Downey, CA

Tomarrow, is the election day. This has been a long awaited time for Californians to finally have a real say in the decision who to elect someone in the party of their choice, whether you are Republican, Democrate or affliated with the other parties.

When Voting, distinquish hype and rederick to logic and reprocussion. Remember when their is an Action, there is a Reaction. Make it a productive day and week. Lets hope and pray we made the right choice.

Carlos Arvizu Sr.

TheDon1950@aol.com

According to the Chronicle Staff Writer James of the SFGATE.com GOP is flagging resistance to increasing the conforming Loan Limits that allow FannieMae, and FreddieMac to purchase loans above the $417,000 treshold.

Unfortunately, a handful of Senators that don't realize that a combination of events have literally killed economic growth for Calirornia and the nation and it will get worst unless they raise the conforming loan limits now. We don't have the luxury of time to wait. How many people have to lose their homes, jobs and any kind of stability before actions is taken to get the country moving forward.

What some government officials don't realize is that the laws they create or delay taking action on, ultimatly can and will affect us one way or another. Most politicians don't seem to realize that not everyone who has a mortgage is in trouble.

Take for an example, 70% of the mortgages made are not necessarily first time buyers, quite a few of thoses trying to get a mortgage are existing home owners, who are trading up to buy a larger home for their famiilies or baby boomers downsizing to move into much more manageable smaller homes, or they are trying to refinancing for some reason or another. (Send their kids to college, pay bills, investments, get a better rate to lower their monthly payments, etc.)

Only a small percentage of home buyers buy a home less than the conforming loan limits, especially in places like California, New York and Massacusettes to name a few, where the average medium home price far exceeds the Conforming Loan Limits. there are approximently 30% of the population are renters, on average only 6% of those renters convert to home ownership, the remaining 24% will never own a home unless they inheiret it, or win the lottery.

All of the mortgages made are not in default. Most lenders on average have a 3% to 5% delinquentcy rate that sometimes end up a foreclosure on a normal basis, due to many reasons, loss of employment, divorce, loss of a spouse's income , medical bills, death, job transfer, and yes, some loans that shouldn't have been made, but that's not totally the reasons why we are having financial calmity.

One of the reasons why we are in our financial mess is that the secondary market has not been allowed to relieve the pressure that many lenders are faced with today, liquidity.

Some lenders have assets that are performing as scheduled, and some have not done quite as well, and some that have assets being foreclosed on, which are non producing assets. When lenders don't have the ability to sell their loans (MBS) on the secondary good or bad, they are caught up in a situation, they can't sell, they can't loan, they can only borrow into more debt, like Countrywide did back in August 2008 from Bank of America, which ultimately is, was or could be the end of Countrywide, with Bank of America standing in the wings to pluck the remaining assets, consolidate and put more people out of work.

When the secondary market and the monitary policy act in unison, the flow of money keeps the money supply moving in the right direction.(Buying and Selling, like a revolving door)......

Just like the air in a balloon, if you don't relieve the air pressure that keeps building up in the balloon, eventually at some point it's going to pop. A lender who can't sell their loans on the secondary market, is force to somehow liquidate those assets, good and bad just to survive long enough, before the government officials gets off their (#?#$?) to do something. (That's why we are seeing so many lenders opting to do a short sale to salvage cash too keep them afloat).

The Secondary market is much like an overdraft protection to a consumer, when funds start to deplete to a certain level and a need for more capital to lend out is necessary, the Primary market (Lenders) will often Sell a block of loans called Mortgage Backed Securities (MBS) at a discount to FannieMae, and FreddieMac. These Mortgage Backed Securities are a combination of performing and non performing assets.

The Secondary market, which means FannieMae and FreddieMac Buys these MBS. These two institutions also Sells these MBS to investment pools on wall street. The secondary market acts much like a broker, they get paid for Buying and Selling. This sustem works well when the flow of money keeps revolving, that's also why the Federal Reserve System also has so much leverage on the flow of money with their two key interest rates the Federal Funds Rate and the Discount Rate.

The Biggest Problem occurred, and no one saw it coming, subprime loans, with an over zealous Wall Street, along with the Mortgage market credit crunch meltdown, couple that with the Federal Reserve raising short term interest rates (Federal Funds) for 17 long continuious months of increases of a .25% basis points.

