Today’s latest suicide by a high level executive in corporate America has many of us thinking there’s simply nothing worth such a permanent and drastic measure.  Freddie Mac CFO David Kellerman was found this morning by his wife.  He hanged himself in the family basement.  Although it’s being investigated and there’s been no definitive reason - not that there ever is - released for his choice, neighbors and co-workers have told the media that work pressure and the stress over Freddie Mac’s financial problems was most likely the reason for his choice. 

As we know, Freddie Mac was taken over by the government late last year and since then, both Freddie Mac and its sister company, Fannie Mae, have battled the guidelines set forth by government regulations. 

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Executives insist the government is imposing too-strict guidelines and are desperately trying to meet those guidelines, but many say it’s not been an easy task. 

What makes this especially tragic is Kellerman wasn’t only not a target in the number of investigations that have been ongoing since the government bailout, but he was one of the good guys who not only refused to play fast and loose with the rules, but was actively working to turn things around.  He was reported as working long hours and standing up against those with less than noble intentions.  He surely missed out on a lot of family time, especially with his five year old daughter.  He was also a volunteer with the D.C. Coalition for the Homeless.  The executive director told the media today that Kellerman was nothing short of a compassionate, dedicated and committed man. 

So with one whose intentions were clearly on the up and up, you can’t help but wonder why suicide was his only option.  He’s left his wife to raise their child and a group of co-workers who will be reeling for quite some time and must now pick up the pieces of an already tattered company without their leader who had no patience for half-hearted attempts and under the table deals. 

This only reiterates what appears to be a new trend among high level executives at the helm of struggling companies.  There have been five suicides in the past six months of those who also believed as Kellerman - the only solution to some problems is permanent and unlike the recession and other financial ruin, it can’t be undone.

Links to Criminal Lawyers and Lawyers

There are two siblings in college, each with a monthly spending allowance of one thousand dollars, no questions asked by their parents. The parents, in their efforts to show much trust they have in these kids, have really painted themselves into a bit of a problem. Because they never questioned where the money was going, and in fact, found themselves depositing even more money when the kids called mid-month and demanding more, they realized they’ve sunk more than fifty thousand dollars into two separate accounts that have basically been mismanaged. Not only that, but what they figured was just the cost of educating their kids has resulted in lazy kids who are flunking out of an ivy league school.

The parents are owners of a large corporation with many employees. Now the parents are broke and have decided to not extend bonuses or raises for their employees, and further, they expect to not add to their employment base and have even considered rescinding offers of promotions to many of the employees. It’s clear they expect their loyal employees to take the hit for the mismanagement of their personal finances and poor choices of giving their now-grown kids free rein. The problem with the employees, besides the obvious, of course, is if they stand together and decide it’s not acceptable - after all, these employees have no problems living within their means and saying no to their kids - and choose to institute a company-wide resignation, the whole community suffers. It’s one of the largest employers in the state, so it will certainly have an effect on a state level as well. The guilt begins and the employees begin to feel the pressure. They want to remain loyal to their own sense of pride and responsibility, but they also don’t want to be forced to finance the solution to this wealthy couple’s lapse of judgment. No matter what these people choose to do, it’s a no-win on some level.

Meanwhile, Mom and Dad are still sinking money into checking accounts for two kids who refuse to acknowledge their roles. As spoiled kids go, these two are top of the line. They feel entitled and believe indulgence is as much their right as the right to vote.

Understandably, the employees are concerned that this will be a short-term and temporary fix since the parents of these kids/company owners, believe they’re being reasonable. The employers feel it’s been a successful year and since they’ve always treated their employees like a large family - turkeys at Thanksgiving, extended maternity leaves - they can’t understand the hesitance, resentment and even anger from those on their payroll.

Even when the employees request a more detailed explanation and a satisfactory reason as to why they should shoulder this huge parenting failure, they’re told they have no right to ask. These company owners aren’t obligated to release any proprietary information, which is how they refer to this problem. Ah, but in the middle of all this drama, the company gets audited and huge discrepancies in earnings and reportings are discovered. Not much incentive for the employees to bail their employer out, is it?

The employees, it appears, will be forced to eat this liability. Think it doesn’t affect you? Well, maybe it does.

The two spoiled kids would be Fannie Mae and Freddie Mac

The parents are the government

The company employees are you and me

And the auditors? This would be the FBI who’s just released a statement announcing they’ll be conducting and investigation into both Fannie Mae and Freddie Mac.

It’s no secret the foreclosures are on the rise for the second year.  Two years ago,  it was possible to secure financing for a new home with credit scores in the low to mid 500 range and it wasn’t unheard of to secure one hundred percent financing. Stated programs, where a loan officer states an applicant’s income and employment history, versus obtaining actual documentation via the employers and banks, were also common.  The lenders were taking risks like never before.  Those risks, along with poor budgeting and a lack of home owners’ basic understandings in terms of how interest rates and appraisal values work are being blamed for the high number of foreclosures in this country.  Add to this high oil prices and other sectors that are performing below expectations and it’s no wonder we’re hearing more and more about an eminent recession.  Some say we’re entering into a recession now. 

There are programs, compliments of Fannie Mae, that are being implemented to assist homeowners who have fallen behind on mortgage payments.  Some of these programs include low interest loans for consumers that will allow them to catch up on payments, there are also incentives in place for lenders who are willing to delay foreclosure proceedings in an effort to keep families in their homes.  The problem, however, is many have no idea these options are available.  There are even refinancing options that have lower approval qualifications for those who are in high rate ARM mortgages.  These new initiatives, as crucial as they are, can serve no purpose if they’re not being used. 

Lenders and banks are closing and merging at a rate of one a week.  There’s not much incentive for these banks to pursue collection of overdue payments if they know an announcement is coming that they’re closing their doors.

Indymac was once considered one of the heavy hitters in the mortgage industry.  When the announcement was made recently that it was reigning in its mortgage division, the very real possibility that it couldn’t exist without this division was enough to send other lenders scrambling for ways to keep from being next on the chopping block.  It’s the classic mistake of making decisions while panicked or based on fear.

Fearful consumers who are worried about how to make an extremely high mortgage payment because of their adjustable rate mortgages present other problems due to this stress, including divorce, drug and alcohol use, gambling and even job burnout in their efforts to catch up by working overtime.  Often, they don’t slow down long enough to take a step back and rethink their options.  That, of course, can only lend to the further decline of the American mortgage sector.  There are no easy answers, especially with this being an election year. 

There are resources that have solid solutions and advice for homeowners who are at risk of losing their homes.  Some are:

U.S. Dept of Housing and Urban Development (HUD)

FAQ Section for Struggling Homeowners

Federal Housing Administration (FHA)