0901 2012 New non-debt financing alternatives for homeowners and small businesses as an economic stimulus tool – the crowdfunding of a FARJHO homeownership structure or a SwapRent contract

This is a topic that I have published and blogged about (see historical blogs on these issues at http://swaprent.com/blog) many times before within the past 6 years since the creation of SwapRent in 2006 and FARJHO in 2009. The more I blogged about it each time through the years, the more it seems that it has carried on much more new meaning as our country’s economic situation evolves. With the recent fast paced development of the crowdfunding movement, the potential crowdsourcing availability of the funding for the new FARJHO homeownership structure and the SwapRent home financing method have become more and more relevant.

Let me start out by repeating the urgent need of developing a few new non-debt based financing alternatives, not only just to reform our country’s housing finance system for the sake of increasing affordable home ownership, but also to help create economic stimulus and create jobs for middle class Americans on Main Street.

Debt should not be the only way to finance home ownership but unfortunately mortgaged homeownership seems to have been the only consumer choice made available to the American people for centuries until today. We will need to educate the public, the academic, the government agencies and the lawmakers alike to help create the conducive regulatory structure, make available and foster the growth of the free market, non-debt based financing alternatives for both homeowners and property owning small business proprietors.

Without going into technical details, both the SwapRent and FARJHO business methods were simply created to realize the common economic concept of property equity sharing or property appreciation sharing. SwapRent took one step further by not only being just a new method to implement an old concept, but also introducing a new economic concept altogether. Instead of sharing up-front equity to realize sharing appreciation profit potential and the associated downside risks, SwapRent uses a cash flow sharing concept and method to let investors share potential upside appreciation in property value and the downside risks of losses with the property owners directly via a online portal marketplace REIDeX.com.

More detailed info on the SwapRent original creation process in 2006 is available at https://www.box.com/s/437c60e4d8931365b9e4 and on SwapRent application in the 2009 JHFI (Journal of Housing Finance International) by IUHF (International Union of Housing Finance) paper at https://www.box.com/s/feae725ede7042c53412 .

Within the past few years, the current administration has repeatedly called for the creation of green jobs to help revitalize the national economy while the opposition party plans to create the same old black jobs by trying to do more fracking of we homeowners’ backyards. Irrespective of the debate outcomes on what kind of green, black, pink or blue jobs to create, the 64 thousand dollar question is still on how to come up with additional money to fund new jobs creation via creating new economic stimulus. It is really the greenback, not the green jobs, that is going to get us out of the current economic dilemmas.

While the Monetarists at our Federal Reserve Board propose we continue to print more greenback, Keynesian economists believe we could continue to shanghai the Chinese to cough up more money to finance our national debt in order for the policy makers to conduct more conventional government led fiscal stimulus projects, Solyndra included.

Perhaps, it is time for these policy makers to think outside the box now. What if, just what if, we could create a new free market based business method that could provide fresh new capital into our economy by encouraging free market investors to voluntarily pump their own money into the system, not for charity, but for the potential possibility of making financial profits from the long run recovery of the US economy, materialized through the increased property value of homes and real estate properties throughout the country that they got to “partially” own when they voluntarily agreed to pump their money into our economic system.

Since neither the new alternative housing finance system of SwapRent or the new home ownership structure of FARJHO are based on a lending concept but rather a tradable co-ownership equity financing concept to help our nation de-leverage, it does not have to rely on a low interest rate environment to be effective to create jobs and to stimulate our nation’s economic growth. It is in fact neutral to the interest rate levels and it has its own dimension in influencing the macro-economic activities so to speak.

Therefore, once a SwapRent or a FARJHO market has been established, the Fed or central banks in other countries could raise interest rates at any time, as they see fit, in order to prevent growing further asset bubbles, to fight potential inflation or to save the value of the national currency from potential devaluation without having to worry about its potential impact on hurting the chances of an economic recovery.

