Consequences of Walking Away

Most homeowners don’t walk away, meaning they don’t strategically default. Yet industry experts contend that millions of Americans who are underwater, would be financially better off if they did walk away, just like Morgan Stanley recently walked away from five properties in San Francisco, five buildings which were underwater. Morgan Stanley just gave the properties back to the bank. As a company, they will not suffer shame and guilt as will a homeowner. Middle Americans are not trained to renege on debt.

These emotions of fear and shame and guilt are cultivated by the government, by the financial industry and, to some extent, the media. And they do this by cultivating a double standard, a standard in which Americans, average Americans are told to have a moral obligation to pay their mortgage and to meet their financial obligations, whereas corporations freely and frequently default when it’s in their financial best interest to do so.

Jason Opland of Columbus Ohio posted on “Real Town,” a real estate network: The difference in norms between average Americans and banks leads to distributional inequalities whereby average Americans are bearing a disproportionate burden from the housing collapse.

Brent Arends, League of Corporate Responsiblity Voters, says that the reason no one is pumping money into the economy is because millions and millions of people are paying into un-redeemable, un-repayable mortgages that are taking all of their otherwise productive income. The astronomical amount of debt, debt that these financial institutions helped to create, is what’s keeping the economy from recovering, according to Arends. His advice? Let the corporations, those financial institutions that are sporting record profits and writing record bonuses, eat the losses.

Strategic Mortgage Defaults

It’s all in the timing. Most middle-Americans would think such a move as dishonest and unethical. We agree.

However, given that lenders do not want to help in any way, such defaults are a calculated financial maneuver primarily by people with high credit scores. We know of at least one person — an attorney — who made such a calculated move. His house was underwater. He set up a corporation, brought a much finer and equally undervalued home under the corporate name. He walked away from the first home – and his mortgage on that homes – with little to no warning or indication of stress typically identified by increased delinquencies on the mortgage payment or other credit payments. And, at the time he purchased his new home, his credit standing was still good. It was a clean move.

Ethical. No, we don’t think so. But compared to what today’s mortgage lenders are doing, well . . .

Why are people doing this? Over the last decade, many people purchased homes, including their primary residence, for investment purposes as much as for shelter and protection. As with other investments, these high credit and financially savvy people are assessing the market value of their home relative to their carrying costs (mortgage payments, taxes, utilities, etc) and making the decision that they are financially better off walking away from the property and mortgage than continuing to make the payments.

Is there a moral failure in this practice on behalf of those individuals who do have the financial wherewithal to make their payments? Perhaps, but it seems apparent that people do not bring their morals into their financial affairs. This harks back to “situational ethics.”

Who Takes the Hit

Homeowners: They lose their homes. However, In California, lenders are generally barred from getting money from a defaulting borrower. The lender gets the house and that’s it, even if the borrower has $1 million in the bank. Only judicial foreclosure allows the lender to get the borrower’s other assets, but it’s slow, expensive and encourages a defense of loan origination fraud.

Mortgage bond investors: Rising homeowner loan defaults led to a loss for MGIC Investment Corp., Milwaukee, in the fourth quarter, and a return to profitability is unlikely in 2009. The Milwaukee company, the nation’s largest insurer of mortgages, posted a loss of $273.3 million, or $2.21 a share, compared with a loss of $1.47 billion, or $18.17, a year earlier.

Not the Banks: As we understand it, in additional to federal bailout funds, the mortgage lenders are covered by this mortgage insurance.

Almost any Option is Better than Foreclosure

In our frustration, many of us just want to walk away. However, the period for eligibility of a future loan differ greatly between a homeowner who loses a home to foreclosure and a homeowner who successfully negotiates and closes a short sale. In an attempt to dissuade homeowners from walking away from their delinquent mortgages, the lender announced that it would bar defaulting borrowers from getting additional Fannie Mae financing for seven years unless they can prove that they didn’t have the capacity to pay, or they attempted to negotiate in good faith for a workout alternative in lieu of foreclosure.

This latter should be easy to prove. Keep notes and a binder of every piece of paper and every phone conversation you have had with your lender (include date, time, name of person, phone number, extension, and badge number if they have one). We guarantee that you will have sufficient evidence of inept banking practices and ongoing lost paperwork to substantiate your efforts at pinning down a modification to no avail.”

Is such a maneuver considered ethical? If so, how so?

Who Are These People

What kind of people work in these corporate offices? How do they sleep at night? This type of maneuver further undermines the fabric and stability of America.

THIS is a clear example of “Situational Ethics,” and, in my opinion, situational ethics are ruling and ruining this country.

Here’s what one author says of “situational ethics:”

Joseph Fletcher wrote: . . . Whether we ought to follow a moral principle or not would always depend upon the situation. . . . In some situations stealing could be better than respecting private property . . . no action is good or right of itself. It depends on whether it hurts or helps people. . . .There are no normative moral principles whatsoever which are intrinsically valid or universally obliging. Love is the highest good and the first-order value, the primary consideration to which in every act . . . we should be prepared to sidetrack or subordinate other value considerations of right and wrong.

That is nauseous. The underlying problem is that most people are driven by fear and will bend situations to suit themselves without any thought of who will be harmed in the process. “Love?” Is he serious. Few people truly “love” themselves, meaning that others are even further down the totem pole and will be treated with disregard.

The Golden Rule

Fortunately, John C. Maxwell, author of “There’s No Such Thing As “Business” Ethics: There’s Only One Rule For Making Decisions”, disagrees with bending the rules to fit the situation. He proposes that there’s no such thing as business ethics because a single standard applies to both your business and personal life-and it’s one we all know and trust: the Golden Rule. Now bestselling author John C. Maxwell shows you how this revered ideal works everywhere, and how, especially in business, it brings amazing dividends. There’s No Such Thing As Business Ethics offers stories from history, business, government, and sports that illustrate how talented leaders invoked this timeless principle of the Golden Rule rather than compromise dignity.

One Herman Purewal lasted less than 24 hours as near as we can figure; we received a letter from him on December 1, 2011.

Following Herman came Paul Gruber, Executive Mortgage Specialist, Office of the President (Oman in Des Moines, Iowa) who had written to us on December 9, 2011 stating that he was our contact and “will be working closely with you . . . ” We sent 110 pages of requested documents to Mr. Gruber in their own FedEd package on December 15th or 16th. It seems now that Paul is not “working closely” with us. Perhaps the 110 pages threw him over the edge.

Curious, we counted all the people contacted for one client since 2008 in our attempts to secure a loan modification on a $725,000 house now worth about $400,000. Our list is 14 pages long and includes dates, names, phone numbers, badge numbers, office locations, etc., of all the people we’ve talked to in order to save just one house. How many are there? We have 40 different names and we have another 40+ letters and calls from people who did not leave their names or numbers. This is all documented in that 20+ pound binder pictured here.

So, how do we stay with this? Why do we continue Battling the Banks? To save people’s homes. Pure and simple. But not without a great deal of stress. The following are excerpts from an eMail that arrived this morning. Excellent timing!

