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Living By Default

Fantastic Article in the New Yorker – identifies the hypocrisy the lending industry is attempting to pull off on the homeowner. If you’re wondering whether it makes sense to short sell your underwater home or find an exit strategy – EVEN IF YOU CAN AFFORD TO MAKE THE PAYMENTS – you need to read James Surowiecki’s terrific article. The Talk Center salutes this article

We normally say that a company “went bankrupt,” implying that it had no choice. But when, recently, American Airlines filed for bankruptcy, it did so deliberately. The airline had four billion dollars in the bank and could have kept paying its bills. But it has been losing money for a while, and its board decided that it was foolish to keep throwing good money after bad. Declaring bankruptcy will trim American’s debt load and allow it to break its union contracts, so that it can slim down and cut costs.

American wasn’t stigmatized for the move. Instead, analysts hailed it as “very smart.” It is now generally accepted that when it’s economically irrational for a company to keep paying its debts it will try to renegotiate them or, failing that, default. For creditors, that’s just the price of business. But when it comes to another set of borrowers the norms are very different. The bursting of the housing bubble has left millions of homeowners across the country owing more than their homes are worth. In some areas, well over half of mortgages are underwater, many so deeply that people owe forty or fifty per cent more than the value of their homes. In other words, a good percentage of Americans are in much the same position as American Airlines: they can still pay their debts, but doing so is like setting a pile of money on fire every month.

These people have no hope of ever making a return on their investment in their homes. So for many of them the rational solution would be a “strategic default”—walking away from the mortgage and letting the bank take the house. Yet the vast majority of underwater borrowers keep faithfully paying their mortgages; studies suggest that perhaps only a quarter of all foreclosures are strategic. Given how much housing prices have fallen, the question is why more people aren’t just walking away.

Part of the answer is practical. Defaulting (even in so-called non-recourse states) is still a lot of trouble, and to most people it’s scary. In addition, homeowners are slow to recognize how much the value of their homes has dropped, and have inflated expectations of how much it will rise in the future. The biggest hurdle, though, is social: while companies get called “very smart” for restructuring their contracts, there’s a real stigma attached to defaulting on your mortgage. According to one study, eighty-one per cent of Americans think it’s immoral not to pay your mortgage when you can, and the idea of default is shaped by what Brent White, a law professor at the University of Arizona, calls a discourse of “shame, guilt, and fear.” When the housing bubble burst, the banking industry was terrified by the possibility that homeowners might walk away en masse, since that would have stuck lenders with large losses and a huge number of marked-down homes. So strategic default was portrayed as the act of dishonorable deadbeats. David Walker, of the Peterson Foundation, waxed nostalgic about debtors’ prisons, and John Courson, the head of the Mortgage Bankers Association, argued that defaulters were sending the wrong message “to their family and their kids and their friends.”

Paying your debts is, as a rule, a good thing. But the double standard here is obvious and offensive. Homeowners are getting lambasted for doing what companies do on a regular basis. Walking away from real-estate obligations in particular is common in the corporate world, and real-estate developers are notorious for abandoning properties that no longer make economic sense. Sometimes the hypocrisy is staggering: last winter, the Mortgage Bankers Association—the very body whose president attacked defaulters for betraying their families and their communities—got its creditors to let it do a short sale of its headquarters, dumping it for thirty-four million dollars less than the value of the building’s mortgage.

When it comes to debt, then, the corporate attitude is do as I say, not as I do. And, while homeowners are cautioned to think of more than the bottom line, banks, naturally, have done business in coldly rational terms. They could have helped keep people in their homes by writing down mortgages (the equivalent of the restructuring that American Airlines’ debt holders will now be confronting). And there are plenty of useful ideas out there for how banks could do this without taxpayer subsidies and without rewarding the irresponsible. For instance, Eric Posner and Luigi Zingales, of the University of Chicago, suggest that, in exchange for writing down mortgages in hard-hit areas, lenders would take an ownership stake in a house, getting a percentage of the capital gain when it was eventually sold. Lenders, though, have avoided such schemes and haven’t done mortgage modifications on any meaningful scale. It’s their right to act in their own interest, but it makes it awfully hard to take seriously complaints about homeowners’ lack of social responsibility.

