GOP's New Estate Tax Break For Millionaires: Tax-Free Inheritance! (Tax Reform NOW!)

The tax law that could make your grandchildren super-rich


Sometimes Congress hands out a break that is so generous it seems it must be a mistake. This one’s a doozy: the ability to receive a tax-free inheritance of $400 million or more.

Thanks to two recent changes in the tax code, investors with huge 401(k) accounts have a way to turn them into tax-free income for their grandchildren’s lifetimes.

This is by far the biggest estate-planning break on record, created even as lawmakers debate over which tax giveaways should be killed to help shore up the federal budget.

“I call this tax break the government’s going-out-of business sale,” says IRA guru Ed Slott, who travels the country teaching advisers and accountants how to squeeze benefits out of the Roth IRA. “This is a tax break you could drive 10 Mack trucks through. It’s an incredible opportunity to do a totally tax-free transfer of wealth.”

This massive estate-tax break was created last year in two steps. First Congress lifted a $100,000 income restriction on who can convert a 401(k) or IRA to a Roth IRA, allowing even the wealthiest investors to convert. Then late in the year, it raised the generation-skipping transfer tax exemption (GST) to $5 million until 2013. The exemption was previously $3.5 million, and was scheduled to drop to $1 million this year before Congress stepped in.

Both of these provisions on their own create possibilities for significant tax savings. But used in combination, the results are exponentially greater.

The Roth IRA has always been on a different playing field compared with alternatives because it allows gains to be withdrawn tax free. Money taken out of a 401(k), regular IRA or other retirement accounts are subject to income-tax rates.

Also, the Roth doesn’t require that minimum distributions be taken after turning age 70½, as other plans do. So if you don’t need retirement plan assets to live on, the Roth preserves it best for heirs.

Not everyone jumps at the chance to convert to a Roth IRA because you have to pay income taxes on the assets moved into the account. So if you plan to live off of retirement account assets, a conversion might not make sense. But from an estate planning perspective, when there are decades of gains ahead, the tax bill can be a small price to pay for big benefits down the road.

With the new GST exemption, the estate planning benefits that can be wrung out of a Roth are eye-popping. Consider an extreme case: A wealthy individual converts a large 401(k) account to a Roth IRA and names a grandchild as the beneficiary. The grandchild, at age 1, inherits the Roth, whose assets have grown to $5 million. Because of the new $5 million GST, the Roth assets would not be subject to estate tax or generation-skipping transfer tax.

Under Roth rules, an heir must take required minimum distributions, but the distributions can be stretched over a lifetime, and assets left in the Roth can continue to grow tax free. Based on a 1-year-old’s life expectancy of 81.6-years, assuming an average annual return of 8 percent, Slott calculates that the grandchild’s lifetime income from the Roth would be $408 million — “completely free of estate, gift, income and capital gains taxes,” he says.

If both grandparents left a big Roth account to the same grandchild, the tax-free inheritance would be almost twice that amount, depending on the age of the grandchild when the second Roth is inherited.

You don’t have to have stratospheric wealth to get in on these great estate planning benefits. Consider: A $100,000 Roth inheritance would let a grandchild pocket more than $8 million, tax-free. This would have been possible even under the old GST tax exclusion, but the old Roth rules, which prohibited conversions from IRAs and 401(k)s for those with incomes above $100,000, would have prevented many from taking advantage of the opportunity.

With the new $5 million estate tax exemption, passed along with the GST exemption last year, the Roth has become a turbocharged, tax-favored inheritance tool for any generation. But the benefits are even more pronounced when the Roth income is spread over the long expected lifetime of a grandchild.

Grace Allison, senior vice president and tax strategist at Northern Trust, cautions that the upfront tax bill on Roth conversions can take the shine off of this strategy, so it’s critical to crunch the numbers. If you convert $5 million, at the highest tax rate of 35 percent, you’ll have to hand over about $1.7 million.

That kind of tax bill is mind-numbing for most people, but in the universe where ultra-wealthy people are trying to preserve their multimillions, $1.7 million may seem like a small amount, considering how much will be saved in taxes in the long run.

In the extreme example above, the total tax savings would be in the neighborhood of $100 million over the grandchild’s lifetime, probably much more

Did Congress intend for this big generational benefit? Although the government could surely use wealthy taxpayers to pay big upfront tax bills on Roth conversions right now, the amount it would forgo in taxes on inherited money over decades would be staggering.

Whether intentional or not, opportunities to combine the Roth with the GST exemption are limited: The exemption is scheduled to drop to $1 million in 2013.

And it’s always possible that tax reforms will rescind these tax breaks before that. Roberton Williams, senior fellow at the Urban Institute, says that if any drastic changes are made, it will be Congress’s mess to figure out how to honor previous tax breaks in Roth accounts. In the meantime, get ’em while you can.


Sources: Daily Beast, Fiscal Times, Fox News, MSNBC, Washington Post, Youtube, Google Maps

Housing Slump & Foreclosure Remedy? Section 8 Voucher Renters!

Housing vouchers a golden ticket to pricey suburbs

It was clear that Liza Jackson’s luck had changed when she drove her pearl-white Dodge sedan, the one with the huge pink plastic eyelashes over the headlights, into Pinebrook, an eight-year-old subdivision where residents tend to notice cars with huge pink eyelashes.

“There goes the neighborhood,” one homeowner said when she heard that her potential new neighbor had a federal housing voucher known as a Section 8.

But Jackson could well be Pinebrook’s salvation, a means by which landlords can rent an empty, crime-magnet of a house to a tenant with a steady, government-backed check.

From Jackson’s point of view, the dismal housing market appeared as a glorious reversal of fortune: Fresh swaths of suburbia were opening up to the very people it has so often excluded.

She had seen one house, and now she rolled up to another, a tan three-bedroom with red shutters. She got out and looked around, a vaguely glamorous vision crossing the grass in a long, leopard-print dress. She peeked into the windows, making out what appeared to be vaulted ceilings.

“Dang,” Jackson said approvingly.

She put the house, a foreclosure turned rental, on her list of possibilities.

The reasons for this irony are mostly familiar. A steadily dropping homeownership rate, 5 million to 11 million more foreclosures in the pipeline, and a raft of investors buying them up have led to a proliferation of rentals in the land of lawns and cul-de-sacs.

But as housing prices keep slipping and the economy remains shaky, there’s been another shift as more landlords view the approximately 2 million American families with a Section 8 voucher — which essentially subsidizes fair-market rent for people who can’t afford it — as among the best ways to fill an empty house.

“It’s guaranteed money,” said David Benham, who owns several rental properties and is a founder of the Benham REO Group, which sells bank foreclosures to investors in 35 states. “It has a great accountability program with the renters. I love Section 8. I wish every one of my properties was Section 8.”

