Thursday, June 21, 2012

Between Gods and ATMs...

Those are some brave bastards over at Moody’s…

Just the other day I was consulting with a Rabbi. No, don’t jump out a window or think that someone has taken over me or this blog. He’s a client of mine.

As I was saying, I was TALKING to this Rabbi and we were joking around. I’m working on the third of three loans for him over the past year. All of which have been with Wells Fargo. I won’t bore you with tons of details but let’s just say that each loan has been harder to get than the next.

Why? That’s a good question. Nothing has changed with the Rabbi’s / borrower’s credit, income or assets. All that has happened is time. Time has gone by. With time, lenders get a chance to make changes. Sometimes the changes are good and sometimes the changes are bad. An average person who glances at the news, would think, “Hey, I bet they’ve made it easier for people to get loans.” Sure, why not? It’s an election year. Both sides of the isle want to be seen as fighting for the little guy. I’ve read a lot of great (and bad) ideas tossed around, claimed that they’re being pushed forward or mandated into affect. FHA streamlines, HARP, HARP 2.0, HAMP, Freddie / Fannie relief programs, etc. These all sound great and have some great guidelines AND you’d think what would be any risk to the lenders since these all seem to be backed by the government.

Guess what, the BANKS WILL ONLY DO WHAT THE BANKS WANT TO DO. They don’t care what programs come out. “Oh, you think you qualify for the 115% CLTV program, guess what we only do that on loans we originally underwrote. What? You originally got your loan through one of the 200+ banks that have gone under like WaMu or Indymac or Countrywide? I’m sorry, you’re going to have to fuck off.” Actually I made up the fuck off part. They don’t even give you that personal decency. They just say no. Or how about the lenders like Chase, Bank of America or CITIbank who have either discontinued or shrunk their wholesale down so low, they really don’t have a wholesale option. If you thought that independent mortgage brokers where bad, wait until you get a taste of glorified tellers trying to take a loan app and fighting frivolous conditions. They wouldn’t know what a 4506t is from 1120’s are? How about the use of rental in come on exiting properties or cash out / value seasoning on new purchases?

Back to my Rabbi story, we only have one condition left. Wells Fargo never asked for this condition before on the other two loans but now they find it so pressing that the loan has been held up for weeks working on this. I can’t get into details but let’s just say, it doesn’t matter. The question / condition doesn’t have any bearing on the borrower’s ability to pay the loan back, question the quality of the borrower, affect the value of the property, change the borrower’s income in any way. We’ve even shown that this is how the borrower has been conduction transactions for the past 3 years. And again, THEY DIDN’T ASK FOR IT THE LAST TWO LOANS that where done within this year.

So I ask the Rabbi, how about a little good word with the man up above just to get us moved along. To my dismay, he said it doesn’t work like that. Besides, the banks only think they’re god.

That’s been stuck in my head. Same as how which ever brave sole was the person at Moody’s who dared to allow a downgrade in the ratings of 15 major banks, will have an ice pick mysteriously stuck in their skull.

Maybe banks are the new gods. First off, there’s actual proof of the person / people who run the bank. For instance, I could actually touch and see Jamie Dimon, head of Chase. Hell we don’t even get visions of Christ on things anymore, a smear of butter on toast which looks like Tim Teebow has taken that racket over. Secondly, BANKS DO WHAT THEY WANT TO DO and what's best for THEM.

Sure the new HARP 2.0 says you can go unlimited CLTV, which means you have to call up the investor on your second to see if they are willing to subordinate to a 150 – 200 – 200+%? Yeah, that sounds like a bank, let me say yes to extending credit to something where we have no equity percentage (actually that does sound like a bank, only they usually save that for millionaire business).

Including the Rabbi’s loan, I’ve got three or four other loans that are all clear of conditions except one stupid thing. They have the insurance but it needs to have the new bank’s name on it as the loss payee first, which should be illegal because in the few days that this is switched technically if the house burns down the lender loss payee is incorrect, but why get into technicalities. How about another loan that the borrower is worth millions and makes millions and has other loans with this lender but they want to have the quarterly filings of the borrower’s business, even though I’ve given them the tax extension form. If I had quarterly filings, I’d have the damn tax returns. So I give them a P & L for 2011 and even through the first quarter of 2012 but now they want a Balance sheet. I gave them one for the current year, but no, they need one that coincides with the 2011 P & L. And don’t forget this charmer, they now need every page of any bank account listed. If it says 1 of 50, they want all 50 pages. I’m sure those boiler plate pages are what is causing all the fraud in this business. Or better yet, the pages that say, “This page is intentionally left blank.”

This is how I feel by the end of the day. I don’t wonder why anyone in this business doesn’t kill themselves; I wonder why it doesn’t happen more!

