"Why don't these families simply refinance? Because the amount owed that would need to be refinanced is greater than what the home is worth, resulting in the loan being denied due to the short appraisal. Solution; waive the appraisal requirement on refinance for owner occupied homes with adjustable rate mortgages. That won't cost anyone a dime..."
Assume mortgages of half of the eight trillion disappear. So four trillion dollars of mortgages burn and go away and are never paid and are a complete loss and write off.
This means the banks and other mortgage owners are bankrupt to the tune of $4 trillion dollars. So the owners of the mortgages need $4 trillion dollars of new capital to get back to square one.
/
"On Wednesday, December 3, 2008 The New York Federal Reserve website reported that they will begin to purchase Asset Backed Securities (ABS) from failed mortgage giants Fannie Mae and Freddie Mac, as well as the Federal Home Loan Banks.
They also hinted that they will stop there - everything seems to be on the table now, officially. Treasuries and stocks may see direct effects, with outcomes mixed. Initially, the program will concentrate on non-callable, fixed-rate senior benchmark securities such as Mortgage Backed Securities (MBS), but there are indications in the language used that the program may expand to include other ABS such as privately issued MBS (non-GSE), bonds, stocks and other equities.
With this much unprecedented Government intervention in the markets, I find it difficult to apply any models effectively in a predictive fashion. In the long run, I believe will be inflation and devaluation of the dollar - combined with the aftermath of record writedowns, mergers, buyouts, and outright failures that we will see in 2009 - that will be the legacy of these efforts."
The Wall Street Bailout is quickly reaching into the the trillions-of-dollars, and many analysts are speculating as to the current running total of the outlays thus far, while other financial experts like John Bogle, the founder of the Vanguard Group, are questioning the legitimacy and impact of the costs to maintain this overly-complicated system even when economic conditions are good.
Henry Paulson today presented his latest in a series of bewildering press conferences, each of which seems to be orchestrated to reveal - in only an incremental fashion - the true extent of the damage to our financial system.
Today's installment from Paulson in summary: Things are really bad, and they will get worse. Whatever we told you our plan to stop the markets from further hemorrhaging was last time, we have since changed our mind. We will let you know when we change our minds again.
In the mean time, the Dow dropped enough to more or less erase the gains realized in trading the last two weeks, posting the third worst point drop in history with the DOW closing down nearly 680 points.
So what are the mounting costs of the bailout to the public in total? Some estimates would have the bailout costs as high as $8.5 Trillion Dollars, while more conservative estimates are a mind-boggling $4.6 Trillion Dollars.
But these costs only represent the liquid assets the Federal Government has pumped into the system in the last few months through FDIC insurance payouts, FHA loan guarantees, Federal Reserve cash injections, the direct Treasury bailouts of public and private firms, and the equity stakes taken in others.
What about the non-bailout costs? What do we as consumers, as private companies, and as taxpayers actually pay on an annual basis to support this system? How much have businesses and consumers already given to the Financial Industry that now demands we put our grandchildren into debt to save their Golden Parachutes today?
John Bogle illustrated in his recent book Enough: True Measures of Money, Business and Life, the damage to, and dangers inherent in, today's financial industry.
Continued: The Financial Industry Takes Too Much and Gives Too Little
A Foreclosure Solution so Simple it Would Work
By Anthony M. Freed
Here is the solution to most of the ills of the current housing crisis - in the form of a languishing US House Bill that would allow homeowners facing foreclosure the option to stay in their homes as renters, and perhaps even compel their lenders to be more cooperative with the distressed borrowers when negotiating loan workouts.
That's right - a solution to the foreclosure problem that would save banks from certain ruin, keep homeowners in their homes instead of out on the streets and onto Public Assistance, put a bottom on the housing price crash while allowing for high-cost areas to come into par with median income levels, and save the taxpayer trillions of dollars in debt that is to be piled on to the trillions of dollars in debt we already own.
Sound too good to be true? That is understandable considering the constant barrage and misinformation being shoveled by the Federal Government's sycophants like Paulson and Bernanke, the ridiculous political posturing of Barney Frank and his faux-hearings orchestrated to merely put the "official story" into the congressional record, and the complete and utter surrender of the Fourth Estate to news cycles and sound-bites.