The relevance of SwapRent or FARJHO to job creations is based on how entrepreneurs and local small businessmen could create new monthly income cash flows by willingly giving up partial future property value appreciation of their own homes or other properties that they own. This potential appreciation may or may not even be realized by the horizon date (e.g. 2, 3, 5, 8 or 10 years from now) given the current economic situation. Through property equity sharing or appreciation sharing to attract fresh capital injection into the local economy, the potential appreciation in property value could actually be artificially created via a self-fulfilling prophecy as more money could chase up the property prices.

The local entrepreneurs could then pool these new monthly cash flows obtained directly from these new programs to say open a new local restaurant together and hire more people to create jobs or to make any other new investments directly right at the grassroots level on Main Street. They would not have to worry about getting this new found fresh capital injection into the local community to be fleeced on Wall Street first or being diverted by some smart bankers to invest in and stimulate other foreign country’s economies altogether simply for personal gains.

These additional monthly income cash flows would become the local home owners discretionary disposable income that would make them the ideal consumers with a new found consumption power to purchase the goods and services from the small business owners in the local communities.

For the existing home or property owners, a 100% ownership of a future zero appreciation scenario by horizon date is still zero, a partial shared 50% ownership of a future 20% or 30% appreciation scenario of their own properties driven by the new fresh capital injection into local communities induced by the SwapRent program or the FARJHO new homeownership structure will translate into a 10% or 15% (one half of the 20% or 30% total appreciation) gain for themselves.

It would seem a much better deal to co-prosper rather than being left poor alone. Meanwhile with the new swapped current monthly income streams they could enjoy perhaps an additional flat screen TVs purchased at local malls for their family, leasing another new electric hybrid car from local car dealers or eating out more at the local restaurants that the local entrepreneurs had just opened by using the new cash flows obtained through these same SwapRent programs. Wouldn’t this be the American way as usual on a pure free market basis without having to pile up any more debts or to raise citizen’s taxes?

In terms of helping reduce the current foreclosure rate, the homeowners who see the signs of an imminent swift recovery of the local property market will think twice about their earlier plans to walk away from their distressed homes. The only way for homeowners to feel that they should not purposely make a strategic default and walk away from their properties seems to be to somehow make them feel that they might be missing out on a swift recovery if they do walk away, another free market decision making process.

The key new economic concept for these proposed programs to work well is for the policy makers to change from a socialist oriented ideological focus on preferential rescue treatments for distressed homeowners that may most likely cause moral hazards, to “a free market based reversible exchange transaction of a part of future appreciation potential of the properties that they own for a perhaps very generous current monthly income cash flow now” offer which is open to all property owners and may be expediently targeted at a few specific high concentration foreclosure-infected neighborhoods that the banks may have exposures to for the best initial pilot project demonstration effect.

In a sense, the more participation by local property owners and free market investors to the SwapRent program or the FARJHO method the more additional fresh new capital would be injected into the local community through the new third party economic landlord investors. That is exactly the reason why these new innovative programs will have to be open to all property owners to participate without discrimination for the long haul, not just for the distressed homeowners on a short term rescuing mentality. Open up more innovative ways to let the free market forces rein and the economic prosperity will happen at its own swift pace.

If the government wants to take a token leadership, all the government policy and lawmakers need to do is to create law and order to become a good game keeper of these new proposed housing finance system and business methods, no tax payer’s money would ever need to be involved.

Based on pure free market principles, the more people there are in the “targeted neighborhoods” to sign on to this new program the more likely the local property markets and the local economic prosperity will indeed recover and the more likely free market based investors will step on each other’s shoulder to rush to inject fresh new fund into the local communities directly through this new free market mechanism. As a result the more the SwapRent contracts or FARJHO co-ownership member interests will indeed appreciate in value due to the property market recovery that will hence reward the initial SwapRent monthly cash flows or FARJHO up-front equity providers. This new economic concept of a farming approach to wealth creation is indeed a self-fulfilling prophecy in the true spirit of capitalism. The more you sow, the more you might reap.

