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?”