So for a group of Americans previously blocked from certain neighborhoods by “not in my back yard” politics, high prices and a lack of rental options, this is a minor bonanza. Those with a Section 8 voucher, a key federal program for the poor, are a fraction of those who need it; waiting lists are full and years long. But they are a lucky fraction. In the recession-era economy, the voucher is becoming a golden ticket to almost anywhere, a point hardly lost on Liza Jackson, whose cellphone was now ringing Lil Wayne.

“Yes?” she said, answering in the prim manner she described as her “white voice.” “I had called about the four-bedroom, two-and-a-half bath? Yes. Liza. Like Minnelli.”


Jackson and her daughter Sheena, 24, were saying goodbye to a cramped two-bedroom townhouse in Honolulu, a city she described as “not all it’s cracked up to be, if you’re black,” and “all high maka maka,” which is Hawaiian slang for unduly expensive.

Jackson had planned the move for months, perusing rentals on Section 8 Web sites that offer everything from chic new condominiums in Miami to four-bedrooms in Phoenix, Las Vegas and Atlanta. Jackson decided on Charlotte, where she could get more square footage for her family, which included Sheena, Sheena’s 5-year-old son, Shamahrie, and her two dogs, Coco Chanel and Mamacita. She saved up from her job as a baker, shipped the car and booked a room at a cheap hotel off the Billy Graham Parkway.

Now it was early June, and she and Sheena were at a briefing at the Charlotte Housing Authority office, a normally dreary place that was bustling like a booming real estate firm.

By 8 a.m., more than two dozen hopeful people were streaming in, having taken overnight buses from New York, Baltimore, New Jersey and elsewhere, where they lived in public housing, or run-down neighborhoods, or places they hoped to escape.

“I want to be around all this fresh air,” said Evelyn Lifsey, who was moving from a Staten Island public housing project. “My moving truck is on standby.”

A housing counselor ended the briefing by handing out a list of Zip codes.

“These are areas with better amenities, more jobs, better schools,” she said, encouraging people to scout them.

Jackson received a folder with her voucher, a prized possession that people spend years on waiting lists to acquire. Jackson’s was $1,032, possibly more if utilities were included or if she found a place in a pricier Zip code. Her contribution was about $200 a month.

She looked over the list of houses she’d compiled: a few older homes and others in subdivisions such as Linda Vista, Running Deer and Pinebrook, a tidy if slightly fraying neighborhood where some homes once sold for $180,000.

“I don’t want to live in some ghetto,” Jackson said in the brawny tone of her native Boston, and it seemed she would not have to. Soon, she and Sheena were zipping down Interstate 85.

It was a sunny afternoon in Charlotte, an ambitious city of mirrored skyscrapers and green suburbs whose last big wave of house hunters was full of bank employees, high-tech workers and other professionals.

Now there was Jackson, who receives unemployment, and Sheena, who gets child support for Shamahrie. Riding along, they fielded calls from agents, some of whom seemed quite eager.

“Yes, hello, Debbie!” Jackson said into her phone.

“Yes, I did receive my voucher,” she said to another agent.

“Yes, I did get my voucher,” she said to another.

Their list of possibilities was growing.

“Just look at all these trees!” Sheena said as they sailed past a blur of highway forest.

“Here you can just drive and drive,” Jackson mused, imagining a better life.

If she was cramped in Honolulu, here she had higher standards. At least three bedrooms. Hardwood floors, preferably. An open kitchen.

They wound their way to the first address, which turned out to be the sort of Section 8 offering typical of the boom years: a small, 1970s-era brick number with dirt patches in the front yard.

“I’ll put ‘[Heck] no’ next to this one,” Jackson said, making a note.

She hit the gas, passing two young men in shorts and tank tops.

“Uh-oh, street punks,” Jackson said, further disqualifying the area.

She steered back onto the interstate, and after a while exited onto Sunset Road, a winding, semi-rural stretch with a run of white split-rail fencing.

“Oooh,” Sheena said, impressed.

They passed a couple of young men in shorts and T-shirts walking along the road.

“Uh-oh, street punks?” Jackson said, unsure which class distinction applied.

“Nah, they look like some going-to-school street punks,” said her daughter, who claimed a finer social radar.

They pulled into Linda Vista, a winding maze of 2,000-plus-square-foot homes.

“This is quiet livin’,” Jackson said, rolling along. “I’d hate to see something ghetto in here.”

Most yards were well kept, though a few were weedy, and here and there, vinyl siding was curling off houses. There was a Mercedes-Benz in one driveway, and old trucks and minivans in others. There were some vacant homes.

They pulled up to one, a gray three-bedroom with a white picket fence. They walked around the house, gold sandals in the clipped grass, and looked through the windows. Sheena was sure neighbors were staring.

Jackson knew that despite stereotypes people might have of Section 8 tenants, she would be an ideal neighbor for these economic times. She had cleared up her credit. She had savings, enough to pay her share of the rent in advance. She was upstanding, planning to attend school to become certified to draw blood. And once she moved, she would stay.

She was what Linda Vista needed, she realized: stability.

If Jackson decided to apply for it, she would contact the owner, Sabre Value Asset Management. The house, which the firm bought in a short sale for $90,000 last year, is one of about 150 it has acquired across Charlotte and Atlanta. All are rentals.

“Our goal is to try to provide a win for everybody,” said the firm’s president, Aaron Edelheit, describing the enterprise as a stabilizing force.

Jackson’s possible Linda Vista neighbors were warming up to that idea.

“I have nothing against Section 8,” said Cassandra Coleman, a homeowner. “Rich, poor, anyone can be a good or bad neighbor.”

She had been laid off from Bank of America for three years. Her mortgage was in trouble. She spoke with the sense that she could probably use a voucher herself.

Jackson realized that her own good fortune was partly due to such misery, but mostly, she and Sheena were thinking about a huge walk-in closet they’d seen.

“You know how many shoes you can put in there?” Sheena said. “I’m trippin’.”


After several days of looking, Jackson had seen at least a dozen houses that were supposed to represent the rewards of middle-class betterment but that were beginning to strike her as a bit shabby or “peasy.”

She did not want some of the peasy carpet she’d seen, or peasy refrigerators or dented, peasy front doors.

She drove again along Sunset Road, which she had decided was not peasy, at least not yet.

She drove by Elizabeth Oaks, one of the newest and most upscale subdivisions, where the builder had recently pulled out. The model home was now a rental.

She drove into Pinebrook, where one resident had dreaded the notion that a Section 8 tenant might move in. Others took a more practical view.

“If you don’t let go of your hang-ups, you’re going to be stuck with an empty house,” said Crystal Campbell, a homeowner who got laid off from Bank of America and recently found a job in the corporate offices of the Family Dollar discount chain.

By now, Campbell had accepted the revised facts of her existence. She could not move because her home’s value had dropped by half. Section 8 renters were not the enemy of Pinebrook but the friend. The house next door needed a tenant.

