By Ryan Wright
There are talks all over the world about the United States’ program to save homeowners from foreclosure. Five months ago Congress made $300 Billion dollars available for this purpose. Let me first start by giving you an idea how much $300 Billion Dollars. First let’s put things in perspective. A million dollars is a lot of money. If you multiply a million dollars by ONE THOUSAND, YOU GET 1 BILLION Dollars. So $300 Billion would equal $300,000 Million.
Another way of putting this into perspective is The United State CIA (Central Intelligence Agency) in there The World Fact Book of 2008 showed Iran’s GDP (Gross Domestic Product) is $382 Billion Dollars. South Africa’s GDP was $300 Billion, Hong Kong’s was $223 Billion and Egypt’s was $158 Billion. On my count $300 Billion dollars is more GDP of several countries. I will go into this explanation to help understand how much money we are talking about. [i]
This extraordinary amount of money is available to help homeowners that have lost their homes in USA. This program has been in effect for over 5 months. The United States Government backed this program and has spent millions and millions of dollars promoting the program setting up web sites, hiring counselors and setting for the guidelines.
The United States Government expected that this program would help over 400,000 homeowners.
I am sure you are as curious as I am as to how many homeowners were helped in the last 5 months….. Well the answer is surprising…..
ONE!
Yes you read it right. One single solitary person participated in the program! CNN Money.com New York reported on March 25, 2009 that the program had only insured ONE loan. [ii]
The Federal Housing Authority spokesman Brian Sullivan stated “Needless to say, the program is not working terribly well”
A Member of the House financial Service Committee Michael Castle (R-Del) said the HOPE program is “one of the most failed programs we’ve had in a long time”
Congress is working on revising the program. I am here to tell you that the revisions will not work unless the Government stops handing out money to people with no responsibility.
Why did the HOPE program fail? Why will the revision fail? Let’s explore the reasons.
1. The government is NOT a business and has No Business altering free markets. Adam Smith in The Wealth of Nations proved that free markets are best served by individuals pursuing their own self interests. This promotes the good of the economy as a whole. Maximizing individuals’ revenue ultimately maximizes total revenue of the society. This is knows as the Invisible hand. [iii] By the government altering the natural cause and effects has consequences that last for hundreds of years. Future generations will pay the price for the money the government is handing out.
2. The HOPE program would only help homeowners that owed 5% more than there homes was worth. Meaning if you owed $150,000 on your home and your home only appraise for $142,000 then you would be $500 short of getting help with the HOPE program. You could only owe 5% more than what your home was worth.
3. The private lenders had to agree to work with the Government in this program. The lenders don’t like the program. They think that they are keeping people in homes that will be foreclosed on in the future. They see it as delaying the problem rather than fixing it for good. The lenders think why should they bring a loan current and then after some time bring the foreclosure process all over again.
4. Many of the borrowers had Interest only loans. An interest only loan is where you are only paying interest to the bank and the balance you owe the bank stays the same and never goes down no matter how many years you make payments. Or the borrowers had Negative Amortization loans. A Negative amortization loan is a loan where each month the payment made is less than the interest charge. So each month the balance you owe the lender goes up. So the borrowers with either of these types of loans and others would need to have payment increase to go to a 30 year fixed loan. The problem being if the borrowers could not make the payment at the lower amount how could they be able to make the payment at the higher amount!
5. The HOPE program was exclusive to Fannie Mae and Freddie Mac loans. It is impossible for a homeowner to know if their loan is Fannie or Freddie backed loan. The representatives from the HOPE program call your lender. I have done that very thing and lender didn’t even have the idea what I was talking about.
6. Many borrowers qualified to purchase the home by a 50% ratio. That is 50% of their income could go to their total housing obligations (interest, principle, taxes, insurance, HOA etc). The new program says that you have to be under 31% of your total income for your total housing payment. So if a borrower qualified at a 50% ratio and they have had some cut backs at work. Their new ration is going to be higher than 50% not lower. But the program only allows for 31% max total housing ratio.
7. You have to live in the home to qualify. So if you have moved out of the home or if you owned an investment property you could not get into the HOPE program.
The above Seven Reasons are why I think the HOPE program has failed. Although Congress is working on a new plan that they “hope” to be more successful. Maybe they will get two homeowners approved by the program so in five months they can report a 200% increase success.
There is a better alternative! Homeowners behind on house payments do need help. They are in difficult situation and they need a solution. However this solution should not come from the Government giving them money, or giving the banks that gave the loans money. Banks took on the risk of giving the loan, made the profit in good times and they should have saved money in reserve for bad times.
