Monday, January 14, 2013

New Mgt. Rules: 4 Us and White House...L&C

The Dodd-Frank Act enacted new rules that the banking industry must abide by to qualify for the government sponsored mortgages under Freddie Mac and Fannie Mae. These rules are suppose to tighten the guidelines that buyers must prove that they can meet when seeking financing for new mortgages. The idea is to provide security for buyers and sellers of homes. What are they, you ask?
To Qualify
you must show that you possess income to be able to pay your mortgage with a 38% ratio with one weeks income within one month. The banks are allowed to stretch this ratio to 43% if the buyer has an excellent credit rating. Feel more secure? I hate to be the bearer of bad news, but back in the day, I use to be a real estate agent.
In Olden Days
you had a 25% ratio and the banks could stretch this to 33%, if you had no other outstanding obligations like excess debt with credit cards, car loans or things of that nature. If you had a good down payment, the banks could extend the ratio to 38%. So much for tightening the rules.
Now, the next big thing that our government faces is the debt ceiling. The Republicans say that they will not approve any higher national debt unless President Obama enacts an equal amount of cuts to government spending, especially under entitlements like Social Security and Medicare. To me, if both parties were serious, they would re-enact the pay-as-you-go legislation, which would at least hold the level of debt to the market interest rates. This thought also had me thinking that if President Obama had any real convictions on our debt, he would apply the new mortgage rules to our present debt with a plan to pay it off.
New 30 Year Mgt. for the White House
at present, we owe under known debt around $16 trillion. Yeah, I know that unfunded expenses like the entitlements, government sponsored entities, off the book liabilities are in excess of another $90 trillion, but one thing at a time.
Currently, we have over 300 million in population, however I will use the 300mil as a round number. In addition, the debt clock says that each household owes over $130,00 as their share of this national deficit. Again, I will use the round number of $130,000. Multiply the population by the individual share or 130,000. The result is the new mortgage amount or $39 trillion to which we divide by 30 years= the amount that our new budget must cut, tax with new revenues or a mixed combination every year for the next 30 years to pay off the present deficit. So, how much is it?
Glad, you asked. It is $1.3 trillion that needs to be paid this year and every year for 30 years. Bottom line: we are in big do-do or another way is the penmanship of the new Treasurer, Jack Lew nominated by President Obama. His style reflects the strength of the dollar. He looks like he his doodling with the letter "O" as in zero. Is that the real value of a dollar?
Liars and Crooks: the new movie, Zero Dark Thirty. It fails to acknowledge the sin of our present military leaders who used torture to seek info on Bin Laden and terrorist in general. The real truth is when the water board and other tortures started, a brave FBI agent walked out on the act. He stated, "that this is not the way America operates. This is how the bottom feeders act." The so-called true story does not reveal this or any conflicts pertaining to the military actions.