But Jackson was ever more discerning, and she wasn’t sure about Pinebrook. There were other places to consider. She had so many choices, including a renovated 2,500-square-foot “gem!” beyond I-485. With her Section 8 voucher in hand, she got in the sedan with the pink plastic eyelashes and headed there next.


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Sources: Washington Post, Youtube, Google Maps

Prince George's County Foreclosures & Bush's Deregulation Policies

Thanks To Former Pres. George W. Bush's Wall Street Deregulation Which Spurred Predatory Lending Practices, The Most Affluent Black County In America: Prince George, Maryland Is Now Experiencing Record Foreclosures.

Do You See How GOP Lawmakers Are Slowly Trying To Destroy The Black Community's Wealth?

The American Dream Is NOT Dead!

However GOP Leaders Want Black & Hispanic People To Think Its Dead For Them.

VOTE OBAMA IN 2012!



Affluent black county mired in mortgage mess


America’s wealthiest black county is in trouble.

Prince George’s County, Md., has gained prominence in recent years as the most affluent county in America with a majority African-American population. Average income in the county is almost double the national average for black families, according to the Census Bureau’s 2009 American Community Survey.

But the county, adjacent to the District of Columbia, has been laid low by the recession and the mortgage meltdown and now holds a more dubious distinction: a rising foreclosure rate that ranks as the worst in Maryland.

More than half of all housing sales in the county so far this year have been properties in foreclosure, a rate that dwarfs other counties in the state, according to MRIS, which provides listing services for real estate agents. This has caused a domino effect of social, economic and financial problems to ripple throughout Prince George’s communities.

“The biggest changes I’ve seen are very visual,” said District Heights resident Yvonne Brown. “If you just drive down my street, there are four empty homes with the grass ten feet tall. It’s heartbreaking.”

Foreclosure sales, which have risen from 34 percent in 2009 to 51 percent so far this year, are just one sign of problems affecting Prince George's.

The county has imposed a hiring freeze, except for new public safety workers, and it recently cut $13 million from the school budget, although the county government's finances are solid enough that all three major rating agencies recently awarded it their top AAA bond rating. A wave of homicides this year has raised concern about safety in the county, and former County Executive Jack Johnson pleaded guilty last month to federal charges stemming from a sweeping corruption investigation.

Experts say there are a variety of reasons why the county ended up in the middle of the mortgage mess.

A decade ago, housing stock in Prince George’s was significantly less expensive on average than in any other suburban county in the D.C. metro area, so it had strong appeal for first-time homebuyers, said Anirban Basu, economic analyst and CEO of Sage Policy Group, a Maryland consulting firm. In general, home prices in low- and moderate-income neighborhoods rose more quickly in the boom and have fallen more sharply in the bust, Federal Reserve Gov. Janet Yellen noted in a speech Thursday.

Prince George's County also was a hotbed for speculative activity among professional and amateur investors during the housing upturn, Basu said. “The demographics of those affected correspond neatly to the demographics of a first-time home buyer: lower and less-stable incomes,” he said.

Brown, 34, is a prime example. As a first-time homebuyer and single black woman, Brown moved to Prince George’s in 2006 from nearby Montgomery County because she couldn’t afford home prices there.

She paid $230,000 for a tiny, 664-square-foot home that she said is “more like a small cottage.” The previous owners had paid $60,000.

“I didn’t go outside of my means and buy an astronomically large home,” she said. “I did something extremely practical.”

Bob Ross, president of the county branch of the National Association for the Advancement of Colored People, said it was clear that when the housing bubble burst, many newcomers were hit harder than the older, more established families.

“People didn’t fully understand what they were doing when they refinanced or when they took out more mortgages,” he said. “I can’t speak for the NAACP, but I do personally believe that discriminatory lending was going on.”

A 2008 report from the National Commission on Fair Housing and Equal Opportunity highlighted the practice of “reverse redlining,” which occurs when lenders target minorities with costly, subprime loans that they may not need or be able to afford. Analysis of data from 2006 indicates that roughly 54 percent of African-Americans and 47 percent of Latinos received subprime loans, compared with about 17 percent of whites, according to the report.

“If one considers the group that is most impacted (i.e. African-Americans and Hispanics), one can make a credible argument that the lending practices and the aggressiveness of subprime lender greatly contributed to the high rate of foreclosure,” Eric Brown, director of Prince George County’s Housing and Community Development Department said in an email.

Newly elected County Executive Rushern L. Baker III said his administration is doing everything in its power to help keep residents in their homes. County officials have allocated $1.8 million in their 2012 budget to rehabilitate abandoned and foreclosed properties.

Baker said in an email that the county is stressing preventative measures "to get people assistance before it’s too late.”.

Carol Gilbert, assistant secretary for neighborhood revitalization in Maryland’s Housing and Community Development Department, said Prince George's County accounts for 25 percent of the state's foreclosures. "It will get worse before it gets better, especially for Prince George’s County,” she said.

“While a lot of gains were made in home ownership, more so in the last three to five years, the foreclosure crisis really hit the minority community the hardest,” she said. “That’s a very big step backwards for building equity and wealth over time.”

In an effort to slow the foreclosure wave, the county is promoting non-profit housing counseling programs like the Housing Initiative Partnership (HIP), which provides financial literacy resources and helps homeowners understand their options.

Brown has been taking advantage of HIP’s help to try to get a modification on the two mortgages she has on her home. Without their help, she would have probably lost her home, she said.

With one in four people in Prince George’s behind on their mortgage, and only six counselors on HIP’s staff, their phones have been ringing off the hooks for the last three years and their calendars are booked for weeks, said Mary Hunter, director of

There’s just not enough funding to support the counseling that’s needed,” Hunter said.

While Hunter still has clients coming in because of predatory loans, more of her clients now are having trouble due to declining incomes. They aren’t necessarily unemployed, she said, but they may have lost a second job, overtime hours or supplementary income from a spouse. Also, Hunter said fewer people are receiving unemployment benefits now than a year ago.

As a high school English teacher, Brown has had to deal with budget cutbacks and furloughs that affected her paychecks. The after-school tutoring programs that Brown depended on for a supplemental income are gone too.

Now she’s hoping to find help in the state’s Emergency Mortgage Assistance Program. The Maryland Department of Housing and Community Development recently received federal funding to offer a limited number of no-interest loans to homeowners who have fallen behind because of loss of income due to unemployment or health issues.

“There’s a huge demand for this program now,” Hunter said. Eligible homeowners can get a zero-interest loan of up to $50,000 for two years to help them with their mortgage. “It can be the only hope people have to save their homes,” she said.

Brown is in the process of gathering her paperwork to apply for the program. Though she has her hands full with a 10-month old child and another on the way, she has been relentless in the fight for her home.

“People don’t understand how much help is out there,” she said. “They’re very depressed and consumed in their situation, and they can’t get past it to apply for a program to get the help they need.”


