Christopher Cox

Chairman of the Securities Exchange Commission

I am no different than most Americans. I have been inundated with politics for what seems like forever. The two folks running have offered a litany of wrongs, rights, problems, solutions and ";why you should vote for me";.

A week or so ago, John McCain stated that the Chairman of the SEC should be fired. Most pundits barely mentioned it and others said it was quite a bold statement. It was not something covered by the "fact check" folks. It was McCain making a statement.

I think most people heard it and just filed it under "angry old guy is trying to show he is in touch with the economy". Some viewed it as just another wild shot at anyone that could be blamed for the financial troubles of the country.

They would be WRONG.

John McCain is 110% correct. I will wait a moment while my liberal friends wipe off the coffee they just spit on the computer screen. I said and I believe it!

Let's go back to a nice sping day.....April 28, 2004 (easy for me to remember..it was my daughter's birthday). It was that spring afternoon that the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent request from the big investment banks. The banks wanted to receive an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The new exemption would unshackle billions of dollars held in reserve as a cushion against losses on their bad investments. Dollars could then flow up to the parent company, so it could invest in the fast-growing world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

Sure, this gets sort of boring and technical, but stick with me on this. One of the commissioners, Harry Goldscmid expressed concern and was told that the change would only affect those firms with assets over $5 billion dollars. He reasoned that if they got in trouble, we would be in a mess. (Welcome to our world today Mr. Goldschmid).

The press did not cover the meeting. A vote was called for and the new rules passed. They were later published in the Federal Register.

Greed took over. The large five investment banks were unleashed from the pesky rules of maintaining sufficient reserves. The leverage ratio at all of the firms grew out of control.

Here is the damning issue.

The 2004 decision for the first time gave the S.E.C. a window on the banks’ increasingly risky investments in mortgage-related securities. But the agency never took true advantage of that part of the bargain. The supervisory program under Mr. Cox, who arrived at the agency a year later, was a low priority. The commission assigned seven people to examine the parent companies — which last year controlled financial empires with combined assets of more than $4 trillion. Since March 2007, the office has not had a director. And as of last month, the office had not completed a single inspection since it was reshuffled by Mr. Cox more than a year and a half ago.

Nobody bothered to see if there was a problem. Nobody bothered to do anything except sit back and hope that the major investment firms were not bankrupting themselves. Mr. Cox sat back entrenched in an attitude that was "non-regulatory".

Roderick Hills, who was chairman of the S.E.C. under President Ford said, “It’s a fair criticism of the Bush administration that regulators have relied on many voluntary regulatory programs, the problem with such voluntary programs is that, as we’ve seen throughout history, they often don’t work.”

The 2004 decision expressed a belief that Wall Street’s financial interests coincided with Washington’s regulatory interests.

Professor James D. Cox (not related to Christopher Cox) was quoted as saying “We foolishly believed that the firms had a strong culture of self-preservation and responsibility and would have the discipline not to be excessively borrowing,“Letting the firms police themselves made sense to me because I didn’t think the S.E.C. had the staff and wherewithal to impose its own standards and I foolishly thought the market would impose its own self-discipline. We’ve all learned a terrible lesson.” .

Maybe the wrong Cox was in charge. James is an expert on securities law at the Duke School of Law.

Last Friday, the commission formally ended the 2004 program, acknowledging that it had failed to anticipate the problems at Bear Stearns and the four other major investment banks. “The last six months have made it abundantly clear that voluntary regulation does not work,” Mr. Cox said.

The decision to shutter the program came after Mr. Cox was blamed by Senator John McCain, the Republican presidential candidate, for the crisis. Mr. McCain has demanded Mr. Cox’s resignation.

Mr. Cox, that blurring sight on the horizon is cumulative picture of millions of horse's rear ends as they gallop off into oblivion. Each one represents the hopes, dreams and future of Americans that you were charged to protect. 

Last Friday, you may have shut the barn door. Our horses are long gone. It is 2008. If this were 1858, you might have found your self below and an old elm tree with a noose around your neck. They used to hang horse thieves.

So, McCain was right. The ill effects of counter attacks kept him from actually letting you know the truth.

Not only should you be fired...no sir, you should face criminal charges for failing to carry out your duties and leaving America in a financially disastrous situation.

I have often shared that there is no value in pointing fingers. My better understanding of your complicity in this disastor leaves my hand raised with one finger pointed your way.

"Those who cannot remember the past are condemned to repeat it."

George Santayana.

I know that I continue to be amazed at the hidden benefits of surviving so many years. I watched the televised debates between the Democratic and Republican candidates for President last evening. The moderator asked "what was the lesson of the Iraq War?".

Both answered. I drifted into a quiet corner of my mind and found myself curled beneath a desk, practicing for the moment that the evil enemy dropped a bomb.

          This is truly a memory for those of us that grew up during the "cold war".  Oh, the Yankee's were surely winning the pennant every year and each fall we were instructed to say an extra prayer for our boys at Notre Dame, but we lived in the shadow of Hiroshima and Nagasaki. Our fathers and uncles had returned from WWII. The horror of the impending A Bomb dropping here in DC was part of every day.

