MonkeyCrash

Obama’s Schadenfreude; Heather Higgins: Townhall.com Columnist

// February 24th, 2009 // No Comments » // POLITICAL ARENA

Great column by Heater Higgins of Townhall.com today. Everyone should read Obama Schadenfreude

The seeming indifference of this Administration to the steady and precipitous decline of the market since President Obama’s election should surprise no one. One has only to look at the President’s past to gauge the prism through which he sees the present… and the future.

Many on Wall Street and Main Street voted for Obama hoping that he would be bipartisan, above politics, and, for many, rein in spending and deficits. They thought his left-wing associations and votes were purely the artifact of necessity and political ambition. When the credit and liquidity crunch hit, they thought Obama would be smart enough to fix it (which presumes, of course, that it can be “fixed”).But this was a triumph of hope over observation. We have elected a president who has no real business or investment experience. His only notable for-profit venture was selling his book; as a law professor, community organizer, and legislator, he operated in redistributionist worlds where wealth, garnered from contributions or taxes, is received and redistributed. In those spheres there’s a seemingly bottomless well of funds, but unlike the for-profit world there can be a disjunction between your customers and your funding. At a non-profit, revenue comes from cajoling funders (who care about students or community residents, but who are not themselves the users of the non-profit’s services); in government, revenue is derived by forcing taxpayers – many of whom are not that legislator’s voters – to pay more.

Read the full article…

John McCain’s Homeownership Resurgence Plan

// October 13th, 2008 // No Comments » // POLITICAL ARENA

Homeownership Resurgence Plan

John McCain will direct his Treasury Secretary to implement an American Homeownership Resurgence Plan (McCain Resurgence Plan) to keep families in their homes, avoid foreclosures, save failing neighborhoods, stabilize the housing market and attack the roots of our financial crisis. America’s families are bearing a heavy burden from falling housing prices, mortgage delinquencies, foreclosures, and a weak economy. It is important that those families who have worked hard enough to finance homeownership not have that dream crushed under the weight of the wrong mortgage. The existing debts are too large compared to the value of housing. For those that cannot make payments, mortgages must be re-structured to put losses on the books and put homeowners in manageable mortgages.

The McCain Resurgence Plan would purchase mortgages directly from homeowners and mortgage servicers, and replace them with manageable, fixed-rate mortgages that will keep families in their homes. By purchasing the existing, failing mortgages the McCain resurgence plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets.

The McCain resurgence plan would be available to mortgage holders that:

• Live in the home (primary residence only)
• Can prove their creditworthiness at the time of the original loan (no falsifications and provided a down payment).

The new mortgage would be an FHA-guaranteed fixed-rate mortgage at terms manageable for the homeowner. The direct cost of this plan would be roughly $300 billion because the purchase of mortgages would relieve homeowners of “negative equity” in some homes. Funds provided by Congress in recent financial market stabilization bill can be used for this purpose; indeed by stabilizing mortgages it will likely be possible to avoid some purposes previously assumed needed in that bill.

The plan could be implemented quickly as a result of the authorities provided in the stabilization bill, the recent housing bill, and the U.S. government’s conservatorship of Fannie Mae and Freddie Mac. It may be necessary for Congress to raise the overall borrowing limit.

Homeownership Resurgence Plan from johnmccain.com

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Mortgage Crisis Solution: Motivate Homeowners Like Sales Reps

// October 1st, 2008 // No Comments » // ECONOMY

Mortgage Crisis Solution: Motivate Homeowners Like Sales Reps

Posted By, Allyn Paul

I’ve been convinced that with the current state of the economy, the government needs to act as a charity and give out $700 billion. I just don’t think investment bankers should be the recipients. The charity should go to homeowners, and they should have to “do” something to get it! They should earn it.

In my middle-class, middle-manager mind, the solution is simple: if we could get homeowners to pay their mortgages on time, we’d be out of this crisis in a matter of months. It will not be a quick fix, but it will be a rewarding one.

At my office, when my sales force is lagging for the month, I create a contest to motivate them. More often than not, money is the “hot button” that motivates, and I’ve learned to push that button early and often. So let’s pretend that everyone in the US with a mortgage is a “sales rep” and congress is the “sales manager.”

How can we motivate our reps to not only perform, but excel? Incentivize them!

Basic Incentive Plan

For Anyone with a Mortgage on their Primary Residence: Run an incentive plan for 6 months (November 1, 2008-May 2009) stating, “anyone who makes their mortgage payment on time every month during that period will be sent a check from the government for $8,000 in June 2009.”

This is for anyone with a mortgage: on time, late or whatever.

Acceleration Bonus For Over-Achievers

For Those Behind On Their Payments: If your mortgage is already behind at the start of November 2008, you are not required to catch up to be eligible for the basic incentive above. You just have to make 6 monthly mortgage payments on time during the contest, but instead of the $8,000 being sent directly to you at the end, the money will be sent to your mortgage company on your behalf to cover arrearage and late fees. (anything left over is sent to you)

However, if during the 6 month period you not only make your monthly payments on time but work extra hard and “catch up” or “become current” on what you were behind, you will get an additional $2,000 for each month you were able to become current on. (3 month maximum)

For Those Who Are Making Payments On Time As Agreed Already: If your mortgage is current at the start of November 1, 2008 your incentive is to get ahead! You will be paid $2,000 for every 1.5% of the principle mortgage amount you send in over and above your monthly payment during the 6 months! (4.5% maximum)

Just like any good sales incentive, if at the end of the contest the manager sees it is making clear headway towards the bottom line, it can be extended for another period of time. Sometimes you may also adjust the contest to focus on another area or need.

Congress or the IRS would also need to put some stops in place. For example, anyone participating in the plan would need to register and have their credit run so as to thwart those who would run out and advance credit cards in order to catch up their debts. We don’t want to rob Peter in order to pay Paul. I am sure there are other fail-safes that could be added.

The root of this idea is to teach us all a lesson while stimulating the economy. You see, I don’t believe that the majority of people who are behind on their mortgages are that way because they have to be. I wonder how many people who are over their heads with mortgage debt still have cable television, a flat screen HDTV and a family cell phone plan with unlimited data package?

How many of them are eating fast food for lunch everyday and drinking beers and Vodka on the weekends? So what if they lose their house; they’ll just go find an apartment and stock it up with that same HDTV, internet cell phone, beer and vodka.

On the flip side, you have the honest and hard-working folks out there who do keep their bills current and still afford the finer things in life. They live within their means. The extra money they earn will surely find its way back into the economy in the form of spending, whether on luxury items or lifestyle upgrades; ie: economic stimulation.

Don’t get me wrong, I understand there are people in real trouble in this country. But the truth is most have just not been motivated properly to make their house payments. There truly is no incentive for them to do so, negative or positive.

A sales rep once said to me, “You catch more flies with honey than with vinegar, so motivate us with positives instead of negatives.”

He was right.

So all you lawyers in Congress need to start thinking like middle managers. What can you do to turn around the country’s “sales numbers?” Is it better to inject money into big company coffers, or put it in the hands of the employees/people?

We elected you, and will be voting again soon. Just beware: swallowing vinegar may cause vomiting. So are we gonna get the honey or what?

Allyn Paul is a big company middle manager. He lives within his means; simply.

His blog, Life and Lawns, offers lawn care tips and advice.