True Discernment

“The Real Estate Prayer Luncheon was organized in hopes of breathing life and positive thinking into the area’s slumping housing market”

The profound ignorance in the American Church never ceases to amaze me. Where is the wisdom in the church today? These people allowed themselves to get caught up in one of the largest greed filled speculative housing markets in history and now they run to God to ask him to keep the party rolling?

Read the three articles below and you will understand why God is turning his back on the U.S. and why he will not answer the prayers of these realtors the way they want their prayers answered!

My take is he will answer their prayers by taking them all to the proverbial woodshed so they can be taught the error of their ways, some will learn the lesson, others will ignore it.

To put the three articles into perspective to show how they are linked, the last article titled “Hedge Funds Dirty Little Secret” tells the story of the collapse of a very large Hedge Fund run by Bear Stearns one of the largest investment firms on Wall Street. Hedge Funds deal in “exotic” investments. Exotic meaning they are highly speculative. They offer some high returns but can be very volatile.

Back when the Housing Market started to crank up, The Exec’s at Fannie Mae and Freddie Mac, two of the nations largest mortgage underwriters, which are also known as NGO’s (Non-Governmental Organizations) or quasi private / government sponsored entities found a way to keep the Housing market growing, and their bonuses and commissions growing, they got together with some of the largest Wall Street Investment firms and came up with some new investments to flog to U.S. and overseas investors: Mortgage Backed Securities.

Mannie Mae and Freddie Mac would purchase mortgages from Mortgage originators and then take those mortgages and package them up with other mortgages of varying interest rates and credit quality to average out the return and risk on the package of mortgages and then sell that package as an investment security, hence the name “Mortgage backed security, because the investment is backed by the properties the mortgages are on. The supposed profit for those who bought the Mortgage Backed Security came from the steady stream of interest payments in the package.

The problem arose when man’s greed took over. When the U.S. market for prime mortgages was tapped out in early 2005, Mortgage originators to keep the commissions rolling turned to a large untapped market in the U.S. those with less than good credit, or the sub-prime market.  Now the mortgage originators cannot write sub-prime mortgages without the blessing of the Mortgages underwriters. And the mortgage underwriters will not sign off on sub-prime mortgages unless they know they can sell those mortgages on to the likes of Fannie-Mae and Freddie Mac, and then on to the buyers of Mortgage backed Securities (MBS) via Wall Street Investment Firms.

And just like a food chain, the wall street investment firms came up with a way to allow the housing boom to continue, by reducing the investment risk and entice investors to buy Mortgage backed securities with sub-prime mortgages in the package, the investment firms mixed into the package prime mortgages with the intent of lowering the risk of the investment going bad.  Sort of mixing some good apples with some bad apples with a hopeful result that you would get average apples in the package.

But when the Sub-prime market for conventional mortgages was tapped out, then came the exotic mortgages to again keep the party rolling: such as Ninja loans; mortgage loans with no requirement for verifiable proof of income, job, or assets!  Interest only mortgages for 105% of the purchase price to borrowers with bad credit!How could a Mortgage market get this crazy? GREED!  Investors just kept buying up the Mortgage Backed Securities like blind lemmings not seeing the cliff approaching. This boom turned housing into a speculative investment, what used to be the single largest investment for a family, the one asset they would hold onto until they died, became a disposable consumer item. “House Flipping” became the new buzz word for this activity at the height of the housing boom, buy houses on the cheap, invest as little as possible in order to sell them on at a profit, This even spawned several reality television shows on how to “Flip Houses”.

The majority of people getting mortgages for owner occupied properties wanted a new house; this caused a proliferation of what has become known as “Mc-Mansions”. Cookie cutter oversized houses spread out like dominoes in tree-less fields across the country,  leaving existing older homes in cities to the “house flipping” market. Or to become vacant for lack of buyers, or to left to slowly deteriorate in the low income rent market, to where now there are entire neighborhoods of older houses in American cities sitting empty and derelict. And where was the American Church in all of this? Where were the prophetic voices crying out against this greed fueled feeding frenzy? They sadly were no where to be found, Virtually all of the nationally known Tele-evangelists were jumping on the prosperity bandwagon!  Even the so-called Prophetic voices on TBN were prophesying more prosperity! Who could have missed the blatant idolatry of “Prophetess” Juanita Bynum’s lavish wedding in a Cathedral on none other than Wall Street in New York City!  The pit of the greed merchants!

More Prosperity and more greed have become the fundamental doctrine of mainline Evangelical Christianity today! What will these hirelings do when the massive debt bubble in the U.S., the largest in world history finally pops? What will be their “Prophetic” message be then?