Of course, many borrowers made bad decisions and acted irresponsibly. But so did lenders—by handing out too much money and not requiring sensible down payments. So far, banks have been partially insulated from the consequences of those bad decisions, because Americans have been so obliging about paying off overinflated mortgages. Strategic defaults would help distribute the pain more evenly and, if they became more common, would force lenders to be more responsible in the future. It’s also possible that a wave of strategic defaults—a De-Occupy Your House movement—would get banks to take mortgage modification more seriously, which would be all for the better. The truth is that banks have been relying on homeowners to do the right thing. It might be time for homeowners to do the smart thing instead. ♦

Read more http://www.newyorker.com/talk/financial/2011/12/19/111219ta_talk_surowiecki#ixzz1hUcoqYYr

Q & A About the Independent Foreclosure Review – Announced the Week of 11/1/11 – from the Wall Street Journal with Commentary from Ken Gross

Commentary from Ken Gross at The Financial Crisis Talk Center:

Below is the text of Questions and Answers that appeared in the Wall Street Journal about the “Independent Foreclosure Review” process announce by the Administration this week. The Financial Crisis Talk Center’s take on this program is that it is an “INSULTING” waste of financial resources that will accomplish virtually nothing other than add to the frustration homeowners who have been abused have already suffered. The items that are compensable as set forth below – are all outrageous and unusual actions in the foreclosure process that can be redressed by victims using the services of qualified attorneys. This program is NOT going to provide relief for robo signing foreclosures and people whose due process rights were violated in taking their homes because of non-payment. If you have gone through foreclosure, the most important issues to focus on are whether you have or still have the opportunity to begin anew debt free. This mean – if you have lingering credit card debt or exposure on second mortgages or the deficiency on the first mortgage, you should meet with an experienced financial crisis management attorney to learn your options is ridding yourself of any lingering debt. Anyway this is out take – but so you have the benefit of being informed – info on the program is set forth below:

From the Wall Street Journal :

Independent Foreclosure Review

Looking for information about the Independent Foreclosure Review?

Homeowners whose primary residence was part of a foreclosure action between January 1, 2009 and December 31, 2010, and whose home loan was serviced by a participating servicer, may be eligible for an Independent Foreclosure Review.

The Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency (federal bank regulators) have required an Independent Foreclosure Review by an independent consultant to identify eligible customers who may have been financially injured due to errors, misrepresentations, or other deficiencies in their foreclosure process. If the review finds that financial injury occurred, the customer may receive compensation or other remedy.

To qualify, your mortgage loan would need to meet the initial eligibility criteria:

• Your mortgage loan was serviced by one of the participating mortgage servicers.
• Your mortgage loan was active in the foreclosure process between January 1, 2009 and December 31, 2010.
• The property was your primary residence.

Eligible customers will be mailed a letter by December 31, 2011 that explains the Independent Foreclosure Review process and a Request for Review Form that identifies some examples of situations that may have led to financial injury. The form must be completed and postmarked not later than April 30, 2012.

If your mortgage loan meets the initial eligibility criteria and you have questions, need a form by mail, or need help completing the form you have received in the mail, call 1-888-952-9105, Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET.

This information is accurate as of date of printing and is subject to change without notice. All other communications, legal documents and disclosures will be provided to you in English. We recommend that you obtain the services of an independent third party interpreter to assist you as needed.

Independent Foreclosure Review

Q1. What is the Independent Foreclosure Review?

As part of a consent order with federal bank regulators, the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS) ( independent bureaus of the U.S. Department of the Treasury), or the Board of Governors of the Federal Reserve System, fourteen mortgage servicers and their affiliates are identifying customers who were part of a foreclosure action on their primary residence during the period of January 1, 2009 to December 31, 2010.

The Independent Foreclosure Review is providing homeowners the opportunity to request an independent review of their foreclosure process. If the review finds that financial injury occurred as a result of errors, misrepresentations, or other deficiencies in the servicer’s foreclosure process, the customer may receive compensation or other remedy.

