Bank Charges May Surge as Mortgages Marked to Market (Update1)

By Elliot Blair Smith 

The process will "put a lot of them out of business," Amaya says. "There's going to be some hard, short-term pain that needs to happen in order for us to start rebounding." (NOTE: It is true from a perspective, but not all the spectrum.  Do we have a better choice? Even I can't promise, things are not so dimmed.)

Ernst Henry, 43, a respiratory therapist in Charlotte, North Carolina, responded as skeptically as Greenberg had after receiving a solicitation from NAD (National Asset Direct)  early last year.

"My initial instinct was to shred the letter," he says.

NAD's Hussion says the company bought Henry's $149,900 loan on a four-bedroom rental property for $94,296, a 37 percent discount from the unpaid balance. Yet with the mortgage market collapsing and the appraised value of Henry's property declining, Hussion says she struggled to refinance the debt.

Henry balked at her offer to cut the principal by about $50,000, contingent on his paying $8,000 in closing costs.

"I'm giving you $50,000. Give me the eight, stop complaining!" Hussion says she told him, raising her voice.

That got Henry's attention.

"It made clear sense to me," he says now.

He took the offer.  

****  ****  ****

Ha! Ha! Ha!  I've known that bankers increased their fees and FDIC charged more insurance premium on bankers already.  See everyone has different perceptions, even with this long article.   The section I am interested most in the article is the last few sentences quoted above which may be the least concern of the reporter. 

Why? I am smiling at it with my appreciation on an experiment confirmation to some practical ideas which has proved there is no need to change the basic game rules as Obama has done or determined to do those Dem's bullshit plans.

Finally, there is a news repost.  I can see someone is doing a partial vision of my ideas on a broader scale.  It took at least 1 year for someone like NAD doing one of my ideas expressed here in AR, by one of the ways I have in my mind long time ago, in making money in this downturn market. 

NAD is doing good in seeking profit.  Look at the Bloomberg's report (web-link provided as above), those few last paragraphs pleased me so much.  Seems Henry got the deal by reducing his loan principal amount from almost $150K to $99,900 and How much the NAD cost is?  Did I hear "$94,296"?

Wrong answer!  Anyone has "software" knowledge of real estate trust deed purchase knows that.  Did you recall there is "$8,000" upfront fee from Henry?  That fee is called "point" in terms of mortgage jargon or "Buy Down."  So NAD's real cost is 86,296.00.  However, the NEW loan interest is charged and based on what?  Yes, you are right, it is $99,900, not $86,296 or $94,296. 

So there is roughly a built-in (or call it "intrinsic") interest "surcharge" of 15% of Ernst's paper rate ($14K divided by $86K= 15%) as opposed to a banker's new loan.  Say the real interest rate for NAD is 9.2% (APY) istead, if Ernst sees it clearly put 8% (APR) in his document. (now can you see what I said: "two sides of a coin" or a "win-win" situation by thsoe real estate gurus?)

Nothing in the report mentioning about old or new interest rates for Ernst as in Patricia Greenberg's case.  I don't want to go into detail analysis about NAD's profit.  All I want to say is NAD is doing great. 

No matter what took place, every party involved here is naturally happier than yesterday.  Ernst, NAD and the banker who sold NAD his note. (Nobody points a gun at his head to sign the contract of assignment, right?)  That's the nature beauty of capitalist market.  Unlike government interference, all the programs made by GWS or Obama incurred objections, complaints and injustice.   In this case, anyone, including you reading my article, is going to blame anything?  Tell me about it, please.

NAD is not good enough for me to grade them "excellent."  They produced social or marcroeconomic effects, not only providing home owners "affordable" housing but also creating jobs, etc.   However, NAD seems far behind my performance criteria: 1) making 100-150% profit immediately (NOTE: for charity reason, we may set the goal for 50-100% profit or less in a year); 2) cut the original homeowner's monthly payment in half.  Why they miss the goals I set in November 2007?  Simple, they are missing the other side of coin my vision has been on.

From my obersevation, a few people are working the way I figured out and they are probably on the other side of coin or both sides.   They are doing great in the past five years.  I can see their business expand from a certain area into nationwide, such as Worldplus (starting from California into the vicinity of states) or Harley (starting from Florida into Seattle).   Probably, they are a private investor looking for their pot of "gold" by digging out others' trash.   Sorry I have no way to know how they are doing, but I will assume they have made some real money to expand their business.   They may not have a non-profit charitable cause in mind, to effectively help the poor folks while revitalizing our housing or national economy.  

Well, I told you that it would be so simple and nature to rescue or revitalize our economy if those people in power could do it right.   When I mentioned it 15 months ago, probably nobody will look at me without difficulty to have a "You are just Bullshit Bragging Yourself" idea kept popping up in his head.   Now, NAD comes up and do it half way I have in my mind.  I am so glad, even NAD just did it with the half performance or achievement I want.

I did it all by myself in the past with my successful cases, on a very local basis without influence to our national economy.  So far, no case failed and all successful, to meet the above two criteria I set.  

However, without the fund support from someone like DellaCamera, I am still down here in Texas and feel so sorry to be unable to do something as I said "to only provide real good, solid and practical stuffs to the weak publics."

Okay, so I told you, didn't I?  Let me prove it to you.  Please go back and read my article post here in November 2007: A Funny World (6-1): Talker with Lips, Doer with LPs  

	花花世界走馬燈集(6-1): Talker with Lips, Doer with LPs
	時事評論｜財經	2007/12/03 02:13 ｜

For an example, one of my neighbors had his home foreclosed on Nov. 6, 2007.  

It is too late for me to work on when I knew it.  There is only 3 days left for me actively and positively "attack" from the other side.  [in fact, there is one business day since it is a weekend.]  They owe a bank $82K that is the minimun bid amount on auction block. 

The real market value is lower than $60K. 

If they let me know earlier and give me at least 2 weeks to work on.  It is very possible for them to stay at their home now.  They may be able to owe a new loan of less than $40k and pay 50% less of monthly payments.  It is a very possible practical goal for me to reach.  

BTW, you guys may ask what's in it for me since you know I am very selfish and good at return calculations?  

Ooh! you are smart to ask!  Let me tell you, it won't make me feel guilty to my pre-set investment goal: 200% return in a year.

How can I do it?  That' what I mean the other side of a coin: know the "sofeware" real estate well enough to set your own rules to play with a lender shark, not to follow theirs. 

If I go out to help the general public with less funds those organizations have, believe me I won't talk about those public or private useless plans that are at the mercy of those greedy lenders. 

 I won't do lip service to give advice and comfort only.
 

Trust me I will use my expertise and the rational market forces to only provide real good, solid and practical stuffs to the weak publics.