Wealth creation by enhancing property value in this equity based manner is by no way creating malignant asset bubbles again. Low interest rates will. Malignant asset bubbles are formed when buying interests were created from using borrowed money (or OPM, other people’s money) where owners have an on-going obligation to service debts. The SwapRent or FARJHO approach by nature is based on a tradable economic version of the shared equity financing concept. Equity financing means that owners do not have to service any interest burden of debts. Therefore the benign asset wealth value created this way is not like leveraging created malignant asset bubbles made up of hot air that are usually doomed to burst. The analogy could be more like igneous rocks cooled from molten lava for equity based asset bubbles. This is simply the inherent more stable nature of equity financing vs. debt financing.

When these new alternative tradable equity based home financing objectives have been met, residential real estate properties or homes ownership will soon join corporations to become the dual engines of economic growth of our capitalism society, one for small business and the other for big business. Home financing through debt alone can not make that dream happen, as has been clearly illustrated by the current housing led financial crisis.

Without the stabilization factor of equity, debt financing only creates boom and bust cycles. Therefore instead of a policy of continuing to push banks for more loose credit at this very moment to repeat what had brought us here to begin with, it may make better sense for our government to consider helping the private sector entrepreneurial entities look for new ways to increase the shared equity-based home financing by creating more conducive legal and regulatory framework to let free market forces help our economy prosper.

Filed under: Cash Flow Sharing, Crowdfunding, Economic Viewpoints, Equity Sharing, FARJHO, Federal Government, Housing, InvestorsAlly, Mortgage, PeoplesAlly, SwapRent, Crowdfunding, Crowdfunding of home equity, Equity Sharing, FARJHO, Fiscal policy, Housing finance, InvestorsAlly, Monetary policy, REIDeX, shared appreciation, shared equity, SwapRent

0830 2011 Helping the GSEs and FHA – Some historical background, a few thoughts and the call for union and transparency

The following letter is the touched up version of a recent response addressed to members of Community Development Banking email listserv regarding some of their member’s interests in working with us on FARJHO. The list members include thousands of community development practitioners, credit unions, banks, CDCs, loan funds, trade associations, regulators, academics, governments and other non-profits.

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Dear FARJHO Ally,

Thanks for the many responses, inquiries and requests to work together on the FARJHO program. By now I think many of you have already had a reasonable understanding of what FARJHO is as a new form of home ownership structure and what it might be able to do to help solve our country’s current economic problems, perhaps with the further assistance of using the more powerful but more complicated SwapRent contract to prevent home owner foreclosures at a later stage as well.

At the moment we are planning to respond to FHFA’s recent call for assistance on August 10th of ideas from the public regarding how to deal with their massive REO portfolios. I have a few thoughts to share with this group for the transparency purpose and I would like to call for many of you to consider joining hands with us in one united proposal.

Why do we need your help? First, we do not even know whether this latest attempt is a genuine call for ideas or is it simply another facade to prepare the pubic that the well-connected crony forces may come in again to buy the national assets (since they were funded by the taxpayer’s money) in bulk at a deep discounts, like how the many crony Russian oligarchs siphoned the national assets at an unbelievable great bargain price with preferential loans to private hands with a Midas touch after the Soviet Union had collapsed.

The distrust is not unwarranted. Remember when the crisis first emerged in 2008 and the federal government came up with their first solution that left many of us flabbergasted? While people are losing homes and jobs left and right everywhere, the first thing they did was to come up with a plan to use tax payer’s money to give one thousand dollars to the mortgage service firms owned by their crony friends for each of the loan mods that they help close?

Don’t be surprised to hear later on about how many genius businessmen will have made another hero of themselves in those public private partnerships (PPP) or joint ventures with GSEs from buying low and selling high again. We already have plenty of those well-connected “heros” who bought the distressed loan assets at extreme discounts from the federal governments over the past few years. Why do we want to let our inactions to make us sit and watch those crony heros back in actions again?

