Tag Archives: Insurance

The real beavers of the recent Congressional dam

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As the world knows know, the GOP-ers & the Dems are duking it out on Capitol Hill as we speak.  The GOP-ers don’t like it that in March, 2010, over 3 years ago, Congress passed the Patient Protection & Affordable Care Act, and made it the law of the land just as many other laws have been passed, like Civil Rights laws.  Imagine the Republicans trying to hold up gov’t funding to stop that already-passed & signed law.

They’re currently trying to grind the government to a halt (which they’ve succeeded in doing for the most part already) and are willing to once again take a chance at not only causing a default of our nation’s debt (theoretically possible, but actually unlikely, as the president could step in & order payment of the debt by citing previous case law and/or legislation), but surely may cause its credit rating to soften once again, which happened the last time they put a stranglehold on government with their strong-arm tactics.  Turns out that the majority doesn’t rule — all it takes is a minority of a few motivated politicians to change the world.

Just in case you were wondering who to blame for the roadblock, here’s your smoking gun, straight out of a Texas babe’s mouth . . .

Republican Sen. Ted Cruz of Texas, the man who’s wanting to be the next George Bush, has recently said the following, and I quote:

Cruz: “We (read: Republicans in Congress & their idiotic supporters of this action) should look for 3 things — #1: We should look for some significant structural plan to reduce government spending.  #2: We should avoid new taxes.  And #3: We should look for ways to mitigate the harms from ‘Obamacare,’ ” He also said that the debt ceiling issue is the “best leverage the Congress has to rein in the executive.”

It’s an attempt to turn back a law agreed upon by a majority of both houses of Congress & signed by the President into law just a little over 3 years ago, a law which mainly helps Americans who have no insurance & can’t get it (“uninsurable” is what they call sick people) or who can’t afford it, and hurts those who have to provide the insurance (i.e., it greatly affects the bottom line of these rich & greedy insurance companies).

What’s amazing is that GOP-ers (both the politicians & their fanatics) actually believe (or at least act like) it’s going to affect them, but it really doesn’t affect much of anyone who has employer-based or gov’t-based insurance, and at last count, that was 80% of Americans.  If it does affect you, it’s simply because you have crummy insurance or your employer and/or your insurance company is using this as a (pardon the pun) lame excuse to raise your premiums, which they all did.

It’s really nothing more than a wedge the “White People of America Who Are Asses” are using to continually divide us socially & politically.

How to fix an underwater housing market

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Here’s my plan to save America’s “underwater” homeowners when we eventually plummet into a “bear” housing market & find that we have a plethora of those who owe more on their home than its alleged fair-market worth — it’s a 4-step process:

1) Have the president create an agency within HUD funded initially by the US Treasury & later partially or (hopefully) wholly funded by fees that, upon application by a homeowner, they will issue a check at a short sale to cover the difference between the appraised value & the outstanding mortgage balance, which check will be paid to the mortgagee (the bank/entity holding the mortgage) at closing.  A fee must be paid by the seller along with the appraisal fee.  The homeowner also agrees to sign a note for the shortfall check that will become a gov’t debt (with no time limits/expiration) on any future homes they buy.  This debt/lien is not to be included on credit reports & instead entered on a gov’t database to let lenders & closing attorneys know there is a future debt to be paid at some point if they have a closing with this person as a seller so that if they have any equity in any new homes, that new equity will pay down the debt.  It would be an interest-free loan & it can’t be bankrupted upon for at least 25 years. This would allows sellers to move on to a hopefully more profitable/valuable home & free up the market to jumpstart sales again, as well as provide more liquidity for banks & more opportunities for homebuyers, which in turn would bring home values up again & would possibly cure the negative equity problem entirely.

2) Have the President remove the due-on-sale clause for all FHA, VA, USDA, FNMA & even private or other conventional mortgage loans that are more than 5 years old & are current so that ANY buyer can buy them so long as they meet these simple guidelines — A) Show income that meets the FNMA income ratio test or show assets equal to 20% of the price of the home, which you must pay down the loan with; B) Show a credit rating of at least 640, with only a 24-month lookback/seasoning for foreclosures & bankruptcies, and 12-month for any other negatives on your credit (i.e., no 30-day late pays within 12 months), and no consideration for any medical bills in collection (they won’t count against you as long as they’re not judgments). Only a $500 leader fee or 0.5% of the sales price may be charged by the lender (whichever is less) to transfer the loan. The loan must be “above-water”, i.e., not owe more than the home is worth or the “underwater” provisions apply above.  This would also apply to short-sales as explained above.

3) Bankruptcy & credit overhaul — Bar current & future prospective employers & insurance companies & anyone else from checking a person’s or a business’ credit history if not in direct relation to a request for credit, and insurance “premium financing” will not be considered a debt for this purpose. A person with bad credit is usually not a bad person; they just either got caught up in a situation that went sideways without warning or made a bad decision that looked good initially, or are burdened by medical bills or a student loan (which can’t be discharged, but they can discharge the other debt so they can afford to pay back the student loan). Restrict credit histories to 5 years instead of 7, and put Chapter 7 BK back to 5 years for reporting (from the current 10 years) & set repeat filings of BK at no earlier than 10 years (currently 8 years). Remove the $150,000 loan threshold & make it so that no one can go back & look at a person’s credit history more than 5 years for any amount of loan. FHA, VA, FHMA & USDA loan guidelines must restrict seasoning of BK & foreclosures to 2 years (current law is 3 yrs on foreclosures & 2 years on BK, which makes no sense) unless it’s an equity sale with 20% down, which would be no seasoning needed.  Require all creditors to allow the customer to reaffirm a debt in BK at no worse than its current terms, and require all interest & payments to be frozen until the BK case is discharged so that debts aren’t piling up between the date of filing & the date of discharge.

4) Require land developers to provide at least 33% upfront equity in the form of cash or other marketable liquid assets as collateral, and require spec home builders to provide 20% of the building cost in cash upfront which includes the cost of the land. This will slow down the supply, increase demand & slow down future speculative booms, plus get rid of speculative builders who have little capital.

All of this makes perfect sense & will step on the toes of many wealthy bankers & real estate moguls, which is why it won’t ever happen, but they can’t say they don’t have a plan to fix it now.