So last nights debate was filled with more discussion about a plumber from Ohio than about the War in Iraq, and justifiably so if you ask me.
Plumber Joe was interviewed by Diane Sawyer this morning and she asked him that since he thought it was unfair to raise taxes on people making over $250,000 a year, then what about the people making $1M or $5M a year and if he thought the wealth should be spread around.
Joe replied "why should they be penalized for being succesfull and working hard to achieve the American Dream? If Obama's tax plan goes into affect, and he punishes people for working hard and making over $250,000 a year, what if they then decide that $150,000 is enough? So they rasie their taxes... where does it stop?"
Plumber Joe Wurzelbacher from Holland, Ohio... you my friend, are my new hero.
The consitution states in the 16th Amendment that "The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without aportionment among the several states, and without regard to any census or enumeration"
Can someone smarter than me please explain to me where in the consitution it states you should be overtaxed for working harder and smarter than the neighbor next door, and achieving the "American Dream"?
Can someone please explain to me where in the consititution it provides for a socialist view of spreading the wealth? Higher taxation for the people who have EARNED more money is LEGAL THEFT and nothing more.
Explain to me where it is my responsibility in the constitution to pay more money than the deadbeat who pretends to be injured because he/she is just too damn lazy to work? Why should food and clothes, and ammenities be taken away from my children because I worked very hard to get those things, to give them to the family down the street who does not have those things becasue they refuse to go to work?
Please keep in mind when you read this that I am not a wealthy white kid from the suburbs. My parents were drug addicts, my mother was on wellfare my entire life, and I was homeless (actually living under a bridge, in homeless shelters, and in cars) for over two years as a child.
I worked very hard to get where I am, and I made a lot of money in the past several years. I paid a lot of income taxes for doing so. Last year I was forced to shut my business down and I lost over $60,000. I am not talking about $60K I borrowed and lost, I am talking about $60K of my own earned, and saved money that is now GONE. Did I receive wellfare, or health insurance for my children for being low income? No. My net income on last years tax return was $0. I lost my home, my business, and nearly my self-respect and sanity, but I knew all along I had the ability to rebound and get it all back. It was not the governments fault that the mortgage industry collapsed. They may have been able to do something about it to keep it from happening, but it is NOT their responsibility to do so. Looking back, I made a few bad decisions, at bad times, and did not have the financial backing to see me through the storm.
I work hard everyday to get back what I lost (note I said I LOST and not what the government caused me to lose) and this year I will make a modest income. My children don't have health insurance, but I don't feel it is the governments responsibility to give it to me. My home still has not been foreclosed on, though it should have been by now, but I do not believe it is the governments responsibility to bail me out.
I have my own bailout plan, similar to Joe the plumber in Ohio. Get off my ass, and do something about it. Work hard and find a way to get back on top instead of sitting around complaining about "how bad the goverment screwed us" and how I am going to "wait and see who gets elected and see what they do to help me out before I decide to help out myself."
Wake up people. Everyone and I do mean everyone has the freedom, and the power to do whatever they want to do in life. Go out and do it. Putting it all on the line and failing is more respectable than never going for it at all and depending on the government to bail me out>
The more we ask the government to fix our self-created problems, the less freedoms and consitutional rights we will have in the future. The moer we ask them to do for us, the more they will have to take from us to do so. Too much government, and too much regulation will cripple what is great about America; it's citizens, and our drive to achieve. If we allow the government to penalize the over-achievers, then what exactly is the American Dream?
Someone with views other than mine, please explain this to me. Anyone who has anything else to add, please feel free to do so.
Thursday, October 16, 2008
Monday, March 24, 2008
Funny News from around the US
Well hello again anyone who even bothers to read this stuff! I don’t get many comments so I am starting to wonder whether or not anyone bothers to give a darn. Whether you do or not, I will continue to write. It helps me focus my otherwise wandering mind that cannot seem to concentrate on just one thing. However, when I write, no matter what about, I can seem to focus for as long as it takes to get out what I want to say...
So here it goes... I am going to start this weeks blog with some funny (or not so funny) news from around the globe this past week or so.
