Wake Up People!

People just don’t get it!

A recent Rasmussen Poll shows that 58% of American consumers are against an Obama administration plan for partial mortgage forgiveness.

Their reasoning, which really escapes me, is that it will be unfair for those who are making their payments on time!

As Dorothy in the Wizard of Oz once said, “Toto, we’re not in Kansas anymore.”

People are way and afar upside down in their mortgages because banks like Countrywide scammed them into taking out loans that bank executives and their colleagues knew were for more than the properties were worth.

Appraisers were even in on the scams. They were paid by the banks to overvalue these properties, and why? Because the banks were making points based on the amounts of the loans they made.

Now, for the first time during the Obama administration, the President comes up with an idea that will really help the economy and the American people, in their insatiable need to profess ignorance, don’t get it.

Even the homeowners it would help don’t get it. It makes me wonder if perhaps the fluoride in America’s drinking water has really destroyed too many brain cells and America simply can’t think.

It was the banks that brought the mortgage value to its current low level, not the homeowners. You cannot continue to foreclose at the level the banks were without dropping the entire market. In Las Vegas alone, there were, at one point, 80,000 foreclosures pending and more than 1,000 occurring daily.

To add to the picture, the subprime loans made to prime borrowers had payments that reset higher -- in some cases, the mortgage payment actually doubled. Is this the borrowers fault? I think not, as evidenced by recent litigation proving that bank fraud was overwhelmingly evident with ALL banks. Yet, the government bailed out the financial institutions and consumers applauded. But now that Obama finally appears to have taken an interest in saving borrowers along with the economy, America can’t see the forest for the trees.

Please explain to me why the majority of Americans simply don’t understand that the massively high foreclosure rate has destroyed not only the mortgage values in the surrounding areas of these homes but the economy itself. How does it benefit society to have more than 4% of U.S. homes sitting vacant while families are forced to live in tent cities?

One of the major obstacles to sustained job growth is the lack of a semblance of stability in the economy. Keeping people in their homes would be a good beginning.

Foreclosures have dragged the economy to its current low. The subprime interest rate, with its variable teaser – which, by the way, was given to prime borrowers -- has drained society of money that could have sustained the economy without us ever having had to get into this crisis. This financial crisis has been based on greed, and we, the unassuming public, have been the pawns of an elite financial society that feeds on us.

Come on America. Wake up, the roses are dying!

As an interesting side note, I took a poll in an office with 32 employees and all were in favor of the President’s plan!

Can the Strategic Defaulters save the US Economy?

The private sector remains in a catatonic state, searching for a bottom line to justify the reemployment of American workers. Yet even as the economy is temporarily jarred by strategic defaulters, the concern of economists has been, will they be enough to sustain the economy long term?

And as serious as this question is, it boils down once again to Wall Street. Whether these strategic defaulters can save the economy long term will depend on the banks, the longer they take to foreclose and evict the more than 8 million homeowners now in default, and those who come after them, the longer the temporary surge in retail sales will be sustained, although it has been flat for the past 3 months, it is sustaining some semblance of an economic recovery even without job growth.

The Banks are so over whelmed with the volume of defaults that the time to foreclose has been extended, now exceeding 14 and approaching 20 months. But as more homeowners make that decision to join in the movement and stop making their mortgage payments the time to foreclose will only be extended until Wall Street finally concedes.

And amid the volume of defaults banks like BoA have begun to rethink what they have done to us, and in an effort to make peach with their borrowers and avert a real back lash they are attempting to initiate a real loan modification program. They are reducing not only the interest rate, and the monthly payment but the principal to a more realistic valuation. If their program is successful, which every consideration says it should be BoA could be the first bank to actually help put America back to work.

Defaulting loans are placing a financial strain on all banks, and perhaps this is really sending a message to Wall Street. Meanwhile those who make that determination to simply stop making their mortgage payments have become the new American Heroes.

We need time, and the strategic defaulters may have just bought it for us.

The Gods of Finance speak softly but carry a big “Carpet Bag”

Wall Street appears primed to surpass even the carpetbaggers of the 1860”s and 70’s with the number of foreclosures actually occurring and yet in the works.

