I could believe that this mattered at all.Â But I donâ€™t.Â I donâ€™t believe the lenders and servicers will follow it.Â And I donâ€™t believe a judge will enforce it.Â Am I missing something?
4. FHA IS GOING DOWN
The Washington Post reported the following:
The share of borrowers who are falling seriously behind on loans backed by the Federal Housing Administration jumped by more than a third in the past year, foreshadowing a crush of foreclosures that could further buffet an agency vital to the housing market’s recovery.
I donâ€™t know who talks like that, but itâ€™s bad news at FHA, and it should come as no surprise to anyone.
About 9.1 percent of FHA borrowers had missed at least three payments as of December, up from 6.5 percent a year ago, the agency’s figures show.
Also bad news, right?Â Right.Â Now check this out:
Although the FHA’s default rate has been climbing for months and eating into the agency’s cash, the latest figures show that the FHA’s woes are getting worse even as the housing market shows signs of improvement. The problems are rooted in FHA mortgages made in 2007 and 2008. Those loans are now maturing into their worst years because failures most often occur two to three years after a mortgage is made.
That is one seriously dysfunctional paragraph, let me tell you.Â And its authors, deserve to be punished for flagrant intellectual dishonesty and banned from writing so much as a postcard for at least a year.
For now, just about every major measure of the agency’s financial health is worsening.
Bad, yes, definitely bad.
5. Florida Bankers Drafted and Now Have Presented a Bill to the Florida State Legislature
The bill would turn Florida from a judicial foreclosure state into a non-judicial foreclosure state.
I didnâ€™t know just anyone could draft a bill.Â Isnâ€™t the drafting of legislation traditionally reserved forâ€¦ I donâ€™t knowâ€¦ legislators?Â When did they start outsourcing this function?Â I need to know, because I have quite a few bills Iâ€™d like to draft.
6. Company Strategically Defaults on 11,232 Underwater Manhattan Apartments â€“ Thatâ€™s a BIG Wowie!
Hereâ€™s what was just reported a day or two ago by AP:
Tishman Speyer Properties walks away from 11,232 Manhattan apartments because it can’t pay its mortgage. That’s good business.
Rick Gilson, a college custodial supervisor in South Dakota, wants to walk away from the mortgage on his mobile home. If he does, he’ll be a deadbeat.
Those two borrowers face the same financial dilemma: Their mortgages far exceed the values of their properties. Yet one gets to walk away without guilt, while the other can’t.
The argument against walkaways is that they will wreak economic havoc if a lot of people do it. Banks will have more bad loans on their books. They’ll make fewer loans. Home prices will plunge more.
Is it just me, or does that sound like a reason to do it, and not a reason to not do it.Â I donâ€™t know about my readers, but Iâ€™m at the point where Iâ€™d be willing to do something that gave the banksters in this country, if not HIV, then HERPES for sure.Â To hell with these people.Â If defaulting will harm them, Iâ€™m tempted to do it for no other reason but that they wonâ€™t like it.