Some folks resorted to digging up their back yards and installing personal bomb shelters. Stories abounded in local papers about the new way to protect your loved ones.  

Then came "Camelot" and dashing young President Kennedy. He challenged us to take part in the new era for America. He dared to dream of putting a man on the moon. He filled our heart with hope. The fears of the fifties seemed to diminish.

Then September 11th, 1962 . . .

Nikita Kruschev told John Kennedy that Russia had no need to install missiles in Cuba and had no plans to do so. Of course, during that meeting Kennedy had photographic proof that the Russians had begun installation of nine missile sites in Cuba. In the war room at the White House, it was "game on".

As a teen, I did not have the understanding of world affairs that I have today. My knowledge of Cuba was limited to the hero's welcome given Castro in New York after he overthrew Batista. We heard stories of the battles won by this revolutionary leader and his compatriot Che Guevara. His dispute with America and turning to the Soviets was not the stuff offered up to high school students.

Our nation went head to head with the Soviets. We blockaded Cuba and threatened to sink any ship that attempted to run the blockade. We were on the brink of a nuclear war. I will never forget the terror that was palpable in classrooms, supermarkets and side streets. It was the topic of hushed conversations in every household.

It is very easy to look back now and see how it happened. There was no looking back as it occured. The only memory imbedded in young minds was the picture of the mushroom cloud, the admonition to look away from a bomb blast and the sinking feeling that the world might end any day.

The crisis was ended.

Our relations with Cuba remain along the isolationistic vein. Kennedy, Johnson, Nixon, Ford, Carter, Reagan, Bush, Clinton and Bush have all failed to resolve the differences and open doors to a new relationship with Cuba.

I thought of that when one candidate chided the other for his apparent willingness to open dialogue with other nations.

Then I thought back to "what lesson's have we learned in Iraq?".

I don't see that we have learned much from Iraq. I think we have only demonstrated that we have failed to remember the past.

Iraq only proves that we did not learn much from Viet Nam.

The attacks on the world trade center only proved we did not learn much from Kruschev.

The failure of the financial system only proves we did not learn much from the mess other deregulation has caused.

As for me, I learned that you can change the names and re-arrange the faces, but nothing offered in any campaign has much of a relationship with what may follow. (I think I remember Lydon Johnson decrying Barry Goldwater's threat to defoliate the jungles in Viet Nam, only to use napalm like it was water after winning the election.)

One thing that we just can't seem to figure out....it is one world and we have to find away to share the space.

We might even have to take a long look at the "two party" system. It never seems to offer the best and more often than not..voters feel that they are left supporting the lessor of two evils.

I will never believe that the best we have include a war hero that is a bit beyond his prime, a less than two year govenor that has to be kept from public scrutiny, a senator that has spent his limited time on the national stage doing nothing other than running for president and another senator that has been happy putting in his twenty odd years without ruffling many feathers.

September 11,1962 our brightest hope sat and listened as a dictator lied to his face. It was the day that the lines were drawn between democracy and all those guys who don't rule like we do. It was the day that our policies of removing those we don't like, supporting dictators that were on our payroll, attempting to control the world events through covert actions came head to head with a powerful nation that did not fear us.

The world has never been the same. We may have won the stand off, although the jury remains out. We may have publicly forced the Soviets hand, but behind the scenes deals show that we also backed down.

Our troubles today are easily traced to our reluctance to admit that we only truly rule the USA and we do not have right nor the ability to control the actions of every other nation. Other nations do not hate us because we wear lipstick or watch MTV. We are not appreciated because we tend to occupy other countries and shoot missiles into neighborhoods. Bad fashion, bad morals, and bad music can be tolerated. 

Death and destruction will never pave the way to peace.

So everyone has an opinion. All of the sudden our leaders in Washington have realized our financial institutions are in crisis. Dire predictions are being shared. One by one talking heads interview the principals and one by one they offer a vision that is terrifying.

Really?

Was it that long ago, that our leaders reacted to another threat by telling us to buy plastic and duct tape? Was it that long ago that our wisest advisers told us that WMD were in Iraq and we had to invade to stave off world destruction? Was it that long ago that the President and members of both houses proclaimed our economy was moving along? Was it that long ago that Al Gore told the world that everything is melting?

Now, money markets will fail. Now, mutual funds will collapse. Now, businesses will falter. Now, nest eggs will vanish. Now, banks will close.

Really?

The problem is news to those in charge of my money? The problem is news to those in charge of your money? The problem is news to those that were charged with monitoring the system? Overnight, we have to put up 700 billion dollars?

Oh please let me hear the American choir send up a resounding...HELL NO !!!!

CNN offers the following tidbit on line....The Treasury thinks that by taking problem assets away from banks, financial institutions will be able to shore up their balance sheets, allowing them to lend to consumers and other banks again.

Am I missing something? The Treasury thinks that by removing the bad assets everything will be ok again. What part of "the banks and financial institutions created the problems" is missing from the evaluation of the situation? Why should we reward bad judgment by removing the consequences of bad judgment.