6 Ways to Conquer the Fear of Rejection

The going price for any worthwhile win is 10 setbacks. If you can handle that failure rate, you have what it takes to succeed.

(Editor’s Note: Only 10? Then we are superstars!)

Early in my career, when I was struggling to start my company, I made a list of all the accounts I wanted to sell. Some, I admit, were far out of my reach, and to my dismay, they wasted no time in telling me so.

If you’re in the entrepreneurship game you better get used to hearing the word “no” . . . Rejection helps knock out the weak. In my case, those early rejections forced me to really listen to my potential customers and find out what I needed to do to change “no, thanks” to “where do I sign?”

You can’t escape rejection, but you can let it go. Here are some exercises that paid big dividends for the author:

• Dissect thoughts under the microscope. When faced with a challenge, what do you tell yourself? “I’m no good . . . this is too hard . . . I’ll never make it . . .?” Don’t let negative self-talk sabotage your attitude.
• Identify realistic fears. Whom do you fear? What might go wrong? Who has the power to reject you? Why would that person say no? The answers will help you prepare your best offer, and facing them will help you keep your composure.
• Focus on the moment. Keep your perspective. Rejection lasts only a moment, and once it’s over, you’ll be able to move on to the next opportunity.
• Be more assertive. Most fears of rejection rest on the desire for approval from other people. Don’t base your self-esteem on their opinions. Learn to express your own needs (appropriately), and say no when it is appropriate to say NO. In this instance, it means NOT accepting a lame modification when we all know the lenders are capable of truly helping and we know they are covered with taxpayers’ dollars for any of their financial “setbacks.”
• Analyze every failure, but never wallow in one. Harry Truman once said, “As soon as I realize I’ve made one damned fool mistake, I rush out and make another one.” Failure is a condition all of us experience. The reaction to failures distinguishes winners from losers.
• Don’t rationalize away the hurt. Turned down for funding? Didn’t get the contract? Don’t let your worth be defined by others. Get back in the game. It’s not a permanent condition; it’s a short-term setback.

Ten setbacks are the going price for any worthwhile win. Look at the major league baseball standings at the end of any season: Out of 30 teams, only eight make the playoffs, and only one winds up winning the World Series. Are those annual standings the end of the world for the 29 losers? Hardly.

Our elected officials, namely Senators, have NOT done their jobs. Too many are responding to their special interest backers and not working on behalf of the people. You need to be in front of THEIR homes and/or in front of the homes owned by senior bank officials.

The Winter of Our Occupation

A proposal from Michael Moore Tuesday, December 6th, 2011

Friends,
And now it is winter. Wall Street rejoices, hoping that the change of seasons will mean a change in our spirit, our commitment to stop them.

They couldn’t be more wrong. Have they not heard of Washington and the troops at Valley Forge? The Great Flint Sit-Down Strike in the winter of 1936-37? The Michigan Wolverines crushing Ohio State in the 1950 Blizzard Bowl? When it comes to winter, it is the time historically when the people persevere and the forces of evil make their retreat!

And they're crazy if they think that a little climate chaos (otherwise known as winter in the 21st century) that they've helped to bring about is going to stop us.

I would like to propose to my Occupying sisters and brothers that there are many ways to keep Occupy Wall Street going through the winter months. There is perhaps no better time to move the movement indoors for a few months -- and watch it grow even bigger! (For those who have the stamina to maintain the outdoor occupations, by all means, keep it up -- and the rest of us will do our best to help you and keep you warm!)

The winter gives us an amazing opportunity to expand our actions against the captains of capitalism who have occupied our homes with their fraudulent mortgage system which has tossed millions of families out onto the curb; a cruel health care system that has told 50 million Americans "if you can't afford a doctor, go F yourself"; a student loan system that sends 22-year-olds into an immediate "debtors' prison" of working lousy jobs for which they didn't go to school but now have to take because they're in hock for tens of thousands of dollars for the next two decades; and a jobs market that keeps 25 million Americans un- or under-employed -- and much of the rest of the workers forced to accept wage cuts, health care reductions and zero job security.

But we in the Occupy Movement reject this version of the "American Dream." Instead, I suggest we shift our focus for this winter to the following actions:

OCCUPY THE WINTER

A proposal to the General Assembly of Occupy Wall Street from Michael Moore

1. Occupy Our Homes. Sorry, banks, a roof over one’s head is a human right, and you will no longer occupy our homes through foreclosure and eviction because well, you see, they are our homes, not yours. You may hold the mortgage; you don’t hold the right to throw us or our neighbors out into the cold. With almost one in three home mortgages currently in foreclosure, nearing foreclosure or “underwater,” the Occupy Movement must form local “Occupy Strike Forces” to create human shields when the banks come to throw people out of their homes. If the foreclosure has already happened, then we must help families move back into their foreclosed homes — literally (see this clip from my last film to watch how a home re-occupation is accomplished). Beginning today, Take Back the Land, plus many other citizens’ organizations nationwide, are kicking off Occupy Our Homes. Numerous actions throughout the day today have already resulted in many families physically taking back their homes. This will continue every day until the banks are forced to stop their fraudulent practices, until homeowners are allowed to change their mortgage so that it reflects the true value of their homes, and until those who can no longer afford a mortgage are allowed to stay in their homes and pay rent. I beseech the news media to cover these actions — they are happening everywhere. Evictions, though rarely covered (you need a Kardashian in your home as you’re being evicted to qualify for news coverage) are not a new story (see this scene I filmed in 1988). Also, please remember the words of Congresswoman Marcy Kaptur of Toledo (in ‘Capitalism: A Love Story’): Do not leave your homes if the bank forecloses on you! Let them take you to court and then YOU ask the judge to make them produce a copy of your mortgage. They can’t. It was chopped up a hundred different ways, bundled with a hundred other mortgages, and sold off to the Chinese. If they can’t produce the mortgage, they can’t evict you.
2. Occupy Your College. In nearly every other democracy on the planet, students go to college for free or almost free. Why do those countries do that? Because they know that for their society to advance, they must have an educated population. Without that, productivity, innovation and an informed electorate is stunted and everyone suffers as a result. Here’s how we do it in the U.S.A.: make education one of our lowest priorities, graduate students who know little about the world or their own government or the economy, and then force them into crushing debt before they even have their first job. That way has really worked well for us, hasn’t it? It’s made us the world leader in … in … well, ok, we’re like 27th or 34th in everything now (except war). This has to end. Students should spend this winter doing what they are already doing on dozens of campuses — holding sit-ins, occupying the student loan office, nonviolently disrupting the university regents meetings, and pitching their tents on the administration’s lawn. Young people — we, the ’60s generation, promised to create a better world for you. We got halfway there — now you have to complete the job. Do not stop until these wars are ended, the Pentagon budget is cut in half, and the rich are forced to pay their taxes. And demand that that money go to your education. We’ll be there with you on all of this! And when we get this fixed and you graduate, instead of being $40,000 in debt, go see the friggin’ world, or tinker around in your garage a la the two Steves, or start a band. Enjoy life, discover, explore, experiment, find your way. Anything but the assistant manager at Taco Bell.
3. Occupy Your Job. Let’s spend the winter organizing workplaces into unions. OR, if you already have a union, demand that your leaders get off their ass and get aggressive like our grandparents did. For chrissakes, surely you know we would not have a middle class if it weren’t for the strikes of the 1930s-1950s?! In three weeks we will celebrate the 75th anniversary of the workers in my hometown of Flint, Michigan taking over and occupying the General Motors factories for 44 days in the dead of winter. Their actions ignited a labor movement that lifted tens of millions out of poverty and into the middle class. It’s time to do it again. (According to the Census Bureau and the New York Times, 100 million Americans either live in or near poverty. Disgraceful. Greed has destroyed the core fabric of our communities. Enough!) Here are two good unions to get your fellow workers to sign up and join: UE and SEIU. The CWA are also good. Here’s how to get a quick primer in organizing your place of employment (don’t forget to be careful while you do this!). If your company is threatening to close down and move the jobs elsewhere, then it’s time to occupy the workplace (again, you can get a lesson in how to successfully occupy your factory from my movie).
4. Occupy Your Bank. This is an easy one. Just leave them. Move your checking and your credit card to a nonprofit credit union. It’s safe and the decisions made there aren’t based on greed. And if a bank tries to evict your neighbor, occupy the local branch with 20 other people and call the press. Post it on the internet.
5. Occupy the Insurance Man. It’s time to not only stand up for the 50 million without health insurance but to also issue a single, simple demand: The elimination of for-profit, privately-controlled health insurance companies. It is nothing short of barbaric to allow businesses to make a profit off people when they get sick. We don’t allow anyone to make a profit when we need the fire department or the police. Until recently we would never allow a company to make a profit by operating in a public school. The same should be true for when you need to see a doctor or stay in the hospital. So I say it’s long overdue for us to go and Occupy Humana, United Health, Cigna and even the supposed “nonprofit” Blue Crosses. An action on their lawns, in their lobbies, or at the for-profit hospitals — this is what is needed.

