D. Maradei Ugel
March 17, 2010

It was difficult for me to sit still and watch Mr. Bernanke & Mr. Gaithner but I had to force myself.  These men are just unbelievable, I’m stumbling for words and that’s rare!  The reality that these men are still in positions of power within our government.   Makes my body literally wince & coil backwards just recalling the memory.  These guys are enough to drive me to suicidal ideation. 

Although after further analysis, all be it momentary; I’ve come to the conclusion that I’m not the one who should be committing suicide.  Mr. B and Mr. G should do the noble thing as the publicly humiliated & disgraced Romans did.  Now that’d be worth paying HBO’s pay per view fee’s just to watch.  Forgive me I think I was just fantasizing in public, ah but wouldn’t it be an appropriate ending to Mr. B and Mr. G’s travesty.
I’ll try to get to the point;  Mr. Bernanke keeps giving the same song and dance.  When Rep. Maxine Waters grilled him today, she asks him why there isn’t something to protect consumers from Mortgage Brokers and loan products that should not be offered to any consumer because it’s so bad.  Mr. Bernanke replied and I believe it was to Congress woman Maxine Waters in CA. “we did do that”.  Ms. Waters replied back to him something to the effect of, “yes but you waited until it had already become a problem before you did anything about it, why” and he continued making excuses to the point where I had to walk away for fear I might throw something at the TV.
Mr. Bernanke is part n’ parcel of why we and the Federal Reserve specifically are in such an epic financial disaster.  Therefore when I see and hear more excuses come out of his mouth, I am appalled. Actually that’s an understatement I am liquified inside with rage and contempt.  I cant help but wonder if President Obama traded something away for some kind of favor or political support; did he agree to allow those two men to be placed in such powerful positions after what they have done to the American people, to our Nation?  These men should be offering to do their jobs at no expense to the American public for a given number of years to compensate for what they have purposely done to us to get us as a country economically.
Unfortunately, Maxine Waters does not understand a few things and she needs clarification.  Rep. Waters relayed the story of a retired couple with a 5 year fixed interest only loan at aprox. 4.5%, after which the loan turns to an adjustable for 30 years (this also seem to confuse her which means she hasn’t done her homework to me).  That type of loan can be done on a 30 year term or a 40 year term at that time depending on who the lender was and the types of loan products that they offered.  Let me explain why this is NOT a bad loan because Rep. Waters is unaware of how these products work and how they benefit a consumer.  For example;  I am fairly certain I recall that loan program/product.  This loan had a 9.75% cap rate for the life of the loan, after it adjusts which is after the 5 year fixed period of time.  At that time, the cap rate was considered great because most others were significantly higher.  Ms. Waters was distressed that a broker would offer such a loan to a retired couple.
What Ms. Waters does not realize because she is not a loan officer and she doesn’t do this day in and day out decade after decade so she doesn’t have a clear concept.    Truth be told that’s actually not a bad loan at all for that retired couple and here is the reasoning;   The rate is fixed at a very low probably the lowest rate possible at that time similar to a short term ARM (adjustable) loan that goes up every 6 months or once a year at 2% a year based on index plus margin.  I used to use the 5 year fixed program all the time and the 3 or 4 mortgage loans that I have had all of them were on the 5 yr. fixed.  The point is you get a rate that’s low like an ARM rate but it’s guaranteed not to go up for 5 full years, after which if the loan balance is small below 70,000 then at 9.75% cap rate the payment is not much vs. at 7% so those consumers don’t usually refi they might keep the loan after the 5th year. 
However, most consumers such as myself we refinance the loan after the 5th year when it starts to adjust.  I will say this in my opinion I have found that if the loan is small its best to do it on a 30 year term.  If the loan is large, especially on a jumbo loan that 40 year term can save a borrower about $300 per month for a 5 year period.    If the loan officer had put the retired couple on a straight 30 year fixed the rate would have been significantly higher and then the payments were most likely to hard to handle therefore the loan officer or broker tried to get them a low rate for a fixed period of time, a product in between the straight ARM loans (short term teaser rates) and a straight 30 yr. fixed.  Therefore that broker in my experienced opinion actually gave them the best loan possible at that time to meet their needs.  We cannot blame everything on the Brokers, it’s Wall St. reform and Federal Reserve oversight that we need.
The Federal Reserve had their chance to protect consumers; repeatedly and consistently they chose self interest.  The notion that we can give them that same power to protect consumers AGAIN is insane, it simply defy’s logic.  Has our government and our representatives learned absolutely nothing from all of this?  It feels dirty, it feels corrupt and unethical to have Bernanke or Gaithner in charge of any kind of oversight or watchdog effort to self govern again.  Oh the insanity of it mystifies me.  It’s disappointing to be so acutely aware that my states representative on the Hill has not done her homework. 
On a subject that is paramount to the American people,  our nation & her constituants.  California has the largest population of any state in the US and Rep. Maxine Waters has not done her homework at all.  How does she knows if she’s being deceived if she doesn’t do her homework first?  Clearly she isn’t psychic ! 
If the majority of representatives are as ill informed as she is it’s no wonder we have gotten nowhere.  Between the two party lines who have made government practically dysfunctional in all areas; and the representatives on the Hill and in the House are ill informed and many have not done their homework.
At this late date, with the bill on the Hill that’s been watered down and diluted to the point that it keeps the wolves in the hen house (Federal Reserve) and allows them to continue to self govern with minimal true oversight.  To be a representative of the people and fail to do your homework it is no wonder there such disconnect between the people and their government.  If these folks cant do their job they should be fired.
D. Maradei Ugel
March 17, 2010