America Wakes Up
Powered by Max Banner Ads
America Wakes Up
In today’s upside down real estate market and the feeding frenzy of speculators wanting to gobble up the spoils of some poor family that has just lost there home, an “innovative” American idea has hit the streets.
YES, believe it or not, you the US Citizen in conjunction with some creativity that was NOT born on Wall St nor hatched in Washington by that group of “jolly no-doers” called politicians have come up with a novel idea of “getting even” with the greedy banks, investors and all of the sharks that were feasting on your blood.
I was knocked off of my seat when a friend explained this, new phenomena to me. WOW! Something so simple, yet it is gaining momentum like a financial tsunami that will benefit, YOU the average US Citizen that is facing the loss of your home.
Here is the program. It is already in place and working. We have to understand that the securitization of your mortgage note was not illegal but an extension of a good working business model. When or where did it go wrong? The banks were anxious to give out money because of the up-sell of your mortgage note. This means that the “boys” on Wall St already had your loan sold to an investment trust before you even bought the home. Sound crazy? Yeah, I know, it sounded goofy to me also.
But, when you get into the workings of the Wall St Investment Bankers minds, you can see how this worked out. Here you are with pristine credit and wanting to buy this house for $300,000 because you knew the value would go up in a year. Perfect sense. It made you a real estate guru. You could sit around watching the tube, drinking a cold beer and brag to your brother-in-law about how smart you were because you were buying this home for $300,000 and it would go up in value while he was stuck with the little bungalow in the city. A great chance to brag.
Here comes your banker. He welcomes you and your wife. He already has the money and you think it is coming from his bank. WRONG. I refer to the “up-sell idea. The banker has a zero down, no cost mortgage for you. He joins into the fray because he being greedy is anxious to make his brokers fee. Remember, BROKERS FEE. That means he is acting as a broker and NOT a lender. So, he is using someone else’s money. You don’t know this but you don’t care. You buy this home for $300,000 and you put nothing down. Your brother-in-law is livid with jealousy because you are rubbing it in. You are now a real estate guru.
Now, here is where the real deal comes into play. That mortgage has terms that change the payments a couple of years down the line. But, because the payments go up $1,000 a month and your income doesn’t go up, you have to sacrifice something. You start using the credit cards to the limit and bam! Overnight, your interest rates sky-rocket to 36%. FORECLOSURE looming ahead. What happened to the genius?
Respectfully, Regis Sauger
You are now at the mercy of the “sharks” feeding on your misfortune. Now a group of savvy entrepreneurs enter into the fold. They are NOT, loan modification companies nor foreclosure specialists. They are a “full circle” group that has found a way to help you. Here is what they do.
FIRST: They have the expertise to deal with your bank and identify the true owner of your note. This scares the bank because they know that they got paid as a broker and are not the owner of your note.
SECOND: They have a national network of Attorneys that practice in Federal Court. They immediately transfer the action to Federal Court which delays the entire process for over a year. Don’t ask me how. I am just writing about this new concept in American life.
THIRD: While the lawyers delay the banks attempt to foreclose; a group of investors purchases the note from the bank at a reduced cost. The investor group is now the new landlord and makes arrangements for the homeowner to get their credit back on track and re-finance at a later date. The amount of the re-finance is about 50% less than what the original mortgage was.
RESULT: The investor makes a profit; the homeowner stays in his home and ends up with a debt that is equal to today’s value. The bank needs liquidity. They need cash to function and go to the Federal Reserve to get more money. So, the cash from the investors is better than the cost of litigation and the repairs, insurance and waiting for a buyer that is qualified to come along. Makes sense to me.
I heard about this concept while on a business trip to Atlanta. When you understand that the banks need cash to operate and that they leverage debt at the Federal Reserve it makes sense. When a bank takes a debt instrument to the Federal Reserve they can borrow many times using that same debt instrument as leverage. This involves another article and the internet is loaded with information about how the Federal Reserve works.
Regis Sauger is a Licensed Mortgage Broker in Florida. He has written numerous articles on consumer credit. He has over 25,000 readers of his articles. http://www.house4real.com Article Source:http://www.articlesbase.com/mortgage-articles/america-wakes-up-1513202.html