So — there are my ideas for the five places we can Occupy this winter. Help the foreclosed-upon to Occupy their homes. Occupy your college campus, especially the student loan office and the regents meetings. Occupy your job by getting everyone to sign a union card — or by refusing to let the CEO ship your job overseas. Occupy your Chase or Citi or Bank of America branch by closing your account and moving it to a credit union. And Occupy the insurance company offices, the pharmaceutical companies’ headquarters and the for-profit hospitals until the White House and Congress pass the true single-payer universal health care bill they failed to pass in 2010.

My friends, the rich are running scared right now. You need no further proof of this than to read this story from last week. The Republicans’ top strategist met privately with them and told them that they had better change their tune or they were going to be crushed by the Occupy Wall Street movement. They didn’t have to change their greedy actions, he assured them — just the way they talk and PR the situation. He told them never to use the word “capitalism” — it has now been made a dirty word by the Occupy movement, he said. Only say “economic freedom” from now on, he cautioned. And don’t criticize the movement — because the majority of Americans either agree with it or are feeling the same way. Just tell the Occupiers and the distressed Americans: “I get it.” Seriously.

Yes, in just 12 short weeks we have killed their most sacred word — Capitalism — and we have them on the run, on the defensive. They should be. Millions are coming after them and our only goal is to remove them from power and replace them with a fair system that is controlled by the 99%. The 1% have been able to get both political parties to do their bidding. Why should only 1% of the population get to have two parties — and the rest of us have none? That, too, is going to change. In my next letter, I will suggest what we can do to Occupy the Electoral Process. But first we must start with those who pull the strings of the puppets in the Congress. That’s why it’s called Occupy Wall Street. Always better to deal with man in charge, don’t you think?

Let’s Occupy the Winter! An #OWS Winter will certainly lead to a very hopeful American Spring.

Yours,

Michael Moore

We wish we could say the following story excerpted from The New York Times is news, or a discovery, or anything other than “Yes we know. And why aren’t these people in prison — general population prison?”

After three years of working to save homes from foreclosure, we are still reading drivel such as the following. Absolutely everything out of the former banker’s mouth has been covered in the news repeatedly during the past few years. The bankers are still smiling and still running free and, probably worse, the former banker in The New York Times’ story is smiling . . . why? Because he got off scott free even though he knew what he was doing was questionable.

A Banker Speaks, With Regret (Yet He’s Still Smiling!)

By NICHOLAS D. KRISTOF, November 30, 2011 (Op-Ed Columnist)

If you want to understand why the Occupy movement has found such traction, it helps to listen to a former banker like James Theckston. He fully acknowledges that he and other bankers are mostly responsible for the country’s housing mess.

As a regional vice president for Chase Home Finance in southern Florida, Theckston shoveled money at home borrowers. In 2007, his team wrote $2 billion in mortgages, he says. Sometimes those were “no documentation” mortgages.

“On the application, you don’t put down a job; you don’t show income; you don’t show assets,” he said. “But you still got a nod.”

Editor’s Note: Try for a loan modification on your mortgage and watch what happens. Real life example: Chase holds a client’s second. The house is upside down $400,000 and $600,000 is owed on the first. If the owner walks away, Chase gets nothing . . . except they have insurance. The client’s income has gone up in a puff of smoke, so there’s nothing they can go after. When the loan was given in 2006, it was on stated income (which was bizarre because the client had an excellent paying job; actual tax returns could have been used). At the time of the original loan (first and second), next to no documentation was given to anyone. Now that a loan modification on a $80k second is being requested, what do they want in return? Glad you asked. Here’s the list — and it all MUST be included in one package:

