Today I did an inspection for Channel 3 news reporter Marie Mortera.  Marie is just as nice in person as she is on TV.  Along with Maria is personal trainer Moxi Morrison and top shelf Las Vegas Realtor Roberta Jenkins. robertaj@americanagrp.com 

 .   Mary Dickerson, ABR,CRS, GRIRealtorRe/Max Elite9931 W. Charleston Suite #2 Las Vegas, NV 89117 Direct- 702-845-5565Email- MaryDickerson@cox.net   www.MaryDickerson.com

 Hey Craig,

This is a long read, but unfortunately, the whole story has to be told.  Let me know what you think:

Pass this on to someone who will listen to me.  Here is what I sent to the presidential candidates with NO RESPONSE:
 

I am a Realtor and loan officer and although this message is long, I think it is something we all can use.  Some people have an adjustable rate mortgage (ARM) that they took out in the last three years.  It has or will adjust in the next one to two years.  If we do nothing, we all lose.  If we do the wrong thing by just keeping the introductory rate low for a while, we also ALL lose, as I will explain later.

If you just use the approach of extending the low, introductory rate, everyone will lose.  The banks will NOT do this on their own, the investors who purchased them will be more burned with no adjustment gains on their money, and more importantly, the banks originating loans will have a difficult time moving forward and will likely make lending guidelines even more rigid than they did this past summer when the pendulum went way past center.  If they think some outsider can just mandate that they freeze rates, they will fight it, or stop lending money, further hurting this current housing situation.

The investors who bought these mortgage backed securities are not who the American public thinks they are.  In fact, all Americans are affected by the mortgage backed security holdings and returns.  Most insurance companies, 401K funds, and pension funds purchase these, as do banks issuing credit cards.  Therefore, if we keep the rates artificially low for longer than they anticipated when they purchased these ARM mortgages in bulk, the insurance companies, banks, pension funds, and 401k funds will not meet financial expectation.  Therefore, our insurance rates will go up, along with credit card interest.  401K funds and pensions will be short of interest to pay to retirees, making matters even worse; not just the people with ARMs, but the entire nation will pay and further dampen this economy.

By not involving the banks that funded the loans, we are almost assuring that the money supply to purchase homes be cut short and since rates revolve not only around supply but risk, rates may rise and further deepen the housing crisis.  If, however, we convinced the banks to MODIFY the note, we could have an answer.  There would be no appraisal needed for this plan, called modification to the note.  The bank would pull the rate sheets from the original lock date and offer the 30-year fixed rate the customer would have received then, plus a penalty of say .5%-1% higher.  In addition, the bank can charge a handling fee to modify the note, re-file the court papers, and pay their staff.  Any consumer with an ARM now adjusting would jump on that in light of no appraisal needed.  On a typical loan of $200,000, the difference in 5.5% and 6.5% would be $129/month.

Also, the funds that purchased the security would get higher returns, meaning no credit card interest rate increases, no need for higher insurance rates, and no further burden on Social Security since 401Ks and pensions would still receive a return on their investment.  If we don’t lock those rates, people will default and leave the eventual investors with nothing, so they will like the idea of taking a bit more now than locking the low, introductory rate for 3-5 more years, and also they will have much less turnover.  Most investors who bought ARMs expected a large majority to refinance out of them, but since the values have gone down, that is not likely possible.

The entire country would see this as fair and here is why.  If two neighbors bought at identical times, one on an ARM and one on a 30-yr. fixed, the conservative buyer is feeling upset right now that he has paid a higher rate for the last 2-3 years and no one cares about him.  His neighbor not only has paid less the last two years, but also will have his payments locked for 3-5 more years AT A LOWER RATE THAN HIS!  By getting his neighbor who took out the ARM to pay a bit higher than he is, the 30-yr. fixed mortgage holder feels justified, his neighbor has a much less likely chance of foreclosing and crashing his home’s value, and the 30-yr. fixed neighbor won’t have to dread higher interest rates on his credit cards, higher insurance on his car, and diminished returns on his pension and 401K in order to help his neighbor.

The ARM buyer will feel relieved and thankfully will keep his home, avoid financial disaster, and both will be able to spend, thus keeping our economy afloat.  The buyer will find some way to pay a little over what he has been paying, and will even happily pay the bank a $1000 modification fee, and then he will be on a 30-yr. fixed note.

The banks will likely loosen restrictions a bit, as they over-reacted after the horse left the barn this past summer and the sense of relief to the country will work wonders on this ailing economy and dreadful housing market.

However, if we don’t do this, housing will deteriorate further until one large capitulation and our country/economy can likely not survive due to how widespread the effects will be.  For now, only about 9.4% of the country has an ARM, so the other 90.6% are resentful if they have no consequence and the government just lets their interest stay frozen, while at the same time scared of further foreclosures affecting their home’s value.

The other plans just do not work.  You cannot refinance a loan with the value issues we have on these loans with ARMs.  The appraisals cannot support the value necessary in order to obtain loan approval under ANY loan guidelines; this is a great solution and I hope you use it to benefit your campaign as well as the housing market and the ENTIRE country.
One last thing…GET RID of Moody’s and S & P’s rating systems.  These are “friends” of wall street, so therefore, how can they give accurate ratings of risk on the mortgages that get sold by their friends at Goldman Sachs, Merrill Lynch, and others?  Replace them with a treasury department advisor who will objectively review the mortgages, using job knowledge, so we can avoid this in the future.  The current system is like having a car salesman tell you how reliable the vehicle is that he is selling.

Guy Sheets
Elite Realty
702-521-6530
www.GuySheets.com

My Father owned his own construction company.  Back in the late 60’s my brother Duane and I would work  construction during school break learning the trade at an early age.

Friends of mine - Jim Desio & Steve Topper recently opened a sports bar. If you have a business you would like to add feel free to give us a call.

790 Coronado Center Dr., Henderson NV

Below, I had an inspection next to the Lied animal shelter and stopped in after the inspection and adopted Gia.

I found this cat (Jones) on a roof, the neighbor said he was up there for a week so I brought him home and he’s been a great cat. Gia & Jones have become best friends and they play together every day.

Today I did in inspection for Tricia Kean channel 13 news reporter, she’s just as nice in person as she is on TV.

Contact 13 Reporter / 5 and 11pm Anchor
About Tricia

If you’ve been ripped off or scammed, Contact 13’s Tricia Kean is the person you want on your side.

Tricia Kean heads ABC Channel 13’s problem solving unit — investigating consumer complaints, warning you about fraud and scams, and providing you with bottom line information that will save you money.

I have been recommending Five Star Pool service.  Francesco is licensed and does a good job. Have a look at his web site. http://www.poolmaintenancelasvegas.com

 Below: Buyer Christine Larin & Realtor Sarah Hankins. Great People!

Below: The car that was owned by Stivale builders.

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