From a trailer park in NESS CITY KANSAS - - "Woman sits on boyfriends toilet for two years!"
Yes you heard it correctly... The lady was apparently mentally ill and was afraid to come out of the bathroom. When her boyfriend finally called for help, nearly two years after she went into the bathroom and never came out, the emergency crew found her literally STUCK to the toilet. Her body had grown around it. Not only that but an infection that had broken out in her legs has damaged her nerves so badly that she will likely spend the rest of her life in a wheelchair...
Port St L:ucie Florida - - "Wife tried to drive over man 20 times"
While I don’t yet have all the details on this one, the dispute apparently started over an argument about $300. The wife, with her infant buckled in the back seat, drove her mini-van after the husband and chased him around the back yard trying to run him over approximately 20 times. He eventually threw a brick at the windshield to get her to stop. Now I am no marriage counselor, but this couple is SCREWED!!!!! You know the cost of a home appraisal costs about $300! Maybe they were trying to refi!!!! All I can say is I feel very bad for the poor child who will have to grow up with one of those two "adults", and I use that term loosely!
From Chicago Illinois - - "Illinois-shaped cornflake sells on Ebay for $1350"
HOLY CRAP is all I can say to this one. First of all, who the hell even looks at corn flakes to see if they look like something? Second, who the hell would buy it? I am running out to the local grocery store right now to buy evey box of corn flakes on the shelves and anything that remotely looks like anything will be on EBAY this afternoon.
New York, New York - - "Customer files suit over strippers shoe"
Why can’t I be that lucky? A securities trader was allegedly struck in the eye by the heel of a strippers shoe while receiving a lap dance at the Hot Lap Dance club near Madison Square Garden.
I guess the stock market is bad for EVERYONE these days if the people who work most closely with it are suing strippers for damages from a lap dance. Silly me, but most folks I know would call it a battle scar! Maybe I should start sleeping with prostitutes and try to sue one when I catch a VD!
And last but not least...
Lambertville, Michigan - - "Teen tried to steal cruiser’s gas".
Unmarked police cars were stationed around a construction area that had been the site of two arsons in the previous week. Police watched a 17 yr old man walk from his home carrying a bucket, and he walked up to an unmarked police car. The teenager began siphoning gas from the police car when the officer got out of the car and arrested the juvenile. Apparently the moral of this story is, if you are going to set things on fire, make sure there is no one in the car you steal the gas from.
All of the above stories can be verified at the website at the bottom of my blog. There were other good news stories you can read from this page that just didn’t make my short list this week.
And now onto the financial part of this weeks blog... most of you will likely now stop reading. But for anyone who is left....
This week the National Association of Realtors announced that home sales in February rose from the previous month stopping a 7 month continuous decline. So what does this mean? Well they are two sides to every story, so I will leave it up to you to decide which one to believe.
The positive side of the story is this... Any good real estate news is good news for those of you currently trying to sell your home. The media controls the buyers in this country more so than anyone, or anything else. Last week there was a report that we were near the "bottom" of the real eastate plunge and homes would start to sell. This was released as a prelude to the expected announcement of the NAR’s announcement this week. There are homes starting to sell, and rates are condusive to allow people to afford some homes again. So if you are currently in the selling market, there could be some good fortunes for you coming soon. Overall, any increase in home sales is good news as it will spur the housing market somewhat.
Now on to the bad side of the story. Although home sales were up 3% from last month stopping a half year long skid, home sales are still down nearly 30% from February last year. No information was released from the NAR stating what percentage of the home sales were bank owned foreclosures or borrower owned short-sales (meaning the bank allows you to sell the home for less than what is owed on it to avoid foreclosure), but many analysts have voiced their oppinions that those sales account for nearly half of the sales in February. Many people think we still are two to three years from the bottom and that home prices will have to fall as much as 30% more for the market to rebound.
I look at it like this. Both sides are right to some degree. The NAR is trying to drive any good news it can into the market by spinning a 30% decline from Feb last year into a posotive by trying to find the good side of things. The more good news they can get out, the better off the market is, and let’s be honest, any increase in home sales is good news! Homes will sell, and not just to investors, and sellers will be able to sell. Everybody wins in this case and I don’t see the bad side of that.
