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WHAT DOESN'T CONGRESS GET?
Congress and Washington politicians recently approved a "bailout program" that has given hundreds of billions of dollars to banks yet mainstream USA is not receiving the benefits of this money. When my clients previously asked me if this bailout made sense I told them it did. After all the American public was told this money would be used to buy bad mortgage backed assets. Did this ever happen? A quick politician shuffle and redirection of these funds have instead been reallocated to allow the banks to invest in what and how they see fit. Are you aware that Bank of America recently decided to further increase their stake in CHINA CONSTRUCTION BANK CORPORATION ? It was recently announced that it may be as early as the end of November that they will be increasing their stake to as much as 19.1% with 44 BILLION shares. Why isn't this money being lent to the American public and to Americans? As a taxpayer, local business owner and having been in banking and real estate since 1979 I find it an "abortion of government spending" and feel that the American public has once again been mislead. "Too big to fail" is a new phrase that seems to be used when the politicians want to convince their constituents that they are spending our money properly. Once again I recall that monies would be used to purchase non performing troubled mortgage backed assets. That way the money could eventually be paid back to the taxpayer. I also feel that there are grave conflicts of interest that are in decision making positions such as our Treasury Secretary Paulson. Why was Bear Stearns allowed to fail and Lehman Brothers allowed to go out of business yet AIG bailed out again and again? Even after the immense bailout of AIG this company and their executives were allowed to throw elaborate parties and events that cost hundreds of thousands. If you have your pension or money in equities I don't have to tell you the damage that has been caused. I for one have had my equities deplete nearly 93% in the past few months. So why is Congress and our lawmakers continuing to feed banks that invest in other countries and not America or the United States of America? Recently Fannie Mae and FHLMCC( the biggest buyers in the secondary market) put a rule in effect that further damaged the public and restricted the flow of funding for lenders and brokers. As of September 30, 2008 if a homeowner was leaving their residence to purchase another home they were not permitted to allow any rental income from their residence to offset their payment. Therefore borrowers that had either bought another home or were building another home were immediately disqualified from doing so if they had less than 30% equity in their current residence. If someone wanted to downsize due to economic conditions or otherwise they would be trapped into staying into their home(even if their intention was to consolidate their overhead through this move). In the past, lenders and brokers were allowed to use 75% of the rental income as long as the proposed rental income was properly documented. We have also had clients that we told builders to build houses for in May and June of this year before the new law was enacted. Their homes were scheduled to close before the end of the year . Since the new law or rule took effect through Fannie mae and FHLMCC(which are being run by the government) these borrowers could have well been declined because they were unable to use proposed rental income. If we hadn't found an alternative solution to close these loans this decision would have hurt these borrowers, the builders, and the suppliers who sold the material and so on and so on. Recently HUD has proposed a change in the manner that brokers must disclose good faith estimates along with 346 pages of changes. Although HUD and the legislature recently acknowledged and agreed that ALL ORIGINATORS MUST ADHERE TO THE SAME RULES AND STANDARDS many of these proposals were only targeted at brokers and did not apply to Banks or Credit Unions. For a copy of this recent proposal feel free to go to WWW.NAMB.ORG. When will the government and legislature realize that when you interfere with the financial and real estate markets that you could hurt our economy? I am not one to complain without a remedy or proposal that will help. If you are interested in my proposals and would like to be kept aware of these and other critical issues feel free to call us directly, Email us or view oncoming information bulletins but remember it is important to tell our lawmakers that ENOUGH IS ENOUGH AND WE WON'T STAND FOR THIS FLAGRANT WASTE OF OUR TAXPAYER MONEY ANYMORE! MGM FINANCIAL CORPORATION - 1531 E. Main Street - Duncan, SC 29334 Office Phone: (864) 486-8000 Fax: (864)-721-2998 Cell Phone: (864) 431-2314 Toll Free Phone: 1-866-MGM-1FIN
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