It may be tacky but it appears to me that those institutions are pregnant with bad debt. They got pregnant by "sleeping around" with anyone. Now they are asking taxpayers to finance the abortion and pretend that the removal of the fetus will somehow miraculously remove their tendency to sleep around.

Common sense (something that is totally absent on Capital Hill) would indicate otherwise.

Now the democrats want help for those facing foreclosure. I suppose they want us to just overlook that the people that are facing foreclosure go into that position using their own free will. Certainly there are cases in which stupidity and greed entered the transaction. But again, the taxpayers are being asked to remedy the errors of others. This smacks of socialism.

The other point that has been brought up is executive compensation. There are many that think these folks are over paid. So, we are expected to just think it is ok for the government to step in and change compensation packages. These discussions are usually found in regimes that have large armies and want to take over the world.

When did we stop being America?

If the government wants to fund all the money markets with tax payer dollars; if the government wants to fund the SBA to greater degree; if the government wants to make mortgage money available to those in trouble, then the government is moving from a republic to a socialist state.

The reason that success feels so good is the opposite side of the coin feels so bad. The reason high risk yields greater gains is based in the risk. We are a great nation because those that fail can always attempt to succeed again. We are a great nation because we offer a system of capitalism that is in part fueled by risk and reward.

Today's problems are not political. Today's problems are the result of apathy on the part of all of us. We have become a cocoon nation. We have found our little niche and we are more than glad to let someone else deal with issues outside us.

We trusted the government to build levees that would hold up against storms.

We trusted the government to keep our borders secure.

We trusted the government to protect our cities.

We trusted the government to educate our children.

We trusted the government to protect our environment.

We trusted the government to protect our rights.

We trusted the government to watch guard our assets.

We have failed.

Now, we must swallow the bullet and watch the government create a debt that may never be repaid.

The only bright side to the story is that we will never have to apologize to those that will eventually be repaying this debt. The average life span of an America will run out three times over before we begin to make a dent in the deficit.

I suppose I will always wonder how could so many little people on main street be right and so few in charge understand what went wrong.

Isn't this the time of the year when we stop and spend an afternoon relaxing on a park bench? There are some pretty fancy scientific explanations regarding the angle of the sun as the earth rotates. I don't really understand them, but I do know as leaves turn fiery colors in their death march the daily increasing chill is often broken by a momentary stroke of warm afternoon sun. Memories of summer past connect and cling to memories of summers passed as pictures of days gone by roll through the cinema of your mind.

As each fall creeps in, I am reminded that the world continues to get smaller and events that occur worldwide are more connected as each season passes. Oh, I may have spent a bit more than six decades (or more than three score for you Lincolnian readers) rambling through the ups and downs of my own life, but not without developing the sensation that either things are happening faster or I seem to realize they are happening quicker. In either case, stored information creates quite a gumbo of knowledge fermenting in one's mind. One can either muse, peruse or abuse. As Hank Williams, Jr so eloquently shared "it's in him and it's got to come out."

So...........for Rylee and Erin......I will just prattle on, finger bound, visually....thoughts and reactions. One day, they may pull a tattered, yellowed copy of the blog out and share what "Pop Pop" shared back in the fall of 08.

Sisters (photo by Molly MacArthur)

Wow, the financial market sure has taken a few strange turns lately. Right now, the Feds are planning to bail out the folks on Wall Street.  This means that the people that have lost money while seeking profits investing in a system that was being abused will be bailed out by the people that they abused. To be sure, there is little illegal about what occured. Yes, there were some loan fraud cases and yes there were some abuses, but for the most part the chickens that Senator Gramm unleased back in the ninties when he led the charge to allow investment banks change their ways have come home to roost. The rampant profiteering that occured while Greenspan was asleep at the switch has left the country in dire straits. The latest charge of calvary appears to be..............print more money. As a political or social aside......America is renowned for never holding folks accountable for their actions (before you get too perplexed, America should read "old white guys"). 

If women or members of minorities had been the ones attempting to use the system to benefit themselves, regulation would have been put in place long before abuses became so out of control.

OK, Labor Day is behind us once more and elections are less than two months away. I shared my honest appraisal in Inna's blog last week. I will cut and paste it here.

Palin schmalin.........enough already.

If McCain is elected she will be in position to do less harm than she is in now. It does concern me that her son has been sent overseas. Not preferential treatment is needed, no, common sense would indicate that we do not put family members of the highest office's in our country in the vicinity of enemies.

Bill Murray stated the greatest truth about our political leaders in Washington..."It just doesn't matter."

Neither party has shown the propensity to run the country efficiently or for the people. Regardless of party affiliation...........they all do the will of large corporations. Obama won't change that and neither will McCain.

Every campaign promise carries the validity of candy coated feces.

They are all out of touch.

If people want to focus on change, get off your ass and get involved at the local level. If you don't like the currrent state of education...join the PTA and get involved with the schools.

If crime bothers you...join a neighborhood watch and support the local police.

Worried about the economy...........stop your personal deficit spending. Stop buying more than you can afford. Stop voting for congressional representatives that spend your money.

Worried about the environment.............go green.

