Some Industry Thoughts

Well- the bailout bill passed the Senate, contrary to the wishes of over 70% of the taxpaying public, and now the fun begins. As a mortgage broker I'm ashamed of the behavior of members of our industry, as a taxpayer I'm appalled by the behavior of our legislators. Not surprised, but appalled. It will be interesting to see how many hands can get into this new, huge, cookie jar at the same time. Just in case anyone thinks that the recent devastating experience in the real estate/mortgage industry has been corrected or altered I offer the following link to some superb reporting. http://www.ocregister.com/articles/camile-house-mortgage-2104411-fargo-wells
It's a long, thorough article, and the comments following are worth a read as well. This is a continuing problem and will go away only when investors/lenders are accountable for their own losses and bad decisions. In other words, privatize. As long as there is a bailout possibility this behavior will continue. The bill calls for a new, tougher, regulator to oversee the performance of Fannie/Freddie. That should work. If anyone can offer an example of government oversight resulting in successful performance of anything you get a prize.
The bright side. There are honest mortgage/real estate people out there. There are mortgages for deserving and qualified buyer/borrowers. We hope you'll call us, but whoever you call, be careful.
As usual,
Thanks for visiting

Taxpayer Bail Out For Lenders

Over 700 pages in the bill passed by the House and about to be passed by the Senate, favored by only 21% of taxpayers but more importantly favored by 100% of lenders. This will probably be the costliest piece of legislation in history when the dust finally settles. FannieMae and FreddyMac are in trouble and the people who oversee their activities, (Congress) have received the benefit of $170,000 of lobbying funds from them. No conflict there. Countrywide and Bank of America are other major beneficiaries of this bill and of course their friends in Congress have had some substantial sweetheart deals from them, Dodd foremost among them.
Meanwhile the hoopla in the media covering the election campaign, or at least half of it, contributes nothing to our peace of mind. Our spend crazy government is likely to get a lot worse if we don't make some wise choices. If the voters would simply act like a personnel director interviewing for the most important job in the company the process of choosing becomes simple. Not just this election, any election. Check the resumes. What have these guys done? What kind of choices have they made? What is the basis for the promises made? The face to face interview, (what we're getting daily in sound bites), may sound exciting, but if it doesn 't comport with past performance the promises are simply pleasant rhetoric and without substance. If you're hiring a salesman, and I've hired a few, the promise of becoming your star performer is only as good as past performance. If there are no accomplishments of note in his past then why would you expect something new now?
Real estate is slow, no news there. Mortgages are available to the credit worthy. Home prices in our area are still declining and foreclosures and short sale listings are far too prevalent. For buyers the market is favorable. For sellers it's not a disaster, but realistic pricing is key to a sale.
As usual,
thanks for visiting

REPRESENTATIVE GOVERNMENT

The perception most of us have is that we enjoy representative government in this country. It turns out that while that is a true statement, we can clearly see that the interests being represented by our elected officials are not those of the voters, but rather those of the dollar contributors. It takes both votes and dollars to get elected, and dollars are trump. National polls were showing just over 20% of the voters favored passage of the $300 billion mortgage bail-out bill designed to offload the worst of the worst mortgages onto the FHA so we all can lose on them instead of those companies like Countrywide who made the loans and should lose on them. The Senate responded to the public will by passing the bill anyway. Senator Dodd should be in jail. Some reports suggest he is instead being considered for the second position with Obama. Politics makes for strange bedfellows.
Indymac has become the second largest bank failure in history, in the hands of FDIC receivers. (Their high level execs also made some contributions to Senator Dodd, but apparently too little or too late.) Their is a list of 90 banks slated for possible failure, and believe it or not, Indymac wasn't even on the list. Scary how little anyone knows about the extent of the financial market problems. Scarier perhaps is the news that has hammered the stock value of Fanniemae and Freddiemac, the perception that they may lack the liquidity to address their mortgage position, and now the hinting around that there may be bailout plans by the Treasury and the Fed. First Bear Stearns and now who knows? For the vast majority of us who handle our obligations responsibly to be confronted with the probability that we are also going to become liable for the obligations of all those who are irresponsible or crooked such as Countrywide is sickening. But the representation we have from elected officials is zero. The efforts of politicians to manage the economy has always been disastrous and now can only get worse. Our dollar is shrinking, oil prices and dependency are killing us, and our elected representatives are clueless. If that doesn't keep you awake at night, then what?