double POSITIVE Marketing Group, Inc.

I’ve been following the governement interaction…or as I think sometimes
lack of reaction…to the meltdown. I came across a couple new articles that
touch on “legislation in prgogress.” I pasted them below…would love to get
your thoughts.

TheNewYorkTimes: New Moves in Washington to Ease Mortgage Crisis

LATimes: Clinton talks trade and mortgages in Iowa

CapeMayCountyHerald: “Mortgage Forgiveness” Bill Passes House

MortgageNewsDaily: MBA Proposals For Mortgage Fraud Legislation

ColumbusDispatch: State asks lenders to agree to mortgage workouts

What do you think, any reason why the Senate shouldn’t pass H.R. 1852 (listed below)?

How does this fall in with Bush’s feelings:

“I plan to help homeowners, the government’s got a role to play,” Bush said. “But it’s not the government’s job to bail out speculators or those who made the decision to buy a home they couldn’t afford.”

Sounds like a “bail out” to me, wouldn’t you agree?

I think the plan seems to be a win win for the people facing foreclosure, for the mortgage industry and for the economy as a whole. Getting the mortgage and housing industries back on track can only bolster the economy. Or is that true? I thought the rate cuts were a positive move fort he economy, but at least one source disagrees.

“Despite Fed cuts, mortgage rates rise. The Federal Reserve’s recent bid to boost the economy by cutting interest rates has apparently backfired when it comes to mortgages.” (Check out the entire article)

Is the fate of the industry truly in the hands of the government, and are they up for the task?

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HOUSE OF REPRESENTATIVES PASSES H.R. 1852 MAKING IT EASIER TO OBTAIN FHA LOANS IF THE SENATE FOLLOWS SUIT

FACTS

The new law will enable FHA to serve more subprime borrowers at affordable rates and terms, recapture borrowers that have turned to predatory loans in recent years, and offer refinancing loan opportunities to borrowers struggling to meet their mortgage payments in the midst of the current turbulent mortgage markets. The bill contains the following important points for you the mortgage broker:

â?¢ Lower down payments. Authorizes zero and lower down payment loans for borrowers that can afford mortgage payments, but lack the cash for a required down payment.

â?¢ Housing counseling. Authorizes more than double the current funding level for housing counseling, to help subprime homebuyers and borrowers late on mortgage loan payments.

â?¢ Subprime borrowers. Directs FHA to provide mortgage loans to higher risk (but qualified) borrowers, without authorizing unnecessary fee hikes on such borrowers.

â?¢ Reverse mortgages. Helps seniors pay for health and other expenses, by removing the loan cap to avoid program shutdowns, raising loan limits, and by reducing the maximum fee lenders can charge for these loans.

â?¢ Multifamily loans. Raises FHA multifamily loan limits, so these loans can fully fund construction costs in high cost areas, and enhances sale of foreclosed FHA rental housing loans to localities, so that affordable housing can be maintained in local communities.

â?¢ Affordable housing fund. Authorizes up to $300 million a year from the bill’s excess profits for affordable housing, instead of returning such funds to the General Treasury.

â?¢ Higher loan limits. Adopts the Frank/Miller/Cardoza amendment that would raise FHA single family loan limits, which now bar loans above 95% of the median home price in each local area and shut FHA out of higher cost home markets. The amendment raises the FHA loan limit in each area to the lower of (a) 125% of the local area median home price or (b) 175% of the national GSE conforming loan limit. The amendment also retains the bill’s provision for a nationwide FHA loan floor of 65% of the GSE conforming loan limit, and gives HUD authority to raise these loan limit amounts by up to $100,000 “if market conditions warrant.’

â?¢ Directs FHA to make available refinancing loans to existing qualified homeowners who are in default or at risk of default due to rate resets or mortgage market conditions, and to authorize lower down payments for such purpose. The amendment also includes provisions to address problems arising from inflated appraisals.

Our research into the Debt vertical is ongoing, so I’m always happy to share when I come across something that I think provides insight into this “five-year young” industry.

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Breaking the Generational Chain of Debt: One step at a time.

“Tragedy can strike anybody, and the results can be devastating”, says Jeff Boulton, President of Rise Above Debt Relief.

“It is discouraging to see how credit cards are exploiting all age groups and demographics. People just don’t know or have a solution.” It is no secret the number of individuals incurring higher debt loads is increasing daily. What motivates Boulton is the ability to do something about it.

“The industry would be better served to continue to educate those that just don’t understand their options. People are uneducated”, states Boulton. Boulton sees and is saddened by the chain of family members in debt and the capitulation by the industry in general to help out.

“It is clear that if a company spends the time and truly cares about their prospect, that the generational chain of bad credit failure can be broken, once and for all.”

“We see entire families driven to debt based upon permissive business rules and lack of understanding.” Boulton believes that demand for Debt services is so great that there will never really be a shortage of clients to help. Boulton doesn’t pass judgment on any Debt Settlement company and understands that most truly do care about their client needs. He would like to see and hear across the industry that everyone truly is in the business to help the prospect instead of the quick sale.

