If you are Michael Jordan there is no housing crisis. There is no recession. Then again he is “Air Jordan “The newly inducted member of the NBA Hall of Fame has plans that have been approved to build a new home in Jupiter Florida. It is not your average size home though, a sprawling 37,000 plus square feet of home. The home will be situated on The Bears Club which is an exclusive gated Jack Nicklaus designed golf club and residential community. The proposed price to build the sprawling new mansion is near $8 million. Local land records show Jordan paid $4.8 million for the land last year. Certainly a sign that even in this economy and housing environment life is still good for Air Jordan.

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So FDIC chairmen Sheila Bair who has repeatedly stated that the Federal Deposit Insurance Corp. is well capitalized must have “overlooked” some numbers. The insurance fund that protects our money on deposit with banks up to certain dollar amounts per account is close to running dry.

A total of 95 banks have failed this year so far and 28 in 2008. The FDIC is predicting now that it will run in deficit until 2013. Regulators now expect upwards of $100 billion in claims due to bank failures over the next 4 years and that was revised from earlier estimates of a need of $70 billion.

The Federal Deposit Insurance Corp. or (FDIC) collects its reserves from fees that banks are charged for the account protection. The FDIC also has a $500 billion credit line with the Federal Reserve but at this point is not prepared to use it just yet. Instead they are proposing for banks to pre-pay their fees to the tune of $ 45 billion to replenish an extremely dry well of liquidity from the FDIC. Tapping into the line of credit would ultimately mean a tax payer bailout of the FDIC something that Bair has adamantly stated would not happen. At the pace banks are folding the likelihood is very possible for the FDIC to turn to the Fed for help.

The question here is do we really know? In March of this year both real estate and the equity markets began to move up. Housing has inched a percent here and there every month. The equities market has ascended like it was the pre dot com era.

So finally sales of existing home sales retreated. It fell 2.4 percent as reported and released today by the National Association of Realtors. It is the first decline in housing sales since March. All of this a day after the Fed gave an upbeat forecast of the state of the economy and that it intended to slow down their intervention into buying treasury debt and mortgage backed securities. The Fed has aggressively been buying both in a 1.25 trillion pledge to help keep mortgage rates low.

Where does that leave us? Well we now know what the economy looks like when the Fed is the backstop for banks, the auto industry, low mortgage rates and induced home buying due to the 8,000 home buyer tax credits. What will the economy look like once the Fed is not there propping us all up? That is the scary part.

Home sales have increased mainly in part due to the home buyer tax credit and low mortgage rates. Take the credit away which it expires as of now in November and if the Fed is scaling back on keeping its finger pressed to push mortgage rates lower has the housing market really been slowly recovering?

Does the Fed see something that no one else can? The job report that was out today was less than expected. But by no stretch of the imagination was it a sign that the employment arena is showing signs of life. Could the Fed really not have that much of a clue? I have pointed out my facts what do you think? Submit your comments.

I have read numerous articles on this very topic “Loan Modifications”. It seems that those two words to the naked eye would seem normal or a good thing. The problem here the majority of articles I read make loan modifications seem like a dirty word. How could that be? President Obama is constantly calling for banks and lenders to do more and get more loans modified. I have read the articles of the fly by night scam companies who are ripping off home owners by taking their money and promising them to help them get their loans modified and never even processes the paperwork.

There are bad apples in every industry need we even begin to list the bad apples in the stock market? There are awful Doctors, worthless attorneys, shoddy contractors do we need to continue? The media and the government for some reason have a problem even for the honest Joes out there to get in the loan modification business. So when I had a past client pop in my office and explain her story curiosity killed the cat.

In March of 2006 I pre-qualified T.C. she was a first time homebuyer and ecstatic to become a homeowner. She had a good job in the medical field so she qualified for 100 percent financing at the time. She had a great realtor at Re/Max and they found a condo in Connecticut. She purchased her condo in May of 2006. A year later she called me to try and refinance however at this point the mortgage market was deteriorating so there was no better deal for her out there.

So fast-forward to the beginning of August 2009 and in my offices pops T.C. and she seemed troubled. She was looking for her realtor who was not in the office; his office is upstairs from mine. I asked her how she was and she said not that good. She had been un-employed for almost a year and wanted to talk about the possibility of renting her condo or selling it.

She had exhausted savings, tapped into her 401k and turned to relatives to help her out financially. Even though she had been un-employed almost a year she was still struggling to make her payments on time with family help and un-employment income.

I asked her if she had tried to get a loan modification? She was not real sure what that was. So I explained it to her and said I will help you put the paperwork together and submit the request. She was concerned about how much that would cost and assured her it would be nothing, I wrote her mortgage to buy the home and I was curious as to the process so we decided to give it a try. I helped her fill out the paperwork and we submitted her loan modification request to her lender GMAC mortgage. Four weeks later GMAC offered to reduce her payment from $1,250 to $850 for 3 months and they will revisit the loan at the end of three months.

In my opinion that was one of the easiest transactions I have had all year even though I made no money doing it. I will tell you it was extremely rewarding to be able to help her out.

If Congress really wants to make a push to get more banks and lenders to get loan modifications done I think the approach needs to be different. Had T.C not come in that day she more than likely would have become a foreclosure statistic. At least now her head is above water and hopefully will find work soon to get back on track. I think a lot of home owners fall behind or about to fall behind and really do not know what their options are. If they did I think we could avoid a lot of foreclosures.

The National Association of Realtors is presently lobbying Congress with a full court press to extend the 1^st time home buyers tax credit. The extremely successful tax credit which Congress enacted to help prop up the devastated real estate market is due to expire on November 30^th. To clarify, if you qualify for the tax credit your purchase needs to close by the 30^th of November.

Presently there are limitations to qualify for the $8,000 tax credit. You need to be a first time home buyer which is defined as never owning a home previously or not owning a home within the last three years. There are also income limitations to qualify which are $75,000 for a single person and $150,000 for a joint couple.

In the previous months real estate sales have been up mostly in part due to the looming deadline of the tax credit. The National Association of Realtors is looking to get the tax credit extended into next year and remove the income limitation.

It would be in Congress’s best interest to extend the tax credit but only time will tell if that happens and seeing as the deadline is November, 30 LoanClassroom will be updating this info as soon as we get any new info.

                You just may get the chance. Granted the Obama’s have taken up much nicer digs in Washington D.C. at The White House they are from Chicago and still have a home there. The house next to the Obama’s in Chicago is going on the market for sale.

                Buying the home will be no easy task. You will first need to have a background check from the secret service just to potentially view the home not to mention that the street is barricaded at all times. The real estate agent listing the house does think the home will command an “Obama Factor” in the final sale price. You can read the full article here:  Obamas House in Chicago

So you are like the majority of Americans feeling the economic pinch some worse than others but nonetheless these are some tough times. From the stock market dropping from 10,000 to 6,000 and change and back up again to the mortgage meltdown to the foreclosure crisis and the biggest financial scandal in history with Bernie Madoff Americans are looking for relief.

We all know the government has done its share of handouts. They have bailed out countless corporations and financial institutions. The one thing that no longer ceases to amaze me is how ignorant and brazen some of us can be. I guess that it is just chalked up to human nature.

The point to all of this is out on the “left coast” of California an employee for Wells Fargo who is a VP in the commercial foreclosed homes division had the intelligent or should I say rash idea to call a property Wells had foreclosed on her weekend hang out. The story gets crazier click here to read the article: WELLS FARGO