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Sources: MSNBC, The Grio, Washington Post, Wikipedia, Youtube, Google Maps

Obama Admin vs Fradulent Foreclosures: Vows To Prosecute Bankers

Obama White House Warns Banks Over Foreclosures

The White House warned banks Tuesday it would pursue them for any mortgage practices that violated the law, piling pressure on the financial sector after two institutions lifted their freezes on home foreclosures.

Bank of America said on Monday it was partially lifting its foreclosure suspension, and GMAC Mortgage, one of the largest servicers of U.S. residential loans, followed suit.

The moves followed two weeks of damaging accusations that financial institutions' use of shoddy paperwork caused some borrowers to be illegally evicted from their homes.

The controversy, which has drawn public outrage and sparked government probes, has raised new fears about threats to bank earnings and the health of the fragile housing market, which has been battered by falling prices and foreclosures of nearly 3 million homes since January 2007.

The White House has rejected calls for a nationwide moratorium on foreclosures, but it signaled Tuesday that even as banks lift their freezes, government investigations would proceed.

"As institutions are determining their next steps in addressing these issues, we remain committed to holding accountable any bank that has violated the law," White House spokesman Robert Gibbs said in a statement.

"In addition to strongly supporting the investigation by the state attorneys general, the administration's Federal Housing Administration and Financial Fraud Enforcement Task Force have undertaken their own regulatory and enforcement investigation into the foreclosure process."

Sources: BOFA, CNBC, CNN, Wikipedia

Hitler's Foreclosure Meltdown Parody (Video)

Sources: MSNBC, Youtube

Foreclosure Moratorium! Obama Opposes! More Homeless Coming!

White House Warns Against Broad Foreclosure Moratorium


The White House Tuesday rejected calls for a broad moratorium on home foreclosures, saying it feared such a step could harm the U.S. housing market and hinder a housing recovery.

"There are a series of unintended consequences to a broader moratorium," White House spokesman Robert Gibbs told reporters.

Disclosures that some big mortgage processors filed affidavits without proper scrutiny in thousands of foreclosure cases has drawn calls from some lawmakers and civil rights groups for foreclosures to be halted in all 50 states.

But it is not clear if any individual or single regulator has the power to impose a nationwide moratorium, with most mortgage regulation conducted on a state-by-state basis.

The health of the housing market is a major concern as the Obama administration tries to step up the economy's recovery from its worst downturn since the 1930s.

Gibbs said the administration is determined to "get to the bottom of" a problem of hasty foreclosures.

"We want to take the just and necessary steps to ensure that the process is being followed legally," he said. "At the same time, we don't want to see broader harm done to the housing market and to the housing recovery."



Lawmakers are acutely aware of voter angst over jobs and the sluggish economy with the Nov. 2 congressional election three weeks away, and regulators face heavy pressure to prevent a repeat of the 2007-2009 financial crisis that began when the U.S. housing bubble burst.

Temporary pauses in foreclosures have expanded among major lenders as the courts, lawmakers and state attorneys general investigate whether banks supplied shoddy paperwork to support evictions of delinquent borrowers.



But an investor group and industry experts warned Monday that a nationwide foreclosure moratorium could penalize pension funds, insurance companies and other investors and make new loans more expensive.


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Sources: BOFA, CNBC, MSNBC, Google Maps

Obama Extends Homebuyer Tax Credit For 3 Months

Pres. Obama Signs 3-Month Extension Of Homebuyer Credit


President Barack Obama Friday signed a law giving consumers already in the process of buying a home three extra months to close the deal and still get a popular tax credit from the government.

Homebuyers with contracts signed by April 30 who failed to go to closing by the original June 30 deadline will now have until September 30 to complete their purchases.

The measure is meant to support the battered U.S. housing market which still faces tough headwinds despite low mortgage interest rates.

The Senate late Wednesday approved the measure just hours ahead of the earlier deadline and one day after House of Representatives quickly approved the measure.

The $8,000 tax credit for first time homebuyers and $6,500 credit for others purchasing a new primary residence was a highly popular temporary measure by the Obama administration to jump start home sales during the economic recession.

The Senate had earlier tried to extend the deadline but failed amid partisan bickering over unrelated legislation.

Real estate agents said as many as 180,000 homebuyers would miss the June 30 deadline because banks and settlement offices were struggling to deal with the volume of people rushing to close on their deals signed before April 30.

Critics say the three-month extension is an invitation for fraud, providing prospective home buyers time to back date contracts to a date before April 30 and subsequently closing on those contracts by the new September 30 deadline.

"The IRS reminds taxpayers that special filing and documentation requirements apply to anyone claiming the homebuyer credit," the Internal Revenue Service said.

Senate Majority Leader Harry Reid, who faces a tough re-election fight in November in Nevada, where the U.S. foreclosure crisis is most pronounced, pushed for the three-month extension.

The National Association of Realtors Thursday said contracts for pending home sales fell by a record 30 percent to an all-time low in May, the first month of sales without the homebuyer tax credit since it was introduced two years ago to spur housing demand.

Hampering a recovery in the housing sector is a weak jobs market.

The U.S. Labor Department earlier on Friday said overall employment fell for the first time this year in June as thousands of temporary jobs ended.


Sources: CNBC, Trulia, Youtube, Google Maps

Mort Zuckerman vs Kristen Gillibrand: Wall Street Backs Zuckerman

Harold Ford Bolts; Mort Zuckerman Rises


Harold Ford gave many reasons for his decision not to launch a primary challenge against Sen. Kirsten Gillibrand, but he didn’t mention a decisive one: The emergence of a richer, stronger center-right challenger whom many of Ford's potential supporters on Wall Street and in New York’s business community would prefer.

Ford’s departure signals, according to two top New York Democrats, just how serious Mortimer B. Zuckerman is about a Senate race.

Zuckerman, who parlayed a fortune in real estate into a mixed bag of media holdings and a prominent role in American Jewish life, has been encouraged by the reaction to the trial balloon he floated a few weeks ago in The New York Times, friends told POLITICO. And he seems to have shut down the former Tennessee Congressman’s attempt to enter New York politics before it ever got off the ground.

"A lot of donors were telling [Ford] that if Mort ran, they would be with Mort," said a senior New York Democrat.

(A spokesman for Ford, Davidson Goldin, denied that Zuckerman played a role in Ford's decision. Ford cited a desire to save his party a bruising primary.)

But Zuckerman – who would likely skip the Democratic primary and challenge Gillibrand in the general election as a Republican-Independent – poses a far graver threat to the national political status quo. The New York billionaire who owns one of the Democratic Party’s loudest megaphones, the New York Daily News, backed Barack Obama in the 2008 campaign but has emerged as a bitter White House critic, and his entry into the race would put Republicans clearly within striking distance of retaking the Senate.

At this point, the only real obstacle to Zuckerman’s entering the race is Zuckerman himself. Friends said they’re not sure whether he’s willing to give up the unusual status he’s bought as a figure who is public when he chooses to weigh in on public policy issues and utterly private in his unconventional personal life. And friends like New York Mayor Michael Bloomberg have told him that, at 72, after a lifetime of running his own businesses and making millions, the last thing that would make him happy would be becoming a freshman senator.