Q2. What is a foreclosure action? What foreclosure actions are part of the Independent Foreclosure Review?

Foreclosure actions include any of the following occurrences on a primary residence between the dates of January 1, 2009 and December 31, 2010:

• The property was sold due to a foreclosure judgment.
• The mortgage loan was referred into the foreclosure process but was removed from the process because payments were brought up-to-date or the borrower entered a payment plan or modification program.
• The mortgage loan was referred into the foreclosure process, but the home was sold or the borrower participated in a short sale or chose a deed-in-lieu or other program to avoid foreclosure.
• The mortgage loan was referred into the foreclosure process and remains delinquent but the foreclosure sale has not yet taken place.

Q3. How do I know if I am eligible for the Independent Foreclosure Review?

Your loan must first meet the following initial eligibility criteria:

• Your mortgage loan was serviced by one of the participating mortgage servicers listed below.
• Your mortgage loan was active in the foreclosure process between January 1, 2009 and December 31, 2010.
• The property was your primary residence.

If your mortgage loan does not meet the initial eligibility criteria outlined above, you can still have your mortgage concerns considered by calling or writing your servicer directly.

Q4. Who are the participating servicers? What mortgage servicers and their affiliates are part of the Independent Foreclosure Review process?

The list of participating servicers includes:

• America’s Servicing Co.
• Aurora Loan Services
• Bank of America
• Beneficial
• Chase
• Citibank
• CitiFinancial
• CitiMortgage
• Countrywide
• EMC
• EverBank/EverHome Mortgage Company
• GMAC Mortgage
• HFC
• HSBC
• IndyMac Mortgage Services
• MetLife Bank
• National City Mortgage
• PNC Mortgage
• Sovereign Bank
• SunTrust Mortgage
• U.S. Bank
• Wachovia Mortgage
• Washington Mutual (WaMu)
• Wells Fargo Bank, N.A.

Q5. What are some examples of financial injury due to errors, misrepresentations, or other deficiencies in the foreclosure process?

Listed below are examples of situations that may have led to financial injury. This list does not include all situations.

• The mortgage balance amount at the time of the foreclosure action was more than you actually owed.
• You were doing everything the modification agreement required, but the foreclosure sale still happened.
• The foreclosure action occurred while you were protected by bankruptcy.
• You requested assistance/modification, submitted complete documents on time, and were waiting for a decision when the foreclosure sale occurred.
• Fees charged or mortgage payments were inaccurately calculated, processed, or applied.
• The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the servicemember did not waive his/her rights under the Servicemembers Civil Relief Act.

Q6. How does my mortgage loan get reviewed as part of the Independent Foreclosure Review?

Homeowners meeting the initial eligibility criteria will be mailed notification letters with an enclosed Request for Review Form before the end of 2011.

If you believe that you may have been financially injured, you must submit a Request for Review Form postmarked no later than April 30, 2012. Forms postmarked after this date will not be eligible for the Independent Foreclosure Review.

If you have more than one mortgage account that meets the initial eligibility criteria for an independent review, you will receive a separate letter for each. You will need to submit a separate Request for Review Form for each account. It is important that you complete the form to the best of your ability. All information you provide may be useful.

Q7. How can I submit the Request for Review Form?

Homeowners meeting the initial eligibility criteria will be mailed notification letters with an enclosed Request for Review Form before the end of 2011. If you received the notification letter, you can send in your Request for Review Form in the prepaid envelope provided, postmarked no later than April 30, 2012.

If your loan is part of the initial eligible population and you need a new form by mail, have questions, or need help completing the form you have received in the mail, call 1-888-952-9105, Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET.

Q8. Who can submit or sign the Request for Review Form?

Either the borrower or a co-borrower of the mortgage loan can submit and sign the form. The borrower signing the Request for Review Form should be authorized by all borrowers to proceed with the request for review. In the event of a finding of financial injury, any possible compensation or remedy will take into consideration all borrowers listed on the loan, either directly or to their trusts or estates.

