This week immediately after signing the death knell "stimulus" spending package in Denver, Mr. Obama made an overnight stop in my former state of Arizona, the state I left now almost two years ago after being one of the early victims of the housing and mortgage crisis, and also after having been the victim of four illegal immigrant thefts within the last ten years of my 45 years residency in Arizona.
The loss of my home was due to many factors and is also why it is infuriating to those of us who have been victims to read a great deal of the misconceptions going on about those who "borrowed too much." Rather simplistic answers are what the media likes – those quick sound bites. But to fully understand what has occurred there are several very pertinent points left out in those Fox News and CNBC whitewashes and half truths.
The media appear now more PR representatives for the political parties themselves, all distorting the truth but the truth and facts are boring and don’t keep those ad revenues piling in. If the truth were actually told, I’m sure the end result would be that French Revolution would look like child splay.
Just for a brief listing of points that these media types are leaving out, and the general public making inaccurate assumptions in the process:
1. These banks were encouraged to sell and market these loans primarily by the Fed, not Fannie Mae and Freddie Mac, because the Federal Reserve only makes profit when debt is incurred. For those that like drama with their facts, go see the movie "The International," for just a brief glimpse of who actually is in charge of our nation’s economy, and who is manipulating it for their own ends. If you purchased your home prior to 1982, then this will be especially hard to grasp, but the home buying market has changed. Monumentally.
In order to "stimulate" the economy after the Keating fiasco, another great Act of Congress was passed affording these banks to market and sell these sub prime loans and then cover their deficiencies by selling them to foreign investors primarily on the secondary market. (John McCain and those other four were up to their necks in interfering with the regulators back then yet got off the same as those bank executives in the bailout did – the public’s memory is so short that McCain even was awarded his parties’ nomination for the highest office in the land, while literally thousands of retirees in Arizona lost their life savings and their homes).
2. If you purchased your home prior to the 80’s then I am sure you have one of those nice, low interest fixed rate mortgages, the terms of which are no more than 20 pages at the most. Post Keating, fixed rate loans were only offered as a secondary offering to those with excellent credit, but were not at all marketed or offered to those with really any marks on their credit records.
First time home buyers were precluded from fixed rate loans unilaterally across the board unless you knew a bank president or were on good terms with your parents and they had good credit and would cosign the loan. The documents are written in such a manner, as with that 800 page stimulus bill, that even a real estate attorney would have trouble deciphering and are written that way on purpose in order to encourage your need for an attorney now when buying a home, although few people could afford such an added expense.
There are books on predatory lenders and predatory lending practices. Most mortgage bankers today are more akin to con artists than bankers. The loan terms and documents are not even provided in most instances after application until the day before closing in which you have 24 hours to digest over upwards of 50 pages of documentation. The same procedure applies to refinances, where in order to "lock in" those quoted sub prime rates, you must return the executed loan documents either at the bank offices, or within 24 hours. My refinanced loan taken out in 2004 due to economic necessity with few options available was based on a LIBOR rate from the London market, not even U.S. prime.
The "global" agenda is affording banks to even market loans using loan terms outside the continental U.S. at this time in order to afford the banker’s added profit. There was no "bankruptcy," of these banks, they have been making money hand over fist after they tightened up the bankruptcy laws in this country several years ago to deny bankruptcy protection to citizens, while we the taxpayers are now bailing THEM out for their campaign loans to the 2008 Congressional members who voted for that sham bailout.
3. The only "negotiable" terms on these loans is actually simply the interest rate, and then you will find there is only a 1/2% or 1% difference between banking institutions. Why? Because most loans are underwritten by Fannie Mae or Freddie Mac, in fact the loan documents themselves are boilerplate and written by the big two in 80% of home mortgages sold today.
4. Assumable loans have gone the way of the horse and buggie and for the most part even VA or FHA loans are obsolete.
5. These loans are packaged, sold and marketed by usually the real estate agents themselves since they also have "preferred" lenders. Don’t use the word "kickback," it makes them uncomfortable. "Interest only" and sub prime loans enabled them to show and push bigger ticket homes in order to make bigger commissions. Why isn’t this being mentioned. Because the National Association of Realtors is also one of the largest contributors and lobbying organizations in the country.
6. The states with the highest foreclosures are also primarily high illegal immigrant states. Property taxes also in a great many of these states during the boom also rose considerably, as did homeowners insurance due to the increased valuation on those homes in replacement costs – those automatic increases that bear no resemblance to the actual costs it would take to rebuild, but to the actual value of the properties.
The border and high illegal immigrant states have higher insurance rates also due to the amount of property crimes involved. Four of the top five states on the foreclosure lists are border states.
7. In Arizona and many West and Southwestern states a new form of communal housing along the communist agenda that is now the Rule of Law in this country has exploded – the mandatory homeowners association communities where you also then pay added taxes in the form of assessments without so much as tax credits for those sums, and which have been statutorily changed in many states to afford those sums to simply be set by the Boards of Directors without the actual homeowners consent.
Many are run by professional management concerns, who treat the owners of these homes as if they were renters dictating such things as paint colors, with fines for noncompliance and with lien and seizure rights to these homes. Many of these homes most likely are really a combination of HOA and mortgage company foreclosures, and the HOAs can move a whole lot quicker than the mortgage companies due to the lobbying efforts of the foreclosure attorneys for laws for primarily their benefits.
The foreclosure attorneys are the ones whose jobs have been stimulated due to their massive lobbying efforts removing former homestead exemptions and other property ownership rights through progressive industry favoring legislation.
So while it may make all of you who still have your homes sleep better at night to blame the "bums" who bought too much home, or didn’t budget enough – I’d like to just say one thing – the wolves are most likely circling around your door and if there are not reinstituted changes in legislation rather than continually throwing money at these problems instead of addressing the cause – it just might be you eventually writing your story.
P.S. While Obama was on his city tour promoting the stimulus in Arizona, he and his entourage stayed at a local resort. From published accounts, it was a rather new resort which had been built since I left Arizona by an international conglomerate (not a local resort, even, and there’s plenty of them). It was also reported that the price for the rooms were in the neighborhood of $2,000 per night for the accommodations which would be suitable for our new celebrity president. Including the entourage, the resort was book solid, courtesy of the U.S. taxpayers – the ones who are losing their homes.
As someone stated in a local paper – there were plenty of vacant homes there he could have stayed in for free.