The naysayers believe we haven’t yet hit bottom and home prices will continue to fall. They are correct also, but I do not believe home prices will have to come down another 30% for that to happen. If home prices fall another 30%, that means millions of current homeowners will have to walk away from their homes and give them back to banks in voluntary foreclosures. The majority of homes in the market place do not have enough equity in their homes to account for a 30% decline. They will be stuck in their homes forever or just have to give them up. The bottom line is, the government will not stand by and allow this to continue forever. They will keep cutting rates, and keep pumping money into the banks, allowing people to finance more, for less. While we may not see double digit value increases again anytime in the next 5 - 8 years, I do not believe we will continue to see double digit decreases nationwide.
Specific areas which just got too expensive, too fast, may continue to see a decline, but the nation as a whole is poised for a rebound.
It will not be immediate. It will take time. By early 2009 I am predicting the housing market will begin its return to normalcy, meaning a stable supply and demand of homes, allowing for normal appreciation, parallel to inflation.
It will take another 9 - 12 months to get rid of some of the excess supply on the market (mostly related to the ever increasing abundance of foreclosures), but once that is done, we will be back to the days of old. Days where people don’t buy too much home for their pockets to keep up (I have made this same mistake myself so this is in no way a slight to anyone who is struggling to survive right now) and they won’t have to because home prices won’t far exceed the level of incomes as they do today.
So take this weeks news as good or bad, depending on what side of the bed you woke up on this week, but in my business, any news of better days is uplifting to me.
To those of you looking to buy right now, you can still find good deals. Sellers are starting to lower prices, because they have to, and in turn, buyers are starting to buy more. The supply will dwindle down, and once it does, home prices will stop falling, homes will continue to sell, and prices will remain stable until the next big BOOM.
The values of Real Estate and gold have always appreciated, and have always made it through very rough and troublesome times. There will always be peaks and valleys in the graph that is home appreciation, but there have ALWAYS been more peaks then valleys.
We are in a valley right now, but I do believe the bottom is not far off and we will start another ascent to the top. Anyone looking to buy... now really is a good time. There are more than enough homes on the market, and more than enough sellers willing to drop prices. It may take a few offers to find the right one, but it’s out there. Just go find it!
Here is the link to my news stories from above...
http://www.msnbc.msn.com/id/4429957/
Everyone have a great day and I hope this week is uplifting and positive for everyone.
James
So here it goes... I am going to start this weeks blog with some funny (or not so funny) news from around the globe this past week or so.
From a trailer park in NESS CITY KANSAS - - "Woman sits on boyfriends toilet for two years!"
Yes you heard it correctly... The lady was apparently mentally ill and was afraid to come out of the bathroom. When her boyfriend finally called for help, nearly two years after she went into the bathroom and never came out, the emergency crew found her literally STUCK to the toilet. Her body had grown around it. Not only that but an infection that had broken out in her legs has damaged her nerves so badly that she will likely spend the rest of her life in a wheelchair...
Port St L:ucie Florida - - "Wife tried to drive over man 20 times"
While I don’t yet have all the details on this one, the dispute apparently started over an argument about $300. The wife, with her infant buckled in the back seat, drove her mini-van after the husband and chased him around the back yard trying to run him over approximately 20 times. He eventually threw a brick at the windshield to get her to stop. Now I am no marriage counselor, but this couple is SCREWED!!!!! You know the cost of a home appraisal costs about $300! Maybe they were trying to refi!!!! All I can say is I feel very bad for the poor child who will have to grow up with one of those two "adults", and I use that term loosely!
From Chicago Illinois - - "Illinois-shaped cornflake sells on Ebay for $1350"
HOLY CRAP is all I can say to this one. First of all, who the hell even looks at corn flakes to see if they look like something? Second, who the hell would buy it? I am running out to the local grocery store right now to buy evey box of corn flakes on the shelves and anything that remotely looks like anything will be on EBAY this afternoon.