There are many private companies all over the country with real estate agents and real estate investors who are helping homeowners through these difficult times. Agents are able to work with homeowners on short sales. This is where the homeowner is behind on house payments hires an agent or representative to work on his/her behalf. The agent then completes and submits hundreds of pages of information to the lender, the agent works with the lender to take less than what is owed on the property.
The Lender agrees to sell the property for less than what is owed on the loan. The benefits of this help the homeowner, the bank, the new buyer, the community, and economy as a whole.
Why would the bank want to do a Short Sale? Because they have reviewed the property and agree that the home is not worth what is owed. Knowing that the bank would sell the home now rather than going through the time and expense of having it to foreclose. Banks typically take a 25% loss when they do a foreclosure that amount is just in actual cost. That does not include the decline in value that the property is now versus what it was when the loan was given.
The banks are HAPPY to do short sales. Banks realize it is much better option, having homeowners cooperating with them in the sale of the home. Banks lose much less and get cash back much faster.
Homeowners are able to leave their home with a clear conscious. They know that they did everything possible to make the situation right with the bank. Homeowners need to realize that they can not control the market place. In doing a short sale the bank agrees that the home is not worth what is owed. The homeowner is able to walk away with head held up high knowing they did everything to make the situation right. In addition they have helped their credit report by avoiding a foreclosure, they have helped their neighbors by getting a new homeowner in the home rather than letting the home vacant.
Neighborhoods with vacant homes tend to decline in value rapidly. They have problems with crime, vandalism, drugs, and many others. That is not to mention the lack of property taxes being paid. They also reduce the value of the surrounding homes and push property values down, and decrease property taxes revenue.
A short sale is very simple, a homeowner who is willing to cooperate contacts a short sale specialist that work with his/her bank and take over all the details of the process. The bank reviews the property and agrees to take less than what is owed on the home. The bank is paid off at a discounted amount. This helps the homeowner, the bank, the community and the economy as a whole.
Many Homeowners want to stay in their home. That was the idea of the HOPE program. That is where private investors come in. Private real estate investors all over this country have money on the sidelines. It is widely known that there are billions and billions of dollars of investor funds that are not being used. Investors are afraid of the economic crisis and are uncertain where to put the money. They are looking for shelter from the storm. Many of these investors can find a safe haven in purchasing these properties at a discount from the bank. They then allow the previous homeowners to stay in the home and rent the property from them.
The homeowners have many benefits:
The Investors have many benefits too:
Now many Homeowners want to be able to buy the property back in the future. I really like the idea of this program. I think if the homeowner is willing to take on all expenses for the property and be responsible for all repairs major or minor for the property, and pay the rent on time every month no exceptions then the tenant (previous homeowner) could have the option to purchase the property in the future. I would recommend 12 to 24 month’s option. Rather than setting sales right price now it can be determined in the future based upon an appraisal given with a condition that the underlying obligations are covered and reasonable profit is paid to the investor. In those cases I recommend that the previous homeowners get a generous discount off the appraisal of the home.
Now an ideal situation has been created.
HOMEOWNER
INVESTOR
MORTGAGE COMPANY
ECONOMY
As you can see the benefits to everyone involved are substantial. The government involvement is not necessary. If the bank wants to sell the home at a discount they can otherwise they can foreclose and sell it latter suffering the consequences and the losses that come from that poor decision.
The major problem with this program is that banks are waiting to see if they can get money from the government rather than follow the above program. The banks will prefer money from government rather than trying different options. The bank knows that government is more generous and will give them more for the home than open market. If the government would get out of the way free enterprise and the invisible hand would bring this housing problem to a fast resolution. This resolution would come without our children and our children’s, children having to pay the price financial for centuries to come. That being said banks are participating in this program every day. They are just holding back, and processing much slower than they could be if free money from the government is off the table.
Let me give you some Case Study Examples.
Davis County Homeowner Gets Saved from Foreclosure
In February, we started working with a family from Davis County. The husband worked in the construction industry and his hours went from more than full time to less than part time. With this under employment they were unable to pay for their house payments. They had a loan on the home with Litton Servicing. They owed around $180,000 on the home for the first loan. After months of effort our team was able to work out a deal with the bank. We found a buyer on the property for $155,000 and we worked with the bank on a short sale. The Homeowners walked away not owing the bank any money.
Riverton Real Estate Investor Gets Saved from Foreclosure.
