Paulsen Adjustable Mortgage Freeze: Don’t be fooled

The adjustable mortgage freeze is a bailout of the big banks. It has nothing to do with homeowners and everything to do with keeping Goldman Sachs, Countrywide and Morgan Stanley in business.

Last week, e-Trade was bailed out and it turns out that a portfolio of mortgage related securities sold for between $0.11 and $0.22 on the dollar.

Also last week, Citigroup was bailed out by Arab investors using money they have obtained by selling oil to the US. The bailout means Citigroup is paying 11% interest. How solvent is Citgroup to be paying that kind of interest?

These are the tip of the iceberg, folks. Financial institutions are imploding everywhere. They froze the money market account used to hold cash by many Florida schools.  I could go on and on but it will only get worse. I won’t depress you further.

What I will say is this. Don’t stay in your house if you can sell. Sell your house in nine days even when there are no buyers, and consider getting your mortgage short questions answered and do a short sale if necessary. Consider getting out of your house if you cannot afford it and if you have no equity and it is falling in value.

The freeze proposal will make sure that no more loans are available to people with less than great credit. How many lenders will want to make new adjustable loans? These are the very same loans that people with less than great credit could still get, but now won’t be able to. The freeze will make the housing crisis last longer and make it worse than it otherwise is.

If you haven’t already, head over to www.HomeSaleRelief.com home page and take my quick free but incredibly informative course on stopping foreclosure, avoiding bankruptcy, slashing your mortgage without refinancing, and much more.