1. Request for Modification and Affidavit (RMA), fully completed, signed, and dated
2. Signed Dodd-Frank Certification Form
3. Completed 4506T or 4506T-EZ form, signed and dated within the past 90 days
4. Proof of additional income from non-borrower(s)
5. Completed 4506T or 4506T-EZ form for non-borrower, signed and dated within the last 90 days.
6. Completed Authorization to Obtain Consumer Credit Report form (enclosed), for non-borrower(s)
7. Two most recent pay stubs indicating year-to-date earnings
8. Most recent quarterly or year-to-date profit and loss statement (signed and dated), reflecting revenue and expenses, with company name and dates covered
9. Copy of IRS Schedule K-1 (Return of Partnership Income)
10. Most recent W-2
11. Verification of Employment letter on company letterhead, signed and dated, that includes year-to-date paid amount with a paid-through date
12. Benefit statement or letter from all providers of income from Social Security, including Social Security for the support of children, disability, survivor benefits, pension, or public assistance, which states the amount, frequency, and duration of the income, and proof of receipt of payment, such as two most recent bank statements showing deposit amounts
13. Proof of income from 401K distributions, dividends, interest, and/or annuities (copies of two check stubs, two bank statements, or copies of two actual checks, reflecting the income;
14. Legal documentation indicating amount, frequency, and duration of alimony and/or child support payments, if you wish to have this income considered as part of your modification request (this is not required), and proof of receipt of payment, such as two most recent bank statements showing deposit amounts
15. Proof of occupancy (recent utility bill in your name at property address)
16. Copy of recorded Quite Claim Deed or Warranty Deed transferring ownership
17. One of the following documents reflecting rental income: Copy of IRS Schedule E (Supplemental Income and Loss), current rental agreement(s), or handwritten lease agreement(s) or contract(s)
18. One of the following documents reflecting boarder income: Statement from the borrower claiming boarder income, letter from the boarder, copy of IRS Schedule E (Supplemental Income and Loss), current rental agreement(s), or handwritten lease agreements(s) or contract(s)
19. Two canceled (their misspelling) checks or two most recent bank statements reflecting rental and/or boarder income – please note that we are unable to accept hand-written receipts
20. Proof of Flood Insurance – current policy or declaration
21. Current Property Tax bill and proof of payment
22. Proof of payment of Homeowner/Property insurance, including declaration page showing amount due
23. Homeowner’s Association bill and proof of payment, as well as documentation o coverage and premium (master policy)
24. Copy of most recent first mortgage loan statement, showing the status
25. Copy of modification agreement for your first mortgage on the property
26. Written hardship letter, signed and dated
27. Divorce decree, separation agreement, or other legal written agreement that has been filed with the court pertaining to a divorce and/or separation
28. Copy of recorded Death Certificate
29. Cop of the executed Power of Attorney
30. Copies of most recent statement(s) supporting assets — all pages
31. Copies of two most recent bank statements, showing deposit amounts, or copies of two most recent alimony or child support checks
32. Copies of two most recent bank statements, showing deposit amounts (Please note that copies of bank statements must be actual copies from the bank; internet copies or transaction histories cannot be accepted. Include all pages of the statements, including any blank pages.)

Added to this irony is that most of this was sent to Chase more than a month ago through FedEx and by FAX. They have no record of receiving any of it. We were just told that to be sure they get the documents, the client should go to the nearest Chase Bank and ask them to FAX the documents . . . right . . . all 150 pages!

Back to the article

. . . “You’ve got somebody making $20,000 buying a $500,000 home, thinking that she’d flip it,” he said. “That was crazy, but the banks put programs together to make those kinds of loans.”

Especially when mortgages were securitized and sold off to investors, he said, senior bankers turned a blind eye to shortcuts.

Editor’s note: The average person did NOT think they would "flip" their homes and make a profit — most people did not even know what "flipping" was; mortgage brokers and lenders, including mine, were TELLING people that they could wait a few years, sell, make a profit.

“The bigwigs of the corporations knew this, but they figured we’re going to make billions out of it, so who cares? The government is going to bail us out. And the problem loans will be out of here, maybe even overseas.”

One memory particularly troubles Theckston (which makes one wonder why he is smiling in The New York Times’ article). He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans . . . Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up . . . (Chase’s) spokesmen acknowledge that banks had made huge mistakes and noted that Chase no longer writes subprime or no-document mortgages. It also said that it has offered homeowners four times as many mortgage modifications as homes it has foreclosed on.

Editor’s Note: The key word here is "offered." See the list above; they have "offered" to consider a modification, but given their requirements, it will be a cold day in hell before they give the average person a modification. I propose that for modifications, they use the same type of documentation required for the original loan: stated income, and a one-page financial sheet, and my signature!

. . . 28 percent of all American mortgages are “underwater,” according to Zillow . . . and the figure is up from 23 percent a year ago . . . it’s difficult to nurture a broad recovery unless real estate and construction revive.

All this came into sharper focus this week as Bloomberg Markets magazine published an exposé based on lending records it pried out of the Federal Reserve in a lawsuit. It turns out that the Fed provided an astonishing sum to keep banks afloat — $7.8 trillion, equivalent to more than $25,000 per American.

The article estimated that banks earned up to $13 billion in profits by relending that money to businesses and consumers at higher rates.

The Federal Reserve action isn’t a scandal, and arguably it’s a triumph. The Fed did everything imaginable to avert a financial catastrophe — and succeeded. The money was repaid.

Yet what is scandalous is the basic unfairness of what has transpired. The federal government rescued highly paid bankers from their reckless decisions. It protected bank shareholders and creditors. But it mostly turned a cold shoulder to some of the most vulnerable and least sophisticated people in America.

Last year alone, banks seized more than one million homes.

Sure, some programs exist to help borrowers in trouble, but not nearly enough. We still haven’t taken such basic steps as allowing bankruptcy judges to modify the terms of a mortgage on a primary home . . . When the federal government goes all-out to rescue errant bankers, and stiffs homeowners, that’s not just bad economics. It’s also wrong.

The actions of the world’s top banks have

Turned the world upside down

Acts 17:6

“There remains an issue with housing that until it is remedied, we are in for an extended period of stagnation and underemployment. It will take many years to remedy and may not be at all if we elect a Republican next year . . . but if we can re-elect Obama, along with the house regaining a democratic majority, there could be some cool stuff in 2013 . . . Like actually legislating the requirements to roll back mortgages to 80% of CURRENT MARKET VALUE.

“The Dem caucus recently hit leadership with its latest demand (Zoe Lofgren of San Jose) that the Congress take such action. Once Obama realizes he has the votes and is no longer concerned about re-election, all bets are off for his support of what we thought were his “issues” like getting troops out of Afghanistan, gay marriage, legalized drugs and other liberal hot buttons . . .”

The comments above and below come from one of the most brilliant people I know in response to my questions and the simplistic ranting “economic view” found on YouTube.

This gentleman’s degrees include Finance, Business, Law (he holds a JD). His career includes real estate (broker and commercial sales), estate analysis/planning, insurance sales, government bond specialist, and he held seven securites licenses. For a NYSE firm, he was responsible for nearly 100 brokers, 10 traders, a real estate syndication department, a public finance department and overall operations for the largest branch office in the company. His “letters to editors” at various publications are always published. He is also a licensed sea captain.

He and his wife are extremely ethical people: They are in a position to shuck and jive people and make lots more money. They do not!

I sent him a comedian’s smart-ass rant from YouTube about America’s current economic state. His knowledgable and thoughtful responses to my questions include:

“The world and especially the US have issues . . . a balanced budget isn’t it. The proliferation of the notion that a sovereign nation’s debt is like a family credit card is DANGEROUS. Economics is more complicated than the jive-ass on YouTube would have you believe.

What OUR nation needs right now is government spending and well in excess of current revenues (which translates to bigger deficits). It doesn’t need higher taxes OR reduced spending. Part of the problem is the law of big numbers–people hear $14+ trillion national debt and that IS a big number . . . so it must be a problem?

As a percent of GDP, it is below average for the world and if we can find growth of even 3%, in a few years, the percent of debt to GDP would be cut in half!!! And contrary to the speaker’s rant, we don’t care who buys the debt, even the Chinese.