Q9. What if one of the borrowers has died or is injured or debilitated?

Any borrower, co-borrower or attorney-in-fact can sign the form. In the event of a finding of financial injury, any possible compensation or other remedy will take into account all borrowers listed on the mortgage loan either directly or to their trusts or estates.

Q10. Do I need an attorney to request or submit the Request for Review Form?

No. If your mortgage loan meets the initial eligibility criteria and you are currently represented by an attorney with respect to a foreclosure or bankruptcy case regarding your mortgage; please refer to your attorney.

The Independent Foreclosure Review is free. Beware of anyone who asks you to pay a fee in exchange for a service to complete the Request for Review Form.

Q11. If I have already submitted a complaint to my servicer, do I need to submit a separate Request for Review Form to participate in this process?

If your mortgage loan meets the initial eligibility criteria, you should submit a Request for Review Form to ensure your foreclosure action is included in the Independent Foreclosure Review process.

Q12. What happens during the review process?

You will be sent an acknowledgement letter within one week after your Request for Review Form is received by the independent review administrator. Your request will be reviewed for inclusion in the Independent Foreclosure Review. If your request meets the eligibility requirements, it will be reviewed by an independent consultant.

Your servicer will provide relevant documents along with any findings and recommendations related to your request for review to the independent consultant for review. Your servicer may be asked to clarify or confirm facts and disclose reasons for events that occurred related to the foreclosure process. You could be asked to provide additional information or documentation. Because the review process will be a thorough and complete examination of many details and documents, the review could take several months.

The Independent Foreclosure Review will determine whether financial injury has occurred as a result of errors, misrepresentations or other deficiencies in the foreclosure process. You will receive a letter with the findings of the review and information about possible compensation or other remedy.

Q13. How do I know who my servicer is? How do I find them?

The company you sent your monthly mortgage payments to is your mortgage servicer. It is not necessarily the company whose name is on the actual foreclosure documents (although in most cases, it is). If you don’t remember the name of the servicer for your foreclosed property, we suggest you review cancelled checks, bank statements, online statements or other records for this information.

If you are still unsure of who your mortgage servicer is or do not see their name listed in Q4, please call 1-888-952-9105, Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET.

Q14. If I request an Independent Foreclosure Review, is there a cost or will there be a negative impact to my credit?

The Independent Foreclosure Review is a free program. Beware of anyone who asks you to pay a fee in exchange for a service to complete the Request for Review Form.

The review will not have an impact on your credit report or any other options you may pursue related to your foreclosure.

Q15. Where can I call if I need help completing the form or have any questions about the review process?

Call 1-888-952-9105 Monday through Friday, 8 a.m.–10 p.m. ET or Saturday, 8 a.m.–5 p.m. ET. If you have already submitted a Request for Review Form, please have your Reference Number available to expedite your call.

Q16. How are military servicemembers affected by the Independent Foreclosure Review?

Servicers are required to include in the review all loans covered by the Servicemembers Civil Relief Act that meet the qualifying criteria. However, servicemembers or co-borrowers may also request a review through this process. Financial injury may have occurred if the foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended.

Q17. How am I affected if I submit a Request for Review Form while in active bankruptcy?

If you submit a Request for Review Form and a review is conducted of your foreclosure process, this will have no impact on your bankruptcy. The letter being sent to you about the Independent Foreclosure Review is not an attempt to collect a debt. If you are in bankruptcy, please refer this letter to your attorney.

Q18. I’m still working with my servicer to prevent a foreclosure sale. Will I still be able to work with them?

Yes, continue to work with your servicer. Participating in the review will not impact any effort to prevent a foreclosure sale. The review is not intended to replace current active efforts with your servicer.

Q19. How long will the review process take and when can I expect a response?

You will be sent an acknowledgement letter within one week after your Request for Review Form is received by the independent review administrator. Because the review process will examine many details and documents, the review could take several months. The Independent Foreclosure Review will determine if financial injury occurred as a result of the servicer’s errors, misrepresentations or other deficiencies in the foreclosure process. You will receive a letter with the findings of the review and information about possible compensation or other remedy. Not every finding will result in compensation or other remedy.