Worried about the state of our country...............viva la revolution.

Palin...schmalin.

We have bigger problems than lipstick on a pit bull or soccer mom.

I would imagine that it should be clear to any reader................we will never achieve the results we desire if we continue to ask others to make the change for us.

It is our world.

I know that as quickly as things will change, we as a people will react and adapt. I am more concerned with the fact that our leaders seem to think that their is no sound reason to consider historical data when deciding future behavior. I know I read that those that fail to consider history are doomed to repeat it. Our species seems hell bent on changing historical perspective to justify current behavior.

Common sense does not change

I sit back in the late afternoon sun and as the air begins to cool around me, I know that there must be a significant impact when the population continues to grow. I know that adding hundreds of new oil wells will not increase the amount of oil that exists. I know that there is a finite amount of buildable land in the country. I know that if folks really gave a damn.....New Orleans would be protected by better levees. I know that if farmers had not altered the course of major rivers, floods might not have been as devasting. I know that Washington will never have a successful WNBA franchise. I know that Sonic still sells the best grilled cheese sandwich. I know that practice does not make perfect...practice makes permanent. I know that both Presidential candidates spend more money than necessary to get a job that will have little to do with any of the programs they promise. I know that the human brain can conceive of anything burned into a piece of toast. I know that when I look at my grandchildren, I see the birth of tomorrows. I can hope they will be better but it was just a little over 60 years ago when I was being looked at as the birth of tomorrows. My crowd hasn't done so well.

I promise you that if you can move beyond the rhetoric and accept that everyone has a right to an opinion and they have a right to believe as they choose, you may discover that acceptance and tolerance will lead to an easier forming of coalitions for change. It will never be my way or your way on every issue. Our way will lead to better days.

But........it is fall and I just may take a short nap on this bench before the sun fades an the autumn evening sends me in search of that sweater.

So, in a time when heros seem to fail and we don't know where to turn for example, this story stopped me in my tracks. I would hope that anyone that reads this, shares it with another and and another. This is the best of us.

Father Who Saved Son Is Remembered For Generosity

By Jonathan Mummolo Washington Post Staff Writer 

Thomas S. Vander Woude would never have wanted a big display in his honor. The Nokesville father of seven sons, who drowned last week while rescuing his disabled son when he fell into the family's septic tank, was more the type to try to elevate the lives of those around him, his family members and friends said. 

But yesterday, more than 2,000 people packed the pews at Holy Trinity Catholic Church for his funeral Mass in Gainesville, some listening from the vestibule, others down a hallway watching on closed-circuit television. Among the attendees were his wife of 43 years, Mary Ellen, more than 70 priests, including the bishop of Arlington, and the friends accrued over decades who came to pay respects to a man who inspired them, right up until his final breath.

If Vander Woude saw the throng, he'd say, "Are you kidding me? . . . Don't waste your gas," said one of his sons, Steve Vander Woude of Nokesville, after the service. But "this guy did something saintly, and they wanted to come be a part of it." 

Thomas S. Vander Woude, 66, died last week while helping his son Joseph, who has Down syndrome, after he fell into a septic tank while working in the yard, police said.

The tank was eight to 10 feet deep, Steve Vander Woude said. His father climbed into the 2-by-2-foot opening, managed to get under Joseph and was pushing him upward to keep his head above the sewage. Initially, Vander Woude was able to keep his own head above the muck, telling a workman who was helping from above, "You pull, I'll push," Steve Vander Woude said. But he eventually sank and was later pulled out by rescue workers, who were unable to revive him, Prince William County police said.

Joseph, 20, was hospitalized last week with pneumonia but was released Saturday and attended the Mass for his father in a wheelchair, connected to an oxygen tank. His family said doctors expect a full recovery. A few days after his father's death, Joseph's family sat with him in the hospital and explained to him that his father had died.

Upon hearing the news, Joseph "sat back . . . he closed his eyes, his chin quivered, and he started crying," Steve Vander Woude said. "I think he understands as much as he can right now."

Another of Thomas S. Vander Woude's sons, Tom Vander Woude, pastor at Queen of Apostles Catholic Church in Alexandria, gave the homily. In it, he likened his father to Saint Joseph, a man who patiently and quietly supported his family, did odd jobs for those in need and was content to worship God and not seek the limelight, Tom Vander Woude said.

At a reception at Seton School in Manassas, where six of Thomas S. Vander Woude's sons went to school, friends and neighbors traded stories about how Vander Woude had gone out of his way to help them. Fittingly, Tom Vander Woude observed, they were standing on the gym floor that his father had installed.

Mary Heisler, 36, of Nokesville, said she never would have come to Virginia as a teenager, let alone met her future husband, if it had not been for Vander Woude. She was receiving Catholic home schooling in Texas when Vander Woude, who was helping with the home-schooling program at Seton, contacted her father and persuaded him to move 14-year-old Mary and her 11 siblings to Virginia to attend the school.

Her father obliged, sold the house, bought a yellow school bus and drove his family to Prince William County. Money was tight, so Vander Woude took the family into his home for a month before lending them money for a down payment on a house of their own in Manassas, Heisler said.