Do you remember in early 80′s it was the Japanese who would take over the world, then it was the Saudi’s (or other middle eastern oil sheikdoms). Do you remember too that certain nations, like Germany after WWI and Argentina and Brazil in the early 70′s “monetized” their debt? Sovereign nations can do that. Sure some stuff will cost more (and no, I don’t advocate that we take it to the extreme that either Germany or Argentina did), but guess what? It is almost unanimous among economists that inflation is a good thing- to a certain extent. And currently, the US has NONE!!! You need some inflation for growth and to stimulate job creation!

We need growth in this country and fast and if we manage to explain the reasons to a majority (51% will do), we will avoid a cataclysmic financial disaster. The logic of the comedian has taken over in the EU and the “austerity” measures in Greece and to a lesser extent in Spain, Portugal, Ireland and perhaps to a lesser extent in Britain and France and Italy will lead to slower growth, less government revenues, more unemployment (citizen misery) and what economists call a death cycle. It has happened before and as recently as 1938 in the US.

I am thankful that there are people out there like Obama who do get it. Problem is that we need to somehow prevent those that feel downtrodden to vote and act contrary to their best interests.

I used to hear investment clients say they wanted time to “research” my recommendations to them. After all, Chuck Schwab has been telling them for years, that a few minutes online at the Schwab website and they will be financial geniuses. My response was always the same . . .

Do you really think that you can gain sufficient knowledge of the subject to form a reasonable opinion in a few minutes of research? I have spent 6 years of college studying finance and economics (SDSU finance and GGU MsF) and now almost a lifetime in the financial markets. Are you suggesting that Facebook or Google can answer to that?

I don’t want to be harsh. We will talk more later.

is often cited as the best book ever written about market psychology. This edition includes Charles Mackay’s account of three infamous financial manias – John Law’s Mississipi Scheme, the South Sea Bubble, and Tulipomania. These three historic episodes confirm that greed and fear have always been the driving forces of financial markets, and, furthermore, that being sensible and clever is no defence against the mesmeric allure of a popular craze with the wind filling its sails. Charles Mackay proved himself a master chronicler of social as well as financial history. Blessed with a cast of characters that covered all the vices, gifted a passage of events which was inevitably heading for disaster, and with the benefit of hindsight, he produced a record that is at once a riveting thriller and absorbing historical document. A century and a half later, it is as vibrant and lurid as the day it was written. For modern-day investors, the moral of the popular manias scarcely needs spelling out. When the next bubble comes along — be it stock market, real estate, or tulips — be advised to recall the plight of some of the unfortunates on these pages, and avoid getting dragged under the wheels of the careening career bandwagon yourself.

According to International Living (an online newsletter): It’s official . . . The end of the “Age of America” will happen in 2016. That’s when, according the latest forecasts from the IMF, China’s economy will surpass America’s. According to International Living, the next president of the United States will be the last to lead the world’s biggest economy.

A decade ago, the U.S. economy was three times the size of the Chinese economy. Up until now economists have predicted that China wouldn’t overtake the U.S. until 2030. What does this mean? Quite possibly quite a few more bubbles will be twisting around and bursting; International Living is predicting the biggest shake-up of wealth in 235 years.

These types of financial machinations are way beyond my brain; all I know is that the middle class (that would be those of us who have been shoring up the system for decades) is someone’s footstool.

Following are economic woes recognized in history which have had ruinous effects. Given America’s economy today, it seems nothing has been learned and greed repeatedly undermines planning as investors intentionally forget (have forgotten) everything they learned in Investing 101. Tulipmania has been invoked frequently in news stories . . . The following was written by Alice Hamilton (Harvard Medical School) in May 1930.

This year, if ever, it behooves us to think soberly of the need of giving some form of security to those upon whom the fluctuations of business throw the heaviest burdens. These are men and women who have no control over discount rates, or credit, or the manipulation of bull markets and bear markets, yet they are the first victims of the battles fought in those high and mysterious regions . . . It is time for us to devise ways of meeting the inevitable disaster of old age and the almost equally inevitable disasters of sickness and unemployment, and these must be ways that will not fail when the stock market breaks or a new machine is invented, that will function in the lean years as in the fat years, and that can be accepted without loss of self-respect.

1634-1638: TULIPMANIA

Known for their passionate love of flowers, the Dutch highly prized the tulip upon its introduction to Western Europe in the mid-16th century. Dutch collectors devised a hierarchy of tulip varieties based upon their species and coloring, assigning values to the various flowers. Because it was impossible to determine which variegation would bloom from a particular bulb, the tulip became an object of speculation. During their earliest years in Europe, the bulbs were primarily of interest to the wealthy, but by the mid-1630s the craze caught on with middle-class and poorer families. The increased demand caused the price of the bulbs to soar.

While there’s no accurate way to render prices in today’s currencies, some prices roughly equalled the annual income of a wealthy merchant. The Semper Augustus tulip sold for a record price during “tulip mania.”

Around 1630 professional tulip traders sought out flower lovers and speculators alike. The supply of tulip buyers grew quickly, however the supply of bulbs did not. It takes seven years to grow a tulip from seed. And while bulbs can produce two or three clones, or “offsets,” annually, the mother bulb only lasts a few years.

Bulb prices rose steadily throughout the 1630s, as ever more speculators wedged into the market.

Weavers and farmers mortgaged whatever they could to raise cash to begin trading. In 1633, a farmhouse in Hoorn changed hands for three rare bulbs. By 1636 any tulip–even bulbs recently considered garbage–could be sold off, often for hundreds of guilders. A futures market for bulbs existed, and tulip traders could be found conducting their business in Dutch taverns.

In order to buy the bulbs for resale at higher prices, people mortgaged their homes. British journalist Charles Mackay, in his definitive history of early financial bubbles, Extraordinary Popular Delusions and the Madness of Crowds (1841), published a list of objects (and their prices) which were exchanged for “one single root of the rare species called the Viceroy”:

• Two lasts of wheat (448 florins)
• Four lasts of rye (558 florins)
• Four fat oxen (480 florins)
• Eight fat swine (240 florins)
• Twelve fat sheep (120 florins)
• Two Hogsheads of wine (70 florins)
• Four tuns of beer (32 florins)
• Two tuns of butter (192 florins)
• One thousands lbs. of cheese (120 florins)
• A complete bed (100 florins)
• A suit of clothes (80 florins)
• A silver drinking-cup (60 florins)

Tulipmania reached its peak during the winter of 1636-37, when some bulbs were changing hands ten times in a day. The zenith came early that winter, at an auction to benefit seven orphans whose only asset was 70 fine tulips left by their father. One, a rare Violetten Admirael van Enkhuizen bulb that was about to split in two, sold for 5,200 guilders, the all-time record. All told, the flowers brought in nearly 53,000 guilders. The tulip market crashed. Despite the efforts of traders to prop up demand, the market for tulips evaporated.

1719-1720: MISSISSIPPI BUBBLE (French Mississippi Company)

This grew out of France’s dire economic situation in the early 18th century. By the time of Louis XIV’s death in 1715, the treasury was in shambles, with the value of metallic currency fluctuating wildly. The following year, the French regent turned to a Scotsman named John Law for help. Law, a gambler who had been forced into exile in France as the result of a duel, suggested the Banque Royale take deposits and issue banknotes payable in the value of the metallic currency at the time the banknotes were issued.