Q20. What happens if the review finds that I was financially injured as a result of errors, misrepresentations or other deficiencies in the foreclosure process?

You will receive a letter with the findings of the review and information about possible compensation or other remedy. The compensation or other remedy you may receive will be determined by your specific situation. Not every finding will result in compensation or other remedy.

Q21. What happens if the review finds that I was not financially injured as a result of errors, misrepresentations or other deficiencies in the foreclosure process?

You will receive a letter with the findings of the review. Not every finding will result in compensation or other remedy.

Q22. What if I disagree with the eligibility requirements or the result of the Independent Foreclosure Review?

The decision of the review is considered final and there is no further recourse within the Independent Foreclosure Review process. The Independent Foreclosure Review will not have an impact on any other options you may pursue related to the foreclosure process of your mortgage loan.

Q23. Does filing a Request for Review Form prevent me from filing other litigation or action against the servicer?

No. Submitting a request for an Independent Foreclosure Review will not preclude you from any other options you may pursue related to your foreclosure.

Sunday/Monday And Have A Little Faith – by Ken Gross – December 8, 2011

Appearing in the December 8, 2011 edition of the JNews – Metro Detroit

Sunday/Monday And Have A Little Faith

Another Sunday night – time to try and salvage some relaxation, maybe watch a movie, and gear up for Monday morning. So clicking my way to an espionage movie, I ran across Have a Little Faith – Mitch Albom’s TV premier that aired on the Sunday following Thanksgiving. I’m not typically a Hallmark Hall of Fame guy – but when I saw it was on I said, hey – Tuesday’s With Morrie struck many a chord with me – so I should give it a try. In fact, until Tuesday’s With Morrie – I did not think of Mitch any different than any other columnist or sports person that I don’t know but do listen or read on occasion.  Have a Little Faith affected me in the same manner as Morrie –it was Mitch’s revelation of his own personal conflict of questioning his plight in life – that intrigued me. I believe it is a lingering anxiety so many of us feel – that our day to day lives take on a significance that in the end is not that significant – and when we find ourselves in a “moment” where “no one is around” we know – and we feel – that void – and the guilt – that we do not do enough –to make this a better world – to help those who need.

Have a Little Faith - was fun. Hogans, Temple Israel – it was like we were there. But way beyond that – there is a powerful message. Rabbi Lewis, in his last sermon – dedicates his “moment” to one of atonement for not doing enough to help his congregates – after having spent 60 selfless years of doing precisely that. I was overcome with emotion at that moment. I knew then, I know now – it’s simply because we become so absorbed in the day to day affairs of managing our lives that we are not in touch with a greater calling.

So how does Have HavehhhHa Little Faith – tie to the current economic issues we face? The tie is not financial – rather it is based on the difference between right and wrong, and good vs. evil. Our elected officials have a constituency far greater than that of Rabbi Lewis and Pastor Henry in Have a Little Faith. The American public and the United States of America is their congregation. Our elected officials are the stewards of our republic and are charged with a greater calling – of looking out for the greater good than individual gain. If that means arriving at a compromise to balance the budget, attaining a workable health care policy that will meet our nation’s needs pr adopting a tax structure that is realistic and fair – then they need to HahHave a Little Faith and do what they have been charged with the privilege and responsibility to do. Rabbi Lewis and Pastor Henry should be their guide.

In the end, there is something powerful and exhilarating when we (in this case me) are reminded of our own humility. For me this comes when I watch a movie, by myself, with no one there, no pretentions – and the emotions reach to my inner sole. Have a Little Faith reached me that way –so I salute and thank Mitch Albom for having the talent and heart to remind me that there exists much more to our lives, than showing up on Monday morning. Mitch – thank you.

Ken Gross is an attorney with Thav Gross and host of The Financial Crisis Talk Center, a radio program that airs weekly at 10:00 AM on Saturday mornings on Talk Radio 1270 WXYT AM.