New York, New York - - "Customer files suit over strippers shoe"
Why can’t I be that lucky? A securities trader was allegedly struck in the eye by the heel of a strippers shoe while receiving a lap dance at the Hot Lap Dance club near Madison Square Garden.
I guess the stock market is bad for EVERYONE these days if the people who work most closely with it are suing strippers for damages from a lap dance. Silly me, but most folks I know would call it a battle scar! Maybe I should start sleeping with prostitutes and try to sue one when I catch a VD!
And last but not least...
Lambertville, Michigan - - "Teen tried to steal cruiser’s gas".
Unmarked police cars were stationed around a construction area that had been the site of two arsons in the previous week. Police watched a 17 yr old man walk from his home carrying a bucket, and he walked up to an unmarked police car. The teenager began siphoning gas from the police car when the officer got out of the car and arrested the juvenile. Apparently the moral of this story is, if you are going to set things on fire, make sure there is no one in the car you steal the gas from.
All of the above stories can be verified at the website at the bottom of my blog. There were other good news stories you can read from this page that just didn’t make my short list this week.
And now onto the financial part of this weeks blog... most of you will likely now stop reading. But for anyone who is left....
This week the National Association of Realtors announced that home sales in February rose from the previous month stopping a 7 month continuous decline. So what does this mean? Well they are two sides to every story, so I will leave it up to you to decide which one to believe.
The positive side of the story is this... Any good real estate news is good news for those of you currently trying to sell your home. The media controls the buyers in this country more so than anyone, or anything else. Last week there was a report that we were near the "bottom" of the real eastate plunge and homes would start to sell. This was released as a prelude to the expected announcement of the NAR’s announcement this week. There are homes starting to sell, and rates are condusive to allow people to afford some homes again. So if you are currently in the selling market, there could be some good fortunes for you coming soon. Overall, any increase in home sales is good news as it will spur the housing market somewhat.
Now on to the bad side of the story. Although home sales were up 3% from last month stopping a half year long skid, home sales are still down nearly 30% from February last year. No information was released from the NAR stating what percentage of the home sales were bank owned foreclosures or borrower owned short-sales (meaning the bank allows you to sell the home for less than what is owed on it to avoid foreclosure), but many analysts have voiced their oppinions that those sales account for nearly half of the sales in February. Many people think we still are two to three years from the bottom and that home prices will have to fall as much as 30% more for the market to rebound.
I look at it like this. Both sides are right to some degree. The NAR is trying to drive any good news it can into the market by spinning a 30% decline from Feb last year into a posotive by trying to find the good side of things. The more good news they can get out, the better off the market is, and let’s be honest, any increase in home sales is good news! Homes will sell, and not just to investors, and sellers will be able to sell. Everybody wins in this case and I don’t see the bad side of that.
The naysayers believe we haven’t yet hit bottom and home prices will continue to fall. They are correct also, but I do not believe home prices will have to come down another 30% for that to happen. If home prices fall another 30%, that means millions of current homeowners will have to walk away from their homes and give them back to banks in voluntary foreclosures. The majority of homes in the market place do not have enough equity in their homes to account for a 30% decline. They will be stuck in their homes forever or just have to give them up. The bottom line is, the government will not stand by and allow this to continue forever. They will keep cutting rates, and keep pumping money into the banks, allowing people to finance more, for less. While we may not see double digit value increases again anytime in the next 5 - 8 years, I do not believe we will continue to see double digit decreases nationwide.
Specific areas which just got too expensive, too fast, may continue to see a decline, but the nation as a whole is poised for a rebound.
It will not be immediate. It will take time. By early 2009 I am predicting the housing market will begin its return to normalcy, meaning a stable supply and demand of homes, allowing for normal appreciation, parallel to inflation.
It will take another 9 - 12 months to get rid of some of the excess supply on the market (mostly related to the ever increasing abundance of foreclosures), but once that is done, we will be back to the days of old. Days where people don’t buy too much home for their pockets to keep up (I have made this same mistake myself so this is in no way a slight to anyone who is struggling to survive right now) and they won’t have to because home prices won’t far exceed the level of incomes as they do today.