Back to Dimon for a second, why are we even wasting our time with him? Congress loves nothing more to make it seem like it’s doing something. Meanwhile if you watch this charade, these government officials are kissing his ass so hard, I’m surprised they don’t make gay porn out of it. Dimon is in charge of a bank that is now one of the largest institutions in the world and was credited for not making the same “bad choices” that these other banks had made. Meanwhile he was brought to share with the world the reasons that Chase has lost (not misplaced and will find again, gone) 2 BILLION – 7 BILLION dollars of their clients money. And he’s the “best” of them!!!!!! Before each committee member starts to ask questions, they address him like he’s god’s gift to banking. He’s just lost 2 BILLION dollars. A monkey with a dart board couldn’t screw up that bad. What’s worse is that they’re not telling him what to do, they’re ASKING him what his thoughts are on what went wrong and what laws / regulations should be in place to prevent such catastrophic losses.

Just to give you an idea, 2 Billion divided by 365 days is a loss of $5,479,452.06 per day. Let’s be generous. Loosing 2 Billion can’t be that easy, let’s divide that over five years and that comes out to be a loss of 1,095,890.41 per day. PER DAY. For five years. If Chase just gave that money to people, you’d have 1,825 millionaires.

To watch these elected officials, who most have no clue on what finance is, kneel down and cater to this guy makes me sick. Why are we even wasting the time and effort bringing guys like this to Washington? It’s like the baseball players that where suspected of using steroids. We didn’t learn anything that we didn’t already know. In fact, most of these players got themselves in more trouble by going. Anyone remember a finger waging Palmero saying he’d never used steroids, only a month later be caught using steroids?

Are banks the new gods? Have all the Rabbis, Priests and Clerics been supplanted by Tellers, Executives and CEOs? It sure seems like it. The government won’t do anything before it factors in the “cost” of its actions. “What will this mean in China / Europe?” No one really cares what China or Europe think, they just want to know what will happen to their respective economies and in return our economy.

North Korea and Iran represent a bigger threat to our country than any other combined factions. Why not just annihilate them? It’s not like we haven’t invaded other countries on less, for less? Because China wouldn’t be happy. Maybe they wouldn’t invest in our country or let us invest in their skilled slave labor force. We could go to Africa, they’ve got poverty all around but they’ve also got uncontrollable Warlords running things around there. Besides, their people aren’t skilled or live in huge governmentally built and funded cities. If the price is the same, investors will always go with the easier to control workforce.

Before I get too far off topic, you want to know a secret.

SHHHHHHH, come closer….

But you can’t tell anyone…..

The Chinese have no choice but to invest and deal with us. That’s what’s so funny!! We don’t even see it.

Oh, yeah, what are you going to do China? Invest in Greece? How about Spain? The Euro was a half hearted idea that works well when times are good but to have no real governing body or control over the different countries, it’s set up for disaster. Good luck Euro Zone over the next 10 years. You think our depression is bad? Our workers don’t take 2 hour siestas in the middle of the day as a part of our culture. You ever heard of a hard working Greek, other than ones that have immigrated to the USA. The Spartans are dead my friends.

We’ll skip over Africa because… really do I have to go into that again?

Russia? “You don’t see piranhas eating other piranhas?” – Rounders, great movie.

So what’s left? South America. Yeah that sounds like a place I should invest my money. With rigged elections and corrupt regimes whose main exports are Coffee, Cocaine and migrant workers? There’s some promise in that but you’re not betting on a strong horse.

The only thing they can do is continue to work with the USA. Now I’m starting to get way off track. Let’s circle this one for a landing.

We saw an extremely brave maneuver by Moody’s today. By downgrading the banks, not only has Moody become target #1 but also probably something that people will soon find or hear is irrelevant. The only prayer anyone is going to hear is the one from when Moody’s wakes up and finds the head of their dead president at the foot of their silk sheeted bed. And the banks will be saying, “Who’s your god now?”

Thursday, January 26, 2012

Space and Beyond

Listening to the GOP debates and now the back and forth between the candidates can make ones mind numb. Especially since the two main runners are Romney and Newt (yes I feel that Gingrich has made it to the status of a one name superstar). I could go on forever talking about politics and what I feel about each candidate but there was something said today that reconfirms a mindset that I just can't agree with.

Maybe it's a generational thing. Maybe it's my love for sci-fi. Maybe it's my hope that the world can be a better place and one day the people of earth will see that, like it or not, we are ALL from the same planet.

Newt stated that "in his second term as as president there will be a permanent settlement on the moon, and it will be American".

Avoiding the absurdness of the fact that Newt would have a second term as president, I'm more concerned about this American settlement on the moon. Whether or not we actually NEED this settlement is a different debate that time will tell. What disturbs me is that if we get to the advanced state as to be able to have this permanent settlement and could leave our home rock, Earth, is that we'd still be saddled with antiquated ideals that have held our world apart for at least the last 5000+ years.

