A friend of mine wrote this and sent it to me. A lot of it makes a lot of sense to me, but then, I’m in the unenviable position of being majorly biased.

I’ve told him there is a pretty brainy trust here, and I’d post it for some feed back. Sorry if he’s not boiling any babies.

Hey youse guys;

I drafted this document a week or so ago, thinking that the logic put forth was along the line of “well dummy, don’t drink the muddy water.” In attemtping to send it to my senators and representatives, I was confronted with e mail input boxes and drop down lists to choose my opinion from. I did get it out to a few politicos, for what it might be worth. I believe that this is what Paulson thought the banks would do when they received bail out money. He didn’t think he had to spell it out. But he should have.
Foreclosure and pending foreclosures in the realestate market have to stop in order for the system to right itself. They are the cause, and they can be the cure. The attached propsoal can be implemented in a matter of weeks, (after is is professionally drafted) and will result in immediate activity in the lending markets. This action will do more to stimulate credit flow than any other action heretofore proposed.
I am no blog guy. I sent this to the director of my local Home Builders Association, and he e mailed back that it was too complex for him to evaluate. He would try and find someone to look at it. Holy

. How dumb are people anyway?

I would like to see this proposal, or at least its intent start to flow through cyber space. You are that kinda guy. If you think it has merit, send to someone, and ask them to send it to someone else. What else can I do?

Thanks

Bob Hartford

The Hartford Proposal for Troubled Real Estate Assets, hereinafter referred to as the “ACTâ€.

Robert Hartford is a real estate and development professional with 30 years experience in the business. The following outline for dealing with pending foreclosure and foreclosed properties will work. Dedicated and conscientious people are required to implement it.

I propose that legislation according to this outline be drafted and implemented.

PENDING FORCLOSURES

EACH Lender holding an asset pending foreclosure, and who accepts, in any amount, funds from the federal “TARP†program will, without option;

1. Have in their employ an OFFICER or multiple OFFICERS who will be exclusively empowered and required to implement the terms of the ACT.

1. CONTACT, through the officer, the borrower as soon as foreclosure is found to be pending and bring them into the below outlined program.

2. BE EMPOWERED to restructure the loan to a new principle value and loan interest rate.

3. BE EMPOWERED to determine and set the principle value and interest rate for a new loan that will replace the existing loan pending default. This amount will be determined by the Officer from considering the following criteria :
a. The initial asset value of the loan pending default excluding all fees, and brokerage charges.
b. The value, according to the opinion of the Officer, of the asset on the day the revaluation is made.
c. The ability of the current borrower to pay.

4. The Officer shall have the authority and obligation to create a new loan based on a thirty year term for a fixed rate of interest using the subject property as collateral in AN AMOUNT DETERMINED at the sole discretion of the Officer, and this loan shall replace the existing loan.

5. IN THE EVENT THAT the performance value of the new loan is less than that of the original, then the loan holder will accept the difference as a loss, but retain the new loan as a performing asset.

6. Funds for new loans created in this manner may come from the federal “TARP†fund.

7. New loans created in this manner may be packaged and sold as securities by the lender INSOFAR AS all revenues generated in this manner are used to originate new loans for foreclosed or foreclosure pending properties.

8. The OFFICER(s) shall have the power to originate new loans, cancel existing foreclosures, and to request and receive “TARP†funds into their banking system.

9. The fees for originating a new loan in this manner will be fixed at $500.00 and such fees may be included in the principle amount of the new loan.

TRAINING

The training of lending officers to implement the program is critical, and must be done quickly. Training will done from a centralized location via video conference technology using as small a staff as possible. Expedience is critical. Officers so trained will be required to continue training after beginning service to stay abreast of developments as the program matures. It is critical that training result in performance by the lending Officers that continually improves the financial standing of the lender while protecting the interest of the Federal program in that lender. The actions of the Officers will be reviewed on a continual basis by the principles of the individual lending institutions who will be solely liable for fraudulent or abusive implementation of the “ACT”. Personnel should be drawn from existing lender employee staff re-employing those recently laid off where possible.

“TARP” MONEY ON THE BOOKS

In the event that a lender has, previous to the implementation of the “ACT” accepted “TARP” funds, that lender shall
a. Account for all such funds
b. Apply any available balances to this program exclusively.
c. Exhaust such balances prior to requesting new funds from the “TARP” program.

EXISTING FORECLOSURES

In the event that a lender has existing properties in a state of foreclosure in their portfolio of assets, then that lender will.
1. Advertise those properties for sale.
2. List those properties with a legal real estate firm for a listing agreement fee not to exceed 3% of the closed sale price.
3. Be empowered to create a new loan for sale of such property according to the terms of the “ACT”

WHY IT WORKS

1. It gets the lending process working again.

2. People in the finance industry are put back to work.

3. Tax payer “TARP” funds are turned into paying assets.

4. “TARP” funds are “recycled” when new loans are packaged and sold as securities

5. The ACT is an alternative to nationalizing the banking system

6. Foreclosures stop

7. It can happen very quickly.

8. Existing assets, though taking a loss, retain some value as opposed to falling to a zero value.

This document drafted by Robert A Hartford, president Silverwood Inc