U.s. Govt Architects Of Hedge Funds Cause Collapse Of Americas Real Estate Economy
U.S. Govt Architects of Hedge Funds Cause Collapse of Americas Real Estate Economy
By: Robert W. Hand
Designated Broker/Owner
Equity Alliance Properties
www.equityallianceproperties.com
Subprime Crisis? Heavens no this is a complete collapse of the national real estate business sector of the U.S. economy with the mortgage companies and the federal government right at the heart of the matter. The effects of the national real estate business enterprise breakdown with the subprime debacle well underway can be felt throughout every economic sector including Wall Street.
Of course there are still those on Wall Street profiteering on the broken back of the real estate business economy. These investors originated and still draw huge amounts of interest on interest only loans and are the beneficiaries of the federal governments deliberately slow actions to remedy this fundamentally simple matter.
For most Americans the most significant form of wealth we have is in the equity in our homes. Americans are losing their real estate endowments and the effect of a broken real estate business sector has brought the general economy to its knees. The masses are feeling it while the rich get richer. Thats right the guys still making money off of these high interest loan products make the headlines saying Just let time fix it. You didnt think they were out of the game did you? Who do you think these interest only loan payments continue to be paid to? The longer this thing takes to get fixed the longer they will continue to draw huge dividends on their interest only loan products that by design were never intended to be paid back as no money ever goes toward principal. Strong lobby money representing those interests is slowing down the process in Washington where debts take time to repay with a nod and a wink.
I released an article last month http://paradisevalleyblog.com/2007/11/crisisoropportunitytruthabout.htmlportraying the number of incidences of loans in default as a small fraction of the number of loans overall a number which is steadily climbing. Nevertheless keeping those numbers in perspective that still leaves by some estimates 1.1 million Americans losing their residential properties over the next 6 years.
Yes this is a simple matter and it can be fixed with cash money go figure. Lets put the numbers of dollars to fix this problem into perspective in a fashion to which weve all grown accustomed; comparing it to the money we spend on the occupation of Iraq. To continue our
military occupation in Iraq the U.S. Taxpayers pay: 270 million every day; 8.4 billion per month; a total of 600 billion spent and approved Warspending; another 200 billion requested for 2008 which would bring the cumulative total to 800 billion. There have been 10 billion mismanaged and wasted in Iraq per Feb 2007 hearings. There have been 1.4 billion Halliburton overcharges classified by the Pentagon as unreasonable and unsupported. 20 billion was paid to former Halliburton division KBR for food fuel housing and other items. Pentagon auditors deem that 3.2 billion of that is questionable and unsupportable. Some figures predict the cost of the Iraq war topping out at
over 2 trillion.
Just a small fraction of the capital Halliburton defrauded U.S. taxpayers out of alone would fix our mortgage crisis would mend the broken real estate business sector of our economy and would have a positive effect on the overall economy that would far exceed any amount of money we put back into fixing the system. So how much money are we talking about? Congressional Democrats led by Charles Schumer DNY advocate spending just hundreds of millions less than 1 billion of dollars into nonprofits to help homeowners and the overall economy. A spokesman for the senator explains he
is not suggesting the government pay off borrowers loans in full but believes a mixture of counseling and restructuring of the loans would bring down the costs of the program dramatically. Even if we paid all the loans in full it would be a pittance in contrast to the overall federal budget let alone the Iraq war budget if you can call Washingtons fiscal policies budgeting. Further we can spread the cash outlay to fix the problem over a period of 6
years according to the rate schedules of the remaining loans in question.
Such a partial bailout is estimated to cost no more than a few hundred million dollars. Compare that to the 8.4 billion we spend every month bringing Democracy to Iraq with combat airplanes helicopters missiles tanks and troops. Even if we bail out everyone with a bad loan what are we talking about in U.S. dollarsa month or two of what we spend rebuilding the Iraq we so surgically blew up? The top runners of the presidential race spill that much in a single weekend at their white tablecloth fundraisers! Appropriation of a relatively small amount of funds would pull our economy out of the tailspin we currently find ourselves in! But whos sufferinglower middle
class not the rich. The Bush Whitehouse neoconservatives were just this week exposed in lies and manipulation of intelligence data regarding Iran as a nuclear threat. This exposure shamelessly still has not thwarted Bushs rhetoric to invade Iran and threats of World War III as he continues to terrorize citizens abroad and here in America. We had better just save our hard earned tax dollars to fight another war on terror in Iran and forget allocating any funds
to fix the U.S. economy which is after all only hurting the peasants. The war profiteers belong to the class of the super rich. George Bush should be impeached while he and his closest advisors including Dick Cheney should all be formally brought up on charges of international war crimes.
We have seen any number of articles written voicing the opinion Why should we pay our tax dollars to bail out some idiot that was just too stupid to know what he was signing or invoking such profound truths as Its just a bunch of greedy investors anyway they knew what they were
doing. Perhaps those are fair characterizations in some instances but who pays? We all do. Worse yet this type of reaction is exactly what the profiteers of this debacle want to continue to hear so the process remains
stalled by the indecision and lack of common platform by constituents. Profiteers continue to earn big returns on the money already loaned that is not yet in default. This has all been calculated to a T and has been executed as planned. Everyone at the top the architects of the hedge funds knew this was not designed to last! These were all interest only loans
which by design were never intended to be paid back as nothing is paid to principal.
Most folks who have fallen prey were not stupid at all but were just trying to secure their familys future in real estate holdings. Mortgage brokers promised consumers that they could refinance out of their nasty little adjustable rate 2nds or HELOCs in 6 months to 2 years depending on the loan program prepayment penalties etc. No layperson could predict the market falling so far so fast. Refinancing out of these undesirable loan conditions quickly became a lost option as so many homes declined in value to far less than originally loaned on them. This has caught far too many people off guard including seasoned investors and real estate
brokers to write this off as some folks being careless or stupid. It is a more sophisticated problem than that. There are folks that not only predicted this but calculated exactly what has transpired and are the beneficiaries thus: the major interests in and architects of the hedge funds that back these securities and continue to prosper from grotesque interest rates on interest only loans. Understand that they dont want legislation passed that keeps them
from being able to charge insane amounts of interest as these interest only loans mature and reset.
You the average homeowner pay the price as do innocent individuals and families just trying to honestly buy their own piece of the rock. We are ALL losing equity in our homes whether you have a mortgage or not at an alarming rate as property values across the nation continue to decline due to the huge surplus of homes for sale. Some markets are declining much faster than others and were talking about significant amounts of depreciation from every homeowner in some metropolitan areas in Arizona Nevada California and Florida to name a few. As more and more loans go into default more and more properties go on the market in the form of short sales and foreclosures at well under market value. Increasing numbers of properties hit the market putting ever more pressure on existing inventories and dragging prices down further. We are getting to where we have so many short sales and foreclosures on the market that under market is the new norm. Our conventional methods for determining current market value and sales price now take into the effective average the
rising numbers of homes with prices slashed. Buyers seeing the declining market values dont want to catch a falling knife. Folks who want to buy are waiting until they see evidence of the bottom of the market. They wont perceive any indication of the bottom as meaningful unless they see property values hold steady then raise again. This will not happen as long as more defaults resulting in short sales and foreclosures continue to flood the
market day after day week after week and month after month. Consumers keep asking as do REALTORs when are we going to see the bottom of this market? The answer is so simple even a cave man can do it; WHEN WE STOP THE CYCLE!!!
Why then if it is such a simple fix are we not already on our way to enjoying the recovery as a result of taking these simple steps. The answer: Greed and the power of lobbying money on capital hill have the process locked up and bogged down in red tape. Interest is earned over time and with interest rates already in place for those making money from these interest only loans they want more time to keep lining their pockets. This expresses one of the most frequently used relations in Algebra: Principal x Rate x Time = Interest Earned. Time is on their side; the super rich who invested in the hedge funds that back the mortgage securities we know as subprime loans. They are getting the time they want because this Republican Whitehouse favors big business big money and big campaign lobbyist
contributors well represented in this group. Government is dragging their feet in spending the money to fix the problem at the pleasure of these predators.