So take this weeks news as good or bad, depending on what side of the bed you woke up on this week, but in my business, any news of better days is uplifting to me.
To those of you looking to buy right now, you can still find good deals. Sellers are starting to lower prices, because they have to, and in turn, buyers are starting to buy more. The supply will dwindle down, and once it does, home prices will stop falling, homes will continue to sell, and prices will remain stable until the next big BOOM.
The values of Real Estate and gold have always appreciated, and have always made it through very rough and troublesome times. There will always be peaks and valleys in the graph that is home appreciation, but there have ALWAYS been more peaks then valleys.
We are in a valley right now, but I do believe the bottom is not far off and we will start another ascent to the top. Anyone looking to buy... now really is a good time. There are more than enough homes on the market, and more than enough sellers willing to drop prices. It may take a few offers to find the right one, but it’s out there. Just go find it!
Here is the link to my news stories from above...
http://www.msnbc.msn.com/id/4429957/
Everyone have a great day and I hope this week is uplifting and positive for everyone.
James
Friday, March 14, 2008
Just an answer to a few questions I get daily.
I have decided to start my own blog about the mortgage industry. It will cover several aspects and be updated semi-weekly to weekly. There is so much I want to write about that there might even be ten posts this weekend. A good friend has been asking me to write alongside his. I pondered this for several days and decided, hey why not. He already made some wonderful blogs and has asked me to run his into mine as well. I will happily do so, because they are very educational and well written.
I love the industry and get several questions about it weekly. Probably not as many questions as people should be asking though. Let’s face it. It’s an intimidating subject to everyone, and very foreign. Many people in my industry know less than many of you.
So I guess the first questions I will address are the ones I get SEVERAL times a week.
"Why are you still in the mortgage business?"
Well, I love it. I decided how hard I work, and what I make corresponds to that effort. I am able to determine my own destiny here. I get to use my personality to meet people and hopefully help them.
"Isn’t it a horrible time in the business?"
Yes. It’s a whole different world compared to a year ago. Thing is, a year ago the money was so easy that it was not at all realistic. I don’t know the exact statistics, but I can get it close. October of every year you have to renew your Florida Mortgage Brokers License. Well in 2006 there were roughly 90k licensed brokers in Florida. In October of 2007 about 47k’ish actually renewed them. For some reason I think it may have been less. You can count on those rough statistics being true across the country. That speaks for itself!
Lots of people came into the industry over the last five years or so, made lots of money with very little effort, and ran for the hills when they had to begin working more than four hours a day. Let me rephrase that, when they had to actually work. Yes, I am as a matter of fact telling you that people were making $150,000 a year the last 4 years in my position and spending as little as 20 hours a week in the office. I sat next to them, I think I out performed them all when the times started getting tough. Maybe ONE of them produced at my level. Now what I did last year was by no means astounding. It was enough, and I know the people I worked with are either jobless or in some other business now, with jobs I am quite sure they hate. I on the other hand am gaining peace of mind sitting here educating you and working on my business.
The thing is this business isn’t bad now if you want to work. Your house isn’t going anywhere. Trust me; your home has gained a TON of value over the last few years. It’s not going to lose all of that unless you pour gasoline on your carpet and light a match. I know you won’t do that. As a matter of fact, don’t be greedy about it possibly losing value now. Most wont, the values are just dormant. If it is, look at what you’ve gained and be joyful about that.
And here’s a statistic that will blow your mind. This is a fact. Ill will touch more on it later in another facet but for now I will get it out there. The average America mortgage lasts three years. Yup, I said three. Can’t be true right? Bet that blows your mind. It blew mine when I first heard it. That’s a stat, not a made up number. It comes from the US Census. You have 30 year fixed rate loan imprinted in your head because you’re a US Citizen and you conform to the norm. You call a broker or bank and you say "hey, what do I qualify on a 30 year fixed rate loan?" You find the lowest rate and you and the Mr. or Mrs. make your way out to dinner, happy that refinancing is over. BUT, the 7 year fixed rate loan was at 5.125% and the 30 year fixed rate was at 6.25%. You know you won’t be in that house in 7 years. You just wasted a ton of money.