During the civil war Reconstruction Period (1865-1870) many people from the Northern States went south because it was so pitiable that there were many opportunities for a person with even a little money.

For example you could own a farm with hundreds of acres by paying the past due taxes, often as little as $25. The carpet bags these men carried were laden with money.

Those Opportunities attracted all sorts of people, from honest hard working farmers, to crooks, charlatans, con artist and of course crooked politicians, and bankers. All these outsiders were (identified by their Carpetbag) and were called “Carpetbaggers”, then and still, in many parts of the south.

Probably the worst Carpetbaggers were the politicians who used their positions in the corrupt Reconstruction Government to enrich themselves through bribes, graft and other contemptible acts at the expense of native Southerners.

Today the dictionary defines a Carpetbagger as “an outsider involved in politics”. And appropriate describes the Wall Street Titans, who no longer carrying their identifiable carpet bag still lavish their money on politicians and control the US Congress and even the White House!

These new Carpet baggers now control every facet of the US Economy, they own more than 7 million private residences, which they have foreclosed, and they are in the process of foreclosing on another 8 million and there are still some 15 million directly behind these.

Through their corruption they have divested the states of their ability to support government by reducing the tax roles and the numbers of employed, and have driven the US government to the verge of bankruptcy, yet these same carpet baggers provide themselves a life of luxury with grandeur and bonuses that are surreal in a lifestyle that most of us could only live in a dream.

The carpet baggers were evil in the 1860’s and they are more evil today!

Yet in the midst of this evil the American people want and deserve to reform a system that has always been corrupt. A movement is afoot in congress but as always the carpet baggers will prevail and no meaningful legislation will pass. To insure this failure according to the Center for Responsive Politics, JP Morgan Chase spent $1.5 million on lobbying during the first quarter of the year, Citigroup spent $1.4 million and Goldman Sachs spent $1.15 million –

Lobbying is a legal form of bribery!

Reasonable people might ask: Why all the worry?

Today most Americans are inclined to see Wall Street as they are a predatory and all-devouring reprobate. That is all but those who are on the banks payroll as are a substantial part of Congress.

Time out for common sense

The Fed and their economists and the media are reporting that we are in a recovery mode, merchants are selling products and consumers are spending money, and overall we are up 1%. Based on this information a stock market bubble has expanded, potentially ruining thousands of investors when this new bubble deflates abruptly.

And it will!

Common sense dictates that while we are given positive information, and especially where the government is concerned, there is always a flip side to analyze. That is unless you enjoy being led once again to the slaughter.

The Flip Side

The FED also reports that the job market hasn’t improved and remains at 9.7 percent, which equates to more than 17.3 million people still looking for a job. Yes we hear about the 162 thousands jobs created, such hyperbole has not gone unchallenged, the flip side was that another 430,000 new filings for unemployment also occurred at the same time.

Additionally the government acknowledges that there are 8.9 million borrowers currently in default, and facing foreclosure.

Economist further estimate that a percent of these 8.9 million homeowners that are in default are spending money in aid of the economy because they aren’t making their mortgage payments, and the figure, they believe represents 1% increase in consumer spending, coincidence?

Ok, time to use common sense, that sound judgment we were all born with.

Given the real facts, it is obvious there is NO recovery, but the illusion of a recovery which is based of a false assumption. When we see real jobs being created, and that number MUST exceed 300,000 net jobs a month then we can say a real recovery has begun.

Banks have made every excuse not to help borrowers stay in their home

Four major banks have made every excuse not to help borrowers stay in their home, but this excuse will make your day.

First we need to understand the real problem!

Beginning around 2003 every bank began to make creative loans. Loans that they knew would never be repaid. They created ARM and option ARM loans, no doc loans and like the military, don’t ask and don’t tell loans, these were also no qualifying loans, stated loans, and if you were breathing you got a loan.

In fact one potential borrower actually had a heart attack while signing his mortgage papers, and the first question from the borrower when they were advised of the incident, “did he sign the loan docs”

In short it didn’t matter whether the borrower was even alive as long as the docs were signed the deal would be funded.

