Interesting:

…As we all know, during the housing boom, millions of Americans pulled cash out of their homes in the form of home equity loans and lines of credit. They also used “piggy back” loans in order to get even lower interest rates on their primary mortgages. Now, many of the borrowers in trouble, and many who are so far underwater on their loans that they don’t qualify for any refi or modification, are choosing short sales as a way out. (Short sales are when the lender allows the home to be sold for less than the value of the loan). About 12 percent of all home sales by the end of 2009 were short sales, according to the National Association of Realtors.

In order for a short sale with two loans to happen, the second lien holder has to drop the lien.

If they don’t, and there’s no short sale, the home goes to foreclosure and the first lien holder gets the house because second liens are subordinated debt to the primary loan.

In short, the second lien holder gets nothing. In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn’t have to agree, but more and more are doing so.

That’s all legal.

But here’s what’s not legal and what’s apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say “on the side,” I mean in cash, off the HUD settlement statements, so the first lien holder doesn’t see it…

Banks hold about a trillion dollars in second liens on houses which are “underwater” – these loans are functionally irrecoverable. If they foreclose, the first lien holder will get nothing. If they agree to a short sale, they’ll get nothing. If they write off the loans, they’ve lost a trillion dollars in “assets” which are probably the difference between being open and being seized by the FDIC. Its quite a problem – and it would be no surprise if they were trying to pull a fast one on the side to get some money to offset what will eventually be a massive crash in bank assets.

There is no way out of our housing crisis except to “cram down” loan amounts to market value – and the first and second liens will have to take an equal percentage hit (it, if a home has lost 40% of its value, then the first and second mortgages will have to reduce their principle amounts by 40%). Its either do this, or face an ever rising wave of people who will just walk away from their homes. The credit hit will last, at worst, for three years – to be sure, it will remain on a credit bureau for 7-10 years (depending on the circumstances) but the actual effect of preventing major borrowing will last, at most, three years (and will probably last only a bit more than a year, in most cases). If the banks don’t see reason, then the people will simply do it on their own. And don’t anyone get high and mighty about this – the banks, themselves, are walking away from loans they took for properties which are massively underwater. Its just business, folks.

The houses were never worth the loan amounts. Yes, the consumers who borrowed were culpable, too. But they’ve already taken the hit. As a for-instance that I’ve mentioned before, I’m out – forever – about $130,000.00 on the house I bought in 2005. Never going to see that money ever again. Its ok – its just money. Think of it as rent for my home. But I am legion – there are about ten million people situated as I am, and the number is rapidly growing. Knock down the mortgage amounts to current home values and everyone just starts over again. With the advantage, for everyone, being that people will stay in their homes, thus helping the overall housing market to recover.

We can do it this way, or we can do it the hard way – but the “underwater” loans will not be repaid. Not now. Not ever.

Only Tuesday will tell – but:

A new poll taken Thursday evening for Pajamas Media by CrossTarget – an Alexandria VA survey research firm – shows Scott Brown, a Republican, leading Martha Coakley, a Democrat, by 15.4% in Tuesday’s special election for the open Massachusetts US Senate seat. The poll of 946 likely voters was conducted by telephone using interactive voice technology (IVR) and has a margin of error of +/- 3.19%.

This is the first poll to show Brown surging to such an extent. A poll from the Suffolk University Political Research Center – published Thursday morning by the Boston Herald, but taken earlier – had Brown moving ahead by 4%.

Rumors are spreading fast and furious around the web that the Democrats have written off Coakley – that Obama’s proposed trip is just window dressing designed to reassure other vulnerable Democrats that Obama will be there for them in the fall. Meanwhile, talking points are being ginned up to claim that a defeat in Massachusetts doesn’t mean that Obama’s agenda is unpopular.

Me? I say we take nothing for granted and work our selves hard to win.

UPDATE: Obama Personally Joins Massachusetts Quake Relief

Of course, the way they prepare is by going against America’s traditions and safeguards in government:

Even if Democrats lose the special election to pick a new Massachusetts senator Tuesday, Congress may still pass health-care overhaul through a process called reconciliation, a top House Democrat said.

That procedure requires 51 votes rather than the 60 needed to prevent Republicans from blocking votes on President Barack Obama’s top legislative priorities. That supermajority is at risk as the Massachusetts race has tightened.

Of course we’ve all heard of the Democrat plans to delay seating Brown, should he win. And then there’s Obama’s broken promise of transparency. Then all the bribes with taxpayer dollars to get votes in the Senate. Oh, and lets not forget that if you’re part of the grand, Democrat coalition you can be excused from Obamacare – and its taxes – altogether. And now they’ll just shove it through with 51 votes…because they can; because they don’t care about America. Because they’ve become a mafia-like organization.

