Congress is trying to get us to swallow a bitter pill. They want us to accept declining home values and pay to do so…hmmm.

If there is a rescue of so called “toxic assets” (a.k.a., bad loans) by us, yes, I’m talking to you…what will you home be worth?

This week iVoteAmerica interviewed a large national lender by telephone regarding its Home Equity Line of Credit customers. We also interviewed a residential appraisal firm to see what is actually going on from the backside of the home lending industry.

Interestingly, appraisals orders are actually climbing. Why? Because mortgage institutions and banks who have Home Equity Lines of Credit (HELOCs) in place have already started massive suspension of these loans, subject to new appraisals and new loan application from borrowers. Underwriters have simply taken a blanket position that properties are no longer

The banking industry is highly motivated to reduce property values and the appraisal industry is kicking into high gear to help them.

The bail out, if enacted into law, will reduce your property value and you will be writing a check to help it happen. What’s wrong with this type of action?

The markets are already beginning to self-correct. Sound banks are absorbing the assets of troubled banks, at pennies on the dollar and they will continue to do so. Wouldn’t it be prudent to allow the market to correct itself rather than propping it up with mandated taxation of property owners who are already seeing values plummet in most markets?

As for John McCain and Barack Obama, you can forget any leadership from either of them…they are now too far down the road of politicizing this issue to turn back. Expect a lot of point, counter-point as we approach election day.

What’s my home worth? Less than it was a year ago. What will my home be worth the morning after a government bailout? A whole lot less than it was the morning before the bailout.

Should we swallow the pill? Is this a poison pill? What will your property be worth the morning after the bailout?

Join the game that has taken America by surprise!

Previous big winners include Wall Street, the Mortgage industry and foreign investors including China and many others. Register today, login and play!

Everyone is automatically a contestant and the stakes have never been higher. Go ahead, put yourself on the line.

The Fed is going to buy up all the bad debt with money supplied by tax payers and then discount the purchase of the mortages to a new set of buyers, yet to be named, by as much as 50-75%.

Yikes! The great American dream of homeownership may become the great American real estate devaluation. It appears, based upon early reports that the Fed may be about to create an RTC concept for residential homes and their mortgages.

What will this move do with respect to McCain and Obama and their positions on the economy and the housing crisis?

What about the fact that Ron Paul turned out to be right in his predictions and his numerous chatenings of Ben Bernanke in front of the Senate and the nation?

Should Ron Paul be America’s new write-in candidate for President of the United States? After all, it appears that he might be the only one who was will to actually tell the American people the truth. See Ron Paul in action. Here’s another example of Ron Paul telling the truth. And here is Still another.

What will you property be worth among the sea of foreclosures and discounted properties?

Should government butt-out and let the private sector fix the problem? Should the government be in the mortgage and real estate value regulation business?

George said, “Let’s play house!”

REALonomics Editorial

Syndicated from REALonomics.net, Friday, September 19, 2008

We now own what we cannot control. We are witnessing the Federalizaiton of the Financial Systems of America. Backed by a fickle Congress and flanked by Federal Reserve Chairman Ben Bernanke, President Bush and Treasury Secretary Henry Paulson, contrary to their former political beliefs that government should stay out of the private sectors of the economy, took measures today to endorse the Federalization of our money systems.

Q1 - What does this mean to the real estate industry?

Clearly we are entering spooky waters wherein we dared never enter before. REALonomics believes the move by the government will paralyze the industry making home buying and selling incredibly difficult, if not impossible, in some already paralyzed markets. Home and commercial property values will assuredly decline even more, reducing the networth of the industry and its investor and home owner base.

Q2 - What does this mean to the mortgage industry?

Expect huge consolidations greater than the Bank of America’s absorbtion of Countrywide and Merrill Lynch. With this consolidation of the financial titans, mega titans will be created and essentially be required to submit to a new set of tightly regulated lending rules. It will be harder and harder to borrow and lend. This will create a over-regulation of the market and further drag on mortgage recovery.

Q3 - What does this mean to Americans?

Each of the more than 300 million people in America, including those born yesterday, will end up with at least a $100,000 debt hanging over their heads. This is the representative figure that is the accumulation of the current escalation of the national deficit and the new estimated $2 trillion dollar bailout of the financial markets.

The government bailout of the private sector of the market means that each of us was just handed a tax bill or, we might call it a “cash call” because we are collectively the new owners of the private problems of borrows and lenders.

Ron Paul (R, TX) was correct when he told Ben Bernanke, in essence, “you are going to bankrupt the American people with your money policies.”

The average American family is essentially, on paper, wiped out by this move and the impact on the real estate and mortgage industries was just extended to perhap a decade or even more.

Q4 - What does this mean in terms of the election?

This is the easy question and the answer is more finger pointing, more investigations, excessive government snooping (there needs to be some), lots of drama on the political stump and a great deal of harm to John McCain, who is already having difficulty coming out from the shadow of Bush’s foreign and domestic policies.

But it also means trouble for Barack Obama. He can forget about his national health care program for all Americans, he can forget about taxing anyone, much less those earning incomes above $250k and he can kiss his “no-new-energy-if-it-means-drilling-coal fired plants-and-nuclear-power” policy good by.

In essence the damage done to both candidacies is substantial and the next 45 days are going to be like the wild-wild-west as we run up to election time. Please vote in the iVoteAmerica.com Presidential poll…hundreds of others are doing so.

The most remarkable thing about today’s move to “take-over” is that it represents a profoundly fundamental shift in our capital market value system and establishes a whole new mechanism for creating a way to further tax the American people. Make no mistake about it, you just got taxed and to pay the tax bill you were forced to financed the payments over time. There was paperwork, no disclosure and no recource for any of us. All of this is taking place right before our eyes without much of a whimper or a voice of protest.