The newest old proposal you have never heard of: Saving Family Homes Act.
Analysis and Commentary on Finance and Freedom in America Today - Get the insider's perspective from a former market analyst for the big banks who was right in the middle of the Bubble Factory...
Anthony is a researcher, analyst and freelance writer living in beautiful Eugene, Oregon. Anthony covers the finance industry - particularly mortgage related topics - and is a fervent advocate of both freedom and accountability
All fish are catch and release.
As a Research Analyst, I worked as part of a talented team who developed competitive market intelligence for the banking and finance industries. 
I worked directly with and for senior members of product development, secondary and capital markets from the largest financial institutions in the country, including Bank of America, Citigroup, JPMorgan, Washington Mutual, Countrywide, Wachovia, Fifth Third, IndyMac, GMAC, SunTrust, and many more.
I have extensive experience in research, data collection, analysis and custom report design, as well as long term project and client management. I continually locate, develop and maintain high level resources and contacts in the finance industry in order to maintain regular access to competitive intelligence that may not be available through traditional channels. 
I have lead high profile projects from conception to development and through implementation, and I have been extremely fortunate to continually have worked with a culturally diverse team of colleagues who possessed unlimited talents, and who worked tirelessly to ensure the highest standards of quality in client satisfaction and product quality. In my position as a Research Analyst, I was also primarily responsible for the bulk of the Special Studies commissioned by our clients. Various research methods in combination with multiple sources of data were employed to prepare studies and reports that were tailored for use by the executive teams of the major lenders.
The primary types of data sought and utilized for these reports consisted of proprietary underwriting guidelines, base rate and adjuster databases with APRs, production metrics and market analytics, fee schedules and internal company communiqué. 
This data was nearly worth its weight in gold, and extremely difficult to secure on a regular basis. Even our own clients would bar access to the majority of their data through the official channels, but we always managed to get our hands the best data. During the housing bubble the hunger for product and market intelligence that was driven by the desire to gain market share was so great that executives at nearly all of the lenders were willing to barter almost anything, but not necessarily with anyone. That is where I did my best work. 
The crux of my position relied on my ability to establish and develop relationships based on trust and discretion with senior level contacts at major lenders who could provide me with regular access to intelligence of the most sensitive nature. Effectively managing and further developing these resources required a great deal of diplomacy and finesse, as the contacts were well aware that my clients included their biggest competitors. Prior to becoming a paid analyst, I founded Everybody's Holding Company, LLC buying, remodeling and marketing investment properties in Eugene, Oregon.
I have experience in all aspects of small business operations, accounting and finance.
All fish are catch and release.
Photos © Anthony M. Freed All Rights Reserved
"Anthony would be a great asset to any company. I worked with him for over a year during his tenure at Heitman and found him to be dedicated and hard working. He was always cool under pressure even during the most demanding fast paced mortgage environment and always delivered quality service with a calm demeanor. His responsibilities as a business partner included the collection, analysis and distribution of sensitive data in a format that was flexible for a diverse audience. He responded to questions and requests on a timely basis and always went the extra mile by following up on a consistent basis to ensure there were no open questions that needed resolution. I have always found him to be articulate, energetic and enthusiastic in his role and overall relationship with our organization."
Vice President, First Mortgage Product Management
Bank of America
worked directly with Anthony M. at The Heitman Group, Inc.
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"Anthony is a preeminent analyst in mortgage banking. His knowledge of the industry and networking abilities would make him an asset to any firm dealing in banking, especially mortgage banking and secondary markets." August 23, 2008
Matthew Miller , Senior Data Analyst , The Heitman Group, Inc.
worked directly with Anthony M. at The Heitman Group, Inc.
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"I worked with Anthony at a competitve analysis company. He was my go-to guy if I had any industry related questions. He could always provide me with the answers I was looking for. I remember one particular instance where we were having a discussion and he predicted Bank of America's buyout of Countrywide about 6 months before the transaction." August 23, 2008
John Creason , Data Analyst , The Heitman Group
worked indirectly for Anthony M. at Heitman Group
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