"He gave us half the home," said Heisler, who met her husband, Tim, at Seton. "I don't think he realized how many people he impacted."

Peter Scheetz, assistant director at Seton, recalled a similar kindness.

"When my wife and I got married, we were trying to buy a townhouse," Scheetz said. "We didn't have any credit. . . . Tom Vander Woude ended up co-signing our loan for our first house.

" There were many similar stories about Vander Woude, who served as a pilot during the Vietnam War, a commercial pilot after he returned home and a longtime volunteer coach.

His dying act was, "truly saintly" and "the crown of a whole life of self-giving," Bishop Paul S. Loverde said at the Mass. "May we find in his life inspiration and strength."

 The sign says the short sale did not work. This happens. It probably happens more often than a successful short sale. The lie continues...a short sale helps a home owner facing foreclosure. How long will the "short sale" lie continue?

REGARDLESS OF THE OUTCOME OF A SHORT SALE.....THE FORMER OWNER (S) WILL BE IN THE SAME FINANCIAL STATUS......THEY HAD A HOME...THEY DID NOT PAY FOR A HOME...THEY LOST A HOME.

IN TENNIS...THEY SAY...GAME....SET.........MATCH.

This site and most of the other sites used by real estate agents have entry after entry full of heart wrenching stories regarding our current market conditions. We share about the plight of people we meet that have run into hard times. We castigate those that we meet that have created their own suffering through greed. We apologize for those that we perceive have been taken advantage of in the past.

Then, we proudly pronounce that we are going to assist the homeowner and work to get the "monkey" off their back. We enter the twilight zone of "the short sale".

                 The rules and regulations to handle the sale and reach the goal of

getting the property sold vary from state to state. They also vary from lender to lender. It is not a place for the unorganized or impatient.

Our industry, for the most part, is made up of people that enjoy assisting people buy or sell homes. As with any profession, the motivation behind each individual varies. I make the assumption that most agents are committed to helping others because if you are just in real estate for the easy money, you won't last through markets like this one.

You have been sold a bill of goods regarding short sales.

     The primary benefactor of your efforts will be the financial institution that holds the mortgage. This fact is hidden behind the tears and fears of the clients we sit with. Selling the home is not going to resolve their problem. Selling the home may reduce the amount of money the financial institution loses but it will not make tommorrow any brighter for the folks relinquishing the deed.

The only other people benefiting from a successful short sale are the participants other than the seller. The lender may only agree to the sale if commissions are reduced. A reduced commission is certainly more than the seller will receive. The agents will earn some money.

The new lender, title company, home inspectors, termite killers, appraisors all stand to benefit from the transaction. Seems like all the usual suspects have their hand in the cookie jar again.

HMMMM....THE SAME PEOPLE THAT BENEFITED FROM THE ACTIONS THAT CREATED THIS MESS, SEEM TO BE BENEFITING FROM THE PREFERED METHOD OF GETTING OUT OF THE MESS.

THE SAME PEOPLE THAT WERE HURT GETTING INTO THIS MESS ARE THE ONES THAT WILL END UP BEING HURT THE WORST GETTING OUT OF THE MESS.

The honest advice for those that can not pay seems to run counter to what we have been told is the moral and ethical manner to advise clients. Get out....pack, move while you control your circumstance, stop sending money to the lender....YOU NEED IT. Of course, if we were really following what is ethical, a great deal of this mess would not have occured or most of the people now in a jam would have gotten there without representation.

AGENTS MADE MONEY REPRESENTING CLIENTS ON THE WAY INTO THIS MESS

AGENTS WILL MAKE MONEY ON THE WAY OUT

THE CONSUMER  CAN NOT WIN

If you are convinced that you are helping folks when you list short sales, at least have the decency to admit that you are helping everyone other than the person living in the home. Tell them the truth..their credit is in shambles, they will not be able to buy again for at least three years, every dime they send their current mortgage holder does nothing to assist their position or credit rating. Let them know that when you are asking them to stage the home or put money into the home that they are not going to receive any benefit from that action. Tell them that whether your commission is 1% or 10%, the bank will make the final decision. Tell them that the sales price is nothing more than a headline on the listing and their failure to pay will not be eased by the amount of money the mortgage company receives.

TELL THEM THE TRUTH....YOU CAN'T HELP, BUT YOU CAN MAKE A DOLLAR GETTING THE HOUSE SOLD

          Let them get off the roller coaster before the

ride begins. Let them get on with their life while they still have some resources. Let them find another place to unpack and mourn the loss of the dream. Let them have the dignity necessary for rebuilding a life.

Of course, you can always walk away and tell the lenders, that are now left holding bags that they chose, they will have to foreclose on every one of the "short sales". Let them spend the time and money now. If the home does not sell as a short sale.....it will become bank owned property at some point.

Today, agents listing short sales are gambling that they can turn the transaction before the bank forecloses on the property. There are no guarantees. The agent is using the calamity to build business, gain exposure and hopefully cash a check.

They just need to be honest...it is not for the owner, it is not for the bank...it is all about the "benjamins".

