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What are Loan Servicers?

Servicers defined here in this New York Times article my Gretchen Morgansen
 Loan servicers act as intermediaries between borrowers and their lenders, collecting monthly payments and real estate taxes and forwarding them to the appropriate parties. As long as borrowers meet their payments, such operations typically run smoothly.

Very often the servicers are just extensions of the banks, with a different name.  It seems like it kills the free market idea but it happens all the time.  Whatever the servicers are doing is usually well know by the large financial institutions because that is who owns them. 


Rentiers manipulating money and opportunity

From Wikipedia

{Rentier capitalism is a term used in Marxism and sociology which refers to a type of capitalism where a large amount of profit-income generated takes the form of property income, received as interest, intellectual property rights, rents, dividends, fees or capital gains.
The beneficiaries of this income are a property-owning social class who, it is argued, play no productive role in the economy themselves but who monopolise the access to physical assets, financial assets and technologies. They make money not from producing anything new themselves, but purely from their ownership of property (which provides a claim to a revenue stream) and dealing in that property.  }

More on bank state here
What is wrong with being a Rentier Capitalist?  I suppose nothing if it wouldn't preclude or be used to preclude opprortunity for the middle class.  We have seen bank excutives get massive bonuses for the good of the country while the common man is left to shoulder the burden of the ponzi scheme. 
It is beyond me as to why the entire country is not screaming in outrage at the obsurd transfer of wealth condoned by the governement and treasury. 
See more of the story here at
Financial Reality Revisited


What has happened since the bank bailouts?

The results of the Trillion Dollar Bank Bailout.

1. Banks increased Profits without writing down toxic assets
2. Mark to Model accounting allows banks to pad their books
3. Lending has decreased
4. Foreclosures have increased
5. Fraudulent document signing by the banks and servicers
6. Banks have continued to get near 0 % interest at the fed discount window
7. Interest rates are rising again
8. Housing sales have dried up
9. Chain of Title issues have arisen from the banks negligent document handle and failure to follow through with rules of the Pooling Service Agreements for the CMBS. 

Florida Foreclosure: What Lawyers Need to Know Now

More on soaring Complaints against Banks

More on soaring complaints against banks.


Limit losses with Stop limit orders

The best way to protect against a major loss is by using trailing stops or stop limit orders. The theory is that you are better off to take several small losses while you search for the big winner. If you place a stock order and you are wrong about its direction you will lower your risk of loss by having a stop limit order in place. The Stop Limit order allows you to place an order based on the price you are willing to accept if the stock goes below a certain point.

For example: if you buy a stock that is $100 per share, and you think it is going to go to 110 you might want to put in a stop limit order at 98. If the stock moves down your order will be activated at 98. If the stock is not heavily traded you may be able to have it sell off right away but it is a good idea to put your activation price higher than your bottom line sales price. You could use 98.50 as your activation price and 98 as your sale price. If the stock is moving down quickly and you do not activate at a higher price, you might not get your order filled. The stock might go from 99 to 97 without anyone buying your 98. Basically you will get “jumped” over and your limit order will still be in at 98 when the stock is down to 95 a share. One your price is missed, which it often will be the case if your activation and sale price are the same, you will have to sell at a lower price, cancel the sell completely or wait until the stock bounces back up and triggers your stop order that sells. This is sometimes what you don’t want though because if it makes it back up to your stop price it might be moving higher. If your order gets missed on the way down you should either manually enter at a lower price to prevent further losses unless you believe the stocks will be back up again. It may or may not so that will be the question you have to ask yourself if those circumstances show up during your trading day.
You will have to learn to take several small losses in order to capture more gains. However, when you are using a trailing stop or stop limit you might get "stopped" out right before the stock makes a big run upward. It is more art than science when it comes to deciding what price to use or how much loss you are willing to accept. You will also have to watch the particular stock you are trading in order to get an idea of its volatility. The stop order will be much different for Apple then it will be for Microsoft. I am still somewhat surprised that stop loss or stop limits orders are rarely mentioned on financial programs or "advice" shows. If you learn to use them early in your career you will have a much higher chance for success.

Penny Stock


Selling Short or Going Long

Selling Short or Going Long

Going long is a term used when someone buys a stock. If you go long you are buying a stock and holding it for a period of time. The time period can be any length but when you buy it is often called going long. The transaction simply involves buying a stock through your brokerage account and moving it into your own account.
Going short is term used when someone sells a stock with the intention of buying it back later at a lower price. The stock is typically is “borrowed” from the broker who expects it to be returned at some point.
You are borrowing a stock that you intend to sell on the open market to another investor. The price could be $10 per share from your broker and you sell immediately 100 shares to someone else for $1000. The stock then drops $2 per share and you buy it back, or cover your short, (see more on short covering here) at $8 per share.

It cost you $800 to buy back the stock needed to return to your broker. The broker only wants the shares back and is not concerned about the price. Therefore you can meet your obligation for only $800 dollars. The $200 is the profit that you have made on the trade.
If you are correct in your assumptions that the stock will drop you will profit. However, if you are wrong, your loss on a short sale could be infinite if you continue to hold the stock.

It is important to set a loss limit on your shorts in case the stock begins a long run up.

(See more on stop limits, and t-stops here.) If you have to pay $1200 to buy back stock to replace what you borrowed at $1000, you will lose $200. There virtually is no limit to your losses on a short sale because theoretically the stock could go up forever. Compare this to a long stock holding and it begins to drop the loss will stop at its maximum when the stock hits zero.

This book will show you hot to read charts and to follow trends.  It is a good book for anyone trading in stocks.  How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition