How to Fix the Economy.  By Jerry Mueller

 As a prelude to this fix I have to insert an observation that it amazes me that the leaders of our great country, both the legislative branch and the executive branch, and the CEO's of large financial institutions have shown such stupidity, ignorance, and amazingly poor business sense.  It makes all of us to take pause as to their ability to solve or resolve the financial crisis this country now faces.  As I go on it will be clear that our best bet is to resolve our problems through the private sector.  After all is it palatable to allow these incompetents to take 100's of millions in hand outs from the American tax payers and foreign investors, without us having a stake in the solution.

 The Problem:  Just as a review because I am sure most of the average persons are now aware of the problem of the poor judgment of the aforementioned idiots.  Oh by the way please excuse my inability to be politically correct.  If I offend anyone, then you probably deserve it.  Sorry anyway.  Ok so the government through the legislature first deregulated the financial markets and lenders so they could make loans at will.  Which in turn washed into Fannie Mae and Freddie Mac which were the federal agencies that were insuring the loans made under their guidelines and oversight.  And the financial institutions then packaged the loans they were making and marketed them through the stock market as mortgage backed securities which were sold world wide.  Then ultra greed came into play when they ran out of securities and started marketing derivatives which no body really knows what those are.  And then to boot the financial institutions started to sell insurance for all of these instruments and in fact did not have the funds to cover the insured.  In other times this would be called a ponzi scheme, and those who perpetrated the fraud should be in prison.  Instead they are all crying like they are the victims and have their hand out for hand outs which are being given by the federal governments as they steal the money from the tax payers telling us that it is better then the alternative, which I totally disagree because these idiots have not even explored alternatives.  And let us not forget that the cause for this problem is that these supposedly smart executives and our leaders suckered for the rising real estate market thinking that it would never end.  How ridiculous when we all know that when it is too good to be true it is in fact too good to be true.  And these were financial institutions that had the solemn responsibility of protecting our money and the nation's economy.

 The Solution.  In our free market society we are able to purchase our homes.  The single greatest benefit of being American.  The fact is that although we can purchase our homes and get a deed to it, that in order to do that most of us have to get a loan.  And there is a legal process in place that if you do not pay your loan the lender will take your home by a process called foreclosure.  And in normal times this process is a great deterrent for borrowers to pay their mortgages so they do not lose their homes and it also is a great deterrent for lenders to have strict lending oversight so they do not get stuck with to many foreclosures and homes that they do not want and cannot sell.  Well unfortunately this is where the system broke down over the past 5 years.  Both borrowers and lenders are to blame.  The part that shocks me is that when the hand writing was on the wall, the lenders did not and were not willing to come up with alternative solutions to the foreclosure process.  Which I have and did but could get no one to listen.  Another words the lenders were now foreclosing on millions of homes.  To date the number is around 10 million homes foreclosed on.  Now if none of you have ever been to a sheriff's sale let me tell you how it goes.  First you should know that the lenders pay legal fees around $60,000 per house to foreclose.  Then when the home goes to the sheriffs sale in any particular county across the country what happens is, the sheriff is there, the lender is there, the lawyer for the lender is there, and auctioneer it there and some of the public is there.  And the sheriff has a list of homes being foreclosed on and the auctioneer calls the auction, it actually goes pretty quick because the public is not willing to pay what the bank is owed on the mortgage so what really happens is the bank then buys the property at foreclosure or what it is called is the bank takes the property in house.  So what we are talking about is that the banks in this country have taken in some 10 million homes.  Well the idea was for the banks to be collecting principle plus interest for these loans.  Now that they have foreclosed they are getting zilch, zero, zip, nada.  They have cut off their entire cash flow on 10 millions homes.  Multiply that time a conservative $1,200 per month average (probably much higher).  My calculator will not go that high but I think it is like 1.2 billion dollars per month.  And this has been going on for over 2 years now.  Not to mention the $60,000.00 to foreclose, and not to mention that homes depreciate (the improvement) and when we do not take care of our homes we know they can go down real fast.  And the banks are not taking the care they need to be on these properties that they now own, which are not worth anywhere near the mortgages they are holding on them.  Why would they let that happen?  Well they thought no big deal because the loans were to be insured by Fannie Mae and Freddie Mac.  Well surprise they did not have the money, and now all Americans are going to get screwed because these business men were either incompetent or idiots or both.

 Really now the solution:  I operate a small real estate company in Bethany Beach, Delaware.  It is a beautiful town in the Mid Atlantic along the Ocean.  Nice.  Well the crappy real estate market has even affected us.  And when sellers call me to sell their homes and I give them the facts of what their particular homes are selling for today, I give them an alternative to rent their homes and get a cash flow that will help them carry the home until we get out of this mess we are in.  It makes money for the homeowner, it makes money for our company and it also keeps home improvement service persons, plumbers, electricians, etc., working.  What I have been advocating is that we set up Jerry Mueller Real Estate type companies all across the country to service not only home owners but the one of the biggest home owners today the BANKS.  And they at least rent a percentage of the homes they have "taken in" and get a cash flow into the banks.  Sure we also auction some of the homes even if there is a loss.  I also have a program where instead of the high cost of foreclosure a new system is worked out with the home owner that they agree to give the home back to the bank, and the bank agrees to rent the home to the that family at a rate they can afford and then have an agreement where they can purchase the home back for the original mortgage price.  This would be a win, win for all. 1. The banks would once again be getting a cash flow or stream to help them carry the load. 2. The work of renting and selling the homes would go to licensed real estate agents who were also REALTORS, who are already a trained work force to handle this type of work. 3.  It would create jobs, by keeping real estate agents employed doing what they are trained to do, and 4. It would create jobs for home improvement and other service people to keep the home in good shape.  (The tenant would have to agree to a certain amount of responsibility for up keep).  5.  It would shift the burden of bailing out the banks from the American Tax and foreign investor, to who is really culpable the financial institutions.  6.  The high paying CEO's that stole millions of dollars would have to repay those salaries to help offset the losses, including those at Fannie Mae and Freddie Mac.  Only after these steps are taken for the Financial Institutions to help them selves through the private sector will the Federal Government offer assistance.  And that assistance must come with strict oversight and even stricter bonds to repay the American Tax payer.

 Would this be an easy plan?  Yes and no.  I would be able to set it up and create oversight.  However the work is not easy.  The rental business is not easy.  And it would require putting all the REALTOR code of ethics to work, so that everyone would be treated fairly and honestly.  Can it be done?  I invite one and all to see the work in progress at Jerry Mueller Real Estate today.

 Call to Action.  Unfortunately I do not know any of the powers who could help me implement this plan.  So I invite again one and all to comment on this plan and help us all fix this economy the old fashioned way.  One homeowner at a time.  Thanks Jerry Mueller.