We had a client that was a real estate investor. With the downturn in the economy, he was not able to rent the property and find tenants. He also lost his job. He purchased the property at the very high side of the market. He owed $270,000 as a first loan to Chase Bank. We were able to work out a deal where the home was sold for $205,000.
Holliday Homeowner Saved from Foreclosure
A client of ours owned a home in Holliday. It was an investment property that she had been renting. There were two loans on the property (i) First to Wells Fargo and (ii) Second to Citi Mortgage. The two loans equaled around $325,000. She was cut down on her hours at work, her husband lost his job, and the tenants in the home refused to pay rent. We were able to work out something with the tenants, Wells Fargo, Citi Mortgage, and some new buyers and the home was sold for $220,000
Murray Homeowner Is able to STAY in her home
Another Client of ours just went through the passing of her husband. She has been out of the workforce and is not able to make enough money to make the payments that her loan went up to. Her loan was $175,000 with Countrywide bank. We had private investors that purchased the home and she is able to stay in the home as a tenant with a much lower payments so it is in the range that she can make the payments. She was also given the option to buy the home back in the future when her financial situation improves.
Utah County Homeowners Foreclosure is STOPED!
A Utah County client of ours was going through a divorce. They needed both husband and wife income to be able to make the house payments. So they just could not afford the house payment on one person’s income. They owed $175,000 to United Bank. We were able to work out a deal where the property was sold to a resident buyer for $144,000.
Magna Homeowner walks away not owing the bank ANYTHING!
A Magna Client of ours had a loan with Wells Fargo on his home in the amount of $182,000. He ended up with Medical Bills that the insurance did not cover. He tried everything and just could not keep up on the house payment while trying to pay the medical bills. It also ended up that he owed more than his home was presenting worth. We were able to sell the home to a new resident buyer for $121,000. He was able to walk away not owing the bank anything.
Local Builder was HELPED!
We helped a local Builder that had lots of inventory. We worked with the lenders and negotiated with them to take less than what was owed on the property. We were able to get the property sold and avoid foreclosure with the homes for the Builder. The Builder was able to eliminate the inventory. One of the banks that agree to accept less than what was owed on homes said that because our company was involved he would do business again with this builder in the future. He appreciated that the builder took an active stance to solve the property rather than just running away.
As you can clearly see, there is a better way. As the government has committed $300 Billion dollars to the housing crisis and has spent millions in promoting the HOPE program, not to mention all the time and effort congress has made to designing and implementing this HOPE program for homeowners.
If the government would get out of the way and let private enterprise solve this problem it will be over soon. Did I mention that our little real estate company in last month helped 7 families avoid foreclosure and some of those were able to stay in there homes. We are helping homeowners avoid foreclosure every month without any money from the government.
The best advantage of the day treatment program means the addicted persons can be treated without leaving their homes, their loved ones, and their work or their studies, whichever the case might be. There are no restrictions on them and this is as similar as inpatient treatment programs. The day treatment program is the most opted and favorable addiction treatment program in Alaska.
In this treatment program, people enjoy the fact that they can lead their normal lives while going in for the treatment. This is the main reason for the wide acceptance of these programs. In fact, the day treatment program in Alaska is a modified form of the outpatient treatment program which is suitable for people who are with mild to moderate conditions of addiction.
It is amazing to know that the day treatment program in Alaska has been gaining in popularity since the last ten years. Due to the flexibility offered during the treatment. And they can continue their work, study or any other social obligations. Let us take look at the various aspects of the day treatment program in Alaska. This will help us to understand fuctioning of treatment programs, its advantages and eligibility.
How is the Day Treatment Program conducted in Alaska?
The day treatment program is quite different from the normal outpatient program in Alaska. This program is classified under the outpatient treatment program. It is compulsory to attend the treatment center everyday and each session of treatment lasts for about three to four hours.
In the day treatment the patients are kept on medication that helps them to lessen the temptation that they have for their substance of addiction. Along with this another medication is provided to cleanse the body of the addictive substance from within. Here, the patient can even be provided a detox program along with some kind of maintenance medication that helps them keep away from the craving for the substance. The purification process is very important in any kind of addiction treatment program. The person is under medication that helps to mitigate the temptation they have for the substance. A normal outpatient program is conducted not more than nine hours a week.
Along with medication the treatment centers also provide counseling for helping the patient come out of their emotional issues. The counselor guides by making the patient aware of what their addiction is all about, what repercussions it has and how it can be worked out from their system. All these programs are provided by the day treatment care centers and because it is sterner from the normal outpatient program it is more effective.