But Zuckerman, who owns the New York Daily News and U.S.News & World Report, has been a practicing pundit for years and “has always wanted to be in the political mix,” said Howard Rubenstein, the New York PR man and a Zuckerman friend. More important, the weaknesses of his likely opponent, Gillibrand, are clear to everyone, and a statewide office has rarely seemed so ripe for the plucking.

“He’d be her ‘worst possible opponent’ among possible candidates, said Democratic political consultant Dan Gerstein.

If Zuckerman were to mount a serious challenge to Gillibrand as a Republican, it would extend the list of strong GOP candidates to well within striking distance of the Democrats’ 18-seat majority, though Zuckerman would most likely define himself as an independent.

Top state Republican officials, including former Gov. George Pataki, reached out to Zuckerman when his exploration became public (not, as reported elsewhere, the reverse, two sources said), with New York state chairman Ed Cox telling POLITICO he has only one caveat: If Zuckerman runs as a Republican, he has to agree to caucus with the party. And Frank MacKay, chairman of New York’s Independence Party, which has often offered wealthy candidates its line, said he finds Zuckerman “impressive” and is “wide open” to a meeting.

“He’s very articulate. He seems to know how to handle himself on television. He has an enormous hammer in the Daily News,” said Rubenstein, who has done work for Zuckerman. “It would breach all of his privacy, though,” he said, adding that Zuckerman “has led a very decent life.”

Like his friend Bloomberg, Zuckerman would very likely draw on the support of Rupert Murdoch, whose New York Post cheered him on with an editorial titled “Run, Mort, Run,” and with whom — after years of bitter rivalry — Zuckerman has negotiated, through Rubenstein, a formal nonaggression pact amid on-again, off-again tabloid merger talks.

Zuckerman, who, according to his allies, has spoken with Bloomberg and his circle about a potential bid, would be a candidate in the Bloomberg model: a mogul whose wealth gets him a party line or two and who taps into voters’ desire for independence from a hated political system.

Whether or not Zuckerman is too old to start at the bottom of the Senate, as Bloomberg has told him, he is hardly on the verge of retirement — he’s known as a hands-on manager and has two young daughters. But he is also not a billionaire on Bloomberg’s scale. The recent real estate downturn sliced away nearly half his net worth, reducing it to a mere $1.5 billion, according to Forbes’s 2009 list — one-tenth of Bloomberg’s worth but still probably enough to finance a Senate race without selling any helicopters.

Zuckerman, born in Montreal, made his fortune buying, selling and building real estate, but with wealth came a craving for a national voice. He bought The Atlantic Monthly in 1980, immediately getting off on the wrong foot with a journalistic establishment that considered him a bit of a bumptious outsider when he sued the sellers, who included the magazine’s staff, in a dispute over its books.



His relationship with his employees has often been difficult. He broke the union at the Daily News, ended its pension plan, and this year ended the company’s 401(k) contributions. There are many former Daily News reporters at other news organizations, including this reporter, who worked for the paper in 2006 but never encountered Zuckerman.

In a recent memoir, a former Daily News editor described Zuckerman as “mercurial,” cheap and untrustworthy, and one senior Republican worried that he would suffer from the ill will of former employees. “There are plenty of people who are going to be happy to chase after things about Mort because of their history with him,” the Republican said.

Zuckerman’s other major platform has been Jewish organizations. He’s a hawkish friend of Israel — in line with many otherwise liberal New York Democrats, like Sen. Chuck Schumer — and was chairman of the Conference of Presidents of Major Jewish Organizations from 2001 to 2003. Those organizational alliances could be a major advantage in New York, where support from Jewish Democrats has been crucial to Republican candidates like Bloomberg and former Mayor Rudy Giuliani.

Zuckerman hasn’t been as successful in media as he has been in real estate: Apart from a windfall from the sale of the tech and business magazine Fast Company in 2000, most of his media investments have been less happy. But they’ve given Zuckerman a public voice; his column runs in U.S. News, and he appears regularly on Sunday TV talk shows such as “The McLaughlin Group,” often identified merely as a U.S. News columnist.

The production of his column, in fact, has been the subject of a great deal of lore in the magazine world. The New Yorker reported in 2007 that the process begins when he calls a secretary to dictate his ideas. The secretary sends her rough copy to legendary British editor Harry Evans in New York, and Evans’s copy then appears on the desk of the U.S. News editor of the moment.

“The official understanding was always that Mort wrote the columns himself and they would appear on the editor’s desk,” said James Fallows, a former editor of U.S. News under Zuckerman; he declined to elaborate on unofficial understandings.

Zuckerman’s opinion writing reveals hawkish, socially liberal views that would probably qualify him as a Democrat in the Joe Lieberman model, though he’s not a registered member of either major party.

Friends said he identifies with the Democratic Party, and he’s given more money to Democrats than to Republicans over the years. But Zuckerman, who voted for Obama, has since emerged as a harsh critic.

Under the headline “He’s Done Everything Wrong,” he wrote in The Daily Beast that Obama has “misjudged the character of the country,” pushed a health care plan that will be a “fiscal disaster” and run a “revolting” and “politically corrupt” operation.

Other columns could produce campaign problems. Zuckerman said he voted for George W. Bush in 2004, and he was an intense supporter of the invasion of Iraq. As a true believer that weapons of mass destruction would be found there, he was convinced Saddam Hussein was “lying” in his denials.

But what Zuckerman’s opinions cost him, his experience on television could make up for, particularly in contrast with Gillibrand, a young senator who sometimes comes across as callow.

“Seeing them on the same stage, there’s an automatic gravitas imbalance,” said Gerstein.

For Zuckerman, the most difficult step into a truly public life might be the questions he doesn’t get asked on “The McLaughlin Group.” He would have to step back from a company that he has defined, Boston Properties, just weeks after the death of his business partner and alter ego, Ed Linde, and the company’s deals would undergo a new level of scrutiny.

Unlike Bloomberg’s Bloomberg LP, Boston Properties is a publicly traded company, which advertises to investors that it “benefits from the reputation and relationships of key personnel” like Zuckerman, and from his “national reputation, which attracts business and investment opportunities.”

His management of his media properties could also be a target. Zuckerman’s spokesman, Ken Frydman, declined to put the question to Zuckerman of whether ending pensions and 401(k) contributions should be considered a model business practice.

On the personal level, Zuckerman is divorced and leads a colorful bachelor life, having been linked romantically over the years to a list of women including, according to The New Yorker, Arianna Huffington, Nora Ephron, Gloria Steinem, Diane von Furstenberg, Blair Brown and Marisa Berenson.

The Daily News in 2008 ran an announcement congratulating Zuckerman on the birth of a daughter but made no mention of the child's mother, prompting head-scratching in New York media circles. Recent visitors to his apartment said a baby is often present but that it’s considered impolite to inquire about the baby’s provenance.