In the proposal from the consortium that includes PeoplesAlly/InvestorsAlly there is no bulk sale of assets necessary. It would be the most fair and equitable way to channel the potential profits and wealth in a recovery directly back to the local communities on Main Street. The GSEs could simply alter theirs and HUD’s current individual REO selling process by adding the FARJHO way. Therefore the bargain price level could be maintained for all types of FARJHO JPIs (joint property investors) directly, irrespective of whether the potential buyers are Tom, Dick and Harry in your neighborhood, some powerful private equity firms in DC or elite hedge funds on Wall Street. Under free market principles, all private capital could form various funds to co-invest with other small potato individual JPIs to directly participate together to help create FARJHO LLCs to own homes one home at a time.

This way, the individual investors in various local communities on Main Street could at least participate on a level playing field by buying at the original REO price. We need more capitalist solutions designed exactly to serve these independently wealthy individuals, small businessmen and entrepreneurs in local communities who may have access to cash or borrow individually at member level to invest at the same price with the same terms as those Wall Street elite financial institutions would to buy these distressed REO assets. These elite institutions are the one who have the exclusive access to the almost zero cost of fund already, thanks to Bernanke. They should not be dished out another advantage given to them to buy these assets in bulk at the expense of the small town investors.

There is really no need for any other crony hedge funds and private equity firms to get to buy these assets in bulk at deep discounted prices and for them to jack up the prices by doing nothing first and then engage us later to resell the REO homes through the FARJHO structure again. Even worse, the dark forces behind these elite financial institutions may simply blatantly steal the FARJHO related ideas and call it something else with a new name to do it themselves without any respect of legal intellectual property rights or ethics.

Catch me if you can seems to be the modus operandi for some of them because they always bet on the fact that you would not have a deeper pocket for legal fees to fight with them to enforce justice. We have learned that in a hard way within the last 10 years of dealing with some of those unscrupulous and unethical institutions but this is more of a future memoir material and not to be expanded further here.

The FARJHO method is really a very simple concept but you would be surprised why it has not caught on by the government and many other powerful institutions already with our relentless campaigning efforts within the past 6 years. Turning a deaf ear seems to be too simplistic as a reason for it.

As explained in the previous CDB list serve posts, the campaign work to create the awareness and adoption acceptance has been a long journey. Over the past 6 years, I have met up many key Congressional staff, high level Fed officials and the Treasury TARP team in the Treasury Department back in October, 2008 when I was in DC to speak at the Housing Finance Innovation Lab sponsored by the Milken Institute. I have also spoken with both the Democratic and Republican presidential economic teams back then. Many of these historical high level discussions, comments and feedback are available to those who may be interested on a confidential basis.

The dealings with the private sector banks, major mortgage lenders and Wall Street firms started way back in late 2006. After spending our own money flying around the country to their headquarters to make presentations and have our brains picked, torn apart and examined by their top mortgage strategy teams, senior executives and technical staffs from before the crisis even started in 2006 to early 2008, although there was plenty of interest and enthusiasm, nothing concretely resulted from them. Later on it became very clear to us that these major private sector financial institutions have no more credibility to launch anything new in the consumer markets. Try to imagine if some folk from Countrywide knocks on your door trying to sell you a new kind of mortgage or a new home ownership structure? What would you do?

The only positive experience that I had from dealing with them is perhaps the Pasadena based IndyMac Bank at the time. In a statement to its board members and key staffs, its CEO was very excited about the SwapRent idea to fix their own distressed mortgage loan portfolios, He instructed his staff back in 2007 to engage us and not to study to death of our proposal until it is too late like what their staff had done with the new ABX idea before. However, studying to death was exactly what his staff team did. By mid 2008, they were taken over by FDIC.

We are not opposed to working with the big banks as long as they consider themselves the “good banks” and start doing the right things from now on, although there are a few exceptions. I still have direct email correspondences with many CEOs and senior management teams and some of their fully owned private equity arms which are searching for solutions to help the banks to manage their troubled mortgage portfolios. After picking our brains on FARJHO and SwapRent what they have been brooding in their strategy meetings is beyond anybody’s guess at this moment. It is very unlikely that they will share the same egalitarian mission-driven values that many of you in this group pursue.