Law’s strategy helped the French convert from metallic to paper currency, and resulted in a period of financial stability.

In August 1717, Law incorporated the Companie des Indes (commonly known as the Mississippi Company), to which the French regent gave a monopoly on trading rights with French colonies, including what was then known as “French Louisiana.” In August 1719, Law devised a scheme in which the Mississippi Company subsumed the entire French national debt, and launched a plan whereby portions of the debt would be exchanged for shares in the company. Based upon the expected riches from the trading monopoly, Law promised 120 percent profit for shareholders, and there were at least 300,000 applicants for the 50,000 shares offered.

As the demand for shares continued to rise, the Banque Royale — which was owned by the French government but effectively controlled by Law — continued to print paper banknotes, causing inflation to soar. The bubble burst in May 1720 when a run on the Banque Royale forced the government to acknowledge that the amount of metallic currency in the country was not quite equal to half the total amount of paper currency in circulation. On May 21, the government issued an edict that would gradually depreciate Mississippi Company shares, so that by the end of the year they would be valued at half their nominal worth. The public outcry was such that one week later, on May 27, the Regent’s Council issued another edict restoring the shares to their original value. On the same day, however, the Banque Royale stopped payment in specie. When the Banque Royale reopened in June, the bank runs continued. By November, shares in the Mississippi Company were worthless, the company was eventually divested of its remaining assets, and Law was forced to flee the country.

The Evening Post, London, England

From Thursday September 21 to Saturday September 23, 1721

From the Amsterdam Courant, September 30, Hanover September 23.

he famous John Law arrived here Incognito last Thursday with his Son, and was since Treated by divers Persons of Distinction; The Saturday following he had the Honour of being introduced to Prince Frederick, he is since gone for England if the common Report is true.

The Evening Post, London, England

From Saturday December 23 to Tuesday, December 26, 1721

The Creditors of Mr. John Law have met at the Notary Maignan’s, to consider the properest methods ot recover their Debts.

The Evening Post, London England

From Saturday November 10 to Tuesday November 13, 1722

Hague, November 5: The Committee of Council, nominated in inspect the Affairs of Mr. John Law, have given Judgment for the Sale of his Real Estate.

John Law who had been born into a family of bankers, believed that money was only a means of exchange that did not constitute wealth in itself. He received a pardon in 1719, moved to London, then to Venice where he died a poor man on March 21, 1729.

1720: THE SOUTH SEA BUBBLE

During the same period that French speculators were driving up the price of shares in the Mississippi Company, English speculators were purchasing stock in the South Sea Company. Famous First Bubbles: The Fundamentals of Early Manias

Formed in 1711 by Robert Harley, the South Sea Company was created to convert £10 million of government war debt (incurred during the War of Spanish Succession) into its own shares. In exchange, the company would receive annual interest payments from the government and a monopoly on trade with the South Seas and South America.

The exchange was successful although the expected trade riches never materialized.

In 1720, following John Law’s example in France, the company proposed to take over the entire British national debt. As soon as the plan was announced to Parliament, the company’s share prices began to rise as speculators gambled on the conversion plan. The House of Lords approved the plan on April 7, 1720, after government officials had been bribed with secret allocations of shares. In order to make the deal more attractive, the company inflated the value of its stock. On April 14, £2 million of South Sea Company stock was offered to the public at £300 per share and the subscription sold out within an hour. The company made several more stock offerings, all of which sold out, with the subscribers representing all social classes. The apparent success of the South Sea Company’s scheme led to the appearance of many new joint-stock companies, which became known as “bubble” companies.

In an attempt to sustain their share price, the South Sea Company convinced the government to pass the Bubble Act in June 1720, which prevented the establishment of new companies without government permission, and allowed existing companies only to carry out those activities that were prescribed by their charters.

The price of South Sea stock peaked at £1050 in late June of 1720, before the scheme began to fall apart. The first large drop in the market occurred in August, as foreigners and other investors began to withdraw from the market.

Parliament conducted an investigation, corrupt politicians and businessmen were imprisoned, and over £2 million was confiscated from South Sea Company directors.

Historical Register, January 1, 1721, London, Middlesex (pg 68, 69)

On the 17th of February the Commons, in a Committee of the whole Houfe, confider’d of the King’s Message relating to the South Sea Company’s Petition and came to the following Resolution, viz.

1. Payment of the Sum of four Millions one hundred fifty six thoufand three hundred six Pounds four Shillings eleven Pence, due to the Publick by the South Sea Company, by Virtue of the Act of the last Session of Parliament, and made payable within one Year, by four equal and quarterly Payments, the first Payment commencing the 15th Day of March 1724 be farther delay’d and postponed to the Year 1732; and that farther Provision be made for the more effectual payment thereof.
2. . . . Repayment of the Sum or One Million, which was lent to the South Sea Company, on or about the 7th of June 1722 . . .
3. That the taking in or holding of Stock by the South Sea Company, for the Benefit of any Member of either House of Parliament, or Person concerned in the Adminifhation, (during the Time that the Company’s Propofals, or the Bill thereto, relating were depending in Parliament) without, any valuable Consideration paid, or fufficient Security given for the Acceptance of, or Payment for such Stock; and the Company’s paying or allowing such Person the Difference arising by the advanced Price of the Stocks, were corrupt, infamous, and dangerous Practices, highly reflecting on the Honour and Justice of Parliaments, and destructive of the Interests of his Majesty’s Government.
4. Any of the Directors of the South Sea Company selling their own Stock at high Prices to the Company or others, at the same Time that they gave Orders for buying stock upon Account of the Company, under pretence of keeping up the nominal Value of said stock, was a scandalous Practice, tending to enrich themselves, to the great Loss and Detriment of the Company, and of other of his Majesty’s Subjects, for which they ought to make satisfaction of their own estates . . .” with which we agree and that leads us back to Waiting For Permission? You Got It!

1924-1929: THE BULL MARKET

The raging U.S. stock market of the late 1920s was hailed by many as evidence of a “new era” of economic fundamentals. Coolidge administration policies included the extension of free trade, anti-inflation measures, and the relaxation of anti-trust laws; and corporate improvements such as increased worker productivity and expanded research and development.

In reality, the driving factor behind both the inflation and the bursting of this bubble was the expanding use of leverage (i.e., debt) by individuals as well as corporations. America’s current sorry state of financial affairs echoes this era; have we learned nothing?

The decade was marked by an enormous expansion of consumer credit, which Americans used to finance purchases of new products such as automobiles and radios, which were created using new techniques of mass production that additionally helped to drive down prices. Consumers also used credit to purchase stocks, and as the stock market escalated, investors began to take advantage of margin loans provided by their brokers. Their primary targets were industries involving new technologies, such as the automobile, motion picture, and aircraft industries. Radio stocks boomed, rising by 400 percent in 1928 alone,7 and the stock market attracted an immense public following.

Oct. 24, 1929 became known as “Black Thursday”: it marked the beginning of the stock market’s “Crash of 1929.” Following the chaos of October, the market briefly rallied through Spring 1930 before plummeting again during the early 1930s.

1930s: THE GREAT DEPRESSION

In a February 1930 article entitled “The Revolution in Banking Theory,” Bernhard Ostrolenk sought to explain the forces at work behind the failure of so many banks during the previous decade. For the first century and a half of our history, he explained, the federal government, and most of the states, had prohibited “branch banking”—the ownership of one bank by another—instead fostering a system of small, independent “unit banks” . . .

The unit bank was well suited to financing the small, independent businesses that had dominated the American economic landscape throughout the 19th Century. But the trend toward centralization of the economy, set in motion during the Industrial Revolution, called for banks with far greater resources.

Investment banking had undergone significant changes as well during that same period. In the January 1930 Atlantic, Edgar Lawrence Smith described how Wall Street’s lending practices had come to violate the basic principles of sound banking. Prior to this era, banks rarely, if ever, made loans to people with whose affairs they were not reasonably familiar.

During the high-flying ’20s, when a customer borrowed from a stockbroker to invest in the market, Smith observed, such caution was abandoned. Iindividuals assumed (and were allowed to assume) large amounts of debt in order to purchase stock they could not afford.

Stockbrokers, in pursuit of commissions and with an eye towards driving prices ever higher, readily extended unwise loans, referred to as “debit balances.” The ability of the borrowers to pay back the loan depended on “the general level of stock prices.” The flaws in this system soon became tragically apparent, ruining many unwitting investors.

1984-1989: THE JAPANESE BUBBLE ECONOMY

From the 1960s to the 1980s, Japan had one of the highest economic growth rates in the world. In the 1970s, the government began to deregulate financial markets, which allowed banks to actively seek out new customers. During the mid-1980s, Japan took a loose approach to monetary policy, which caused the money supply to increase and interest rates to fall. After obtaining low-interest loans, corporations were easily able to raise funds on the markets. While these funds sometimes fueled capital investment, they often were recycled back into further speculative market activities.

Land speculation was another important part of the bubble economy. Japanese land prices were traditionally high, partly due to the mountainous island nation’s small amount of available land and population growth. Because of its high value, banks often accepted property as collateral and land served as the engine of credit for the entire economy.

The government increased interest rates five more times before August 1990, to try and halt the continued rise of property prices. The government was forced to intervene in a futile attempt to try and revive the market and stave off recession. Throughout the 1990s, Japan experienced slower growth than any other major industrial nation.

First published in 1841, Extraordinary Popular Delusions and The Madness of Crowds by Charles Mackay is often cited as the best book ever written about market psychology. This Harriman House edition includes Charles Mackay’s account of the three infamous financial manias – John Law’s Mississipi Scheme, the South Sea Bubble, and Tulipomania. These three historic episodes confirm that greed and fear have always been the driving forces of financial markets, and, furthermore, that being sensible and clever is no defence against the mesmeric allure of a popular craze with the wind filling its sails. Charles Mackay proved himself a master chronicler of social as well as financial history. Blessed with a cast of characters that covered all the vices, gifted a passage of events which was inevitably heading for disaster, and with the benefit of hindsight, he produced a record that is at once a riveting thriller and absorbing historical document. A century and a half later, it is as vibrant and lurid as the day it was written. For modern-day investors, the moral of the popular manias scarcely needs spelling out. When the next bubble comes along — be it stock market, real estate, or tulips — be advised to recall the plight of some of the unfortunates on these pages, and avoid getting dragged under the wheels of the careening career bandwagon yourself.

Resources: The Atlantic, PBS.org, Newspaper Archive (online), Wikipedia, and as noted above.

For the most part, most Americans are faced with psychological tyranny whereas many others are faced with brutal force that costs their lives. People in countries such as El Salvador fought for their lives between 1980 and 1992. It’s a long list around the world and touched on briefly here: Tent Living

Machine Gun Preacher” is based on the true story of Sam Childers. Childers is an ex-convict who got his life right through the help of his wife, Lynn, who became a Christian. His newfound faith has led him to take up a crusade to save the children of Sudan by building an orphanage and rescuing them from the murderous clutches of the Lord’s Resistance Army. Responses during an interview with Childers about the movie and his experiences:

What was the exact moment you decided you were going to make a serious change in your life? Do you remember?

What is shown in the movie definitely did happen. It’s just the timeline was messed up. I first knew I was going to change my life in Orlando, Fla. I was in a bar fight that turned into a shootout. I was almost killed. On my way home that night, I made up my mind that I was done. I speak about drugs and alcohol all the time. If there’s one thing I share with everyone it’s if you ever want to stop an addiction, it’s all right here (points to head.)

God can do anything. A lot of times we want to think that God is like a genie in a bottle. If you have an addiction, you have to first make up your mind, “I’m not living this life anymore.” That’s what I did. It wasn’t until four years later that I ended up saying, “Hey, I’m done. I’m going to spend the rest of my life walking with the King.”

This isn’t here to recommend any form of religion. It is here to help keep balance, give us impetus to stand for our rights, but also realize that no matter how bad it is here, it is far worse elsewhere.

Having been caught up in America’s real estate debacle for four years, and having worked with families to try to save homes from foreclosure, it’s clear that a substantial mistake made by many of us was to keep pulling money out of our homes — money that we could not pay back — and often to buy things that aren’t needed. We don’t realize it, but we have been brainwashed from birth to SHOP. That is a whole other story, but global economy is based on shopping! One of the reasons why our government wants loan modifications is so we have money to buy things which will “stimulate the economy!”

Excuse the broad generalization, and everyone’s story is different, but too many us us have used our homes as piggybanks and have gotten caught in one of the world’s economic downturns. These downturns have been happening since the dawn of time starting with world conquerors such as Genghis Khan, Alexander the Great, Islamic, Ottoman Empire, the British Empire, Spain, . . .

For those who still have their homes, there is a relatively simple way to pay off your homes in 5-7 years. Soon that will be posted here.

Once I realized what I had done, I read everything I could find, including Rich Dad’s Advisors®: The Abc’s Of Getting Out Of Debt: Turn Bad Debt Into Good Debt And Bad Credit Into Good Credit and Perfect Credit: 7 Steps To A Great Credit Rating starting in the year 2000. Each book got me closer to living debt free and I was so good at it prior to our current financial crises that I was able to travel to 24 countries around the world.

Because Wall Street caused our current Mortgage and credit crisis, in part due to our lack of their deep financial machinations, many of us are having to climb out yet again. Even though it’s been depressing, earlier reading provided knowledge that it is in fact possible to climb out of almost any financial crevice. You can get out of debt and stay out of debt with almost any of these books, including The Everything Improve Your Credit Book. While you are climbing out . . . or before you fall into credit traps, think about ways to make additional income at least for the short term until America turns around . . . which is predicted to be another five years!