So, you have come to the realization that you can't pay your mortgage payment anymore.

What to do? You have heard the horror stories. You remember the things that your mother told you about paying your bills. Lessons heard from the pulpit echo quietly in the back of your mind. Nights once sleep filled become a session of tossing and turning and wondering what will happen next.

An honest dose of the truth might get you on the track to a less stressful existence.

You are not a bad person.

The stories in the press are just that....stories. The reasons that have brought you to this point can be as varied as the number of people in your same position. The only way forward is to accept where you are today. Do not believe the folks that preach moral superiority and try to paint you into a corner that offers no way out. Yes, you did sign a note. Yes, you do owe the money.

But, you can't pay what you don't have.

You should call your lender. You should explain your situation. You should ask if there is any way that your loan can be re-written with terms that you can afford to pay. You should do that because it is the right thing to do.

If the lender offers to re-write your loan...problem solved. If they refuse or if they can not offer you a loan you can afford, you have to do what is necessary to protect yourself and anyone that is depending on you for shelter.

Here are the facts.

     A short sale does nothing for you or your credit rating. The term short sale is even a misnomer in your situation. Lenders do not lose money in short sales. Short sales actually refer to a sale in which the seller actually brings money to the table at closing so the lender does not lose money.

     It doesn't matter what song and dance anyone does for you. If you do not pay the mortgage in full, that fact will be reflected in your credit rating. There is no asterick for folks that tried to sell their home and failed to receive the full amount. There are no bonus points in a credit score for being a "good guy". If you don't pay, your credit rating will be adversely rated. End of story. Your credit was "ruined" when you signed the papers for a mortgage you could not pay.

     If your lender will not work out a new loan with you, you have a responsibility to find a new home. You should do it now. If you can't pay your mortgage, you better find a rental that is affordable and make the move as soon as possible. There is no advantage to continuing sending money off to a lender in hopes that they will let you stay in the home until you find a new place to live. It won't happen!

     If you want to attempt a sale to reduce the amount of money you default on, then do so, after you move out. Please don't buy into a agent that tries to convince you that they are the saviour and if you let them sell, all will be well. Your situation is broken and no one can fix it.

     Do not buy any of the current schemes that offer to make the pain go away for $500 or $1000. The only thing that goes away with any of those schemes is your $500 or $1000.

If you can't pay...get out while the getting is good. Don't destroy the property. Don't sit and wait for the bank to come in and ask you to leave. Use the little control you have left over your housing situation and go find a new home.

One way or the other, the bank is going to get the keys. The mortgage holder does not care about your tomorrows, they only want the property or the money. You don't have the money. Let them have the house.

Tommorrow, you can begin to put the pieces together. Today, you have to act to protect yourself and those that you love.

Just my thoughts. I mean when you peel back the layers, it is only you under the covers.

You’ve often heard the phrase, “A picture tells a thousand words”. The unspoken truth that should be mentioned in conjunction with that statement is “A camera hides a thousand lies”. This fact is repeatedly supported in the marketing of homes on the internet. Skilled photographers, using all the tricks of the trade, share snapshots of a home that entice the viewer to visit. Upon physical inspection rooms seem smaller, the busy street outside is revealed, the smell of pets or cigarette smoke lingers, and lots of things that just aren’t right become real. I would rather share the experience, good and bad in an essay. You may not find every fact appealing, but you won’t be surprised when you stop by for a visit.

2521 MONOCACY BOTTOM RD, ADAMSTOWN, MD 21710

List Price: $425,000

Some people enjoy the crowded streets in the city. There are others that are more comfortable in the pre-planned communities in the suburbs. This home is located beyond the hustle and bustle. This home is just beyond the cookie cutter developments. This home is close to major roads and convenient to shopping but…..those words just don’t tell the whole story.

For just a minute imagine the end of a long day at work. Your drive home is shared with literally hundreds if not thousands of other commuters. The further from city center you drive, the more traffic thins out. You think to yourself “thank god it isn’t raining or snowing”. At some point, you peel off and exit the main road and head home.

A few minutes further is the exit to the peace and tranquility of the Stronghold and the natural valley adjacent to the river. A couple miles more on the same thoroughfare and you would soon be driving alone the banks of the river. The wonderful zen quality of trees in full bloom, the river, the wild life and quiet road home could be yours.

Ten more minutes and you are transported light years away. The harrowing pressure of competing for space on a three lane highway is replaced by an easing off the gas pedal and watching a mother doe with her speckled fawns. The nerve racking tension of keeping track of J-walkers is replaced by the need to keep an eye on the red fox trotting along the tree line. The shrill sound of horns is replaced by the gentle call of geese as they travel to the riverbank.

The life you left behind (it will be there tomorrow) included the fight for a parking space when you got home. This slice of country includes a delightfully colorful garden of multiple varieties of plant life in your front yard. You are surrounded by flowers, trees, plants and shrubs that make up your own “garden of eden”. No one can really put a price tag on peace and comfort. Then again, no one can measure the impact of the stress found in the cities and suburbs.

