What was so interesting however is a report out by First American Loan Performance, a research company out of San Francisco which  determined that a stunning 41% of the sub-prime loans made in 2004 were sold to unsuspecting homeowners that could have qualified for the prime money loans and probably avoided a lot of the consequences of the bouncing interest rates we are now facing with all the sub-prime resets.

It get’s worse however, that by 2005 the sub prime rip off was calculated at 55% and by 2006 it was a mind boggling 61%. The turn and burn mentality of the mortgage lenders was grilled into the sales reps who constantly pushed the more lucrative sub prime paper to earn bonuses and brownie points for their managers. This seems a lot like fraud to me; willful and intentional.

It seems like a lot of people’s FICO scores could certainly have been protected had they been sold the right mortgages which would have been geared for home ownership vs home default.

The administration has vowed to block any future meltdowns caused by the financial systems with new legislation… Let’s hope that it will finally curtail the lust for Wall Street to see if they can break the bank.  Historically,  many great empires have collapsed under the weight of debt.  

We could be next. Taxpayers will be saddled with a 1 trillion dollar debt with the Fannie Mae and Freddie Mac bailout alone.

Saturday’s Tahoe Rim Trail hike was from Barker Pass to Tahoe City and what a Kentucky Derby this was!  Hike lead guide, Doug Flaherty has been doing back to back hikes for the TRT the last two weeks and he has seriously acclimated to his marathon running speeds. Even our sweep Lynn was at a accelerated pace with Doug. He’s just got those pony legs and they want to run. I was lovin’ every mile and thanks be to God that I didn’t take a digger.

We burned through the 16.7 miles in 6.5 hours with lunch and photo breaks landing in Tahoe City at the river at 2:30 pm. I was amazed at the terrain on this segment mostly designed to be in the deep forests, with spectacular high peaks and graceful Page Meadows, filled with lupine and corn flowers up to my shoulders. Each segment is so unique and different. I am so enchanted with the Tahoe Rim Trail and thanks to all those people that have suffered building some of these routes which must have been pretty brutal in the hard rock and shale sections.

I was surprised by the heat however and did not realize how very hot it gets on the open terrain over looking the Lake. Most of my life was spent either on, in or around the shores of Tahoe and it really did not seem very extreme in temperature. Take a jaunt at noon on the Rim and you will want to have a Serpa carrying an umbrella for you. It’s really hot up there.

The Pacific Crest Trail branches off from the TRT on this segment and we met two PCT hikers that were travelling North to Canada. Trail names were Shake & Bake and Time Lord. So if you are wondering where your friends are, they are safe and still moving.  Good tidings to you both and happy trails.

The particular details involved a short sale that was completed three years ago and just in the last month, the X-homeowner received a bill from the IRS for 156k. This attempt at collections was for the HELOC which the homeowner received a 1099-C on a couple of years ago.

Thinking that everything was kosher, this homeowner need-less-to-say was totally ambushed by the aggressive letter for payment. The good news is that when his CPA got involved, he was able to widdle this bill down to 30k since most of the original HELOC went towards improvements at the residence and not for toys like a new boat or worse a Hummer.

It’s always safe to bet these days that you will be getting various demand letters from an official looking company who now owns the HELOCS or even a second since they are usually not settled out in a short sale and eventually the IRS.

What usually happens is the original loan has been sold multiple times. Since there is no security for the debt, the new holder of the note has subcontracted to a collection company. Now your private information and phone number is in one of the universal  ”call centers” which operate 24/7 around the world and in all time zones. My personal favorite call center is in Bombay, India because the Indians are so patient and polite. Time is on their side however and a billion of them waiting to dial your number and send you a very nasty letter.

So, my recommendation is to call your CPA immediately and also your attorney who can negotiate a settlement with either of the entities. I have heard that the HELOCS can be settled for as little as 5% of the original amount. It’s worth your time to find an expert that can handle the final debt stripping of the loan and get this sucker buried once and for all. It’s not all that bad really since you got off the huge hook of the original debt, so be gracious and negotiate.

