The Arizona Sentinel

July 26, 2009

Kuddo’s to the Arizona State Legislature

Filed under: My Posts — thearizonasentinel @ 8:49 pm
I dont often comment on state issues, But heres one I cant leave alone.  The Arizona legislature has just passed a law that in a nut shell says, if you buy a home as an investor or speculator.  And that home winds up in foreclosure, the borrower still owes the difference between what the bank got for the home and balance remaining on the loan.  Well, kuddo’s for you in the legislature.  Who would have thought that this law wasn’t already on the books, Previously a foreclosure would hit your credit score, but not your pocket book. 
 
This previous policy is one of a dozen reasons, Arizona is number 2 in the nation for foreclosures. Some fella named Farley with the Arizona Real Estate Association, says” Arizona is number 2 in foreclosures now. If this law isn’t changed, the state could lead the nation in bankruptcies next year.”  Knock, the lights are on but nobody is home.  The home speculator business is a major cause of the surplus homes that we have now in the country. It was a steady engine, motivating builders, and bankers, and Realtors with dollars signs, and Escalades driving their greedy program. And under the Farley model, he would have the banks take the hit, rather than the speculator. or Banks take the risk, speculator gets all the possible gain,  lousy business model if you ask me.
I have first hand knowledge of Realtors, telling me, “buy it now and in 6 months pick up a quick $25-30 thousand dollars.  Mr. Farley, your industry was a major contributor in where we find ourselves today.  Cause and Effect!!
Having said that, there is still one more, party that must share the blame. First unless you can prove that the home your buying is going to be your primary residence. Instead of 20% down, you should have to have 50% or more depending on your incomes Vs, liabilities. They must have a good deal of skin in the game.  So in my view where the state came up short was failing to add the requirment of downpayments. Buying  second home for speculation is not a residential purchase, its a commercial purchase and should be treated as such in underwriting. 
“Its elementary Watson”
 Real Estate Associations nation wide and their members, in many respects have no one to blame but them selves for the excess’s of 05-06. Its going to take a decade to work our way out of this mess. Frankly I dont see us ever getting rid of all these surplus homes, unless they set them on fire or take a dozer to them .  And whos gonna eat that deal.  Crank up the presses!!
 
Farley goes on to say , that this law will hurt retirees.  NOT,. It will help them , and here is how, most retirees are looking to reduce their property taxes,. The housing market has dropped 45-50% his numbers, but I agree. Fact is housing was overpriced 45-50% and property taxes were based on a false market or economy.  So Retirees should be screaming at their taxing authorities to get real and get it right.
 
On the brighter side, depending on your point of view,. The next phase of Alt A, , ARMS are starting to show up for resets. 1.5 homes have forclosed since the first of the year,. Over the next 18 months, another 2-3 million homes are going to have to reset. Will they no, because , we built to many homes, and now those homes are upside down, plus lenders are no longer willing to stick their nose out for illegal aliens ,and speculator mortgages.  In addition Commercial loan balloons and roll overs are finding that no one wants to pick them up or allow them to roll over.  So the worst is yet to come.  Obama said the other day as did his Ballerina Chief of Staff Imanuel, that the worst was over, and that they were seeing signs of recovery. Like everything else obama spues, he has no idea of what hes talking about. If he’s gonna stay in the WH he’d better start listening to OMB(Office of Management and Budget) instead of Balarny Frank and Nancy Pelosi.
 
The fed will try to keep rates down,. But until he Bernanke gets them back were they belong,  The nations cash, will remain on the sidelines. China is going to demand higher rates going forward, the risk of buying U.S. Treasuries aint lookin so good.  Printing more sorry paper will only drive up inflation and interest rates,. Im ready R U.
 
Someone asked me the other day, ” Who owns Fannie Mae”  Thats simple I told em ” China”   The same people that own your house.
Now while these folks in Washington are home, give em hell over crap and tax , and obamanocare,… If you see him ask him how hes gonna fix social secruity, I can tell you , but lets see if he will.  
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