Since it did not seem to get anywhere with these federal Administration folks, Congressional politicians, big banks and the Wall Street firms in the US, I spent the whole year in 2008 campaigning to and dealing with various state, county and city governments and the housing agencies. Some prominent head of housing finance authority once indicated that they had been working with Goldman Sachs in terms of new ideas or strategies on mortgages and they were therefore “in good hands” as the reason not to pursue a deeper discussion with us. I don’t blame her. Who else wasn’t charmed and enamored by those sexy investment banks before in happier time? The problem now may be that many of them may still have that poisonous infatuation or fatal attraction for doing business with those Wall Street firms for some reason, no matter how dangerous it may mean and turn out to be again for those local residents that they serve.

Our FARJHO/SwapRent work has since evolved into a grassroots effort. Rather than seeking endorsements from the politicians we are getting direct votes from the consumers instead. The movement has finally started picking up momentum in 2011. What we will need now is to find some major organizations to affiliate ourselves with as far as the political force and the political will are concerned in order to provide the economic benefits directly to the American people.

The best economic ideas or new innovations would have no teeth and they are useless if there is no political power or monetary power behind them. Back in 2005 I made a miracle happen by introducing the first Yuan denominated Interest Rate Swap into the Chinese interbank market. As a result of the new ability to lock in the long term cost of funding from a bank’s asset/liability management perspectives, we, China Everbright Bank where I worked as the Chief Investment Officer and an EVP, became the first bank in China to introduce the long term fixed rate mortgages to the entire Chinese home owners market. The RMB IRS market that we had started has since evolved into a trillions of dollar financial market by now. Please see the attached WSJ article ( http://www.box.net/shared/sz6uij0f0q0shkye0l7o ) as one of my previous track records of making new financial innovations and new financial markets happen.

The reason why I was able to do it within a very short time of only a bit over a year to introduce the most capitalistic concept and method of financial derivatives to the biggest communist country in the world at the time was due primarily to the hire-and-fire power that I had at the time. I was among the top executive board level management leaders in the sixth largest bank in China. At the high management level, there wasn’t a lot of endless debate by committee discussions on whether to proceed or not to proceed since I was brought in and reported directly to the president of the bank who is a strong and forceful leader. Any junior managers who did not understand the new project were allowed to go back, study and come back to execute it. If they still could not handle it they would have to step aside to let other more competent persons to make their assigned tasks happen. Nobody is allowed to sit there as a bottleneck and study new ideas at their own pace for their own enjoyment. That was how an unstoppable execution team was formed.

I had never been a political person and financial rewards have never been among the prime motives for doing the things that I do. As described in the WSJ article, that I am builder, not a keeper. I simply enjoy the hard work to blaze the trail. Along the way, the things that I have created have over and over again helped many others advance their political careers and most other people who had lent a hand and participated in the early stage eventually made much more money for themselves while I left and moved on to build other new projects.

As for this current FHFA proposal, we have until September 15th to send it in. I have had some not so pleasant experiences dealing with these federal agencies due to my economic policy-wise dissenting blog posts. I had been excluded from many opportunities to present my academic papers and speak to the housing and community development professionals in the FRB sponsored conference events due to my explicit economic policy dissents with the Fed’s monetary policies. I do not agree with their unwise monetary policies and the various QE programs.

For one thing, why did Bernanke and his cohorts even bother to raise the interest rates repeatedly in such a rush back in 2004/2005 to pop the housing asset bubble built during the Greenspan era to trigger a crisis? Wouldn’t a softer approach in raising rates have been much more prudent? After irresponsibly popping the housing bubble to create the crises without any prudent soft landing plans for the ensuing negative consequences, they went on a money pumping binge to reverse the damages by lowering the rates to the extreme in a panic. Jerking our economy through the unnecessary extreme ups and downs of interest rate manipulations seems to be the only things they thought they knew how to do under the disguise of an overly touted Milton Friedman style of Monetary Policy. Looking at the net effects since Bernanke took over in 2005 (a FRB member since 2002), do you really still think that they knew what they were doing?