“I’d like to see all debt settlement companies seeking to listen in detail and assist their clients in such a way to provide a better standard of living.” When asked, what exactly he would expect from the average company, Boulton replied,

“Fundamental principles such as budgeting, understanding responsibility as a credit card holder, and the ability to manage cash flow are all imperative to getting out of debt.” These seem like simple principles but it is common for a client to be dis-engaged in the process.

“We continue to see the upward tick of the number of individuals in debt and the average debt load.” Boulton does believe a sea of opportunity does exist for his clients. Based on the changes, he feels he can actually afford to take on a true client services solution. Boulton believes that all debt settlement companies have plenty of opportunity to serve their prospects in a professional and thorough manner.

“Just two years ago we saw the average debt load range of $10-15,000 move to $25-30,0000. This represents both the number of clients and the size of the debt.”

“I don’t think we understand the surmountable problem that is at hand! Because the countries debt problem has been slow and subtle over the decades we have failed to recognize the beast that has been growing, and if not tamed can literally do some serious damage to our country and its future. No matter what, we will continue to service, educate, and care about the individual families that are wrestling with this beast”.

Jeff Boulton is the President of RiseAbove Debt Relief, a debt-settlement company based out of Phoenix, Arizona. Jeff has over seven years experience in the industry and can be reached at jeff@riseabovedebtrelief.com

Jeff started in the financial lending industry in 2000, worked with clients and their investment portfolio. During this time he held educational seminars on becoming debt free and investing and still does so. A year and a half ago started Rise Above Debt Relief www.riseabovedebtrelief.com , and now is aggressively helping people get out of debt.

Why are lead buyers buying less leads in the mortgage vertical? The volume of consumers calling and filling out online forms is as high now, if not higher, then it ever has been. Well, quite simply, loan officers aren’t closing loans, companies are being forced to close up shop, and that results in less money in the marketing pool. The reasons for the numerous lay-offs and businesses that have shut down are obvious – the sub-prime meltdown and the implosion of mortgage-backed securities. I’m curious what phase we’re in now though, recovery? Everyone is wondering if we’ve hit the bottom yet, and watching to see who emerges from the wreckage. The question is, are we helping ourselves get over the hump? The continued advertising on radio, television and the Internet – for the same mortgage programs that got us in this mess in the first place – can’t be helping. What are your thoughts, do we need to move past the ads promising monthly payments too good to be true? If so, what is the evolution of the marketing message that will benefit consumers, provide customers with quality leads and – not kill volume? Can everyone have their cake and eat it too? I would love to hear your thoughts?

On a side note, I did find some subtle humor in the articles I was reading:

The article:

“We have to stop them plain and simple. We have to stop the ads and we have to stop the mortgage brokers from their deceptive practices in general.”

Now view the screenshot of the article

The article:

“There is little debate that mortgage industry practices have created ill effects for lenders, consumers, and the economy as a whole,” Eva Weber, the Aite analyst who authored the report, said in a statement. “The question now is when the fallout from these practices will dissipate. The unfortunate answer is that things may still get worse before they get better.”

Now view the screenshot of the article

Don’t you just love dynamic ad content?

I’m sure you’ve seen the headlines, and the question:

Was the Fed action on Aug. 17 effectively a Countrywide bailout, saving a company many saw as too big to fail?

Fed watchers and banking experts say far more is at work here. The Fed wasn’t reacting to Countrywide’s plight as much as the conditions that put the lender in such deep trouble.

I’d love to get your thoughts. Was the fed reacting to conditions or to Countrywide, the last giant standing?

While reading (surfing) the New York Times this week, I came across an interesting article and transcript from the Democratic debate in Iowa. This particular “review” of the debate focused mainly on one issue, how the debate only briefly touched on one of the biggest issues facing our country – the crisis in the mortgage markets. I can’t say I was completely surprised by the blip on the radar, and this debate speaks for itself. It seems as though many of the politicians either don’t grasp the gravity of the situation, or just choose not to address the issue. Or maybe, they’re just completely confused! Take for example the following excerpt from the transcript.

Governor Richardson: This is the Katrina of the mortgage-lending industry. The answer to your question is yes, there has to be more liquidity, more funds in the market. What we need is more transparency between those that are making this business happen.

And what we also need to do is to not appoint officials that are in the industry to regulate that specific industry. The mortgage industry, they’ve become — a lot of them — a bunch of loan sharks.

Senator Biden: The answer is yes. But we need, as the governor says, more transparency, particularly with regard to hedge funds and private equity funds. They are the ones that are causing this thing to go under. And there’s no transparency, no accountability. We don’t know how deep this problem is.

After reading this several times, I can honestly say, I have no idea what the Governor or Senator are talking about in regards to Transparency. Seriously, what are they’re talking about? I’m not sure they even know.

There was an interesting Q&A article in the news this week that featured Kerry Killinger, chairman and CEO of Seattle’s Washington Mutual Inc. There were several questions, but one in particular grabbed my attention. It read:

“Q: In broad terms, could you tell us your impression of what happened in the mortgage market and how it happened? Foreclosure activity is increasing as adjustable-rate loans are reset. Who is to blame?”

I realize this question has been asked and answered ten-fold over the last few months – and you can read Kerry Killinger’s answer and the entire Q&A session at: http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/08/12/BU72RBP6U.DTL

But I was curious what you thought of the CEO’s response, and in general, your thoughts on where the mortgage industry is heading?