“Those are obnoxious questions,” Frydman said in an e-mail. “So I’m not gonna ask him to answer them.”


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Sources: Politico, CNBC, Fox News, Youtube, Google Maps

Is Obama - Geithner's Anti-Foreclosure Plan A Complete Failure?

Homeowners Often Rejected Under Pres. Obama - Tim Geithner's Loan Modification Plan



Ten months after the Obama Administration began pressing Lenders to do more to prevent foreclosures, many struggling homeowners are holding up their end of the bargain but still find themselves rejected, and some are even having their homes sold out from under them without notice.

These borrowers, rich and poor, completed trial modifications of their distressed mortgage, and made all the payments, only to learn, often indirectly, that they won't get help after all.

How many is hard to tell. Lenders participating in the administration's Home Affordable Modification Program, or HAMP, still don't provide the government with information about who's rejected and why.

To date, more than 759,000 trial loan modifications have been started, but just 31,382 have been converted to permanent new loans. That's averages out to 4 percent, far below the 75 percent conversion rate President Barack Obama has said he seeks.

In the fine print of the form homeowners fill out to apply for Obama's program, which lowers monthly payments for three months while the lender decides whether to provide permanent relief, borrowers must waive important notification rights.

This clause allows banks to reject borrowers without any written notification and move straight to auctioning off their homes without any warning.

That's what happened to Evangelina Flores, the owner of a modest 902 square-foot home in Fontana, Calif. She completed a three-month trial modification, and made the last of the agreed upon monthly payments of $1,134.60 on Nov. 1. Her lawyer said that in late November, Central Mortgage Company told her that it would void her adjustable-rate mortgage, which had risen to a monthly sum above $2,000, and replace it with a fixed-rate mortgage.





"The information they had given us is that she had qualified and that she would be getting her notice of modification in the first week of December," said George Bosch, the legal administrator for the law firm of Edward Lopez and Rick Gaxiola, which is handling Flores' case for free.

Flores, 58, a self-employed child care worker, wired her December payment to Central Mortgage Company on Nov. 30, thinking that her prayers had been answered. A day later, there was a loud, aggressive knock on her door.

Thinking a relative was playing a prank, she opened her front door to find two strangers handing her an eviction notice.

"They arrived real demanding, saying that they were the owners," recalled Flores. "I have high blood pressure, and I felt awful."

Court documents show that her house had been sold that very morning to a recently created company, Shark Investments. The men told Flores she had to be out within three days. The eviction notice had a scribbled signature, and under the signature was the name of attorney John Bouzane.

A representative in his office denied that Bouzane's law firm was involved in Flores' eviction, and said the eviction notice was obtained from Bouzane's Web site, www.fastevictionservice.com.

Why would a lawyer provide for free a document that gives the impression that his law firm is behind an eviction?

"We hope to get the eviction business," said the woman, who didn't identify herself.

Flores bought her home in 2006 for $352,000. Records show that it has a current fair-market value of $99,000. The new owner bought it for $78,000 at an auction Flores didn't even know about.

"I had my dream, but now I feel awful," said Flores, who remains in the house while her lawyers fight her eviction. "I still can't believe it."

How could Flores go so quickly from getting government help to having her home owned by Shark Investment? The answer is in the fine print of standard HAMP documents.

The Aug. 25 cover letter from Central Mortgage Company, the servicer that collects Flores' mortgage payments, offered Flores a trial modification with this comforting language:

"If you do not qualify for a loan modification, we will work with you to explore other options available to help you keep your home or ease your transition into a new home."

CMC is owned by Arkansas regional Arvest Bank, itself controlled by Jim Walton, the youngest son of Wal-Mart founder Sam Walton.

A glance past CMC's hopeful promise finds a different story in the fine print of HAMP document, which contains standardized language drafted by the Obama Treasury Department and is used uniformly by lenders.

The document warns that foreclosure "may be immediately resumed from the point at which it was suspended if this plan terminates, and no new notice of default, notice of intent to accelerate, notice of acceleration, or similar notice will be necessary to continue the foreclosure action, all rights to such notices being hereby waived to the extent permitted by applicable law."

This means that even when a borrower makes all the trial payments, a lender can put the house up for auction if it decides that the homeowner doesn't qualify — assuming that foreclosure proceedings had been started before the trial period — without telling the homeowner.

Until now, lenders haven't even had to notify borrowers in writing that they'd been rejected for permanent modifications.

In January, 11 months after Obama's plan was announced, homeowners will begin receiving written rejection notices, and the Treasury Department finally will begin receiving data on rejection rates and reasons for rejections.

The controversial clause notwithstanding, the handling of Flores' loan raises questions.

"Foreclosure actions may not be initiated or restarted until the borrower has failed the trial period and the borrower has been considered and found ineligible for other available foreclosure prevention options," said Meg Reilly, a Treasury spokeswoman. "Servicers who continue with foreclosure sales are considered non-compliant."

CMC officials declined to comment and hung up when they learned that a reporter was listening in with permission from Flores' legal team. Arvest officials also declined comment.

McClatchy did hear from Freddie Mac, the mortgage finance agency seized by the Bush administration in September 2008. Freddie owns Flores' loan, and spokesman Brad German insisted that Flores was reviewed three times for loan modification.

"In each instance, there was a lack of documentation verifying that she had the income required for a permanent modification," German said.

That response is ironic, said Michael Calhoun, the president of the Center for Responsible Lending, a nonpartisan group in Durham, N.C., that works on behalf of borrowers.

"These lenders gave loans with no documentation and charged them a penalty interest rate for doing so. And now when the people ask for help, they are using extravagant demands for documentation to give them the back of their hand and continue to foreclosure," Calhoun said.

German said that Flores was sent a letter on Nov. 24, which would have arrived several days later, given the Thanksgiving holiday, informing her that she'd been rejected for a permanent modification. Flores and her attorney said she never got a letter, and neither Freddie Mac nor CMC provided proof of that letter.

Exactly one week after the letter supposedly was sent, Flores' home was sold to Shark Investments. That company was formed on Aug. 19, according to records on the California Secretary of State's Web site. Shark Investments, apparently an unsuspecting beneficiary of Flores' woes, has no phone listing. The Riverside, Calif., address on the company's filing as a limited liability company traces to a five-bedroom, four-bath house with a swimming pool.

German didn't comment on whether Flores received sufficient notice under Freddie Mac rules, or how the home could move to sale so quickly.

Flores' legal team, which specializes in foreclosure prevention, thinks that lenders and servicers are gaming Obama's housing effort.

"It seems servicers are giving people false hopes by sending them a plan, and they are using the program as a collection method, getting people to pay them with no intention of modifying the loan," said Bosch. "I believe they are using this as a tool to suck people dry."

Dashed hopes aren't exclusive to the working poor such as Flores.