So what do you find when you get out of the car? This is a stately colonial that is 13 years young. The current owners have been diligent about keeping the home up to date and in cared for condition. Open the front door and step into the formal living room on the right. It is light filled with many windows. Every angle offers a view of the surrounding woods. Take a walk through into the family room that is adjacent to the kitchen. The kitchen, modern, clean and well designed does open to the family room.

I can only imagine the wonderful parties held in the past. It is so nice to be able to prepare the meal and chat with guests. You can’t put your finger on it but the feeling is just “down home comfortable”. There is a formal dining room for those occasions when the “in-laws” show up and you want to put on a nice spread. The area is large enough to put in the extra leaf in the table and do up Thanksgiving Dinner as well.

The upstairs has 3 good sized bedrooms, everyone with a view of the night sky that is incredible. It is amazing how crystal clear the heavens become when you get beyond the haze of the city.

 Speaking of star gazing, the deck out back is a perfect spot to enjoy meteor showers, falling stars and the power of the harvest moon. This is a unique opportunity to own a home with features not found down county. This is a chance to get away from it all at the end of every day.

I stood on the porch one night and watched the orange globe of the July moon rise above the trees out back and marveled at how much beauty surrounds us. This home waits on the lucky family that doesn’t mind driving a few minutes for hours of joy.

 My name is John MacArthur. I boast that I support my clients every step of the way. I think some of those steps are gentle ones that you use in feeling home in the home you find. If you would like to visit this home, please give me a call and I will arrange to meet you at your convenience. My number is 301-537-4377. My email is macarthurgroup@gmail.com

It seems like every one of these monkeys has an answer. I won't label any of them. I have been busy for the past month working with those buyers that the "experts" keep saying don't exist. I have been writing offers for those buyers that the "experts" keep saying won't get off the fence. I have been assisting a seller I listed in reviewing the multiple offers on the property he agreed to sell at a reasonable price.

The "experts"??????

If you stop and listen to the "old time" agents pontificate, you will hear that this is the worst real estate market since Sherman marched to the sea. You will hear claims that no one has ever seen a market this bad. If you read the headlines offered by the Wall Street Journal and other major news folks, you will read that everybody is sinking. You will read that foreclosures are creating a global crisis. If you listen to the talking heads, you will hear gloom and doom.

Of course, we can always dial in the NAR. Larry Yun continues to offer up comical advice for agents and consumers alike.

Your other choice is to wake up. It is not their market. It is YOUR market. You live there. You work there. You know the dirt better than anyone else. You know the streets. You know the shopping. You know the impact the overall economy has had on your friends and neighbors. You know the truth.

If you don't....shame on you. Has housing overall gone to hell in a handbasket? In some places, sure. There are neighborhoods that have been hammered. Only an idiot could not have seen it coming. "Nothing ventured, nothing gained" sure does fit 100% interest only financing. I don't know of any poker game that would allow someone to sit in and bet without tossing in the ante. Newspapers and nightly news share the stories of hard pressed homeowners losing the home of their dreams.

Bunk.

Just because you dream it does not validate your right to that dream. The country was built on a system of people that dream and follow the steps to realize that dream. They saved money and were invested in the homes they purchased. The foreclosure rate on that group was minuscule.

Too many agents, lenders, reporters, talking heads and "experts" are focusing on the dire predicaments of a small segment of the market place. We are inundated with information. The causes of the problem keep changing.

Over the last few years, I have heard that the market collapse is the result of .... the War in Iraq, Katrina, Global Warming, the Bush Administration, fast talking mortgage brokers, illegal immigrants, legal immigrants, the rise in the cost of energy, speculators, teaser rates, investors (pouring in and pouring out), over building, builders, local governments, english only loan documents, lack of government oversight, the rise in the cost of gas, too much government intervention, the pending election, bond bundling, and the increased pressure on fannie and freddie because of bad loans.

Lots of reasons.

I have heard agents with decades of experience share that they have no idea how low the market will go and moments later complain about bottom feeders. I have heard agents with decades of experience complain about listings that were being bought ( a cute way some agents procure listings by having the seller convinced that the home is worth more that market value) and then listened to them share that they think last years prices will hold this year.

Lastly, I keep hearing that the big problem with the market is the consumer. The sellers are too dumb to lower their prices to realistic levels. The sellers listen to agents. Agents take over priced listings. Agents as a group support homes priced to high. It would seem to me that if you take a higher priced listing, you should charge a higher commission rate. It will be harder to sell. If the seller agrees with your advice and lists the home at a more attractive price, you can charge less because you won't have to work as hard.

Buyers won't move. Hmmmm, I don't doubt that some agents find this the case. It might be hard to make a move if you are working with either mister gloom or misses doom. How can you expect a buyer to act if you support the illusion that things are changing so quickly todays bargin may become tomorrows burden? Looking at the market and seeing nothing good will leave you fulfilling a self fulfilling prophecy.

It is your market and your career. There is not one damn gimmick that will get you back on track. There is no magic system that will turn things around. You walked into this career with all the skills needed to be successful. You will craft your tomorrow, in part, using the tools you have acquired.

I do have a mantra.