Just don’t panic. if you call them back yourself get as much information as possible from them as to what they want, how they want payment, will they take a cash settlement vs a payment settlement for a discount, etc.

Consumer Credit Counseling Service
1-702-364-0344

Consumer Credit Counseling Service is the nation’s oldest consumer credit counseling organization. The agency helps consumers learn to manage their finances, balance their budgets and get out of debt. Their services are confidential and counselors are available in person, over the telephone, or via the internet.

Addtional Hotline Numbers

888-995-HOPE is available:

• To any homeowner in America having trouble paying their mortgage
• Any time–24/7

888-995-HOPE offers:

• Absolutely free foreclosure prevention counseling by expert counselors at HUD-approved agencies.

When a constituent calls 888-995-HOPE:

• Service begins immediately—the counselors themselves answer the phone
• Homeowners can get budgeting help, a written financial plan, assistance contacting their lender
• If they’d like face-to-face counseling, they are referred to their local NeighborWorks® agency or other counseling agencies
• If they need additional services, they are referred to agencies in their area.

Senator Reid invites struggling homeowners to come to this workshop and sit down with a HUD approved housing counselor and their lender to discuss workout options that may be available for them in order to avoid foreclosure on their home.

According to the Congressional Budget Office the potential cost to the U.S. taxpayers for just the Fannie Mae and Freddie Mac bailouts will reach  a whopping ONE Trillion. That’s a lot of future debt folks.

With all this bad news it would make so much sense if the Nevadians would start being serious about using the Foreclosure Mediation Program. Here is a program that is basically free to all homeowners for just a $200 processing fee you can actually set a concrete date to meet with an authorized representative of your mortgage and try to figure a way to avoid foreclosure.

Granted, the loan modifications have not been going well but the blame has to be split between the banks and homeowners. What I have observed in the mediation’s that I have attended for my clients is that people who are totally prepared with the proper documentation and have that magical 31% ratio for the mortgage to income margin will get a temporary loan mod.

If the lender has a portfolio loan they can also manipulate the ratios to work for some type of modification. But if you just do not want to keep your home  the alternative to a modification is a short sale and this can be approved via the program too. This way you leave the mediation with some guidance as to how you are going to re-build your future.

The pain of foreclosure is just not loosing your home, it’s the waiting and uncertainty that is like water torture. Your life is just wasted away a day at a time. What most people do not realize is that this can be a controllable process and with an outcome that is manageable.

Using the FMP can help participating homeowners  avoid a foreclosure and settle with the lenders causing less damage to their credit and in fact can be ready for new financing for a home in two years!

I think if you are getting in trouble with your mortgage and you need help contact your attorney first and also your CPA. They can give you the options but ultimately I think you need to book yourself into the Foreclosure Mediation Program and escalate the dialogue for home retention or sale.

Here’s the web site: www.nevadajudiciary.us and click on Foreclosure Mediation. There’s a lot of information and you need to learn the critical deadlines.

What I cannot figure out is here we have the most beneficial program in the States for people to use and most homeowners are not using the opportunity. Take advantage of this awesome program and get yourself some help.

Call me. I can help you walk through the shadow of darkness…

We were wondering when someone would kick this bucket and now someone has. Check out the letter that was sent out recently on behalf of the nations foremost mortgage insurance institution commonly known in the trades as MGIC or Mortgage Guaranty Insurance Company.

____________________________________________________

From Armitage & Associates, Investigative Services, Inc.
320 East Buffalo Street, Suite 702, Milkwaukee, WI, 53202; Phone 414-276-7007; Fax: 414-276-7107

Letter of Representation

RE: MGIC Certificate Number: 24576577
Armitage Case Number: 10-1981
Borrower Name: Smith XXXXXX
Borrower SS XXXXXXXXXX

To whom it may concern:

This letter shall serve as notice that Armitage & Associates and the Titan Group have been retained by Mortgage Guaranty Insurance Corporation(MGIC) to reverify, as part of an internal control process, the facts and circumstances surrounding the mortgage loan application by Smith XXXXX . Said loan transaction is more specifically identified as XXXXXX Please note that said application may or may not have been approved by MGIC for mortgage insurance. Armitage & Associates and The Titan Group, PI have been authorized to act on behalf of MGIC in this instance to examine all documents and records related to this application.

