What, you don’t think so?

I’m thinking the $25 billion agreement is enough to go around but maybe we owe the lawyers something for their time. And the government. And maybe Uncle Sam will give it back to the banks shortly. Not as gifts mind you. No, they’ll couch the money in something fancy sounding and we’ll be left wondering who’s been had.

Oh well, such is life these days. Let’s make sure 2012 is a more honest, more prosperous, and more (for)giving year than this one.

Sound good to you?

Today’s lucky (or unlucky) government agency is . . . the FHA!! Not only have their cash reserves dropped below $2.6 billion (slightly below mine, btw) but there’s a good shot they’ll be asking for a bailout within the year. The fact that reserves are low is actually nothing new; it’s been below the 2% minimum for 3 years running. And you know what? I don’t even blame them for needing a bailout. It’s not like they control the housing market or home prices. (They may have helped cause the mess in the first place but let’s not get picky.)

What gets me is that the government is actually going to give them the cash. Toss money into a poorly run, losing proposition. If you don’t have the guts to step back and take a stand then you shouldn’t be in the game in the first place. If no one in Washington can just admit that there’s something fundamentally wrong with the system then I think they’ve got their heads in the sand.

I give the FHA full credit for doing their best to stay afloat. It’s really not their job to try and make a difference (I guess). But it is our representatives’ job. If I can see the problem and you can see the problem, then why can’t the people who are actually there to do something about it?

Hey, Washington, don’t make me come up there!

So I keep skimming and I read about how real estate losses are always high this time of year. And then one more piece of the puzzle – HARP, the government’s refinance program, is trying to get reinvigorated. So let me paint the whole picture for you guys:

1) Homeowners defaulting – mortgage giants lose money

2) Mortgage giants get bailed out by Treasury

3) Treasury offers to refinance mortgages for homeowners at lower rates

4) Homeowners make lower payments every month to mortgage giants

5) Mortgage giants post losses based on monthly earnings

6) See step 2

Oh boy, I think you see the problem now. Somehow the system got corrupted. Being completely honest here, I won’t deny that some people or organizations involved in this cycle have good intentions. (I’m all for helping people keep their homes, avoid default, make reasonable mortgage payments but we all know that Short Sales are the only sane way to do this, help the housing market recover, and provide genuine solutions.) But good intentions only lead one place. And every bank, mortgage servicer, government agency, and crooked politician who can get his hands on cash will fall to temptation.

I wish the entire country could see how misguided these programs are. But so far everyone prefers to look at the short terms benefits and ignore the big picture. I won’t apologize – I’m a man with vision, who looks ahead and anticipates problems, and I’m not afraid to speak my mind.

What about you?

Now that may seem like a strange answer, but consider this. There are a million good ways to invest money but they all take money to get started. So they’re not necessarily risky, but are expensive. Then there are bad investments, such as lottery tickets. They’re cheap, but don’t pay off very well. So what I’m trying to say is that if you’ve got loads of cash, it’s not necessarily a good idea to throw it all away on bad investments.

Sounds like reasonable advice, right? That is, until you’re a bank and decide to invent your own backwards rules. The latest report on how TARP money has been spent among banks who took the bailout will really get you fuming. It turns out that as soon as they saw loads of free money coming in (the “lotto ticket”) they upped their asset risk level by 10%. That means they said, “Hey, we’ve got free cash. Let’s take some crazy risks with it.”

If that doesn’t drive you crazy let’s hammer the point home a little more. All the big banks made bad investments. They through the economy into a spin and our government decided to throw them free money. They took the cash and bought . . . bad investments! They’ve actually made themselves riskier than they were before the bailout.

I can’t believe these people are so short sighted. You don’t take tax payer money for being dishonest, money which you don’t deserve and didn’t work for, and rip us off behind our backs but spending it on even more dishonest schemes.

I’m giving up for a little while now. I’m digging up my mayonnaise jar from the backyard and investing in something safe, like a sandwich. Wanna join me?

Why are they risky? And why now?

It’s really backwards logic and that kind of thing only seems to work on Wall Street. When we were in the worst of the financial crisis (aren’t we now??) the ratings agencies knew the banks would get bailed out if they looked like they were going to fail. That means more security, higher rating.

But now when recovery seems to be appearing (where, though??) the banks aren’t “too big to fail” so they’re less likely to be bailed out by Uncle Sam. Translation – less security, lower rating.

So you see the backwards nonsense going on here? When we’re doing better we’re more risky and when we’re doing worse we’re more secure. I think the Fed got itself into a real mess with these bailouts. Once they stepped in and said their wallets are up for grabs to any big company the entire market system got thrown into chaos. If they’re too active ratings go up artificially. If they pull back ratings drop even though the banks and investors are going better.

Like I said from the beginning, it’s a war of perception. You can’t judge the strength of an investment by anything other than the strength of the investment. Make a smart choice, put your money with a winner and don’t bet against a crash.

Am I out in crazy town over here? Does anyone think the bailout system made markets better? If you do, I’ve got a great bridge to sell you!

Have an awesome weekend guys and in the words of a great movie – “Be excellent to each other!”