David Smith owns a beautiful home in San Clemente, Calif., the location of the Richard Nixon Presidential Library. Smith purchased his five bedroom home four years ago for $1.3 million. Today, the real estate Web site Zillow.com estimates the value of Smith's home at $981,000, slightly below the $1 million he still owes on it.

Smith said he went from "making a lot of money to making hardly any" as the national and California economies plunged into deep recession. He's a salesman serving the hard-hit residential and commercial construction sector. On top of his hardship, Smith's mortgage exceeds the limits for the HAMP plan.

In late August, Smith signed and returned paperwork in a prepaid FedEx envelope to Bank of America that said it had received the contract needed to modify the adjustable-rate mortgage he originally took out with the disgraced lender Countrywide Financial, which Bank of America bought last year.

The modification agreement shows that Bank of America agreed to give Smith a 3.375 percent mortgage rate through September 2014, and everything Smith paid between now and through 2019 would count as paying off interest. He'd begin paying principal and interest in October 2019, with the loan maturing in 2037.

The deal favors the lender, but Smith, 55, jumped on it because it kept him in the home.

Armed with what he thought was "a permanent modification," Smith returned a notarized copy of the agreement and made subsequent payments on time.

In return, he got a surprising notice from Bank of America saying that his house would be auctioned off on Dec. 18.

"It looks like they're trying to sell this out from underneath me," Smith said. "My wife cries all the time."

After a Dec. 16 call from McClatchy asking why Bank of America wasn't honoring its own modification, the lender backed off.

"The case has been returned to a workout status and a Home Retention Division associate will be contacting Mr. Smith for further discussions," said Rick Simon, a Bank of America spokesman. "The scheduled foreclosure sale will be postponed for at least 30 days to allow for review of the account in hope of completing a home retention solution for Mr. Smith."

The Center for Responsible Lending says such problems are common.

"Everyone acknowledges that the system is not working well," Calhoun said.

Visit msnbc.com for breaking news, world news, and news about the economy

Gov't Mortgage Plan Provides Little Permanent Help


The Obama administration's embattled mortgage relief plan has provided permanent help to only 4 percent of borrowers who have signed up, weak results that could threaten the housing market's recovery.

Among big lenders, Bank of America Corp. had the worst performance in the Treasury Department report card released Thursday. The nation's largest lender completed just 98 modifications for the 160,000 borrowers who had signed up by the end of November. GMAC Mortgage had the most modifications of any lender, just 7,100.

About 760,000 have signed up for the program since it launched in March. But as of last month, just over 31,000 homeowners had received permanent loan modifications. Nearly the same number have fallen out of the program completely either because they missed payments or were found to be ineligible.

The report shows the administration is not going to hit its long-term target of helping up to 4 million borrowers with modified loans, said Ted Gayer, an economist at the Brookings Institution.

The more borrowers the program can't reach, the more foreclosed homes will spill onto the market, pulling down home prices. About 14 percent of homeowners with a mortgage are either behind or in foreclosure.

''Nobody really knows how big that wave will be,'' Gayer said.

The Treasury Department said it will step up pressure on the industry to improve. The administration's focus is to ''get as many of those eligible homeowners as possible into permanent modifications,'' said Phyllis Caldwell, chief of Treasury's homeownership preservation office.

When the poor progress was clear last summer, Treasury set a goal of enrolling up 500,000 borrowers by Nov. 1. With the clock ticking, many lenders started giving homeowners verbal approval for a temporary modification.

''They were going to do anything to hit that number,'' said Marietta Rodriguez, national director of homeownership programs at NeighborWorks America.

Under the program, eligible borrowers who are behind or at risk of default can have their mortgage interest rate reduced to as low as 2 percent for five years. They are given temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete the required paperwork, including proof of income and a financial hardship letter.

Lenders blame the low success rate on borrowers who don't return the necessary paperwork to complete the process.

But Michael Heller of Salinas, Calif., says he and his wife have submitted all of the required documents and made six months of $1,800 payments to JPMorgan Chase & Co., but have yet to receive an answer.

''Every time we send them documents, they send us a form letter that says your modification is risk, you screwed up, you didn't send us the necessary documents,'' said Heller whose landscaping business has taken a severe hit due to the recession. He figures the house he bought for $640,000 in 2006 is now worth $250,000.

''You never talk to the same person twice,'' he said. ''It makes you a little bit kooky. This has been extremely stressful.''

JPMorgan Chase had no immediate comment on their case.

Mike Brauneis, director of regulatory risk consulting at consulting firm Protiviti Inc., predicts that only 20 percent of borrowers who were verbally approved for modifications will ultimately sign up.

''Either people qualify verbally and never send their paperwork in, or they send it in and the numbers are different,'' he said.

Wells Fargo & Co. has enrolled about 3,500 homeowners in the Obama program so far. There are 14,000 more who have completed all their paperwork and are likely to finish the process soon. Another 9,000 have made three payments but haven't sent back any documents, while 11,000 have sent some paperwork.

''We're going to do all we can to try to get their attention,'' said Cara Heiden, co-president of Wells Fargo's mortgage division.

Bank of America said it is trying to reach 50,000 customers who have completed three payments but are missing some or all documents. It said its ''momentum in converting customers to permanent modifications'' will show results this month.

Some borrowers, who lied about their incomes when they originally took out their loans, still aren't able to show proof. During the housing boom, the lending industry didn't require borrowers to prove their income, and those loans are highly concentrated in the states hardest-hit by the housing bust.

More than half of loans made in California and Nevada from 2004 to 2007, for example, required little or no documentation, according to research firm First American Core Logic. Nationally, about 4.3 million of those loans were made during the boom years.

''You definitely have a group that shouldn't be in the loan in the first place'' said Terry Moore, managing director of consulting firm Accenture's North America banking practice.

A watchdog report this week said the government effort ''appears capable of preventing only a fraction of foreclosures'' and that only $2.3 million out of a potential $75 billion government commitment had been spent.

Steve Carpinelli, 39, of Alexandria, Va., thought he'd be a natural candidate for the Obama plan, after seeing his income drop 35 percent from about $65,000 two years ago. He's struggling, but has still made his monthly mortgage payments so far.

Though he was initially approved for a temporary modification, made four trial payments and sent back the necessary paperwork, Citigroup Inc. denied him last month.

''It is the most grueling processes I have ever been through financially,'' Carpinelli said.

A Citi spokesman declined to comment on his case but said, ''if the borrower does not qualify, we look for other potential loss mitigation solutions.''




NACA Continues Promising Mortgage Modifications Despite BBB Complaints



The Neighborhood Assistance Corporation of America, or NACA, promises to help struggling homeowners save their houses from foreclosure. But are those promises kept?

This weekend NACA will stage one of the organization's Save the Dream events in Charlotte. At a similar event in Columbia, S.C., earlier this year, 30,000 people showed up looking for assistance.