Most of our liberals are ok with this – because they are slaves in mind and spirit.

UPDATE: And the contemptible Barbara Boxer (D-CA) is weakening in her re-election bid.

And in the middle of the night:

Big Labor got some big love from President Obama and congressional Democrats yesterday after they agreed to exempt union workers from the whopping “Cadillac tax” on high-cost health-care plans until 2018.

The sweetheart deal, hammered out behind closed doors, will save union employees at least $60 billion over the years involved, while others won’t be as lucky — they’ll have to cough up almost $90 billion.

The 40 percent excise tax on what have come to be called “Cadillac” health-care plans would exempt collective-bargaining contracts covering government employees and other union members until Jan. 1, 2018.

I hate to put it this way – but you f****** liberals! Just who the heck do you think you are? This is your signature plan. This is what you say we must have. It is you who say that health care is a right and that the government must be involved…but if doing it risks your campaign cash, you’ll let people out of it? What about the rest of us who don’t even want the dratted plan? Gonna let us out?

Heck, no. Can’t do that – need to shaft someone for the cost of what you darned well know is just a power grab. How much more corrupt can you liberals become? Whom else are you going to sell yourselves to? If you believe in this, then you should be lining up to pay for it – in fact, if its such a good thing, you should be willing to exempt the critics for 8 years…prove to us its better! Show us we’re wrong.

Well, you won’t do that – and you won’t do it because you know….oh, you know!…that the whole concept of socialized medicine is worthless and anti-human. But you liberals want it – oh, you want it so badly. Because it gives you control. Because it sticks it to the productive part of America – the part you hate; the part that is just too filled with religious believers, gun owners and people who insist upon liberty.

Utterly contemptible – and we’re going to make you pay for this.

And his name is John Dennis:

John Dennis, an accomplished businessman and entrepreneur, has been a pro-liberty Republican for a quarter century.

Born in Jersey City, the son of a longshoreman and a city hall clerk, he grew up in one of the city’s toughest public housing projects.

After graduating from Fordham University with a degree in business administration, John co-founded Humanscale, which became one of the world’s top 10 design firms, specializing in office ergonomics.

After a varied career in global development and marketing, John created Foundation Real Estate, a San Francisco-based investment company with domestic and international holdings.

He is the founder of the San Francisco chapter of the Republican Liberty Caucus and currently the head of the Campaign for Liberty San Francisco.

John is a board member of the Republican Liberty Caucus California, has served as an alternate on the San Francisco Republican Central Committee and is a member of the National Rifle Association.

This is certainly the man with the biggest uphill battle in 2010 – just getting the people of San Francisco to even consider a Republican is going to be hard…getting a majority of them to vote GOP…well, all things are possible. The important point: Pelosi will not go unchallenged.

It is up to us GOPers to do what we can for Mr. Dennis – though, of course, if there are other GOPers out there vying for Nancy’s seat, we’d like to hear from them. Any challenge we can mount in these bastions of liberalism means that the liberals will have to spend that much effort and money defending rather than attacking and that, in and of itself, is a good thing.

But, also, you never can tell. Who of us ever thought that Brown would even have a chance in Massachusetts? The people are furious with government – and its not just conservatives and Republicans…its independents and even that part of the left which is actually in favor of liberty (this is a small percentage of the whole – but it is there, and we should reach for it). These are revolutionary times and we should not lock ourselves in to the political boxes of the past.

I wish Mr. Dennis all the luck in the world and if anyone out there had ever thought of running – this is the year to do it. Pick your entrenched Democrat and have at him – it just might work.

No surprise to hear this about a shill for the old Saddamite regime:

A former chief United Nations weapons inspector is accused of contacting what he thought was a 15-year-old girl in an Internet chat room, engaging in a sexual conversation and showing himself masturbating on a Web camera.

Scott Ritter of Delmar, N.Y., who served as chief U.N. weapons inspector in Iraq from 1991-98 and who was an outspoken critic of the second Bush administration in the run-up to the war in Iraq, is accused of contacting what turned out to be a Barrett Township police officer posing undercover as a teen girl.

Guess he’s got too much time on his hands now that he can’t undermine US victory in Iraq….

Even the dimmest of Democrats should start to understand this:

A new Quinnipiac University poll finds 67 percent of Americans oppose funding abortions with government funds under the government-run health care bill pending in Congress. This is the latest of several recent polls all showing a majority of Americans oppose tax-funded abortions.