I am by no means saying that 30 year fixed rate loans are bad. I think they are great. But there are 1000’s of loan programs out there. It’s all a matter of finding someone you trust to do your mortgage for you and then making sure they actually are looking out for your best interests. My goal in this blog is to educate people who are willing to read about their homes, the market, and one of the biggest decisions they make in their lifetime (and according to the US Census Bureau, they make it a handful of times in their life.)
Jason
I love the industry and get several questions about it weekly. Probably not as many questions as people should be asking though. Let’s face it. It’s an intimidating subject to everyone, and very foreign. Many people in my industry know less than many of you.
So I guess the first questions I will address are the ones I get SEVERAL times a week.
"Why are you still in the mortgage business?"
Well, I love it. I decided how hard I work, and what I make corresponds to that effort. I am able to determine my own destiny here. I get to use my personality to meet people and hopefully help them.
"Isn’t it a horrible time in the business?"
Yes. It’s a whole different world compared to a year ago. Thing is, a year ago the money was so easy that it was not at all realistic. I don’t know the exact statistics, but I can get it close. October of every year you have to renew your Florida Mortgage Brokers License. Well in 2006 there were roughly 90k licensed brokers in Florida. In October of 2007 about 47k’ish actually renewed them. For some reason I think it may have been less. You can count on those rough statistics being true across the country. That speaks for itself!
Lots of people came into the industry over the last five years or so, made lots of money with very little effort, and ran for the hills when they had to begin working more than four hours a day. Let me rephrase that, when they had to actually work. Yes, I am as a matter of fact telling you that people were making $150,000 a year the last 4 years in my position and spending as little as 20 hours a week in the office. I sat next to them, I think I out performed them all when the times started getting tough. Maybe ONE of them produced at my level. Now what I did last year was by no means astounding. It was enough, and I know the people I worked with are either jobless or in some other business now, with jobs I am quite sure they hate. I on the other hand am gaining peace of mind sitting here educating you and working on my business.
The thing is this business isn’t bad now if you want to work. Your house isn’t going anywhere. Trust me; your home has gained a TON of value over the last few years. It’s not going to lose all of that unless you pour gasoline on your carpet and light a match. I know you won’t do that. As a matter of fact, don’t be greedy about it possibly losing value now. Most wont, the values are just dormant. If it is, look at what you’ve gained and be joyful about that.
And here’s a statistic that will blow your mind. This is a fact. Ill will touch more on it later in another facet but for now I will get it out there. The average America mortgage lasts three years. Yup, I said three. Can’t be true right? Bet that blows your mind. It blew mine when I first heard it. That’s a stat, not a made up number. It comes from the US Census. You have 30 year fixed rate loan imprinted in your head because you’re a US Citizen and you conform to the norm. You call a broker or bank and you say "hey, what do I qualify on a 30 year fixed rate loan?" You find the lowest rate and you and the Mr. or Mrs. make your way out to dinner, happy that refinancing is over. BUT, the 7 year fixed rate loan was at 5.125% and the 30 year fixed rate was at 6.25%. You know you won’t be in that house in 7 years. You just wasted a ton of money.
I am by no means saying that 30 year fixed rate loans are bad. I think they are great. But there are 1000’s of loan programs out there. It’s all a matter of finding someone you trust to do your mortgage for you and then making sure they actually are looking out for your best interests. My goal in this blog is to educate people who are willing to read about their homes, the market, and one of the biggest decisions they make in their lifetime (and according to the US Census Bureau, they make it a handful of times in their life.)
Jason
Tuesday, March 11, 2008
Stock Market Rally's for best day in 5 years!
The DOW Jones, NASDAQ, and Standard and Poor are all up over 3.5% of their total volume today!All three are the largest single day jumps in over 5 years since the first major rally after the World Trade Center Attacks.
This is good news for investing all around, and is contributed to be a direct result of the FED's announcement to bail out mortgage companies by allowing them to "trade" the non-sellable mortgage backed bonds, for more liquidable treasury bonds.
