Marc’s Corner

Campaign Election Signs vs. Open House Signs

Yes, this is somewhat of a rant. OK, I take that back, it is a rant – not somewhat! It appears that everywhere you turn there are political campaign signs popping up all over the place. These are a blight on our landscape. My senses are assaulted and I am forced to look at these everywhere I turn through election day.

As if that’s not bad enough, now you’re getting all of those pre-recorded messages telling you how great the politician is; what they’ve done; and, of course, the vote for me crap. Don’t you just love it! Yeah, I’m sure as much as a stick in the eye.

Many of the local municipalities here have cracked down majorly on roadside signage, especially for those of Open Houses. We have many that actually go around on the weekend and will pull Open House signs while you are trying to do one and then we wonder why no one or so few showed. Yet, our roadsides are littered with campaign signage. Why? Because our politicians, legislators, lawmakers, whatever you wish to call them preclude these from the laws. I guess that they feel this is there inalienable right. They must be better than you and me. Remember, they are serving the public’s interest – or are they really? It’s not like they don’t have enough privileges.

Yet, our signs get picked up and tossed away. There is one municipality that is at least working with us and is allowing us to put our Open House signage out from Friday through Sunday. It is only hoped that others will follow suit. Our local Realtor® Board has sent proposals to many cities, but with very little response. Yet, when election time comes around guess whose support they want?

I think the Do Not Call list is great. I detest getting these unwanted sales calls and do in fact file complaints on the DNC website at www.donotcall.gov. But again, our politicians thought they should be precluded from this. As a Realtor®, I can’t make calls to expired listings or FSBO’s without having a customer that is interested in their property. I can’t play the old game of Dialing for Dollars.

Yet, our trusted politicians thought well of themselves so much so that they excluded themselves from any Do Not Call rules and regulations. I guess that they felt that their campaigning is a public service that will only enhance my life. Not that it may be an intrusion of sorts at all.

It must be great to be a politician, because it appears that we continually find in all types of legislation, items that either are beneficial to them and/or their campaign contributors. It appears that even though we’ve elected them, we’ve become second class citizens. I resent that fact! How dare they? I don’t know how we get around this except for possibly keeping a more watchful eye on our politicians and when they stray, simply vote someone else into office. We really do need to send a message.

See you next time at Marc’s Corner!

OK, so President Bush signed what’s been commonly called the Housing Bill. It’s being touted as a panacea for our mortgage and housing market ills, but unfortunately comes nowhere near to being such. Again, I must restate from a previous post, The American Housing Rescue and Foreclosure Prevention Act, it should be called the Banker Bailout Bill. Forgive my cynicism, but numbers and figures are being touted and we, the taxpayers that are footing this bill, are going to be in for a major surprise in the long haul.

Before we go into that, I’ve read many articles and posts critical of the fact that First Time Homebuyers are being offered a tax credit as opposed to a tax deduction. The difference being that the credit will have to be paid back interest-free, mind you, over a 15 year period; while a deduction would basically just be a freebie. What I also think is good about this measure is that they, our leaders legislators, did not limit this to vacant homes as had been anticipated.

The fact that this loan has to be paid back is only fair because by doing otherwise you’re penalizing others who bought prior to this enactment or afterwards. Mind you this is only for first-time homebuyers, which includes those who haven’t owned a primary residence in 3 years, and the home has to have been bought between 4/9/08 and 7/1/09.

Anyway, will this stimulate the purchasing of homes? I think it will have little effect in that you still have to qualify for a loan with stiffer requirements and down payments.

One of the main concerns that I see with this bill is the Fannie Mae and Freddie Mac bailouts. Let me clarify, not the fact that they are being bailed out, but the basically unlimited funds that they are being given access to. All we’ve been hearing about is the estimated costs this bailout will be. But they are only talking in the short-term, there is no way to accurately estimate the costs over the long haul.

A good portion of this bill is aimed at those with at-risk mortgages at possibly having the ability to refinance at a fixed rate and that the new mortgage will be government backed by the FHA. Firstly, the lender has to be willing to go this route since it is totally voluntary. Some surely will in that they’d rather have their money than your property. But more than likely the mortgagee is not going to get such a great deal. Do you think that the lenders are going to go out of their way to give you, the borrower, a better deal? Seriously!