Fannie, Freddie Spend $640,000 on Conference

Comment from Ken Gross -This is so far beyond pathetic – Frannie and Freddie spend $640,000 on a conference for 100 people ($6400/per) to entertain the mortgage companies — This is an insult to the very foundation of democracy. Ed DeMarco – the prince of NO PRINCIPAL REDUCTION on mortgages – you need to join the ranks of the 13 million unemployed Americans – NOW, RIGHT NOW!!!!!

Sometimes lines are crossed, then again, other times– you find out the other side doesn’t even recognize that a line exists … this is one of those times – we have funded them with 150 BILLION of US Taxpayer money – which is growing every day — and rather than solve the housing crisis – they are spending money on Bonus (13 Million for 10 execs, and throwing AIG style parties for the mortgage lenders) Tomorrow – when another 1,000 or so people lose their homes to foreclosure – we need to ask the question – How can we allow this to go on?

FROM THE WALL STREET JOURNAL —

• DECEMBER 1, 2011

Fannie, Freddie Spend $640,000 on Conference

By ALAN ZIBEL

Fannie Mae and Freddie Mac spent more than $640,000 this fall to send 100 employees to a Chicago mortgage-industry conference and to host events there, a decision the companies defended amid criticism from a lawmaker.

The Federal Housing Finance Agency, which oversees the government-controlled mortgage-finance companies, outlined the costs in a letter to Rep. Randy Neugebauer (R., Texas), a member of the House Financial Services committee. Mr. Neugebauer, who had sought details on the conference, called the spending “lavish.”

The federal housing regulator “has special responsibility to make sure that Fannie and Freddie are run responsibly and in a way that minimizes taxpayer losses,” Mr. Neugebauer said.

The spending included nearly $342,000 for travel, food, hotel and meeting-room space and $74,000 on four invitation-only dinners for mortgage-lending companies that do business with Fannie and Freddie. The companies spent about $140,000 to sponsor the conference and about $68,000 for registration fees, the regulator said.

The companies’ top regulator defended the spending as a whole, but said he would apply greater scrutiny to sponsorships and dinner events. “I believe we can and should provide more detailed direction regarding such expenditures in the future,” Edward DeMarco, acting director of the FHFA, wrote to Mr. Neugebauer in the Nov. 23 letter. The letter was released Wednesday by Mr. Neugebauer’s office.

Fannie and Freddie dominate the U.S. mortgage market, purchasing and guaranteeing about 70% of new loans from mortgage lenders. Though lenders have few other outlets to purchase their mortgages, Fannie and Freddie say they value face-to-face meetings with customers as a way to understand their needs.

“The cost savings associated with meeting hundreds of customers at one location versus traveling to various locations across the country is significant,” said Amy Bonitatibus, a Fannie spokeswoman. Freddie spokesman Doug Duvall said the event allowed Freddie to meet “with our lender customers in a cost-efficient way. In just two days we held approximately 200 meetings.”

Fannie and Freddie have reduced their spending on conferences since they were put under federal control, and attend such events when there is enough business justification for doing so, the FHFA said. Scrutiny of Fannie and Freddie has grown on Capitol Hill; their federal rescue three years ago has so far cost taxpayers more than $151 billion. Lawmakers have been irate about large bonuses paid to executives hired to run the companies after their near collapse in September 2008.

The conference, held in October, was also sponsored by the mortgage-lending divisions of J.P. Morgan Chase & Co. and Citigroup Inc. as well as other service providers. Speakers included Rep. Spencer Bachus (R., Ala.), chairman of the House Financial Services Committee and Housing and Urban Development Secretary Shaun Donovan.

FCTC Announces Annual Turkey Awards

FCTC – 2011 TURKEY AWARDS

These are “turkey awards” – not loser awards. Jerry Sundusky, Penn State Administration – those are all losers so they don’t rate turkey awards….