The way they are trying to reflate the stocks, bonds and commodity asset bubbles now at a speed that would make Greenspan’s loose monetary policies considered a child play. All these new Bernanke led loose monetary policies were done at the expense of extreme negative consequences of an accelerated and unprecedented polarization of the economic wealth redistribution in America with the rich getting richer and the poor getting flat broke. Crisis is indeed too precious a thing to waste for many of those profiteering cronies who took advantage of these situations.

I think these incompetent policy makers owe our country a big apology.

I do not subscribe to Krugman’s simplistic throwing good money at the bad trying to hope for something to stick kind of Keynesian solutions either. If simply telling people to throw money at the problems to solve a problem could be considered a genius, then many people could easily become a genius. Our own government would be full of geniuses already then. Solving problems without squandering money away should probably deserve more credit.

When John Maynard Keynes lived back in the 30’s and 40’s there weren’t any fast telecommunication infrastructure, money wiring mechanism, fast speed trading technologies and convenient transportation means, money from either aggressive monetary policies or even fiscal policies could have stayed in the same country long enough to stimulate the domestic economy. Nowadays that the excess liquidity the federal folks have created would simply turn into hot money instantly by the elite minority private equity companies, banks, hedge funds and Wall Street firms to flow into high GDP growth emerging markets to benefit themselves personally with us average Americans still holding an empty bag with not even a bread crumb falling on our heads.

Remember the last time you read in the news about how some investment gurus on Wall Street and the big banks saying they are expanding in China and India as a new strategy and many are moving their operations to Singapore? That is where all our federally empowered low cost of money went and continue to head for. Therefore a new way has to be created that the stimulus money could become local property based and paid out directly to the local residents in local communities here in America for it to have the desired economic stimulus effects of creating local jobs and local economic activities. That is exactly what the SwapRent contract was created to do (please see more details below).

Bernanke often prides himself as a student turned expert of the 30’s depression but I wonder why we all have to buy into the more than 70 year old 30’s solutions and lessons that he and the Keynes worshiping Krugman gang are trying to sell to us to solve our country’s current economic woes. Those solutions may have worked to a minor degree to help countries get out of their depression/recessions in the 30s or 40’s but it is not likely to make any contributions to our country in any way now in this technologically very different world.

Some may also think that it was World War II that dug us out of the economic conundrum in the 40’s, but the two wars we had and still having now seem to have dug us into even deeper troubles. If you don’t have the manufacturing capability anymore, waging wars will only make China and other manufacturing oriented Asian countries even richer, and as for us, perhaps only a few more drone joy stick playing teenage billionaires. Economists and economic historians can tell you histories but what valuable contributions history could provide that is relevant in a totally different environment may be questionable. Managing a country in the modern world by asking them what they see in their rear view mirrors could only bring you a major head-on crash sooner or later.

In my humble views, incompetent government policy makers, like incompetent politicians, should be voted out of their jobs in a true democracy. They should be responsible for the precious time lost in having viable solutions early on to fix our country’s economic problems and the further deterioration of our national economy. A simple apology just won’t do it.

It may not make sense for us to simply sit there to wait for a pat on the back like a school boy by these incompetent policy decision makers and willingly hand over our dedicated research results and hard earned solutions to them to let them save their undeserved jobs, take credit and let their cronies profit from it. We would rather find some other new blood of policy makers just like we would like to find other new ambitious and forceful politicians to champion these causes to bring the economic benefits to our citizens in a new Administration through the election process. In that regard, we have indeed been waiting for these new generations of smart and capable politicians to emerge so that we could wholeheartedly support them behind their back with the implementations of these new solutions as a major part of their economic policy campaign platform.

People do not always get what is most economically beneficial to them. They only get whatever the politicians tell them to get. What we will need to do is to try to find those good future leaders for our country and rally behind their back with these newly invented economic solutions.