Basically it would be like me having extra money while you are completely tapped, and have no credit left either, and giving you something you would easily be able to sell. In return you give me something you can't sell, or at least not immediately due to the nature of the product, in hopes that eventually I will be able to sell that item and make my money back, bailing you out right now by allowing you to sell the item I gave you.
Another analogy - - your house has been on the market for over a year. I will give you all of my stocks that are highly liquid, and of equal value to your home, and you give me your home. You can then sell ALL of the stocks tomorrow and get your money. I will hold onto your house until it sells for what I need it to sell for to get my money back. I will hope to make a little money in the meantime renting it out and hope the renters pay me... but I endure all the risks, and you don't. I also take the risk that I will NEVER be able to sell your home for what I need to sell it for to recoup my costs.
Make sense?
No? One last analogy. You have a huge collection of GI Joe's. They are quite valuable, but there is a limitted market for such things. I have a collection of Thomas the Train and BRAT's dolls my kids no longer use. I give you enough Thomas the Trains and BRAT's dolls to equal the value of your GI JOE collection and we trade. You immediately sell the stuff I gave you since it's popular and will sell quickly, and I put my new GI Joe Collection on EBAY, waiting for the right price. Hopefully the value of the GI JOE's go up while they are waiting to sell, and I get a nice profit out fo the deal, but if not, I really don't need the money, so I wait until I can at least sell for the value of the crap I gave you!
Make sense now? If not, sign off and go to bed... try reading this again another time =). For those of you who get it, let's move on!
Why on Earth would I do this? I do this because we are friends and I like you, and just want to help out. Plus I have the money to do it and I won't miss the stocks, or BRAT's dolls I gave you either. Not to mention that what you do on a daily basis really helps out my customers, who use my product regularly which directly affects whether or not I stay in business.
It was a good move in my oppinion, much better than just printing more money, causing our dollar to get weaker and weaker in the foreign trade markets. The feds have agreed to do this for about $200Billion.
The second leg of the bail out is, they have also agreed to lend out another $200Billion at 60% of the value of those same type of mortgage backed bonds on short term loans, to increase liquidity, and will hold those bonds as security on the loan. Once the banks have more money, they can then pay back the loan and get the bonds back.
Leymans terms - - You give me your GI JOE's as collateral and I give you 60% of what they are worth. You come back and repay me what I lent you and I give you the GI JOE's back. If you don't pay me back in time... I sell the GI JOE's. If they sell for more than 60% of the value, I make a profit.
If it sounds to you like the FEDERAL RESERVE has just become the World's Largest Pawn shop, you aren't far off!
Whomever may still think the mortgage industry does not DIRECTLY affect nearly every aspect of the economy should definitely rethink that after todays stock market rally, relating from mere NEWS of the FED bailing out mortgage companies and banks, and allowing them to pump more money into spending.
I heard today that an old friend of mine thought I was stupid for even still being in the mortgage business... but if I wasn't would I really care that the FED's are handing out $400BILLION to banks??? Maybe, but only if I thought it would raise my taxes or something along those lines.
The fact is, I like that I care, and I like what I do. Especially in times like this when everyone else is bailing out of the industry, or trying to charge people as much money as possible on every loan because they just aren't writing that many of them.
Meanwhile, I keep treating people fairly, giving a good service for a great price, and earning customers for life. When the other guys start price warring again because it has again become SEXY to refinance, my customers will stay loyal even if I am a little more expensive than the other guy at that time. If not, I will remind them what the other guy tried to charge them when the market was bad, an that my price has always stayed the same. If they still leave, then I won't take them back the next time the market rebounds, because frankly, I just don't need their business that much! My integrity and ethics keep me ahead of the curve, and keep me busy enough to enjoy my free time.
As always... I have everything you need mortgage related... plus extras you dont! Email or leave a comment if you if you have any questions, or just want to tell me what a swell guy I am! Any negative comments will be researched for address of poster and I will come to your home!!!! Just kidding.
Everyone have a geat week.
James Prince
This is good news for investing all around, and is contributed to be a direct result of the FED's announcement to bail out mortgage companies by allowing them to "trade" the non-sellable mortgage backed bonds, for more liquidable treasury bonds.