Washington Mutual even loaned money to an unlawful immigrant making $900.00 a month, he was financed for a $616,000 mortgage in southern California

But even better, New Century Mortgage actually loaned several million to a prison inmate in Colorado based on a no qualifying loan

All of these loans were sold up line to companies like JP Morgan, Citigroup, and Deutsch Bank. The loans were then securitized as mortgage backed securities and packaged into trusts where they were sold to anxious investors. However, since all these banks knew the loans were in reality NO good they opted to take out insurance. These policies came in two different formats, one was a derivative now known as a Credit Default Swap, the other was a standard form of default insurance.

Most borrowers were placed in ARM type of loans, ARM is an acronym for Adjustable Rate Mortgage.

By 2007 when these rates began to adjust upward, borrowers began a systematic default. That was when the banks began their ferocious bout of foreclosures.

Between 2007 and 2010 we can only speculate on the number of properties the banks have taken back. Why, because sufficient information to make a tally is being withheld. However we can approximate that number to have been realistically more than 7million. We do know that currently 7.9 million homes are seriously behind with their payments. And from information released recently another 15 million are right behind this group.

Ok now you have the picture.

The banks created the problem, and just about every bank was on the verge of collapse, they borrowed from the FED and they borrowed from us, the US taxpayer to stay afloat.

The Federal government came to the banks rescue, providing $787bn in funds, to bail out the entire financial community and the Federal Government failed to attach, as they usually do, any strings to these funds.

Who is suffering? All of America!

The banks used their own appraisers to establish the then current home Value, those appraisals were inflated because the banks wanted to loan as much as they could, the more they loaned the more they made.

The true value of the property was obscured by the appraisal, and without doubt most all properties were at least 30% to 40% over appraised.

As borrowers sought help from the banks, they found themselves speaking to deaf ears. No one was listening, and no one at the banks even cared, instead the Banks, began a systemic liquidation of the property through the foreclosure process. In short, the banks foreclosed on so many homes in such a short time that they actually ran down the values of these properties below their norm.

All the borrowers were asking for was some help and some decency and integrity, they found none. Instead borrowers were foreclosed, many were then sued for a deficiency and if there was a second mortgage, which there was in most cases, they sued for breach of contract. These punitive acts on the part of the banks forced hundreds of thousands of borrowers into bankruptcy, currently there are some 6,000 filings a day.

Now we understand what happened, we understand who created this financial disaster, and we would expect that after bailing out the major banks, that\ they would reciprocate. But alas, that is not their agenda.

Obama has come up with several plans, yet none have been a success. The banks don’t want to keep borrowers in their homes, they want those homes. Apparently it is more profitable for the bank to foreclose than to help the borrower. Evidence of this has become apparent when we look at the FDIC sales agreement with these banks that are now deemed “too big to fail”

Now for the part that you have been waiting for!

JP Morgan, Citibank, Wells Fargo and Bank of America feel that to reduce the mortgage amount on home loans for borrowers currently behind, or in fact to offer any help to borrowers, is not in the best interest of those who are making their payments. Consumers they say, who are paying their mortgages on time, are likely to see such reductions as unfair. In short, these illustrious banks would continue to take the homes away from the very people they defrauded. And they will continue to come up with excuse after excuse for not offering any real help. That is unless forced to help, and sadly the likelihood of that in this administration is a far fetched illusion.

7.9 Million Americans have stopped making Mortgage payments!

In the wake of this unprecedented epidemic, the government has no concept how to help the homeowner, instead the Obama administration comes up with one empty program after another, and none have worked!

Why? Because they were not intended to!

This administration has gone out of its way to help the banks foreclose on America. Providing a bailout for the financial sector, without the taxpayers or the borrowers in mind, as such we have already witnessed over 7 million properties taken over by bankers, and now we see the possibility that another 7.9 million are about to go, and right behind them is anticipated to be another 15 million homes.