For a new alternative proposal on how to solve our country’s current economic problems on a pure free enterprise basis without spending any of the tax payer’s money or incurring further national debts we will need the new policy makers to seriously consider this “New Third Way” to economic policy management. Please kindly make sure you read the Chapter 6 of my introductory article on SwapRent that was published in the December 2009 issue of the Journal of Housing Finance International published by International Union of Housing Finance (IUHF) at http://www.box.net/shared/v24qtqip4hlgff5l1646 and the following blog post.

http://peoplesally.wordpress.com/2011/02/19/02202011-it-is-not-keynesian-it-is-not-monetarist-perhaps-we-could-call-it-swaprentism-any-better-suggestions/

Anyway, enough about the background info. The reason why I felt strongly that this complete transparency of what had happened to date is necessary so that I would not be advised and recommended to spend the next 6 years going round and round with the same people in power again. They already had their chances but they chose to lead our country down in a different path of what we have today. AAA credit and economic super power status could not be reversed back so easily and the debts that they have piled up won’t go away any time soon. The top Wall Street elites may pretty soon migrate to China to pursue further personal wealth for themselves. You and I will be left on our own and we’d better start planning our own futures together on our own soon.

The SwapRent solution should also better come after FARJHO has been successfully implemented. What I propose now regarding implementing the FARJHO program is that we would like to invite the state, county and local housing authorities, housing finance agencies, pension funds, endowments, foundations and local credit unions, community banks, non-profit groups, to join us in a proposal to create a national operational critical mass to handle large scale deployment to help FHFA implement the FARJHO based solutions and perhaps at a later stage, the SwapRent based solutions to avoid foreclosures as well. More on that later.

Each of your housing authorities, housing finance agencies and non-profit groups locally will handle the local FARJHO transactions and we will continue to advise and conduct the necessary training seminars to your staff and your trainers for your local organization to be able to conduct the actual local deployment yourselves. We will also work on creating a national standard of practice for these new FARJHO structures, taking each individual State laws into consideration. This could all be done on a non-profit basis but we do need funding and operational support to make this a reality.

I would like to sincerely invite each of you to step up to the task and do whatever you could from your end to make the necessary contributions in order to save our country’s economic futures together. Sorry about the long post but full transparency is probably the best way going forward to make this happen to the full benefits of the American people without any potential interference by biased politics or any privileged private groups.

Although the current purpose is to make a RFI response to FHFA together, our alliance should target a broader audience on a pure free market basis beyond simply helping the GSEs and FHA to clean up their own mess. While the need of GSEs and FHA may be a burden that we will need to address on patriotic grounds, they are not the one who would get to call the shots on what directions the FARJHO program should head in the future. Politically nobody has decided on their destiny yet since they are too big to fail at the moment. We should not let FARJHO be a sacrificial lamp to feed the monsters and let them refuel and grow again to postpone their eventual bigger ultimate implosion at very American citizen’s even higher expense.

Therefore, I hope there are some other alternative stronger organizations politically and financially out there who are willing and capable to take on the challenge to lead this project. We will be quite happy to play a secondary support role to provide the necessary intellectual properties and training efforts to make the team effort more successful. Please feel free to contact me directly for a further more private discussion. Thanks again.

Ralph Y. Liu
Managing Director
PeoplesAlly Foundation
23 Corporate Plaza Drive, Suite 133
Newport Beach, CA 92660
Tel: 1-888-456-8881 x 888
Fax: 1-888-315-3831
info@PeoplesAlly.org
http://www.PeoplesAlly.org
http://www.twitter.com/SwapRent
http://SwapRent.com/blog/
http://www.linkedin.com/in/ralphyliu

Filed under: Cash Flow Sharing, Economic Viewpoints, Equity Sharing, FARJHO, Housing, InvestorsAlly, PeoplesAlly, SwapRent, Asset Disposition, Bernanke, Enterprises, FARJHO, Fed, FHA, FHFA RFI, Fiscal policy, FRB, GSE, HUD, Keynes, Monetary policy, REO, Reuest for Information, RFP, SwapRent, Wealth redistribution