So folks protect your equity protect your interest in your own real estate holdings protect your childrens chances of profitable
real estate holdings in America and contact the congresspersons and senators whom preside over your districts. Give a positive voice to the budget to fix this problem. It will pay back huge dividends to our economy as a whole as we recover and stop the downward fall of the equity in our own homes.
This type of government subsidized economic recovery would not be without precedent. Consider the Savings and Loan crisis of the 1980s where the government bailed out SLs to the tune of 150 billion 1980s dollars. We can fix our subprime crisis today for a fraction of that amount.
Currently on the hill there is proposed legislation to impose new limits on the adjustable rate mortgages scheduled to reset.
Congress has been and is trying to pass legislation to put a freeze on interest rates. These are bandaids for a bullet wound. Let your voice be heard. Put some pressure on politicians to get this subprime debacle resolved with swift and certain action! It is a simple matter and the beneficiaries of this thing dragging out are the very entities who caused it in the first place. Together lets end it now!
Do you want to play hardball? All right then lets consider that the federal government does not want the average American to gain dramatically in personal wealth. Why would that be? Glad you asked. Since the years of Reaganomics and theories of a trickle down economy always reminds me of being pissed on and deregulation our country has moved ever more from the worlds shining example of Democracy to a text book example of a Republic aristocracy with the Center of Power no longer held by the masses the common man. The Power Center is now with the elite the upper class the super rich the multibillion dollar corporate entities the Texas based oil brokerage firms that ultimately determine tax code foreign policy federal budget allocations and the decision to go to war with whom and when and whom have the power and influence to throw elections.
It does not serve the rich constituents of this elitist government entity strangling America to allow its citizens to amass wealth. No my friends that would pull too much of the Power back towards the center. Think Washington doesnt give any thought to that dynamic? Of course they do. Washington is so paranoid of the power of its citizens that they are breaking constitutional laws or rewriting the constitution as they see fit to ensure CONTROL threatening our basic civil liberties in the process. Thats right even firefighters who can regularly in the course of their duties gain access into peoples homes without a search warrant are now being trained to look for any signs that a citizen might not agree somehow with government policies and might thus be considered a threat to the government or even a terrorist. What a lot of bullocks. Im a veteran of the U.S. Navy whose job was gathering and disseminating intelligence and have stood for protecting and honoring our nation. Now its obvious I dont agree with government policies. They would now view me as a threat! Sounds more like a Republic regime than a
Democracy. Sounds a lot like World War II Germany doesnt it? Well thats America today as we know it. Are you more comfortable with your head in the sand? Thats ok go back to sleep this article is about over. Germany went from a Nation of knowing to a nation of believing. Are we following in their footsteps as foolhardy goodwilled ignorant patriots? Too often we blindly
believe the lies told by the President and his government instead of challenging others and ourselves with the truth. I remember as a child learning of the atrocities in Germany under Hitler and asking How could all those people let this happen? and how could all those people have been fooled by their government? In the words of Bob Dylan; Patriotism is the last refuge to which a scoundrel clings; steal a little and they throw you in jail; steal a lot and they make you king. This country has been preying on the good will of its unsuspecting citizens and it will be our undoing if we dont wake up.
Many Americans were making big money during the real estate boom in large part due to the ease with which funds were available to acquire primary and investment real estate. So many of us bought in to it and for most it has only benefited the lending institutions. Once the real estate investment game became profitable for the common citizen it would selfdestruct right before our eyes. The timing was calculated planned and the program executed by millions of exuberant homeowners and firsttime real estate investors not suspecting the falling axe. But those in the know the architects of the hedge funds knew exactly what would transpire. They didnt bet their billions on a hunch! Oh no they calculated every phase of the process and watched it deliver dividends.
Let me offer this challenge to other Real Estate Brokerage firms Mortgage Brokerage Firms Banks and Title Companies: Equity Alliance Properties will pledge 1000000 of every 4000000 it brings in net revenue towards any program signed into law organizing such private funding. Lets take back control of the real estate business sector for
the greater good of the American homeowner!
About the writer:nbsp;nbsp;Robert Hand is the Designated Broker Owner President and Founder of Equity
Alliance Properties an
Arizona real estate firm. With over 12 years of experience in Arizona and
Phoenix area real estate he offers a CLEAR ADVANTAGE for his clients.
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