MORTGAGE & BANKSTER UPDATES

3/4/2010

NEW YORK (CNNMoney.com) — More bad news on the housing bust front: Nearly 25% of all mortgage borrowers were underwater, meaning they owe more on their loans than their homes are worth. First American CoreLogic, the research firm that monitors housing equity, reported Tuesday that 11.3 million homeowners or 24% of all homes with mortgages — were underwater as of the end of 2009. That’s up from 23% and 10.7 million borrowers three months earlier. Nevada wins the boobie prize with 70% of all mortgaged properties underwater, next was Arizona with 51%, then comes Florida with 48%, followed by Michigan with 39% , that disaster area known as Detroit is really dragging Michigan down. Detroit has the lowest median housing prices in the country at $7,500 and some houses are being sold for just ONE DOLLAR! Lastly, California is at 35%. Did you know that Californias economy is the fifth largest in the world? I predict that California is the first state to go bankrupt.  For many homeowners being underwater has few consequences, if they’re not planning to sell and can afford their monthly bills, they can wait out the downturn. My suggestion for people in that situation, especially if they are also carrying credit card or other consumer debt is to get on the Pay it Off System to help them quickly pay off their mortgage and debts and build equity back into their homes, for more info go to: www.teampayitoff.com.

For others however, being underwater can spell disaster! If they lose their jobs or have a financial emergency they have no equity to tap into. They can’t even downsize or relocate to find another job because they cannot sell their homes. That’s why it is SO IMPORTANT that they build equity back into their homes and on the wealth building side I suggest they purchase a whole life insurance policy with some of their funds.  I will go into the benefits of taking out a whole life policy in another missive.  Negative equity is a significant drag on both the housing market and on economic growth says Mark Fleming the chief economist with First American CoreLogic, it is driving foreclosures and decreasing the mobility for millions of homeowners.  

Traditionally, being underwater was one of two main factors in determining a borrower’s likelihood of foreclosure. The other is having sufficient income to pay bills. But, there’s an increasingly important exception: strategic default. As equity gets more and more negative, (as the home prices continue to decline) some homeowners are choosing to quit paying and mail the keys back to the bank and walk away, But that isn’t as easy as it sounds, there are still legal consequences that have to be dealt with. I suggest you discuss this with an Attorney that has knowledge in the Real Estate arena.  As long as we have falling housing prices we will continue to have homes with negative equity, no one is quite sure how to remedy this situation certainly not the Federal Government!

A new study has been released that estimates that 5 million houses and condos on which mortgages are now delinquent will go thru foreclosure and be put on the market within the next few years!  Another devastating housing crisis would absolutely destroy the vast majority of small to mid sized banks in the U.S. In such a scenario the FDIC would be able to make use of the new facilities that they are opening up around the country. I just read that they are planning a huge 100,000 sq ft facility in the Midwest. There are even rumors that the big banksters do not intend for most small and mid-size bankers to survive the coming crisis.  There are whispers that the big bankers see all of this economic turmoil as a great opportunity to “consolidate” the banking industry. So what should you do to  get your family protected and prepared?  Get out of Debt any way you can, use mortgage acceleration programs, debt settlements, mortgage modifications, downsize, and get rid of unnecessary expenses.  Try to start developing alternate streams of income and come up with a plan for what you will do if you lose your job. The Reality is that hard times are coming and a lot of people are going to lose their homes and their jobs. Please don’t blindly trust the System, now is the time to make sure that you and your family will be prepared even if a total economic collapse develops.

Here are a few interesting facts I dug up this week:

Our Federal Government (OBAMA) huff and puff and try to look like a champion of the people by declaring that NOW  they want to put the Banks in their place – Ha, Ha, Ha.  Did you know that the SIX BIGGEST BANKS hold more assets as a % of GDP today than they did before the financial meltdown?  In 1995 the six biggest banks total assets were 17% of GDP AND NOW it is an astonishing 63% of GDP!  In the next two years 500 to 1,000 small banks will fail. The six biggest banks will get bigger. The Federal Reserve is owned and controlled by these 6 banks, they own your legislators, QUITE SIMPLY THEY RUN THIS COUNTRY!  When will the SHEEPLE wake up and understand that these are the scum bags who have ruined this great country, shipping jobs overseas and totally obliterated the middle class, while reaping enormous  profits!

I think this is fascinating. The dollar is up strongly against every major currency in the world in the last 60 days except the Yen. Everyone knows that gold goes down when the dollar goes up. Not this time. Gold is hitting a 6 week high today. This tells me that the smart money is buying gold because they know that this supposed dollar strength is bullshit. Our currency is the best looking horse in the glue factory. It will eventually reach its true intrinsic value of zero. Buy gold.

If you have any questions or concerns or would just like to  vent, you can e-mail me at: wayne@teampayitoff.com. I would be happy to look over your financial situation, run a FREE Financial Analysis for you and guide you in the right direction during these perilous times.