HOMEOWNERS struggling to pay their bills must find the federal government’s bailout of troubled Wall Street firms confusing. All they are hearing are Government Money to be available, they might think its for them. But its not for the homeowners directly or so called Main Street but its still going to Wall Street.
After all, government officials have repeatedly said they would not help victims of the subprime mortgage crisis, reasoning that they should not get rewarded for making bad decisions.
It’s Economics 101 that people who take bad risks will continue to do so if there are no consequences to their actions. That maybe true but what about AIG, Fannie Mae and Freddie Mac to name a few. This brings all of these cherished notions of free markets into question.
Why is the government helping companies who sold mortgages to people who they knew couldn’t afford them and repackaged the loans into securities that were unloaded on unsuspecting investors – but doing little for individual homeowners?
Today, Timorthy Gaitner approved a Trillion Dollar Bill to buy Toxic Loans for big corporation playing with your money. This is not a good sign for Main Street or Homeowners John and Jane Doe who is in need of financial help. This means to me that the banks that now own your loan has a way to write off more money with their losses and now have even lesser reason to help you Main Street.
Real Estates Sales are slightly up, that means the reserves that are in the banks are going into real estate. That means, the banks not willingness to help homeowners might be advantageous to investors or First time buyers. Because in some areas, the investors and First time buyers are gobbling up those properties.
Now, lets talk again about "Loan Modification Companies", I have repeatedly said on my article that I would like for someone to come forward and "SHOW ME THE RESULTS" results that your company have successfully reduce these homeowners mortgage balance, have reduce their second loans or have given rates as low as 2%. Because that is what they are selling you isn’t it? To me I will continue to say they are false promises targeting distress homeowners vulnerable to these gimmicks. I also want these Loan Modification Pyramid Scheme ( what I call it ) to disclose how much they are making on each Loan modification application they bring in.
I overheard a couple talking about a company charging a $3,500.00 fee and a monthly retainer fee of $1,000.00. That is outrageous and I just had to cut in to this couples conversation and get more information. Turns out that a Loan Broker who signed up with a Law firm as an Independent Contractor can go and solicit for Loan Modification, they can either recruit more independent contractors or actual homeowners in need of Loan Modification. This couple told me that they went to a seminar where the actual Lawyer was there but could not give a straight answer. Very understandable for a Lawyer, but when you talk to their Independent contractors you get straight confident answers sometimes with verbal guarantees. Why is that, because I think they don’t know what they are saying, doing or both. Obviously they also could be flat out lying and just want your upfront fee for their commission in order for them to make their own mortgage payments. Does this not sound like a "Pyramid Scheme" to you?
I just want people to understand well, their own financial situation, find out how much are all your debts and mortgage obligation and be truthful in looking ahead and seeing whether you can pay of the mortgage with a realistic payment. If you cannot, you have to learn how to either increase your own income to pay the mortgage or just have to let go and clean your slate for a better future. Otherwise, six months from now, you will still be taking on this problem and still cant have a valid information solution.
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For my honest opinion, call me direct be prepared to listen to my truthful and very direct advice. Call Ken Go at 1st Innovative Finance (888) 822- 5363 or write to: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Please be understanding to yourself, mistake can be made to better yourself in the future.
( Published on April 1, 2009 in Asian Journal Los Angeles p. B4 )
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