Connect with us

Politics

Dear Mr. President, I Can Rescue the Economy!

Published

on

Barack ObamaI have an answer the foreclosure crisis and a way to turn around the economy at the same time.

First, an outline of the problem:  The old way of doing things with foreclosures have not changed.  That’s the problem.

After a property is foreclosed, the bank lists it with (mostly) the same agents they have been working with for years.  Newbies who may actually know the market are not invited…..but that’s not where I am going.

The properties are just thrown on the market no matter what shape they are in because the bank needs to get it off their books.

So, that makes the homes available to only a few buyers…investors with cash, not the ultimate home buyers.  They end up paying retail after the cash investor fixes it up.

No, I am not against the investors making a profit, it’s just that there are too many homes and it makes no sense.

I know there are FHA 203k loans, but they are cumbersome, expensive and not available to all property or property types.

How about, Mr. President, making each property that is foreclosed by the banks fixed up to standards that an owner occupant can move into and finance properly.

Give income to the construction trades that are hurting and recoup the outlay when the home closes (with interest!).

What did we just accomplish?  We gave people jobs, we moved property faster and for more money, we added to the number of mortgages in the system with quality property that made mortgage backed security investors happy and to top it off, we stimulated an economy with the taxpayers making money!

I know someone knows someone that that knows someone who can actually get this idea to someone at the White House to get this rocking ASAP (May 1, the day there is no tax credit would be good!).

Realty Reality! That describes Fred, a sharp witted and outspoken realist for the mortgage and real estate world who has appeared on CNBC and NPR's Marketplace along with being quoted in the New York Times, The Wall Street Journal and other media outlets. Fred is the CEO of U S Spaces, Inc/Arrivva (a real estate brokerage firm in PA, NJ, DE and CA) and U S Loans Mortgage Inc (mortgage brokerage in PA, CA, FL and VA), and serves on the Board of Directors and is the Federal Legislative Director for the UpFront Mortgage Brokers. Fred is also the co-creator of real estate startup Rentscoper.com, a mathematically driven rental search engine. See everything Fred at fredglick.com.

Continue Reading
Advertisement
27 Comments

27 Comments

  1. Dean Ouellette

    March 7, 2010 at 8:27 pm

    Have to respectfully disagree with you on this one, more government mandates is NOT the way to fix this. Let’s keep the government out of it and come up with an alternative like the HEFI program or some fractional interest program where the bank can save face by cutting principle and make some of it back in the long run while giving the homeowner a payment for a house at market value.

    Now of course I know what you are saying, if we are going to spend govt money, let’s be smart about it, but let’s not give them any new ideas, let’s just tell them to step away and let the market correct itself or the banks to become innovative

  2. Fred Glick

    March 7, 2010 at 10:07 pm

    @Dean My ideas come after discussions with economists, Wharton professors, money mangers and highly respected politicians.

    The basis of the economy along with the world wide capital supply does not allow for the currently popular rhetorical method of economic reestablishment.

    The government is and must be a driving force to get an economy out of it’s doldrums. This has been true for every recession. Especially, this one that was so severe in combination with the power of a countries like China and Korea that have never threatened the US economy during an American recession.

    To give an example, think of this as a line of credit. It goes up, it goes down.

    I hope you see the point and if you would like, please email or call to discuss it further.

    • Nashville Grant

      March 10, 2010 at 1:02 am

      What if we simply paid demolition companies to demolish all of the foreclosed homes to create scarcity and rising pricing. This method also puts folks back to work in this industry, but uses the opposite approach. Solves over building too 🙂

  3. Ken Montville

    March 7, 2010 at 10:14 pm

    Are you saying that the Government should buy up all these foreclosed homes from the banks, fix them up ala the New Deal and then sell them?

    Certainly the banks aren’t going to sit still for a mandate to spend money. If they would, I’d rather they let some money loose for qualified borrowers or home owners that want to or need to refinance.

    Unless, of course, I can be a GS-15 Realtor for the Uncle Sam Real Estate Co. with full Government benefits and leave. 🙂

  4. Justin Boland

    March 8, 2010 at 9:40 am

    I agree with Dean — the only weak spot in this proposal would appear to be the part where the government is put in charge. There is not a strong tradition of understanding housing among bankers or academic economists. From 60’s tenement projects to the modern mortgage crisis, American homeowners and taxpayers have been the petri dishes for a whole lot of government experiments in the past several decades.

    Maybe it’s time to discuss fully privatizing the Federal Government and selling it to Berkshire Hathaway. They could, at least, afford it.

  5. Kristin LaVanway

    March 8, 2010 at 11:26 am

    Repairing the economy and cleaning up the housing market are really two separate tasks. I agree that the government must be involved in matters of national economy, but real estate is a local issue, and, in my opinion, is not benefitting significantly from government assistance.