Basically it would be like me having extra money while you are completely tapped, and have no credit left either, and giving you something you would easily be able to sell. In return you give me something you can't sell, or at least not immediately due to the nature of the product, in hopes that eventually I will be able to sell that item and make my money back, bailing you out right now by allowing you to sell the item I gave you.
Another analogy - - your house has been on the market for over a year. I will give you all of my stocks that are highly liquid, and of equal value to your home, and you give me your home. You can then sell ALL of the stocks tomorrow and get your money. I will hold onto your house until it sells for what I need it to sell for to get my money back. I will hope to make a little money in the meantime renting it out and hope the renters pay me... but I endure all the risks, and you don't. I also take the risk that I will NEVER be able to sell your home for what I need to sell it for to recoup my costs.
Make sense?
No? One last analogy. You have a huge collection of GI Joe's. They are quite valuable, but there is a limitted market for such things. I have a collection of Thomas the Train and BRAT's dolls my kids no longer use. I give you enough Thomas the Trains and BRAT's dolls to equal the value of your GI JOE collection and we trade. You immediately sell the stuff I gave you since it's popular and will sell quickly, and I put my new GI Joe Collection on EBAY, waiting for the right price. Hopefully the value of the GI JOE's go up while they are waiting to sell, and I get a nice profit out fo the deal, but if not, I really don't need the money, so I wait until I can at least sell for the value of the crap I gave you!
Make sense now? If not, sign off and go to bed... try reading this again another time =). For those of you who get it, let's move on!
Why on Earth would I do this? I do this because we are friends and I like you, and just want to help out. Plus I have the money to do it and I won't miss the stocks, or BRAT's dolls I gave you either. Not to mention that what you do on a daily basis really helps out my customers, who use my product regularly which directly affects whether or not I stay in business.
It was a good move in my oppinion, much better than just printing more money, causing our dollar to get weaker and weaker in the foreign trade markets. The feds have agreed to do this for about $200Billion.
The second leg of the bail out is, they have also agreed to lend out another $200Billion at 60% of the value of those same type of mortgage backed bonds on short term loans, to increase liquidity, and will hold those bonds as security on the loan. Once the banks have more money, they can then pay back the loan and get the bonds back.
Leymans terms - - You give me your GI JOE's as collateral and I give you 60% of what they are worth. You come back and repay me what I lent you and I give you the GI JOE's back. If you don't pay me back in time... I sell the GI JOE's. If they sell for more than 60% of the value, I make a profit.
If it sounds to you like the FEDERAL RESERVE has just become the World's Largest Pawn shop, you aren't far off!
Whomever may still think the mortgage industry does not DIRECTLY affect nearly every aspect of the economy should definitely rethink that after todays stock market rally, relating from mere NEWS of the FED bailing out mortgage companies and banks, and allowing them to pump more money into spending.
I heard today that an old friend of mine thought I was stupid for even still being in the mortgage business... but if I wasn't would I really care that the FED's are handing out $400BILLION to banks??? Maybe, but only if I thought it would raise my taxes or something along those lines.
The fact is, I like that I care, and I like what I do. Especially in times like this when everyone else is bailing out of the industry, or trying to charge people as much money as possible on every loan because they just aren't writing that many of them.
Meanwhile, I keep treating people fairly, giving a good service for a great price, and earning customers for life. When the other guys start price warring again because it has again become SEXY to refinance, my customers will stay loyal even if I am a little more expensive than the other guy at that time. If not, I will remind them what the other guy tried to charge them when the market was bad, an that my price has always stayed the same. If they still leave, then I won't take them back the next time the market rebounds, because frankly, I just don't need their business that much! My integrity and ethics keep me ahead of the curve, and keep me busy enough to enjoy my free time.
As always... I have everything you need mortgage related... plus extras you dont! Email or leave a comment if you if you have any questions, or just want to tell me what a swell guy I am! Any negative comments will be researched for address of poster and I will come to your home!!!! Just kidding.
Everyone have a geat week.
James Prince
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