The results, of these interest rate hikes, were slow in nature, starting in 2004, the real estate market continued to trive, 2005 was a banner year, the rate hikes continued, slowly chipping away as the rate of appreciation slowed to a crawl in 2006, asking prices of homes began to drop, as the demand began to dry up, consummer confidence withered with an over zelious news media, grabing as many headlines to gather media attention to ultimately sell their advertising message, like a feeding frenzie, this provoked many political leaders to jump on the bandwagon, without looking at the underlying problem.

As property values started to decline, we were on a direct collision course with the Home Equity Lines of Credit (HELOC). These 100% type financing had two loans, an 80% 1st Loan and a 20% 2nd loan, because of the 20% 2nd loan, there was no requirement to have mortage insurance. The other part of this equastion leading us into a fast moving freight train is that when the loan is scheduled for recasting or resets, that's when the deferred interest reaches a 115% of the original loan balance, the mortgage is reamortized at the remaining balance plus any deferred interest, and usually at an adjustable interest rate based on the most commonly volitle Libor Rate, and ooften at a substancially higher monthly payment.

This is a perscrition for disaster, not only for the 3% to 6% directly affected with this type of loans, the entire system is currently bottleneck. While those politicians are still trying to debate what to do, it a break down of the system. The breakdown is this, The Conforming Loan Limiits need to be raised that will allow the flow of money to circulate the way the system is set up to do.

With the conforming loan limits at current levels of $417,000, the people who want to buy, sell, move up, move down or refinance can't. Can't Can't Can't.

20 hours ago, the GOP have expressed opposition to the raising of the conforming loan limits. This is out right stupitity on our elected leaders, they are not clearly looking at all the damage that has been done or what further damages that rest with the outcome. The dollars, will drop like a bomb, it's already taken a beating against other currencies, this is sheer political bull, that makes no sense?

Any attempts by the federal reserve to have lowered interest rates will all have been in vein. I don't side whether you are a Democrat or Republican, which side or philosophy you have, We are all Americans, and deserve to have a government that's for it's people. A hand full of United States Senators, are keeping the Country from moving forward. Bankrupting the entire economy, doesn't make a lot of sense, doesn't it?

My name is Carlos R. Arvizu Sr

562-755-3856

The problem of waiting, is one of the reasons why the real estate and mortgage industry is such a shambles. If you know what the problems are, take decisive action to fix the problem.

Unfortunately, too many people in government, analyst, politicians, (and news media included which exacerbate the problem and prolong the agony without rationalizing what are all the components of the problem.

There are too many people in the leadership position, that sometimes second guess, procrastinate or are opportunist for self purposes, until the problems are so out of control, that eventually everything's comes to a halt, making it worst for everyone.

Like in the case of the Federal Reserve, for an example, they always take a wait and see attitude, which is one of the components that was partially to blame for the credit crunch and why were in the mess today.

They increased the short term interest rates for a long 17 months, and waited for the reaction to be full blown, instead of adjusting interest rates that would soften the real estate market to a soft landing. What did they think was going to happen?

They waited well over a year and several months before they started to lower the interest rates.

It's like a car, ... if you know your brakes are in need of repairing, and find it difficult to come to a stop, you don't wait until you killed some innocent family, that happens to be in the way of your fast moving car. The momentum will finally catch up to you. Why does someone have to get hurt or killed, because your brakes failed?

The same thing is happening to the country. The other part of the equation is the lending industry is stymied because of the conforming loan limits are far below, the threshold of the medium home price. How many people have to lose their homes, how many people have to lose their jobs, how many lives do you destroy. I am at the point of running for office myself, but unfortunately, I don't have the financial backing or time.

The reality is self evident. Why do you think, we are having all of these problems with mortgages, home values dropping, people losing their jobs, recession and so forth. Not taking action, or relying on someone else to fix the problems we have.

Carlos Arvizu Sr.

TheDon1950@aol.com

The Honorable George W. Bush President of the United States

Dear Mr. President,

It's with respect for the office of the presidency, I write this letter. I believe, as well as many others who are in the same opinion, that the stimulus package you propose who a couple of days ago would put the nation in debt without any sizeable contribution to growth to keep us out of recession.

It makes no sense to put us in debt, without creating a real stimulus package to put people to work, and grow the economy.