Sincerely,
Sean Cludy
Investigator.

Note: Any questions regarding the authenticity of this letter should be referred to: Armitage & Associates, Rico Garcia, 800-824-2927 ext 224
I can be reached at 559-232-8700
Toby Bogges PI 24404

____________________________________________________

You can just imagine the billions of dollars that these guys are going after and if they collect just a small portion, it’s going to be the lottery. Plus, the lawsuits that will be hitting the courts against the borrowers and mortgage agents if they were party to the misinformation.

Our take is that MGIC is trying to not only collect on the fraud from the borrower but it will make a case for them not to have to pony up the resources to salvage the lender from the default on the loan. A sort of merry-go-round of debt karma now hitting the lenders which may have provocated the bad loans. I guess the appraisers will be brought into any investigations and suits too. Then the Realtors…

Crystal Bay Point

The Tahoe Rim Trail has become the holy mantra around Chase this summer.  This week’s journey was from Tahoe Meadows to Brockway Summit. 19.6 miles of Alpine wonder.

 My colleague Megan Warren was the Chaser on this segment and luckily for her since it just about in her back yard, most of us have to commute. Here’s a few words from Megan…who is also our coach by the way.

 ”The hike on Saturday was incredible!  To add my TWO cents, not only did we have the most incredible views EVER we also had Tim Hauserman, the author of the Rim Trail book!  We learned so much about the flowers and trees.  QUIZ: what tree is shaped like a wizard hat?…..The Hemlock!  Our group was fast and strong and finished the 19.6 miles in 8 hrs and 35 minutes (including the breaks)!!!  In addition, our group scaled the highest elevation to date; 10,333 feet at the top of Relay Peak”  – Megan

We totally lucked out on Saturday with supremely beautiful weather. On Friday we had so many lightening strikes in Reno that the airport was temporarily closed. I was uncertain if we would need a fire extinguisher on the trail. But the day blazed blue, no clouds in sight for that matter.

Our guides were also top knotch. Tim Hauserman from Tahoe City, a professional guide in real life and in real time a writer as Megan mentioned in her notes. I actually went to school with his sisters at Tahoe Truckee High and it was such a surprise to meet him on the Rim after let’s say 40 years? Magical.

You can check out his web site and check out how someone opted into the ultimate lifestyle.  http://writeonrex.com/Welcome.html

Here is a comment on his Rim Trail Book.

“The Tahoe Rim Trail: A complete guide for hikers, mountain bikers and equestrians is a comprehensive guide and a good read, as well. Until picking up Hauserman’s book, I had little knowledge of the Lake Tahoe area. Hauserman’s love of the area comes through so effectively I find myself longing to fill my pack and head west to explore this fairly new trail. The TRT has definitely made my list of “someday” trails.”

http://HikeTheWild.com 

The Tahoe Meadows to Brockway segment was my favorite jaunt thus far mostly because of the unbelievable vistas from Relay Peak and the spectacular views of Lake Tahoe non stop. The colors of the incredibly diverse plant life, flowers, forests and rocks were truly picture perfect. Our pace was swift but not so fast that we were not able to enjoy the journey.

The elevation to Relay was perfect to get the heart rate amping and that made for a nice workout for the first 4 miles or so, then down the mountain to the end of the trail with lots of botanical notations, free flow stories and ofcourse nice people hiking.

Our sweep was a trooper too. Doug, a volunteer and marathon runner that just happened to sweep the same segment for TRT on Thursday, Friday and Saturday with us. He has like totally awesome legs to say the least. And rewarded him with an icy Coors for his dedication to our safety and welfare.

To complete my thoughts, trekking the Tahoe Rim Trail for the first time with the professional guides and volunteers is just about the best experience one could have at Tahoe. I totally recommend the journey and here’s the official web site so you can.

http://www.tahoerimtrail.org”>>

PS-

Megan Warren did the 1.2 mile Shark Swim Launch on Sunday at 9:00 am at Burnt Cedar Beach and won first place in her age group. See what a day on the Rim gives you?  Wings…Congratulations Comrade.

