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October 1, 2008 
by Connie Saunders
10/1/2008
We have a complex problem but the real solutions are fairly simple:
Here is my proposal:
- Provide a New Government Loan Product (NGLP) to Sub-Prime Borrowers in ARM’s which clearly didn’t qualify for the loan products they were given and/or for those buyers who can prove Fraud was used by Loan Officers, Brokers or Developers with Attorney General Complaints filed for same. This loan will use the Current Market Value (CMV) of the property as the basis of the loan, forgiving the deficiency with a Contingency Clause that should there be a refinance or sale within a 30 year period of time, that a prorated percentage of the profits (prorated based on percentage of time left on the 30 year loan) would be shared with the Government until the interest free outstanding balance is paid in full.
- Require Loan Officers to pass a Certification Program and have accountability, including having Licenses, FBI background checks to ensure ethical histories with no convictions of fraud. Or Eliminate Commissioned Loan Officer’s compensation from a HUD1.
- Require Developers be or use Licensed Brokers to sell all property developed and follow Real Estate Broker guidelines fully or be culpable when fraud occurs with Required Development Bonds that will cover fraud and seek out and properly punish those who perpetrate Mortgage Fraud.
- Tar and Feather Developers, Loan Officers, Brokers, Lenders and others found Guilty of Fraud by having a .gov ‘Tar and Feather’ like web site, which posts pictures of each culprit found guilty of Fraud with full list of Crimes Convicted of and other damaging details. This Web Site must be used by any public agency when lending or hiring. The penalties for guilt should be “too gruesome to confront”, not patty cake.
With this program lots of money will be spent, but it will be spent in the direction of clearing the problem up directly and expeditiously. Heads of Freddie and Fannie are getting off with MILLIONS of dollars in severance packages on top of getting many MILLIONS for the very few years they were in office proposing and doing a very bad job of things. If this is our idea of how to spend our children’s’ children’s’ money, I, for one, protest. http://www.carolinapoliticsonline.com/2008/09/13/foxx-co-sponsors-legislation-to-ban-freddiefannie-golden-parachutes/
But I feel the above is fair, a bit elaborate but to take these to foreclosure where dollars gotten will be 60 cents of the CMV, or to Short Sell them for 88 cents of the CMV will cost the Government much more than this, with no future shared profit plan.
Also I have just come back from a National Default Servicing Convention where it was suggested by a senior analyst to simply Bulk Sell these properties to Investors. Investors from Germany, China, Russia, Oh Yes, Don’t close your eyes Americans. Won’t this create slums? Plus we are talking about 50 cent dollars. What will our true cost be?
Can anyone poke valid holes in this, or can we fix up this ship so that it doesn’t sink before its’ too late.
Connie Saunders
Foreclosure Freedom Network
(800) 616-4255 Cell (877) 333-4506 Work
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