I am and always will be a true red, white and blue American. But I also see that our world has become much smaller over the past few decades as technology has brought people from all over the world together. It's amazing to me that in seconds I could be online with people from all over the world. I could jump onto my Xbox and be playing Gears of War with someone from NYC or London or even Iran or China.

I truly believe that as the world becomes smaller, old school war will become a thing of the past. I don't ever think we will have a conflict on the scale and scope of World War 2. We knew very little of what Germany was doing in early 1930. The average person couldn't tell you what countries or providences made up the USSR in the 70's and 80's. Compare that to now, we know when there's the slightest unrest in the middle of an African desert. We might not do anything about it but we know. Twitter and Facebook can topple a corupt regime in Egypt at the same time a lonely man in Calabasas downloads what would normally be illegal porn from his office computer... I mean check soccer scores from the EPL (that's right, whew that was close). Anyway, my point being the world is a much smaller place. I could understand hiding under your desk at school due to the threat of a nuclear attack from a nameless / faceless enemy, but would I go to war with Han from Korea that I play video games with online and who sends me bootleg movies?

How does all this fit into an economic blog? Well, because like it or not, we're in an world economy now. On a day to day basis we feel the affects of what happens in Europe and Asia. We've got 24 hour economic news channels. I can trade stocks all over the world from my iPhone at any time of day. If anything is going to bring the world together it's going to be money.

To have a permanent fixture on the moon would take a massive amount of money. It would also be tremendously risky. What any shrewd person would tell you would be to bring in different groups and spread the risk out. I'd hope that we'd also bring in the best and brightest for such an endeavor and that would mean bringing together people from where ever they may be from.

This is the next step of exploration not just to see who can plant a flag first. The moon already has an American flag. Does that mean we own it? I don't think so. Besides, unfortunately and sadly a corporation will probably claim or be given ownership over anything new that is discovered. More than likely it will be a multi national corporation.

To think that a man who is running for president wants the USA to own the moon scares me. What are we going to do with the moon when we can't even fix the problems we have at home? Or maybe he's thinking of a good place to divorce his 3rd wife and leave her on this moon settlement.

We've learn from the past, that to become great we must work together. A massive undertaking, like living on the moon, is going to take a joint venture. As we are becoming one economy and one society, we certainly shouldn't forget our roots and heritage, but we should put aside old xenophobic fears accept that we need to work together. Instead of an American settlement we should have a human settlement. Believe me, when the aliens come to take us over as slaves or steal Earth's natural resources (the ones we haven't polluted) they won't care which part of the rock we're from.

Tuesday, January 10, 2012

Lenders / Banks passing the buck.


Well it’s 2012 and this year I promise, or at least one of my goals, is to update you all with the most recent financial and mortgage information with the Bear perspective. The first thing I’ll say is that, thank GOD 2011 is over. 2012 has to be and will be a much better year for all of us. I’m actually excited and encouraged about where the loan industry will go. I don’t think we’ll see to much of a growth or betterment of our economy but there are so many changes that are going on, I can’t help but think one or two might actually help the average consumer.

I can’t say that 2012 is starting off great as far as all you mortgage customers out there. Sure rates are low, and will continue to be low. But I’m going to show you the best example of “the banks will only do what the banks want to do”.

Attached is an actual email that is basically passing the buck to the consumer regarding fees for ALL mortgages. It’s funny that even though they say this increase to rates / fees are due to Fannie Mae and Freddie Mac new regulations, the lenders are continently applying this rate / rebate hike to ALL loans. I wonder who’ll pocket that money? HMMMMM?

The funny thing is that this email from Wells Fargo came out Monday and no other lender said anything. This led to may of my piers speculating that maybe this was just a Wells Fargo thing. Which very well could have been the case. But seeing how this is a copy cat business, I knew other lenders would follow suite. Especially since most “lenders” just sell their loans on money lines to Wells Fargo, Bank of America and Citibank (just to name some big ones). Sure enough today, Tuesday, I started to get the same emails from even the smallest lender that rates / fees would increase.

About two months ago Obama said in a speech that he was going to push for a loan program that would help everyone, even if they where upside down on what they owed, there would be a mortgage for you. I got call after call for about two weeks asking about the new “Obama” loans. Well, two months later and there still hasn’t been a new loan program that has come out yet.

See, Obama is a politician. Like him or hate him, he’s going to say what he wants to happen. All politicians do this and if a republican had said this, the result would be the same. No one will tell the banks what to do. Sure they’ll take our bailout money but they’re only going to do what they want and if by chance there is a regulation that they have to adhere to such as this increase in GFees, they’re just going to pass it along to the borrower. They’re not going to let something like this stop them from making the same money they’ve always made.