The rate of foreclosure is currently accelerating faster than lenders are capable of going through the process to take them back. It currently takes well over a year, in some cases nearly two years, to go from missing a payment to being foreclosed and evicted.

As this article is written, 7.9 almost 8 million borrowers have stopped making payments to their lender, instead they are spending what they perceive to otherwise be dead money, paying in essence for what many believe to be a dead horse.

In most areas of the country borrowers are figuratively speaking, under water with their loans, in Las Vegas alone, the most severely damaged city in America more than 81% of borrowers are upside down. On any given street there are between 2 and 4 homes already foreclosed, and “vacant”

This 2 year period gives the borrower ample time to purchase items that their mortgage payments had otherwise prevented. Accordingly we are witnessing a new thinking process as borrowers are retiring other forms of debt, and acquire things they otherwise could not afford.

On the bright side, this could help to generate a sort of financial recovery on the back of the banks who created the problem -- they may inadvertently be helping to solve it.

How do we get America moving again?

17.3 million Americans need jobs.

Vacant storefronts abandoned and often shuttered homes and schools tell the story of the economy in real life 3rd dimension.

Wherever we go from one coast to another, this is the reality for many towns and cities across America , a nation no longer reminiscent of its better days, a nation of shrinking tax rolls and migration.

For many and for generations yet to come, there will be a different face peering out from the murky windows, staring as in a translucent state of amnesia

We as a nation have been in a decline since the 1980’s but is was so gradual a decline that we didn’t notice until the fan turned brown from our splattered remnants.

And now that we see the picture that has so assiduously unfolded, how do we as a people get out from under this elegantly conceived effrontery to not only us, but to a lifestyle that made us a great people?

Yes America was forced to transition, to pick up roots planted while the nation appeared to be on a forward momentum, but that roll wasn’t a boom and prosper roll, at least not for us.

We were used, we had become, somehow in the darkness and shadows, the mere pawns of those who consider themselves the elite of our society, and we as a people now at the hands of a government that has joined in league with them, have found ourselves without recourse to recover the government we had believed was ours.

Instead we find ourselves at the mercy of a street in New York , where the enterprises of capitalism have abandoned American principles and churned from democracies ashes a new form of governance, and it is not one with our assent.

However, there is something that remains more pressing to our society; can we yet emerge from this creative captivity unscathed?

In common parlance, what America needs is jobs, and there is one concept that may work, a return to a form of isolationism, but in trade only.

It is suggested that for America to recover, drastic measures are required, and are offered for consideration in this article:

First; no imports would be allowed unless we as a society require them, as such oil would be allowed, while all manufactured items would not. Whether it would be autos or clothing or appliances, they would be disallowed.

Second; our large corporations will be required to open plants in America and to hire Americans or their products would be denied sales in the US .

Third; these multinational corporations would be taxed 90 percent on all goods manufactured and sold abroad, giving them incentive to reverse the trend begun under the Reagan/Bush administration which promoted the exit of jobs and businesses in America in favor of a service oriented society.

And finally: there will be no additional bailouts for the financial sector, if they lose our money again they will like any other criminal be dealt with in a similar fashion.

Obama says it’s time to say Good-by and Move on

The foreclosure crisis has been a challenge for this president, who has invested more than $787bn in Wall Street in hopes they would help keep Americans in their homes, now this administration has thrown in the towel, the new direction, help the banks to liquidate American homeowners. Obama’s new approach paying homeowners to leave quietly.

Taking effect on April 5, the new program hopes to encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program, (which simply hasn’t worked), to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

However, this program like all the others is dependent on co-operation from the Banks and servicers of the loans, who so far have refused to participate in these types of government programs unless there is money in it for them. Short sales have been unsuccessfully tried for the past two years and very few have actually been accepted by the banks without the borrower agreeing to repay the short part of the mortgage, this plan is not expected to fare any better.

Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in "relocation assistance."

However the servicer earns much more than $1000, by maintaining the borrower in a default status, and through the foreclosure.

This program is more like a slap in the face of the defaulting borrower! $1,500.00 won’t pay even a portion of the moving costs.