So while the White House is scrambling to figure out how to finally shut down Freddie and Fannie, the two organizations are making sure the taxpayers are on board to bail them out. Taxpayers have already put up $64 BILLION in the last 2 years. So if the government thought to cut its losses before dropping any more money on a losing proposition they were just a little too slow.

How do you feel about it? Are you sorry to see them go? Are you pissed about having to throw an extra $500 million at them to close the books? And how many more losses are they planning on accruing this year?

They claim that taxpayers have less and less to worry about as time goes on (maybe because we’ve got less and less to pay them with). They’re showing less losses in each quarter, and I’m sure they’re prepared to take all the credit for that. But it’s much more likely that it’s the strength of the economy and the slight recovery of the housing market that are showing up on Freddie’s books, despite whatever claims the CEO might make.

So let’s put aside delinquency rates, bad portfolios, and all the other major issues plaguing such organizations. The simple fact is that all of Washington has realized that it’s time to reform the system. Let’s just pray they act on that before more money goes down the drain.

Hard as it may be to believe, Fannie Mae is asking you (yes, you!) to shell out $2.5 billion to cover their deficit for July to September! I wish I could lose money that quickly.

They’ve swallowed up $88.6 billion in taxpayer money since September 2008. And how much have they paid back? $8.1 billion! That’s less than 10%. I wish I could get loans at that rate.

And guess what they attribute any gains they’ve made to? Newer single-family mortgages. And why? Because lenders are getting pickier when it comes to evaluating borrowers. So their older loans are doing badly and they’re not bringing in new ones quickly so they’re messed over either way. I wish I was allowed to drive backwards on the highway!

I guess there may be some bright sides buried somewhere in here. The delinquency rate of home loans held by Fannie Mae is dropping. But their inventory of foreclosed homes keeps rising. And of course loan modifications are fizzling out so no one is looking there for any help.

So I’m not sure what the future holds for ol’ Fannie. But it will probably involve mountains of cash rolling in the front door and leaving via the sewer.

Currently, the bill is at $148 billion. Now all they need is either another $73 billion . . . or $215 billion. Doesn’t sound very promising in either case does it?

Most of this money is and will be used to cover losses on home loans. That explains the ballooning price tag. Mortgages aren’t likely to stabilize any time soon, so it’s best to prepare for the worst.

The study still pointed out that their figures only go through 2013. It’s possible that more money will be needed beyond then. But they’re more optimistic saying that by 2013 most bad loans should be resolved.

It’s not really the issue now whether taxpayers should bear this responsibility. We’ve been committed to the mortgage firms’ success and it might not make sense to bail out now. But what do you think of the claims they’ve made along the way. Has the money already infused stabilized the markets? Will 2013 turn out to be the end of volatility?

We may not be able to answer those questions absolutely, but you guys out there working the streets have a better sense then a suit up in Washington. So let me know how you see things.

So those of us left might possibly think about letting our fingers dip into a pot that just might not be ours.

Which brings us to some troubling news coming out of yet another study that no one really wants to face. Corelogic (if you’re nodding your head like you’ve heard of them, please go to sleep) claims that out of the 400,000 homes that go up for short sale each year, $310 million of it is through fraud.

Now I know what you’re thinking. You and me can spare that kind of money, but banks and the government, no way! Not in this kind of economy.

And I’m sure you’re just itching to pull the government out of its financial woes and paint a nice rosy picture of the future. But how?

Simply send me any excess millions you’ve got lying around and I’ll see that the banks are well taken care of. Okay, just kidding, that was actually an example of fraud and I’m glad you were paying attention.

But no, you and me aren’t like the government. We don’t believe in bailouts. We believe that the best thing to do isn’t to flush money down the toilet (though that would be pretty cool, right up there with using $100 bills to light cigars).

Instead, we’re going to make Short sales the best thing that this economy has ever seen. We’re going to get out there and make short sales the best choice for anyone looking to get out of a losing situation. And we’re going to make short sales for breakfast with a side of hash browns.

Wait a minute, I may have gone too far. But who knows? So get out there and make a sale!

Lenders were most frequently asked by borrowers how they can raise their credit scores, reduce debt, and build savings. Most people don’t know how credit scores work, nor how to improve them. (Maybe most people never had to think about it.) A fifth of all institutions surveyed said people ask mainly about their savings accounts and how FDIC works. And one in five lenders said borrowers mostly ask about budgeting and debt consolidation.

Lenders frequently felt that the best information they had to offer was regarding IRAs and home equity loans. The company that conducted the survey feels that the results indicate that borrowers are trying to improve their financial footing.

Whether this adds up to the widespread belief in the economic recovery that they’re predicting is questionable. Had this survey been conducted a year ago, would the results have looked very different? Maybe the most frequently asked question to banks a year ago would have been “Are you hiring?” And two years ago: “Are you lending?” And three years ago … and so on. What a survey like this needs to show are trends. Not snapshots of information. It’s extremely tricky to draw conclusions from isolated data. The best way to really see how the national mood has shifted is to compare these results with ones from previous periods.

We’ll just have to convince ourselves for now that recovery should be on everyone’s mind.