The Special Report by the RGJ Sunday Business on the debunking of the myths regarding the housing crisis was very interesting since it shows that most of what the public believes is crapola. We are not at the end of the housing crisis by a long shot check out the facts.

1. There were 1,352 homes in Washoe County for May alone that received the blue tape notice which is a Notice of Default taped to the door or window of your house with blue painters tape alerting your entire neighborhood that you are on the plank.  Or a Trustee Sale which is a foreclosure sale and you are out of the house forever.

2. This equates to one home in every 133 residences that have had one of the two choices above and this is three times the national average.

3. Worse now is that Nevada has been ranked as the nations foreclosure leader for the last 41 months consecutively.  I guess it’s better than having the nations highest murder rate ranking but not much. People lives are being destroyed one way or another.

4. A whopping 50% of the closings in the first quarter for home sales were either foreclosures or short sales, totalling 990 homes which equates to 330 properties each month are being recycled. But this creates pressure on the market to continue to lower the pricing bar.

5. Shadow inventory is lurking in the midst waiting to be released by the banks who are worried that it will topple an already desperate situation for them, approximately 5 million more homes to be dumped.

6. Zillow reports in addition to this 5 mil there are 5.3 million sidelined sellers that need to put their homes on the market but are hanging by a thread hoping that there will be a recovery some how.

7. Nevada posted the highest unemployment (chief issue for failure to get a loan modification) in the nation for May which came in at 14%. Many of the unemployed are not even part of the stats since they have stopped looking for work.

So what is a homeowner to do? If you are on the edge with no resources to protect your property and a job that is slated for reduction or termination, you need to jump high now. 

Give me a call and I can get you into the network so you can become educated about your legal rights, programs that are available, credit counsellors that will help you get your financials together, attorneys that can strategically plan a workout, accountants who will evaluate the future tax consequences of a foreclosure, short sale or modification. It is critical that you get into the research and prepare well for a smooth landing.

Sand Harbor Lake Tahoe from the Tahoe Rim Trail

What a glorious journey this Tahoe Rim Trail is becoming. This is our third segment and the day was Tahoe perfect. This is a shot from about 10 miles in on the Rim over looking the famous Sand Harbor Cove from Christopher’s Loop. Probably the most beautiful view point of the harbor with out a doubt.

We took off with our guides Ricardo and Lynn one a lead and the other a sweep, from Mount Rose at about 7 am. The sky was perfectly calm and totally clear which surprised me since we have been seeing monsoon conditions over the Sierra Nevada’s from Reno for the past week. I thought for sure that we would be hiking in rain ponchos. But not a cloud in sight and definitely no wind. Cool breezes were had mid afternoon which was wonderful and totally unexpected.

The Tahoe Meadows to Spooner segment just has to be one of the marvels of the entire trail. Stupendous views, enchanting forests, pristine trails and almost no people. We did see a few machines with helmets but they were gone in a flash and had very nice legs and backsides.

Our Chase team member this segment was the adventure racer Guy Johnson who is also a marathon runner. Needless-to-say, he went ultra light and ultra fast, flying down the trail and landing at Spooner Summit at 3:01 pm. Sweet. I am stripping down my gear again since Guy had only 2 litres of H2o and a small container with something mushy to eat. I think all together with clothing he was maybe 6.5 lbs. I could be wrong but he looked like an ad for ultra runners. Shorts that floated even.

I was able to tail gate a Pacific Crest Trekkie and graduate from UCSD, Benjamin Mayberry (22) who is a soloist and was including the TRT in his quest to complete the entire combined trails of 2315 miles by October. He paced me which is what I was looking for and we got down at 4:48 to ice cold bottles of Coors and conversation of the trails he has crossed solo since May 4th.

You can trek along the Pacific Crest Trail and the Rim with Ben,  map his travels, see other trekkers and learn about the wild and beautiful lands we are missing when we spend too much time at our computers.