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60 Minutes: “How Much Danger Is Still Out There? We Don’t Really Know.”
60 minutes did a piece on Credit Default Swaps and explained at a high level how many of the “side bets” that happened since 2000 had a role in the financial problems of today.
Note the last part of the video when former SEC commissioner Harvey Goldschmid is asked at 12:01 of the video:
“How much danger is still out there?”
Mr. Goldschmid’s reply:
“We don’t know… We don’t really know.”
Ignite Phoenix: 5 Minutes Sometimes Feels Like 5 Hours
I received an email yesterday that read:
Congratulations! Your idea submission was selected to be given at Ignite Phoenix #2 on October 29th!
Fun!
Maybe it was the catchy title that the judges liked who were selecting people to present:
“Not Using The Web For Marketing - How I Went Broke.”
So, if you have *at least* an extra 5 minutes and want to know how important the web is to use in your overall marketing efforts, be sure to attend Ignite Phoenix #2!
See you on the 29th…
Arizona Attorney General Urges Broad Adoption of Mortgage Modifications
The Arizona Attorney General’s office has joined with 9 other states to urge 16 lenders to work with borrowers on loan modifications.
The latest urge comes on the heels of a report by a Working Group that concluded that industry measures to keep homeowners out of foreclosure had actually slipped since the last report in April, 2008 and that currently a full 80% of delinquent borrowers are not on track for any loss mitigation outcome.
According to the report:
“The mortgage industry’s failure to develop systematic approaches to prevent foreclosures has only spurred declines in property values and further increased expected losses on mortgage loan portfolios.”
“Given the significant losses associated with foreclosures, and your fiduciary duty to
maximize the return for your investors, we believe that every major servicer of subprime loans
should adopt these types of programs as soon as possible. We believe that doing so is in the
interests of homeowners, servicers, investors, and the economy at large. We urge you in the strongest possible terms to adopt a comprehensive, streamlined, and effective loan modification program
as soon as possible.”
This could be very good news for people who are currently being told “no” when trying to work with their current lender.
WSJ: The US Taking Equity Positions In Banks
By now, you may have heard that the US Government is going to start taking equity positions in many of the nations largest banks and the Nationalization of the US Banking System is becoming official.
As covered in the Wall Street Journal:
To kick off Tuesday’s expected announcement, the government is set to buy preferred equity stakes in Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. — including the soon-to-be acquired Merrill Lynch — Citigroup Inc., Wells Fargo & Co., Bank of New York Mellon and State Street Corp., according to people familiar with the matter.
Some of the big banks were unhappy about the government taking equity stakes, but acquiesced under pressure from Treasury Secretary Henry Paulson in a meeting Monday. During the financial crisis, the government has steadily increased its involvement in financial markets, culminating with a move that rivals the breadth of the government’s response to the Great Depression. It intertwines the banking sector with the federal government for years to come and gives taxpayers a direct stake in the future of American finance, including any possible losses.
My question is this:
Suppose (for a moment) that the US Government’s actions result in an all positive outcome — meaning, banks who are hurting now get much-needed liquidity in return for giving up an equity position and as a result return to risk-adjusted-rate-of-return profitability levels.
What will the US Government do with their new-found return on investment?
Save Social Security from it’s impending bankruptcy?
Create more entitlement programs?
Spend it on more taxpayer funded junkets?
Use any surplus to pay down the national debt and hope the national debt clock starts working again?
Invest it “wisely” in companies who are too big to fail?
And now just for fun - see the top 10 US Government “wastes” and my personal favorite (#1) “the missing $25 Billion” .
Many of you that we have spoken with over the last month or so have asked our opinion on what all of the recent market changes mean to America’s Future.
I confess openly and in public — the scale of the current economic problem is something that I cannot exactly wrap my head entirely around, but it appears as if capitalism is being replaced by a dose of socialism.
Do they have mortgages in a socialistic society? I will have to look into that and get back to you.
Arizona Mortgage Team Podcast On PhoenixHousingBlog.com
Want to hear more about some of the latest hot-topics in the Arizona mortgage scene?
Be sure to listen to our podcast with Candace Robinson of PhoenixHousingBlog.com where we talk about many of the things on people’s minds including:
- The $700 billion bailout and what people are saying about it
- The FHA Hope For Homeowners program
- What you can do if you owe more than your house is worth
- What loan programs are extinct or endangered
- Loan modifications - what they are and what is happening with them
- What can a buyer do to increase their chances for a loan approval
- How to find a good loan officer
- When Tammy predicts “things will turn around” (be sure to listen to this segment starting at 27:58!)
A special thanks to David who produced the podcast and Candace who was an excellent interviewer!
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Arizona Mortgage Newsletter