10.     Banks – for making sure they don’t take any of that money and actually loan it to small business to spur economic growth

9.       NBA Basketball Players – for thinking we really care if you strike for the next 20 years

8.       Fox News and All the Conservative Talk Hosts – who determined that the only news worthy event of Occupy Wall Street was discussion of sanitary conditions

7.       Bank of America – for consistently doing nothing to help the housing crisis in the largest way

6.       Ndamukong (Damuknon) Suh – for his post game explanation of how a STOMP is simply an Exit Strategy

5.       Herman Cain – for thinking that foreign policy can also be solved by 9/9/9

4.       Ed Demarco – Head of FHFA (Federal Housing Finance Agency

3.       President O’bama – for not running Ed DeMarco’s butt out of town

2.       United States Congress – for makings sure our credit rating is downgraded and our future is bleak all in the good spirit of bipartisism

1.       American People – for allowing ourselves to be treated the way we are – always say, it’s okay to make a mistake, but you need to learn from it.

Ken Gross and Thav Gross announce Free Seminar on Capturing Your Financial Future – December 7th, 2011 –

What do you do if your house is under water? If you owe $300,000 on  your home and today it is only worth $170,000. Are you just going to “stay the course” and pay for the house over the next 20 years – paying $130,000 plus interest for air? If you have $50,000 of credit card debt, at 19.9% interest – are you going to just “stay the course” and pay the interest and payments over the next 19 years and 3 months (that is if you make the minimum payments) paying a total of $99,109 to payoff the debt. THIS IS WHAT THE FINANCIAL INDUSTRY WANTS YOU TO DO. If you do this, your credit score may be 725 now and 725 every day for the next 20 years – but you’ll have nothing in the bank for savings and retirement. There is an alternative – by exiting the house underwater and shedding the credit card debt  – you can put yourself in a position that rather than “staying the course” you “create your course” – the result – you begin to save the $2,000 per month you were paying on the credit card debt and you bank the $1,000 per month you will save by reducing your housing costs so that you are paying for housing based on TODAY’s market values.  You must realize that 2008 values – are in the words of the great, Ernie Harwell, “Lonnnnng Gone.” Saving the $3,000 per month over 20 years, with a modest return will yield you over $1,000,000 in savings.

The choice – a reduced credit score for 1-2 years and becoming debt free and having a savings account of $1 Million – or reaching 70, with nothing in the bank (but, oh yes, a perfect credit history). When you need food to eat or shelter when you’re 72, just try and pay for it by giving them some of your credit score points! Sound harsh – this – is the reality of today’s world. This economy, as miserable as it is – does create opportunity. The hard part for many – is recognizing the reality and taking action.

If you want to learn how to do this – attend the FCTC and THAV GROSS’s free Financial Crisis Management Seminar on December 7, 2011 at 7 PM. Sign up on the Website or call our offices at the numbers listed.

THIS IS YOUR CHANCE TO GIVE YOURSELF THE GIFT OF YOUR LIFETIME THIS HOLIDAY SEASON – YOUR INVESTMENT – AN OPEN MIND AND  1.5 HOURS.

Ken Gross – STOP House Rep. Olson’s Attempt to Brings Unfair Foreclosure Reforms to Committee

The Financial Crisis Talk Center urges you to take the steps listed below to help STOP this deplorable action. There is no justification or rationale to Mr. Olson’s bill. His action represents a callous disregard of a problem that has reached epidemic proportions. Beyond that – why would we shorten the 6 month redemption period that has been the law of the State of Michigan for the last 50 years? What on earth happened to the concept of our legislature doing something designed to help its constituency? Is the banking industry the new constituency? If so, where does that leave the residents of the State of Michigan? I urge you to read the below post from Michigan Forward and make the calls and pass the word. Bottom line – if we remain quiet – the train will run us over. — Ken Gross on Thanksgiving Day – 11/24/11

Michigan State House Representative Rick Olson (R) from Saline has introduced more unfair housing policy before Michigan’s homeowners. Olson’s HB 5176 reduces the 6-month redemption period to 3 months. As anticipated this legislation is designed for loans where the “original mortgagee has never assigned the mortgage or the indebtedness secured by the mortgage and has not transferred the power to service the mortgage.” We expect this bill to be taken up at a meeting of the Housing Banking &Financial Services Committee  on either November 30^th or December 7^th.