Home Bargains Fraught with Bank Caginess!

Although banks are estimated to have some 7 million (foreclosed) homes in their inventory they are releasing only a few at a time running the cost to purchase these homes upward. To add insult to an already deep injury, investors are coming in with all cash offers which make buying a home for someone who wants to live there next to impossible.

Yet foreclosures are primed to rise as more than 5 million homeowners are currently facing foreclosure and the government programs aimed at keeping borrowers in their homes has failed miserable. Why? Because loan servicers make money while a property owner is in default, and the small amount the government offers these servicers doesn’t sway their interest.

Loan servicers have NO incentive to modify a loan for a borrower, accordingly only approximately 66,000 of the 750,000 homeowners who are allegedly otherwise qualified for a modified loan have actually received one.

The majority of borrowers seeking a loan modification are played with through a trial modified loan for periods of three months at a time, after completing this trial period, the loan modification may be denied and another trial period initiated. Meanwhile the servicer receives the benefit of these payments!

Borrowers acting in good faith often become frustrated and ultimately just give up, which appears to be just what the banks want!

Why do we say this?

The $787bn bank bailout was “allegedly” to stimulate the banks to make loans, now that the banks are rich with cash, Bernanke has instructed the banks NOT to make loans because as he said, ”loaning money into circulation will create inflation” instead Bernanke has devised a plan where the Banks will place blocks of cash totaling billions, with the FED keeping the funds out of the market place yet the FED will pay the banks interest on this money!

Let’s be real!

The reason for the all cash borrower being favored by the banks is that now this money is also taken out of circulation, and guess what- When the Banks place billions of dollars with the Fed and they draw interest, who do you think will pay that interest?

Yup, we’ve been had again!

The Banks and their New SCAM - an industry laden with crooks!

With Foreclosures topping 5 million and another 7 million in the wings, the banks now have a new SCAM. They foreclosed on our homes, taking the home at the bottom of the market. Collected the insurance on the difference between the Note (They didn’t Own) and the market value they created by the volume, velocity and volatility of their foreclosures. Initially dumping the home cheap to bring down the market even further, in order to acquire the properties at an even lower price, they now are holding several million homes off the market, to force the value of these properties back up in order to make an additional windfall.

Real Estate Brokers across America have stopped submitting offers to Banks relating to their REO’s because they have found that the banks are playing games with the potential buyers, the Banks have no interest in selling their foreclosed properties until the market returns, and they (the Banks) are the ones who can make it return.

Meanwhile the Banks have been made whole, and in some cases have not only collected the insurance, but sued the former homeowner for a deficiency, that difference between what the home was foreclosed for and the mortgaged amount.

We are in an inflationary market, and the Banks realize that they were the cause of the market collapse, by placing a volume of homes on the market they caused the value of the homes to fall, now by restricting the homes they place on the market the values are expected to rise, it’s the old game of supply and demand, a lot of money chasing a few homes will cause the value of the homes to rise, by releasing a few thousand homes at a time, the market will stabilize in the banks favor.

Initially, the Banks, because of this SCAM and their insatiable greed blocked the borrowers attempt to sell their home instead of it being foreclosed. They accomplished this by the shear volume of the foreclosure frenzy. Now the Banks are primed to reap the windfall of a market they created at the peril of the borrower.

There is a lot of money that has been created over the past 8 years. The market has inflated for almost every other commodity but Real Estate, now we can expect to see this market inflate again.

Bank Incompetence on the Rise as the Government Continues to Bail Them Out

Guaranty Bank of Austin, a Texas bank has demolished 16 new and partly built houses acquired in Southern California through foreclosure, figuring it was better to knock them down and take a complete loss rather than to attempt to sell them for a reduced price.

The homes are located in Victorville, California. Victorville city officials said the bank told them the cost of finishing the development would exceed what they could bring in by selling the homes.

The homes were “substantially” complete more than 90%. The median new-home price in Victorville is $265,990, according to Hanley Wood Market Intelligence. Homes in the Victorville development were priced at a range of $280,000 to $350,000 in early 2008, now comes the difficult question and one that is simply a matter of good business judgment.