    Here in Phoenix, one of the nation’s hardest hit housing markets, the market is very brisk, especially in the price ranges below $250K. Fix-and-flip investors pick up distressed properties and turn them into a market-ready product. They are effectively doing what you propose in your article, but with private finds, not tax dollars. Buy-and-hold investors provide rental properties for displaced homeowners who won’t be buying in the near future. And owner-occupants buyers do have a selection of affordable homes.

    Reducing the number of foreclosures is the real problem…once these foreclosed homes hit the market, the laws of supply and demand are doing their job.

  6. Aaron Charlton

    March 8, 2010 at 3:27 pm

    You’re advocating for giving up our freedom to the government in the hopes that they can make better decisions than we can. They tried that 100 years ago in Russia…and 50 years ago in Cuba. Didn’t work so well for them.

  7. Benn Rosales

    March 8, 2010 at 3:39 pm

    Because it’s the gov handling the improvements the best we could hope for is ADA compliance and that it meets code. Why not just turn the 8k credit into a home improvement credit, didn’t hud do this in the 80s to move inventory? Zero down to 100 down with improvement incentives?

  8. Aaron Charlton

    March 8, 2010 at 3:46 pm

    To be honest, these are good ideas. I just personally don’t trust the government with money. It scares the heck out of me! If they can’t figure it out with the money they’ve already printed, more programs and more money can only make it worse. I’d like to see them take a step back.

  9. Greg Barnhouse

    March 8, 2010 at 10:56 pm

    Really? I’d say keep the government far, far away from foreclosures and short sales. The government has proven they cannot be trusted with our money. Even the banks gave the “bail-out” money back. I’m all for less govenment.

    I’d say, let it run its course. It will get sorted out.

  10. Fred Glick

    March 10, 2010 at 8:47 am

    @Grant,

    I actually called for that awhile ago on CNBC for new construction.

    It is a logical add-on to my idea.

    Someone has to do a market survey on each house to see which ones would get the rehab. We are not going to rehab houses so they will sit.

    Also, I would like to see Fannie and Freddie expand the financing that they are offering for their REOs where you can get 97% with no MI for owners and 90% for investors.

    All they are doing is transferring the paper to people that have great credit and income. But, they are blanking out others of similar situations from homeownership and recovery by making them go through mortgage hell.

    If we can replace a Fannie Mae no-doc with 500 credit with a 95%, 750 credit score full doc but with 3% down and no-MI, aren’t we all in better shape?

  11. Fred Glick

    March 11, 2010 at 7:14 am

    Here we go, the CNBC interview:

    https://www.youtube.com/watch?v=o3mc8_e2v9I

Leave a Reply

Your email address will not be published. Required fields are marked *

Politics

The House Judiciary antitrust investigation holds big techs’ feet to the fire

(POLITICS) CEOs of Alphabet, Facebook, Apple, and Amazon set to testify in House Judiciary Committee antitrust investigation hearing today.

Published

on

house investigation

The House Judiciary Committee is closing in on the end of a year-long investigation into tech giants Google, Facebook, Apple, and Amazon, to evaluate possible antitrust abuses. CEOs from all four companies were set to testify on Monday, July 27, 2020. The hearing has been pushed back to Wednesday, July 29, to allow members of Congress to pay respects to civil rights leader Representative John Lewis (D-GA) who died of pancreatic cancer on July 17.

Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook, and Sundar Pichai of Alphabet (Google’s parent company) have all agreed to testify. This will be Bezos’ first time in front of Congress, whereas all the others have testified before on different matters. Twitter CEO Jack Dorsey was invited to testify by Representative Jim Jordan (R-OH), but is expected to not attend.

The Antitrust Subcommittee began the investigation in June 2019. Each business has been the subject of scrutiny for their roles in dominating their respective industries and playing an outsized role in market competition for smaller businesses. The Committee is interested in evaluating current antitrust laws and whether they apply to, or should be updated for, these mega corporations. They have already heard testimonies from smaller companies like Sonos and Tile about these companies’ alleged monopolistic practices.

The focus of the investigation for Apple is on the App Store, and whether it has implemented policies that are harmful for app developers. Google has a tight hold on the online advertising market. Amazon – which during a five-week period early in the pandemic saw an increase in value equivalent to the total value of Walmart, the world’s largest firm – has been criticized for its treatment of brands that sell on its e-commerce platform. Facebook is being investigated for its acquisition practices, cornering the social media market with purchases like Instagram.

Amazon is expected to face additional scrutiny for its treatment of warehouse workers during the pandemic. Facebook and YouTube (a subsidiary of Google) have been the subject of regular criticism about monitoring hate speech on their platforms, and their treatment of the workers responsible for doing so (Facebook in particular).

The hearing is set to occur virtually in order to adhere to social distancing guidelines. Watch the hearing live at 12:00 p.m. EST Wednesday, July 29 on the House Judiciary Committee’s YouTube channel. Please do note the hilarious irony of streaming a Congressional antitrust hearing on YouTube, which is owned by Google, which is owned by Alphabet, which is testifying at said hearing. God Bless America.