The Michigan Foreclosure Task Force anticipated this action in a previous post. This administrative nightmare for Michigan’s housing industry and homeowners. MFTF opposes the changes made to Michigan’s foreclosure redemption period by HB 5176. HB 5176 presents a fundamental unfairness to homeowners who don’t know whether or not their loan meets the above criteria and more importantly have no choice in the matter. This bill will further delay the loan modification process Michigan homeowners rely on to preserve their homes. HB 5176 creates a paper log jam for the big lending institutions that hold approximately 90% of Michigan mortgages.

Michigan Forward is asking your help in gaining public support for our position which will require all of us  to act quickly!

Please immediately, call or email  the following House Banking Committee Members:

Rep. James Womack –(517)373-0589 –JimmyWomack@house.mi.gov
Rep. Paul Clemente –(517) 373-0410 –PaulClemente@house.mi.gov
Rep. Jon Switalski –(517) 373-1772 –JonSwitalski@house.mi.gov
Rep. Woodrow Stanley –(517) 373-8808 –WoodrowStanley@house.mi.gov
Rep. Rick Olson –(517) 373-1792 –RickOlson@house.mi.gov

When you call these State Representatives give them this clear message:

• Shortening the 6-month redemption period on any residential mortgage is bad news not only for Michigan’s at-risk homeowners but for all of us in terms of reducing our property values,increasing the number of vacant properties,eroding the local tax base that pays for basic services and further slowing the housing market and our overall economic recovery.
• Specific to HB 5176,shortening the redemption period on loans as  defined in the bill is fundamentally unfair to homeowners who don’t know whether or not their loan meets the criteria and more importantly have no choice in the matter.

MERS CASE IN MICHIGAN IS REVERSED BY MICHIGAN SUPREME COURT – SAD DAY FOR HOMEOWNERS WHO HAVE BEEN WRONGFULLY FORECLOSED

LSJ.com ..

Michigan court ends doubt over foreclosure process

LANSING, Mich. — The Michigan Supreme Court has reversed an appeals court ruling that had cast doubt on thousands of home foreclosures across the state.

The Supreme Court said Wednesday that it’s legal for Mortgage Electronic Registration Systems to foreclose by advertisement when a loan turns bad. Known as MERS, the company acts as an agent for lenders.

Property owners in Kent and Jackson counties had convinced the appeals court that MERS couldn’t take certain steps in the foreclosure process because it didn’t actually lend the money. But in a 4-3 decision, the Supreme Court says MERS has an interest in the debt and acted properly under Michigan law.

Democratic justices in the minority wanted to keep the case alive and hear more argument.

Two Friends – Fannie and Freddie (from the Financial Crisis Talk Show – On Air November 12, 2011)

A poem – emphasizing and poking fun at the reality that the banking industry is the benefactor of the Fannie and Freddie Mac bailout that as of this date is at $156 Billion dollars of taxpayer money. All indications point to a settlement of the Fannie and Freddie Mac lawsuit against the major banks in the $25-29 Billion Range. Guess who will cover the loss of $126 Billion – plus??

Fannie & Freddie *** Two Friends

By Ken Gross

November 12, 2011

Once upon a time in our great land

Two friends to all  –

Fannie and Freddie sat on a wall

But then came a crises and they both took a great fall

All the King’s financial wizards, banks and good men

couldn’t put Frannie and Freddie  back together again

Their best friends – the banks – then cried “oh no”

Because without their great friends to buy their bad loans

All the great loss would be on their bones

But with the magic of political debate

And a 147 billion of taxpayer loot in the crate –

they assembled Fannie and Freddie back together again

Now their great friends are again covering their loans

Leaving all of us with nothing but moans

So now all they need is to settle the score

And the scam no doubt  will become lore

Though some complain it matters not

The deal will be cut behind doors that are closed

At a cost that’s a mere pittance against the billions lost and foreclosed

But considering these days –  it’s certainly not

much a surprise …

As we watch them silently laugh in our face

One thing is certain – it’s a disgrace

for the whole human race