But on the other hand if they do go this route, it is most likely cheaper than going through a foreclosure. The other problem I see is that who’s to say that the borrower won’t go into foreclosure with the new mortgage. Again, more loses and costs to the taxpayers.

What really gets me is why is there a need for a federal database of personal data and fingerprints of anyone who basically has anything to do with the originating of a loan? Loan originators are licensed in Florida, where I’m located, and I gather most states in the union. This is just abhorrent in that it appears that the government wants more information on its citizens and they’re utilizing this fiasco to weasel their way to getting such.

To further the indignity, one part of the bill requires banks to report information on all debit and credit card transactions. Excuse me, but when did my spending habits become the government’s business? The more and more that I’ve learned about this bill, the more I kept on hearing George Orwell’s Big Brother in 1984 in my head. OK, so there are other things running around in my head as well – go figure!! I believe in rules and regulations, but this is just going too far.

Lastly, I want to leave you with this tidbit. It appears that a provision in the bill is to assist Chrysler (even though they aren’t mentioned directly) to benefit from a corporate tax incentive even though they are only a LLC, a partnership. Huh, and this has what to do with the topic? All I can say is good lobbyists and whoever else they have on the payroll or campaign donation list.

So what do you think? Is the Housing Bill a panacea, a fiasco or even somewhere in the middle?

See you next time at Marc’s Corner!

As was alluded to in a past post, I’d wanted to tackle this issue. We elect our legislators to work in our best interest. Yet, most of us would not think to look and see who’s financing their campaign. I think that the majority of us would like to think that in most cases ‘we the people’ are of paramount importance.

Didn’t our votes put you into office, Mr./Ms. Politician? Oh, that’s right your campaign is being funded by PAC’s (Political Action Committees), special interests, lobbyists, etc. Foolish us!

With that said, I came across an excellent website, OpenSecrets.org. It’s one of the best sites that I’ve seen. You can search by individuals, Congressional Committees, Congressional elections, Presidential election, even by Lobbyists and PAC’s and see who they are contributing too.

Their Mission Statement is to Inform, Empower & Advocate –

• Inform citizens about how money in politics affects their lives
• Empower voters and activists by providing unbiased information
• Advocate for a transparent and responsive government

So, instead of giving you facts and figures, check out their site. It’s definitely interesting and worth the time.

See you next time at Marc’s Corner.

Marc It Sold!

Welcome back to Marc’s Corner –

As I’d mentioned in my previous post, we are going to discuss the American Housing Rescue and Foreclosure Prevention Act, which in some circles is know as the Bank and Builder Bailout Act. Hmmm, imagine that!

There are many aspects to this bill and for our purposes we will only touch on a few major ones and they’ll be discussed in no particular order. The supposed major gist of the bill is to help alleviate foreclosure to many homeowners. The numbers are pegged by the House at 400,000, but this is skeptical at best considering that this is a voluntary measure on behalf of the lenders.

How it would work is that the Mortgage Lender would have to agree to take a loss on the existing mortgage. They would have to reduce the loan balance to 85 percent of the home’s current value. A new mortgage would then be written at a lower interest rate and insured by the FHA (Federal Housing Administration). This is all considering that the homeowner will be able to afford this new loan.

Now, this may seem great for the homeowner and I’m all for keeping them in their homes. But, the lender in many cases could be able to recover more money than they would in a costly foreclosure. So here we are possibly helping the lenders who helped create this mess save some money and not penalize them more. Does anyone else have an issue with this concept?

One of the supposed purposes for this bill is to shore up housing prices because they have declined quite a bit in most of the country. This just cannot be the case. The market will correct itself as it has done so in the past. Pricing, as anyone who took Economics 101 knows, is matter of supply and demand. Governmental action can do nothing to change that unless it can reduce supply or increase demand. Just like the Economic Stimulus package could do little to infuse life into the economy.

Another aspect of the bill is to give a tax credit of up to $8,000 for first-time homebuyers who buy a vacant home in the next year. While this is good for our neighborhoods in that a vacant home will now be occupied, I think it creates a great inequity to the home seller who has taken care of their home and paid all of their bills on time. Why should they be made to suffer any more than necessary? The drop in prices, so-called short sales and foreclosures all around them are enough, they need not incur more hardship.