The blindness of greed in Evangelical Christianity has become so pervasive that I have seen local Pastoral staffs jumping on the house flipping bandwagon, and piercing themselves though by using borrowed church funds with which to buy and sell houses!

Has the American church gone mad? Yes they have mad with blind greed!

Folks earnestly pray for the American Church, as it is getting ready to hit a stone wall that will crush the vast majority of its congregations.  God is going to answer prayers, but it is going to be the answer that will be the great shake out of the American Church. Pray that you will not be one of those who get crushed!

Realtors attend worship service to pray for better market

KERI HOLT Florida Freedom Newspapers

Wednesday June 20th, 2007

DESTIN — More than 300 people with a keen interest in the Emerald Coast’s real estate market gathered Wednesday at Destiny Worship Center to ask for God’s blessing.

The Real Estate Prayer Luncheon was organized in hopes of breathing life and positive thinking into the area’s slumping housing market.
     
It was the first of what the organizers — co-owner of Crye Leike Coastal Realty Wanda Duke, former Destin City Councilman Mel Ponder and Destiny Worship Center Pastor Steve Vaggalis — hope will become a regular, uplifting event.
     
“The heartbeat of today’s economic community is on the backs of the real estate community,” Ponder told the crowd.
     
The event was an hour and a half of fellowship over lunch, scripture readings, prayer and testimonials. Those gathered had one goal — “changing the climate in the area.”
     
“We need to think positively and get everyone on the same page,” Duke said. “Positive things that come out of your mouth will end with positive results. If we lose hope, we lose everything.”Real estates sales are down all along the Emerald Coast. According to figures from Metro Market Trends, total sales in Okaloosa County in May were down 44 percent compared to May 2006, and year-to-date sales in 2007 are down 36 percent compared to last year.
     
During the luncheon, several speakers, including Buddy Runnels of Cornerstone Development Group and the Sterling Co., reassured the crowd by reminding them that the market has gone down before, but it always comes back up.
     
“You must have vision, perseverance and passion,” Runnels said. “Work hard. Things are positive; they’re just in the future.”
     
The luncheon ended with Vaggalis inviting all Realtors present to come to the front of the church auditorium for a special prayer directed toward them.
     
“We are helpless people turning to a helpful God,” Vaggalis said. “That’s what this luncheon is all about.”

http://www.nwfdailynews.com/article/6725 

Mortgage Meltdown!

“For many months, Mike Larson has been warning you about a meltdown in America’s vast new market for home mortgages. Now that meltdown is here. He told you home sales and prices would fall, and they did. He told you that American homeowners would default on their mortgage payments in record numbers, and they have. He warned this would shake Wall Street to its core. Now it is.The evidence is ubiquitous and indisputable:From their peaks in 2005, existing home sales are down 16.9%; new home sales, down 29.4%.For the first time since data was collected in 1968, home prices have declined nationally for nearly a year.

Worst of all, American homeowners are falling behind on their mortgage payments in record numbers: The delinquency rate on low-quality mortgages has surged to 13.8%. On medium-quality mortgages, it has more than doubled. And on all mortgages, it has now surpassed the worst level of the last recession. This mortgage meltdown has struck down the stocks of home builders, low-quality lenders, and now, as Mike demonstrated on Friday, also the widely owned Real Estate Investment Trusts (REITs).

The mortgage meltdown has mortally wounded or killed 82 higher-risk lenders, delivering huge loan losses, early payment defaults and funding cutoffs. Some have severely curtailed lending operations. Others have filed for bankruptcy.

And last week came the clincher:

The Mortgage Meltdown Has Just Precipitated One of the Largest Hedge Fund Collapses of All Time . . . . . .

.”http://www.moneyandmarkets.com/issues/MaM633_4.html

Hedge Funds’ Dirty Little Secret
By Doug Kass
Street Insight Contributor
6/28/2007 7:49 AM EDT
URL: http://www.thestreet.com/newsanalysis/investing/10364962.html

“It all started with the erosion in sub prime credits, as delinquencies and foreclosures in late 2005 skyrocketed after housing affordability was stretched by a sustained period of low interest rates, which encouraged housing’s speculative activity (the outgrowth of which was record buying of non-owner-occupied investment properties) and the insensibilities of lenders.”

 The culprits and sinners of this cycle are plentiful . . . . . …  They include a too-easy Federal Reserve, loosely regulated and heedless housing lenders, avaricious home speculators, funds of funds that encouraged hedge fund investors to leverage, greedy hedge fund investors . . . . . . . . Reckless lending and the egregious use of leveraged capital has permeated our financial system, raising the risk that the sub prime disaster is the leading edge of a deteriorating credit cycle and that its effect will be chilling.”