Shut the hell up and just let me work.

Those dollars down the drain represent the hours wasted. Who wasted them?  Hmmm, how do you waste them? Let me count the ways.........

• Begin with the hours a new home buyer spends in front of the computer screen perusing all the homes for sale in their price range (we won't count the productivity lost when searching at work).
• Then there are the hours the new home buyer spends on weekends, driving around stopping at open houses.
• Next, you have to toss in the hours the new home buyer spends doing research on which agent to use in their search.
• Now, the cost of the hours begins to increase. After all, the agent is doing this for a living and even if they don't realize it, their time spent is money spent.
• The next batch of hours lost are spent visiting properties that may or may not be available. Under our current rules.....it has become a "crap shoot".
• These are followed by the painful hours. You know, those hours it takes to prepare an offer, followed by the hours it takes to receive a response. You can even add a bunch of minutes for the time you wait for the agent to even return a phone call.
• The come the hours of death. All the time spent has been for naught.

The home was not really for sale. It was in the MLS. It did have a list price. It did say pending 3rd party approval. It did have a sign in the yard. I did have a lockbox on the door. I did have a fancy sell sheet on the table. The home was not really for sale.

The following is an example. This is not t.v. and this is not a fictional account. Names remain the same. I make no judgement on the innocence of anyone. It just is a sample of why short sales don't sell.

A very good friend of mine called and asked if I would consider taking a young couple out to find a home. She prefaced the information with "they don't have a lot to spend, but they are a very nice couple." I told her absolutely, send me the information and I will do what I can to help them.

I chatted with the wife and she said they could meet me at the property that evening. I drove to Brunswick and showed them a home. Now, now....before we walked through the door, I explained agency relationships and the other information required by the State of Maryland. They liked the home, but said that the location was just a bit farther than they would like. They explained that they would like to find a home soon, but they are not under any time constraints. I told them I would do some searches for them.

I went back to the office and did the usual MLS, Craigs List, FSBO.com searches. I checked the on line classifieds and came up with a group of homes that were in Frederick. I sent them the information. They wrote back with a list culled from list that they wanted to see.

I made the proper arrangements and we met a second time and went on tour. The first house we visited was missing a refrigerator, toilet and upstairs window. I rechecked the listing and the agent had shared "great shape, bank owned." Apparently, the bank did not own a refrigerator, toilet or upstairs window. We moved on to the next home. Our third stop was very brief. The owner (yet another in a short sale status) shared that "they did not give a rat's xxx what the agent told us, they were not allowing people to see the home except on weekends". They slammed the door in our face. (I made a mental note to make sure and call the agent and let them know how much my clients appreciated that treatment. My buyers did not want to reschedule for the weekend or any other day.)

At the end of the evening, they had found the home they wanted to buy! It was a nice little townhouse at 121 Lauren Court, Frederick, MD 21703. It was listed by Homestar Realty located at 8120 Woodmont Ave, Bethesda, MD 20814. The listing agent was Marjorie Perez-Martinez.

The list price in the multiple listing service was $141,000. The AGENT REMARKS : Gorgeous townhouse in perfect location. Hardwood floors in main level, ceramic tile in all baths, huge closets, stone patio with fenced rear, storage shed and much more...PRICE TO SELL..A MUST SEE... This is a Short Sale subject to bank approval. As is condition.

The compensation was listed as 3%.

Now, other than the fact that it was apparent that the agent did not know the difference between hardwood floors and cheap pergo knock offs, I believed that the information provided was correct.

My clients had financing in place and came in to sign an offer. I won't bore you with too many facts. Using my expertise and knowledge, I suggested that they offer $148,000 with $6,500 in closing help. I was aware that there was another offer and we would be in a competitive bid situation.

My clients signed the offer. I submitted the offer and we began our wait. After about 36 hours of calling and leaving a message with the other agent (trying to ascertain if 1. the offer had been received and 2. had the offer been submitted to the bank.), we were told that the offer had been sent to ..................drum roll, eye roll, belly roll, roll the dice, roll over and play dead..........Countrywide.

Bright and early on day 4 we received a note from the listing agent. Countrywide had sent my clients a counter offer. THIS IS NOT A MISPRINT. Countrywide's counter offer was $158,000 with 2% seller help and a reduction in the commission to 2%.

I called the other agent. I asked..."Let me understand this. My clients offered your client a contract that would net them $1,500 more on the price and they have responded that they want $17,000 more in price and are willing to offer $3,160 in seller concessions?"

The other agent asked if my clients wanted to counter.

"NO, the offer submitted is their best and final offer. Tell Countrywide take it or leave it."

We are still waiting.

Oh, why short sales don't sell? Maybe it's just my opinion, well, it is my opinion, bait and switch stopped working when vacuum cleaner salesmen stopped going door to door. There is no policy preventing broker's from listing a property well below what they know or should know would be acceptable to the bank. There is no ethical requirement for those zealously seeking to reap the rewards of people struggling.

I realize that I share the same profession with the other broker and the listing agent. Fortunately, I do not have to ever share the same room with them.

My clients, well, it is a setback, but I will find them a new home.