One other item in regard to these proposed tax credits. The bill itself creates a shortfall of over $2B, thus adding more to our deficit.

There are definitely some good things that are coming out of this and some ensuing bills. One is for the establishment of an independent regulator to oversee Fannie Mae and Freddie Mac in addition to their overhaul as well as that of the FHA. It would also provide $4 billion in grants for states and municipalities for rehabilitating foreclosed properties to be used for affordable housing.

Now, this is not all for free to the rescued homeowner, and that is rightly so. They will have to pay a 1½% annual insurance premium and if the home’s value increased and they decided to sell or refinance, then they would have to share the profits with the government. This is a concept that was proposed by John Vogel, Jr, a professor at the Tuck School of Business at Dartmouth, that I wrote about in the post, Foreclosure Plan – Is this a Panacea or a Step in the Right Direction?

While this bill may help some, it is not a cure all.

I would like to think that our legislators are doing this to help our fellow man and neighbors, but it’s more than likely not and that they are going this route to save their rear ends in an election year. Sad to say but true for too many of them. But then that’s a horse of another color.

See you next time at Marc’s Corner.

Marc It Sold!

Thank you for stopping by and reading. My name is Marc Grossman & I was asked by the staff at Zolve, after they read a couple of my blog posts, if I would contribute to this site. I must admit that I was thrilled at the opportunity and humbled at the same time.

As you can deduce from their site title, RealEstatePolitics.com, we will be talking about real estate and politics and how they intertwine in our present state of affairs. I won’t deny that I am opinionated, but at the same time I am willing to see other viewpoints and give credit where it is due. With that said – Welcome to Marc’s Corner!

I was formulating what to write in my head and wanted to speak about the Mortgage Aid/Foreclosure Rescue Plan that made its way through the House and is now stalled in the Senate. But while thinking on all the aspects that are involved, it just appeared to be too convoluted to tackle correctly in one post.

Before we go any further, I need to make a couple of statements. First, I think it is a horrible thing for someone to have their home foreclosed upon. I have a major issue seeing someone who has worked hard and has been doing what they were told to do, to wind up losing their home and almost everything else with it. I am not a bleeding heart nor am I a sadistic bastard. Well I’m sure I know some people that may say differently.

But one of the main questions that has to come to mind – Is the government the answer to our present situation? I have an issue with that on many levels. You have to remember, when you think the government is the answer, than you are therefore saying ‘we’ are the answer. Because the long and short of it, is that it’s us who will ultimately foot the bill.

Here’s an example, we have a slight issue with that in the State of Florida with property insurance. Amongst all of the insurers, there is a company called Citizens, which is the state’s insurance co. Unfortunately, this company was grossly under funded to handle the catastrophes that have occurred in this state. Because of that, every insurance policy in this state pays surcharges to cover those loses. But that’s a story for another day.

There are several other questions that need to be asked in regard to the measures being proposed by Congress. Who is really getting bailed out? Is it the people that will be saved from foreclosure or is it really the lending institutions? This needs to be taken a step further as to who are some of the major proponents of this bill beholden to. We’ll look at some of these players and their campaign contributors. I think some of the things that we will unearth will surprise you.

Just a little history before we wind up for today. Lending institutions make their loans based on risk. The rate the consumer pays is based on their risk factor. You hear now about lending criteria being tightened. Well really all we are seeing is it going back to the way that it was before these lending institutions decided to ease their lending restrictions.

You may ask why did they do this? Well there were several reasons. There are two main ones that I see. Firstly, they needed to tap into a market to procure more loans and this they did by easing restrictions and making it almost as simple as signing your name to get a loan. Almost anyone could get a stated income no documentation loan. Secondly, they were playing the risk game themselves. They saw, as did so many, that real estate was appreciating at double digit rates in many areas.

I remember when we hit the height in 2005, we would see properties that were appraising for values never seen before. It was unbelievable. Now, it’s really amazing to me because these lending institutions have economists. They had to know that this market was not sustainable. Goodness gracious who in their right mind could have thought otherwise.

So this begs the question, why should these companies be saved from themselves? And on top of that, why should we, the working people, be the ones to use our hard earned money to save them?

Just a thought!

Anyway, again Welcome to Marc’s Corner and I’ll see you soon!

Marc It Sold!