Continue Reading

Politics

Additional unemployment benefits outside of the CARES Act

(POLITICS) Unemployment is at an all time high in the United States and individuals need to be aware of reapplying for additional benefits.

Published

on

unemployment broke

June saw some additional jobs in the US and unemployment fell as of early July, but CNBC advised pausing on any celebration just yet, saying that “The employment crisis is still worse than any time since the Great Depression, the country’s worst economic downturn in its industrial history.”

The unemployment statistics in our country right now are really scary – especially for individuals and families that see a looming deadline of July 31 for the supplemental $600/week provided by the Federal Government through the CARES Act put in place in March. There are discussions on extending these benefits as many families have not been able to replace their incomes or find new employment opportunities, but it doesn’t seem like anything has been finalized there yet. Congress is in the middle of a variety of options:

  • Discontinue the additional $600/week but allow those on unemployment to continue to file and receive their state benefits (usually up to 26 weeks or possibly extended up to 39 weeks by The CARES act)
  • Send out additional stimulus checks (Congress is currently exploring a $X Trillion stimulus package)
  • Extend the additional funding (on top of the weekly amount allotted by state) but cut it from $600 to $200
  • It’s also been put on the table in the House of Representatives “The Heroes Act” to extend the additional $600/week until January 2021 ($3 trillion).

There are some additional benefits that are available (different than the funds by the CARES Act), but you may have to reapply for them. So, make sure to check your state’s unemployment pages and your filing status. Some states do not require you to reapply and you can continue on with extended benefits.

According to CNBC, “The additional aid expires after the end of the year. (This is a different program than the one paying an extra $600 a week through July 31.) For some reason, the [Department of Labor] has taken the position that people have to file for the additional PEUC benefits,” said Michele Evermore, a senior policy analyst at the National Employment Law Project.”

No doubt that this can cause additional stress and uncertainty especially when you have questions about your filing and are unable to get through to someone on the phone. With the way that the unemployment cycle is setup, technically July 25 is considered the last date for that cycle (and July 26 for New York), so be sure to check and see what the next steps are for you if you are currently filing.

Continue Reading

Politics

How will pausing the reopening of states impact the recovery of the economy?

(POLITICS) The resurgence of COVID-19 has left Americans with a lot of questions about our nation’s economic future. That ambiguity is seemingly a feature, not a bug.

Published

on

COVID-19 reopening economy

The rest of the world watched as the United States dramatically reopened “the economy” last month. Now, it seems we’ve changed our minds about that.

The White House has repeatedly said that it will be up to individual states to form their own pandemic response plans moving forward. But letting local governments devise their own solutions has produced large gaps in their preparedness, as well as profound confusion around the best practices for balancing the country’s public and economic health.

California, which represents the largest economy in the US and the fifth largest in the world, was one of the first states to put serious quarantine restrictions in place. The decision to relax those orders only came after anti-lockdown protestors demanded that Governor Gavin Newsom reopen the state’s beaches, businesses and churches. Newsom may now regret this capitulation as California just called for a second round of statewide lockdowns.

Other state legislators are slowly following their lead, as the threat is becoming very dire in some places. Florida, for instance, is now a global hotspot for COVID-19 and Miami is being called “the new Wuhan”. The state is also currently struggling against another wave of unemployment, partly because their economy is heavily dependent on summer tourism (which has persisted despite the spike in cases, but not nearly at pre-pandemic levels).

Florida, California and Texas are altogether responsible for 20 percent of all new COVID-19 cases globally.

Every state is fighting two battles here. Coronavirus relief efforts in the US are still seriously underfunded, and most health organizations here lack the resources to effectively test and treat their communities. But the problems that have emerged for workers and small business owners, like evictions and layoffs, have also been devastating in their own right.

In essence, the United States reopened in an effort to curb the nation’s financial freefall and ballooning unemployment. Economists predicted at the beginning of July that reopening would allow the US to avoid a recession, and all would go smoothly. These projections likely did not account for a spike in cases that would halt this economic rebound.

That’s not to say the circumstances here haven’t improved at all over the past months; currently there is no acute shortage of ventilators, and doctors have had some time to refine their strategies for treating the virus. Overall, the national unemployment rate is slightly declining, while working from home is going so well for companies like Twitter and Facebook that they will be permanently switching much of their staff to remote work.

By comparison, though, New Zealand took the pandemic much more seriously than the US did, and they are objectively in a better position now in all respects. Prime Minister Jacinda Ardern cracked down hard and early, closing the country’s borders completely, and instituting rent freezes nationwide. As a result they have virtually eradicated COVID-19 within their borders. A report from S&P Global also expects New Zealand’s economy to recover quickly compared to the rest of the world.

While this tradeoff seems like a zero sum game – as if we have to pick either our health, or our wealth – it is not. In fact, we could very well end up with neither if our lawmakers don’t proceed with caution.

Continue Reading
Advertisement

Our Great Partners

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Emerging Stories

Get The American Genius
neatly in your inbox

Subscribe to get business and tech updates, breaking stories, and more!