"We're the one shining light in the country when it comes to foreclosure prevention and restructuring mortgages to make them affordable," said NACA CEO Bruce Marks at a news conference to announce the Charlotte event.

But the president of the Better Business Bureau in Charlotte, Tom Bartholomy, said that is a bit overstated.

"There's nothing that they do that is more special than any other mortgage broker or lender will do for you," Bartholomy said.

In Charlotte, the BBB has logged 5 complaints against NACA. Nationally, there have been 63 complaints.

"At the end of it all, it comes down to that what they promised going in, they weren't getting at the end of it all," said Bartholomy.

Because NACA has helped thousands of satisfied homeowners across the country, the number of complaints is relatively small, so the BBB still gives NACA a B+ rating.

Katoma Cardwell was a NACA employee until he turned up at the news conference Tuesday afternoon. He admits he is in a pay dispute with the organization but also wanted to question CEO Marks about his claims.

"He is trying to distort what type of success NACA is currently able to provide for their members," Cardwell said.

Security guards barred Cardwell from going inside, telling him he had been fired.

A NACA executive who came outside told Cardwell, "Obviously you are attacking the organization so you can go through human resources to discuss anything further."

NewsChannel 36 questioned Marks about Cardwell's claims. Marks said, "There are some people that want to make a name for themselves by being on the media but we are focused on getting the job done."







More tax dollars for the self-proclaimed Bank Terrorist

Despite receiving taxpayer money, NACA doesn’t provide public reports on either its loan-brokerage business or its campaign to modify mortgages. Jim Campen, an economics professor emeritus at the University of Massachusetts, Boston, says he tried in the 1990s to analyze the performance of loans arranged by NACA, but Mr. Marks refused to provide data.

Mr. Marks says he feared the data would be used by another nonprofit to discredit his group. NACA does provide information to lenders that work with it, he says, but sees no duty to disclose it to the public.

“He’s been very effective in shaking money out of the banks,” says Mr. Campen, but “he’s not one to open up his records to public scrutiny.” Wall Street Journal
Article dated * May 20, 2009





NACA’s “Save the Dream Tour” Now Disappointing Thousands in Phoenix


It started this past July 31st and went through August 3rd, and 40,000 very nervous homeowners waited in long lines in the hopes of saving their dreams.

One woman, a 46 year-old single mom who had lost her job, fallen behind on her bills, but was working again, waited apprehensively to find out if her lender, Wells Fargo, would modify her loan or throw her out in the street. (I know that’s a harsh way of putting it, but I’ve decided that there’s been enough soft pedaling on this point.)

The event was yet another brought to homeowners by the Neighborhood Assistance Corporation of America, or NACA for short. The event’s brochure promised “Same Day Solutions” for homeowners who would get their loan modifications approved on the spot by many of the largest lenders and servicers in the country.

Bank representatives, dressed in their golf shirts with embroidered bank logos, would be on hand and would get things done for homeowners on a while you wait basis. NACA, a nonprofit based in Boston would be there with hundreds of housing counselors.

Wow. When I first heard about this whole “Save the Dream” thing, I thought it sounded absolutely fabulous.

When our single mom left the event that day she felt terrific. She was confident that her home would now be saved. A NACA housing counselor had reviewed her financial documents, and then she had met with a representative from Wells Fargo, who had agreed to modify her loan, taking her interest rate down from 6.375 to 4.375, and cutting her payment by more than $200 a month. Wells also agreed to a forbearance agreement that would allow her to skip the next six payments, and tack the amount onto the back end of the loan.

She was so happy.

The Wells Fargo representative couldn’t give her a written agreement, but it was a direct contact with her lender, and she watched as the representative wrote her name down along with her phone number and the promised interest rate… right on her NACA workbook.

She was so happy.

Fast forward to September 22nd, eight weeks later when she received a letter from Wells Fargo that specified very different terms than she was promised. In the letter it said that at the end of a six-month moratorium on payments, she would have to pay a balloon payment of all six payments missed.

So, as you might expect, our single mom tried to call her Wells Fargo representative at the number she had been given while she was saving her dream two months earlier… but she was never put through to her. Instead, Wells Fargo now told her to stand by… because Wells would be contacting her in a few months, at which time she could apply for a loan modification! And even better, Wells now said that it had no record of the agreed to interest rate reduction.

So, next she called NACA, left voice mails and sent emails but never got a response. And wouldn’t you know it… the identification number that she was given to track her file online on the NACA website didn’t work. Darn the luck.

So, now our single mom is concerned. She’s facing a balloon payment in January and is once again scared that she will lose her home… the home she purchased in 2002 with a 20% down payment…. the home in which she has close to 50% equity, but can’t refinance because of her credit score.

Now she’s angry. Very angry, I would think.

Here’s what she told the St. Louis Beacon:

“I’m angry at both the bank and the organization — Wells Fargo and NACA. Is the idea of ’scam’ in my mind? Yes. And that’s a quick turnaround for me. But, it was a very difficult 40-minute call I had with the bank — to see what I thought was a gift, of sorts, a break, just kind of disintegrate.”

NACA’s CEO is Bruce Marks, and he’s known for his outrageous acts in defiance of banks. I read about the guy and frankly, had to like him. For a while, he was delivering old, crummy furniture to the front lawns of bank executives on weekends. Pretty cool, right? Now I’m not so sure.

When Bruce was asked for numbers on how many St. Louis homeowners have received loan modifications and how many are in some sort of pending status, all he would say is that “it’s a rolling number”. It’s apparently a number that rolls. Bruce went on to say that that the focus would be on completing pending cases before the tour would resume in Los Angeles in late September. The “vast majority” will be completed by the end of this week, he told the St. Louis Beacon.

Were they? I don’t know. I can’t find any published numbers anywhere. I sure hope “the vast majority” of the 40,000 people that attended the NACA “Save the Dream” event… had their dream saved.

But I’m skeptical. Because when you consider that, according to the administration’s report cards that were published on August 9th, Bank of America only modified 4% of its eligible loans. Bank of America is the country’s largest mortgage holder, so it seems hard to imagine that the “vast majority” of 40,000 homeowners could save a dream out of that 4%. Maybe I’m not getting the math right.

At least NACA provides their housing counselor services FREE! That’s right, they don’t charge any of those distasteful up front fees everyone is so concerned about. Nope, NACA gets their money the old fashioned way… from the taxpayers… well, from the government who gets their money from the taxpayers. In fact, NACA recently got $16 million in government funding to provide housing counselors to distressed homeowners. But that’s not considered an up front fee, I suppose. So, you see… that’s free right there.

Oh, and one more thing… just for fun I looked up NACA on the Better Business Bureau Website and guess what? You guessed it… an ‘F’.

NACA’s Save the Dream? Or just another government funded nightmare?



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Sources: McClatchy Newspapers, Huffington Post, Wall Street Journal, NY Times, MSNBC, Michelle Malkin, WISTV, WCNC, NACA, Whitehouse.gov, BBB, Youtube, Google Maps