Is it not better to sell the homes and get something, perhaps a price of even $200,000 than to knock them down and take a complete loss? But then again who ever said what Bankers do made sense!


Jack Ferm has written several books which can be downloaded from his web presence at www.usjusticefoundation.org They include: “Goliath Must Fall”; “Project MKUltra”; and “Into the Darkness"

No Good Deed Goes Unpunished

I retired in 2003 from a practice in Las Vegas as an Independent Paralegal and gave up my weekly Radio Show. Early in 2008, seeing the turmoil and the suffering of the 80,000 plus people in Las Vegas whose life had been turned upside down by bank foreclosures; I researched the problem, interviewed underwriters and other attorneys, found that the banks themselves had caused the problem and were now removing these people as carelessly as we would put out the garbage. There was a serious lack of concern on the banks part for the trauma they were causing families, the emotional distress, the suicides, the hopelessness they felt and ultimately the divorces and lost generation of children. I was determined to stop the banks and to try to help these people stay in their homes.

The foreclosure epidemic has taken a substantial toll not only on the families and their emotions, and not only on pets and their loss, but on the economy in general. I re-established the U.S.Justice Foundation in approximately August of 2008. My wife and I financed the Foundation with an initial loan of $100,000. I hired 3 attorneys, 3 paralegals, and several typists and intake personnel, our budget was in excess of $100,000 a month, and our mandate was to help anyone who wanted to stay in their home.

The next step was to align myself with a Public Company to raise money sufficient to buy these properties at the foreclosure auction and allow the families to remain in the properties. This has been accomplished and the announcement is anticipated to be made this coming Monday, February 2, 2009.

Since October 2008, I was a regular on television station KVVU Fox 5 Las Vegas on The More Show. As a Consumer Advocate, I was informing the public of the extent of the foreclosure problem, and how that could be stopped. The Attorney General of Nevada and or the Governor could initiate a Foreclosure Moratorium, as was done in the last great Depression of 1933. But they have no interest in stopping the foreclosures, and I would ask why not??

Additionally on January 21, 2009 Bob Massi, a media hound and in my opinion, an unsuccessful local attorney who was the legal analyst for Fox 5 Las Vegas went on The More Show and attacked what appeared to be myself and the Foundation. Immediately thereafter, my appearances on The More Show were cancelled and my commercials were stopped. Hearing about his rant, I viewed the interview and as it appeared to be about the Foundation and me, I gave a demand to Fox 5 and to Massi to retract the false information.

An interesting side note: in approximately 1995, I was a host of a local radio show over a small local station, KRLV in Las Vegas. Bob Massi was a host of a show on a larger station, KKVV Las Vegas, called Law Talk. One Saturday Massi was unable to make the show, I received a call from the shows producer, Rod Douglas, asking if I would fill in for Massi, I agreed. I received more calls that day then Massi had ever received and at the conclusion of the show, I was asked if I wanted to take it over, I did and for the next several years my show was called Law Talk, it was my understanding that Massi had been bumped.

Upon serving Bob Massi with the required “Demand for Retraction”, Massi immediately called me and we discussed his interview. During this phone call, he assured me that this interview was not about the Foundation or me but what he called “copycats.” He assured me that he would do what ever Fox 5 said to do to correct the misinformation. However, Fox 5 has ignored the problem requiring me to sue KVVU Fox 5 Las Vegas, Bob Massi and The More Show for Slander Per Se, and the other claims that are a part of a Defamation Lawsuit, which I am unable to file until after the 20 day Code Requirement for a Demand for Retraction has expired. This demand will expire February 13, 2009.

When I decided to help people being foreclosed upon and to help them take on the banks, I fully expected to be attacked, and I fully expected an attempt to discredit what we are trying to do, so this is not a real surprise. What is a surprise is the stupidity of Bob Massi and the General Manager of Fox 5, Darren Mc Donald.

This makes me wonder whether Fox 5, Darren Mc Donald and Bob Massi were bought by the banking interest, or are just plain stupid.