The new survey asked: “Do you support or oppose allowing abortions to be paid for by public funds under a health care reform bill?”

Some 67 percent of respondents said no while just 27 percent sided with President Barack Obama and pro-abortion groups favoring abortion funding.

Republicans were opposed to funding on a 87-10 percent margin as were independent voters on a 67-26 percent margin. Democrats were split 47-47 percent on abortion funding in the health care reform legislation.

Even the President’s own party is not with him on the abortion issue – if the Democrats do ram through anything which in any way, shape or form can be classed as federal funds for abortions, then the effect will be devastating on them in November. Normally, I be confident that abortion funding is a dead letter – but our Democrats do seem bent on political suicide this year. We’ll have to see how it comes out.

As for me – go ahead, Democrats, make my day.

God bless these poor people:

PORT-AU-PRINCE, Haiti — The tiny bodies of children lay in piles next to the ruins of their collapsed school. People with faces covered by white dust and the blood of open wounds roamed the streets. Frantic doctors wrapped heads and stitched up sliced limbs in a hotel parking lot.

The poorest country in the Western Hemisphere, still struggling to recover from the relentless strikes of four catastrophic storms in 2008, was a picture of heartbreaking devastation Wednesday after a magnitude-7 earthquake.

Tuesday’s quake left a landscape of collapsed buildings — hospitals, schools, churches, ramshackle homes, even the gleaming national palace — the rubble sending up a white cloud that shrouded the entire capital.

All we can do, now, is pray – and rush to help.

UPDATE: Archbishiop Serge Miot among the dead.

UPDATE II: Missionaries of the Poor has people in Haiti, and their organization suffered no loss in the quake. I’ve donated to this excellent organization for quite a while, now, and highly recommend it.

UPDATE III: Food for the Poor is also an excellent group and is sending help to Haiti.

UPDATE IV: Archbishop Dolan talks about the tragedy in Haiti (video) – “Haiti is the broken Body of Christ”…

UPDATE V: Anchoress receives reports:

3:24 PM It’s a nightmare here. They are starting to dig mass graves for the many unclaimed bodies. Some areas,the smell is unbearable. We still are having tremors. Just now in fact.

UPDATE VI: Looks like Haiti will become a de-facto American protectorate over the next few days as Haiti’s government is essentially collapsed and non-functional. If we’re going to do it, might as well be in for a dime, in for a dollar…get a UN resolution putting Haiti into trusteeship under American protection. We’re going to end up spending billions, anyway, and we might as well do something permanently useful. And here’s where Obama can come in really handy – he’s probably the only American President who could ever get the international community behind such a move. But, keep in mind, if we do this, its for 50 years.

Noemie Emery explains:

…In a sense, Obama has never been more than his education (Columbia, Harvard), which for some people was more than enough. When Brooks met Obama in 2005, the new senator had no experience and no accomplishments, but he was perfectly briefed in the requisite talking points.

“As they chewed over the finer points of Edmund Burke, it didn’t take long for the two men to click,” Gabriel Sherman wrote in the New Republic. On the basis of this, Brooks decided Obama was “dazzling,” would one day become “a very good president” and should run for that office as quickly as possible. He compared him to Burke in his subtle complexity.

“Run, Barack, Run,” he wrote a year later, on the grounds that crisis required his talents. “I divide people into people who talk like us and who don’t talk like us,” he admitted to Sherman. He then paid Obama the ultimate compliment, by saying he could write for the New Republic himself…

The bloom is off the rose – but not for the elite. In spite of all evidence, the elite will continue to assert that Obama is a great President. Why? Because the hardest thing for even the most saintly person to admit is personal error…and for self-absorbed elites, its next to impossible. For the elite to turn on Obama they would have to admit that having a prestige education isn’t sufficient for success…and that would wreck their world view.

They chewed over the finer points of Edmund Burke? One wonders, then, at the quality of education in the Ivy League if you can chew over Burke and still be like Brooks – or Obama. One of the finer points of Burke is …

Sin has many tools, but a lie is the handle which fits them all.

And Obama lives by lies – lies he was instructed to hold by the elite which educated him, embraced him and elevated him to the White House. And the elite is going to stick by him, right to the end.

Mish explains.

As I’ve said – the “recovery” is all smoke and mirrors. It is trillions of dollars borrowed from the grand-children temporarily boosted GDP numbers. Its all going to come crashing down – now, next month, six months from now, a year from now. I’m still picking March, but it could be any time. The only thing I am certain about – it will happen.