We have far too much debt, that this may create pandemonium throughout the world's economies. In order for the United States on the growth mode is to provide real teeth in an economic stimulus package is to create real Jobs. To point out a few examples of this;

1. Americans are losing good paying jobs to foreign countries, as of such, why not put before congress a tax rebate or credit that rewards U.S. taxpayers for buying products that are made up at least 51% that are produced here in the United States.

2. Energy efficiency should be rewarded to taxpayers in the form of a credit or rebate as a stimulus to reduce our dependency on foreign oil.

3. Credit those automakers that Increase the Standards for fuel efficiency vehicles, increasing mileage per gallon, thus reducing fuel consumption, as well as tax credit or rebate those taxpayers who purchase energy efficient cars and trucks.

4. Credit energy companies for Research and develop crude oil and natural gas here in the United States as well as explore other fuel alternatives to shake us from foreign oil interest.

5. Increase the Conforming Loan Limits in states like California, which exceed the average median home prices that of states like Alaska, Hawaii, and the Virgin Islands. It makes no sense to why Mr. Lochard is refusing to acknowledge that California is a high cost state.

The conforming loan limit for FannieMae and FreddieMac is set at $417,000. California median price has been more than $500,000. Most of the lenders that have been affected by the so called credit crunch, subprime debacle really stems from actions by the Federal Reserve acting to slow in adjusting the fed funds rate, hanging out to dry many lending institutions, such as countrywide for example.

Now that the federal reserve has lowered the Fed Funds and Discount rate by .75 basis points, the only thing stopping the economy from moving foreword is the raising of the Conforming Loan Limits. This should get the country back on the positive track.

I am forwarding this letter to the Federal Reserve Chairman, as well a few Congressional leaders as well as a few key senators. I thank you in advance.

Very truly yours,

Carlos R. Arvizu Sr.

TheDon1950@aol.com

A State of Confusion. The Leadership of our Country is beyond confusion and comprehension.

What Fed. Chairmen Bernake said that the Country needs a stimulas to keep us out of recession, is true, However, the political leadership in office, and the wantabe'e are all opportunist without rationalizing the damage that they would be doing to the country if they gave a rebate to everyone.

Four or Five years ago, President Bush gave a credit of a few hundred dollars to everyone on the tax rolls, all it really did was push us into more debt. Rebates or credits should be a stimulus for Job Creation and Growth Opportunities for the country.

Look at the cost. Let's say a credit went out of $800. to 150,000,000, thats' 120,000,000,000. that does nothing but put us in debt. You want a stimulus do this:

1. Since we have an Automotive Manufaturing base in the United States that have Jobs tied to it, give a credit to the taxpayers who invest in buying cars that are made in the United States. Granted that there are foriegn companies already providing us with automobiles that are partially made here in the United States, any auto manufacture that has at least a minimum of 50% made in the USA, consumers of those vehicles would be entitled to receive a credit or a rebate. At least it provides Jobs here, instead of being outsourced.

2. Energy conservation is another form of producing Jobs and reducing our dependancy of foriegn oil. Create a credit that a taxpayer would be entitled to receive a tax credit for insallation of energy efficientcy within their homes. This helps the building trades create more Jobs.

3. Get real with the Corming Loan Limits that FannieMae and FreddieMac are authorized to purchase on the secondary market. In states like California, which is the third largest state in the country, which is and has always been a high cost state, over and above Hawaii, Alaska, and Guam.

The California economy is 20% of the nations income. When President Bush's appointee, James Lochard, who is the director incharge of the Federal Housing Enterprise Oversight Committee, refues to raise the conforming loan limits above the $417,000 treshold, he is leterally causing the United State and California in to bankruptcy.

The Conforming Loan Limits that FannieMae, and FreddieMac are allowed to buy on the secondary market helps the flow of money into circulation, which is why the Federal Reserve System can manuver it's two key interest rates to help keep us out of recession and keep inflation in check.

The system can not work efficently without the flow of money, the way it's intended to be, our entire Economy is affected and at risk from bankruptcy, from the builders, to the guy who cuts your hair at the local barber shop, people rethink their buying decisions, when consumer confidence is shaken.

When people can't make ends meet, and have to struggle just to survive, this is damaging to the country. People who are unemployed, don't produce. The very fabric of wealth of the United States economy is in our homes. Countrywide, and other lending institutions are having problems, because the money supply is dried up, and without a revolving flow of capital that the secondary market provides.

Carlos R. Arvizu Sr

562-755-3856

TheDon1950@aol.com