Therefore, the day treatment program works better than the normal outpatient treatment program in Alaska. The program is only possible for patients who have mild to middling forms of addiction.
Can anyone join in the Day Treatment Program in Alaska?
The severity of the addiction and the extent will be considered before taking this treatment program. The treatment will be effective to only those who are people with moderate addictions. In case of severe addictions, the person will not be able to come out it through a day treatment program. If their consumption of the substance has been very low, then it is easier to come out with the help of the day treatment program.
The day treatment program also depends a lot on the self monitoring and the patient’s willpower. Because if the patient for some reasons is not able to make a proper determination to stay away from the substance as long as the treatment is going on, this program will be futile for them. Therefore, it is very important to motivate them with the help of family members.
What are the Advantages of the Day Treatment Program in Alaska?
The advantages of this treatment are it allows you to socialize and participate in other activities of the life. The best benefit is it allows you to be a part of the family and the patient need not leave the job or studies. Since most of these programs are not conducted for more than three to four hours a day
Also, the treatment is an answer for somewhat more intense kinds of addiction than the ones an outpatient treatment program handles. In case you think that your addiction has gone beyond the typical abuse situation, then you can use this program. Therefore, plan your requirements and preferences well before you get into a day treatment program in Alaska. This is important if you really want to make use of this program to your advantage
As in any other area of life, Internet marketing has good and not-so-good aspects. The good aspects are residual income programs that perform what they promise. The not so good are programs that say one thing and do another. There are unreliable enterprises in any business environment, whether online or offline. That’s why it’s important to choose the right residual income program.
What are residual income programs? They are usually affiliate programs where you promote and sell different products and services. These products and services are the brainchild of someone else, not your own creation. You earn commissions for sales performance.
In an affiliate program, you receive a tracking identification code. When someone links from your website, blog, banner or text ad to the affiliate parent site, you earn money. It’s actually simple because the tracking code tells the affiliate parent that you were the one who sent the customer their way. Affiliate programs are residual income programs. They are attractive home-based business options.
Not all residual income programs are alike. What should you consider before you sign up with an affiliate to earn residual income? The following are five things to look for in a residual income program:
Choose a Reputable Residual Income Program
Choose a program that subscribes to the same high standards you have for your own business. Your chances for earning significant residual income are greater when you choose an affiliate partner that has quality products. You also want to choose a company that gives top-notch customer service. They must offer quality service to you and any customers you send to them. You want a company that offers guarantees and warranties. The company must stand behind their product. They must also support their affiliate team who goes into business with them.
Choose a Residual Income Program that Innovates
We’re looking at products and customer service again, from a different angle. You want to choose a residual income program that sells relevant, current products. You do not want to be part of a program that never upgrades their product line. Check to make sure the affiliate program markets products that are not yesterday’s that no one wants, unless you’re dealing in antiques and collectibles.
Concerning customer service, choose an affiliate program that strives to find new ways to serve you. Do they offer excellent resources to help you market better? Are they readily available when you need them? Is their staff knowledgeable to answer questions and concerns you may have about the residual income program?
Choose a Residual Income Program Based on Price
By price here, we’re talking product price. Does the program offer products priced fairly. It doesn’t mean you need bargain-basement product offerings. It does mean the price structure should not gouge consumers. Even if the product is the next best thing to whatever the latest best thing is these days, it should not be over-priced.
Consumers know when someone is taking advantage of them. They will click away from your website quickly once they sense your price is out-of-whack with similar offerings elsewhere. A good residual income program prices appropriately.
Choose a Residual Income Program That Pays Fair Commissions Monthly
You will expend time and effort to promote affiliate products. You will also expend time and energy to mentor your downline placed under you. It’s imperative that your residual income program pay you a fair commission. Twenty-five percent commission and upwards is healthy profit territory. Many programs pay these types of commissions. Look carefully at those who do not pay these levels of commission. They may not be worth your while.
Choose a Residual Income Program with a Proactive Manager
You want a program manager who is interested in your success. When considering a program choose one where the affiliate manager takes the time to connect with you regularly. You want a program manager who keeps in touch offering you marketing tools and resources. You want a manager who organizes affiliate-marketing training sessions. You also want a manager who is there to offer advice when you’re having trouble building your business.
Consider the above when deciding on a program that’s right for you. You will save yourself much grief when you choose a good program right from the start. A residual income program with the above qualities will set you on the right course to Internet marketing success.
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