Secure your business’s future using the right SBA loan bank loan or equity financing for you. Whatever path you take, do NOT use your home as collateral; thousands of families assume their property value would continue to rise, took out small business loans against their home, and hit a brick wall. Their business proceeds are down and they cannot pay back the line of credit against their home.

Do what some of the wealthy did when younger: Own one house free and clear. Do not touch it. Do everything you can to protect your home.

When it comes to your chances of receiving financing and doing it right Financing Your Small Business provides you with all the answers you need. It helps you find ways to combine various types of financing and shows you how to get the money you need. This book shows you how to get a bank loan, presentations, writing business plans . . . another “don’t:” Never start a business without a solid business plan. Yes you may love mountain bikes or golfing gear, but have you run the numbers on income/outgo, market fluctuations based on seasons? This book also has working with professionals, how to value your business, how to find and evaluate investors From SBA loans to venture capital sources Financing Your Small Business shows you the ways to get the money you need.

Consider reading at least one tome about the Rise and Fall of the US Mortgage and Credit Markets: A Comprehensive Analysis of the Market Meltdown. Again, I believe that part of what millions of us are facing is the result of not having sufficient financial education; it is NOT taught in our schools; only five states teach financial literacy. With the current debacle, let’s all hope that changes.

An interesting proposition is put forth in The Debt-Free Millionaire: Winning Strategies to Creating Great Credit and Retiring Rich is a call for a generation that was brought up on spending tomorrow’s money today. This pragmatic and refreshingly contrarian approach to the real secrets of cash-flow management—and leveraging the credit system—are a breath of fresh air in a smog-choked world of misinformation and confusing financial advice. Start living the dream. Take charge of your financial future. The Debt-Free Millionaire offers unique insights, little known strategies and easy-to-understand practical tools to first manage then eliminate debt. It is amust read for both consumers and financial professionals to better explain the often complex world of debt management. The book is a straightforward guide to debt, and how to eliminate it, that is as timely as it is needed. Anyone who follows the program in this book will be glad they did. This is not a get-rich-quick scheme. We need a paradigm shift in our financial thinking processes; this is an excellent start.

It was also started with the hope that one or more of my favorite crime shows would pick up stories and air them as a “Queen For A Day” fundraiser for families . . . you know: “Save A Home Today” by voting for the family you think needs/deserves the most help. TV and movies have the power to help people through these messes. Incredible TV episodes and movies HAVE been aired addressing lending fraud, but none, that I know of, have directly helped anyone with their mortgage mess. TV spends far more time playing with bachelors and hoarders.

I’m 2.5 years into working to save my home from foreclosure. After two years of battle, and an 8-inch thick 20 pound binder, I was accidentally given a 5-year loan modification.

“Accidental” meaning that after all paperwork was signed, my lender tried to rescind the offer. I took the paperwork to an attorney; he supported my premise that it was a legal and binding document. The lender wiggled but I do have a modification.

Since I seem to have some breathing room, I thought I would take time to give you some notes on what I did to survive this nightmare of fraudulent forbearance agreements and fear of foreclosure during forbearance periods, which is NOT uncommon.

I wrote my way through cancer, so I am writing my way through this, along with volunteering with Marin Family Action to help others save their homes.

When I was laid off from my real estate marketing job in 2009, my life became an ongoing attempt to control my own thoughts and fear so I would not go crazy; volunteering and trying to help others made a huge difference in maintaining balance; I was not alone by a long shot.

Years ago, during drug experimental days in San Francisco’s Haight Ashbury, a friend suggested I could stay balanced with classes and tapes of Yoga. He was serious. I started classes which kept me fit and out of psychological trouble through renewed strength and a sense of peace. Of course, given that I’m from San Francisco, we also joined Maharishi’s Transcendental Meditation crew and practiced Zen meditation for hours on end. All of this stuff works!

Because I could not get work after 40 years of full time employment, I had to retrain myself in something. I happen to like computers and working from home, so I opted for Starting and Operate My Own Home-Based Business by taking online courses. I couldn’t afford to attend school. Because of the Internet, online learning is easier to do now than ever.

For any business, you need to know Marketing on a Shoestring.

If you have a family and can’t leave home, or don’t have the funds to take courses outside of your home, consider online learning. Online learning does work and during these times you may have to reinvent yourself. Dust off your dreams; see if you can put together a future that is appealing rather than frightening.

A note of caution, please consider carefully, especially if your dream career is photography. Yes, it is a seemingly “romantic” career path. It is also an extremely difficult one because everyone with a tiny camera or cell phone is shooting these days. If you don’t need income (and I’m assuming you wouldn’t be on this site if you don’t), this is a rough road.

I was a professional photographer and won a couple of awards; however, my daughter, who is a banker, has an exceptional eye for composition. Shots from her cell phone often equal or exceed what I take with my “professional” cameras. (The photo above right was taken with her cell in a very dark chapel in Greece.) Photography, like Web design, carpentry, database administrator, accountant, etc. takes a great deal of skill. None of those skills are random.

That link up there will also take you to business classes; if you have never taken, say, a financial planning course or never developed a business plan for a start-up, I highly recommend either or both. They will serve you well no matter what you do in life.

No matter what you decide to do, ALWAYS have a Plan B, a way out. For years, my car was stocked with a year’s supply of basics;  in my case that included a tent, sleeping bag, backpacking stove change of clothes, flares, first aid kit, etc. It came in part from being a camper, but beyond camping that stuff came in handy repeatedly. It also gave me a strange sense of freedom, as in “I don’t need these people.” And in the case of America’s lenders, that is how I feel. On a brighter side, if I decided I wanted to stay in a coastal campground at a moment’s notice, I could.

My goal when I bought my home in 2006 was to figure out a way to pay off my home within five years; due to illness and job loss I was thrown off track, but I’m getting back on that track now. This link takes you to 900+ products to help you with your emergency preparedness and I truly hope some of this works for you to give you peace of mind as you Battle the Banks.

I will be writing more about what is helping me and others get through this and, again, I hope this helps you find ways to stay calm and WIN!

No matter what your situation in life, always stay on top of your credit. Poor credit will affect everything you do and everything you buy on time, whether it’s a house, car, refrigerator, computer, will cost you more. If you do not know how to handle this yourself, click through to Lexington Law Firm to Clean Up Your Credit Report. Before I started paying strict attention to my credit reports, I had a home loan at 12% at a time when it should have been 7%. I sold that house thinking the payments were too high when all I had to do was reduce the interest by getting my credit report cleared!

I read everything I could find, including Rich Dad’s Advisors®: The Abc’s Of Getting Out Of Debt: Turn Bad Debt Into Good Debt And Bad Credit Into Good Credit and Perfect Credit: 7 Steps To A Great Credit Rating starting in the year 2000. Each book got me closer to living debt free and I was so good at it prior to our current financial crises that I was able to travel to 24 countries around the world.

Because Wall Street caused our current Mortgage and credit crisis, in part due to our lack of their deep financial machinations, many of us are having to climb out yet again. My earlier reading provided knowledge that I would in fact climb out and I’m against just about there. You can get out of debt and stay out of debt with almost any of these books, including The Everything Improve Your Credit Book