Sunday, November 2, 2008

Last Push for Reality Against Obama

I'm tired of ignorance. I'm tired of laziness. I'm tired of people wanting change just for the sake of change. And that's exactly what people think they'll get when Obama is elected. Yes I said "when" because it is going to happen, despite what I vote, or my small circle of influence. Even the professionals aren't able to open the eyes of American on how Obama is not the savior that he makes himself out to be.

Will he give America a better image in the eyes of the world? Will he peacefully resolve the war in Iraq? Will he prevent future terrorist activity against Americans? Will he sound articulate and intelligent in his speeches? Will he bring economic stability and prosperity to America? Will he bring more jobs to Americans? Will he keep big corporations headquartered in America? Will he keep Americans healthy at an affordable price? Will he unify our country's politicians? Will he stop the hatred within our country?

The answer to many of these questions is a big fat "who knows" and "probably not". As someone said on the radio a few days ago, politicians speak of the winds of change and they always end up being a big leaf blower. They make lots of noise, blow everything around but then everything settles back down and nothing changes.

It's said that every president since Nixon has mandated that we would stop our dependence on foreign oil within just a few years. And where are we now?

Is our current push for more economic vehicles really a new trend? Wasn't the Honda CRX getting 50MPG back in 1983? How are we able to get the same computing power that put the space shuttle in orbit within a $300 iphone. But we can't get more than 30MPG in a car within that same timespan? Carter and Clinton couldn't do it. So Obama can?

But I digress. As you may know, I'm a real estate Appraiser, so I am heavily involved in the residential real estate market and was there for the Southern California boom and the Phoenix boom. So here's a little personal history and how it relates to the big picture.

My wife and I bought our first house in 1999 for the paltry sum of $220,000. A purchase price $20,000 more than the previous owners paid in 1987- that's right, in 12 years, the prior owners saw their home value increase a total of $20,000. In reality, they saw their value drop significantly during the late 80's/90's market downturn so they got out once they saw the light of day.

We bought our first house when my wife and I were both working, with no kids. I was making about $24k per year and she was making about $36k. We had our $20k down payment, we supplied full W2s, we provided bank statements, we provided references, etc. And since we didn't have 20% down, we paid PMI. Isn't that the right way to qualify for a mortgage? At least it was back then.

But then, when our home value went up to about $260k within a year, we refinanced to get rid of our PMI. We then refinanced when it was worth about $290k. After all, interest rates were dropping, and we wanted to improve our home features. So after that refi, we took some cash out, put it in the home, and our total payment was actually less than what we were originally paying when we first bought the home. Amazing. And for some reason we needed less and less documentation to get these refinances done. We didn't question it.

Then, when we had a major life change, my mom wanted to sell us her house. I had lost my job in the dot-com world and was preparing to delve into the appraisal industry. So now that my wife was making about $60k, how in the world could we afford a $600k home? Well guess what, some new "stated income" program allowed us to qualify for that house. Plus, since we sold our old house at a huge profit, for a 20% down payment and a lower than market value sale price, how could we say no.

So now we're in our interest only 5 year ARM at still an awesome rate and I was now appraising homes for a good company. So the affordability wasn't a factor at all. But in doing close to a thousand appraisals in SoCal between 2003 and 2005, I saw the mayhem that was going on. People buying crappy 1000SF 70 year old boxes facing busy streets for half a million bucks- and not to sound judgmental, but we're talking about people who appeared to be less than qualified (sorry to judge, but I won't question you on your job insights and you don't question mine). Entire neighborhoods of new tract homes worth $800k, with stay at home moms. People buying handfuls of homes at a time- after all, the ride was continuing.

But then when our second child was born and we saw the mayhem in California coming to a head, we realized that we needed to get out, move to a slower pace, and really raise our family in what we felt was the right way- one parent staying at home during the formative years, affordable home payments, less traffic, better economy, etc. So we "bought" a house in Arizona while we still owned our California one- with the intention of selling the California one and moving to Arizona directly. The house we had in California was worth about $900k, built in 1969 and about 2800SF. The house we were buying in Arizona was worth about $400k, built in 2005 and about 2800SF. Now that's practical- right?

Never mind the fact that we got stuck with a higher rate because the lender didn't believe that we were really moving into the home. We knew our intentions. We sold our California house at the perfect time and I started my business. But now that I was a local, I started to see the reality of what we moved into. On our block alone within a brand new master planned community of about 1700 homes, there are about 38 houses. Of those 38 houses, 12 are owner occupied. Of the rest, 25ish were investment properties. Those 25ish were owned by about 20 individuals- that's right, we have on our street alone several homes that are owned by the same person- who lives in another state. and then there's the rest that have been vacant since we moved in. Since then, we've seen about 8 houses on our block go into foreclosure and now we have about 12-13 owner occupied homes. But guess what, our home is now worth about $240k. We're faithfully making our mortgage payments, we take care of our yard, we love our community. But we've got a 5 year ARM with about 2 years left before it adjusts. So when you see the news stories of "people" who have fallen victim to this sort of thing, now you have an actual example. But we're still making our payments and are doing our best.

So now that I've gone off on some strange non-political rant, what the heck is my point? Well here's another video for you to watch. But instead of simply posting it, let me narrate from my own perspective. This is not a video with crazy music or nasty photos of people involved. Just their actual published and viewed statements and comments made by the individuals, newscasters and anyone else involved.

Now the first gentleman you see is a man named Andrew Cuomo and he was the chairman of the HUD during the Clinton administration. In this video from 1998 (around the time we bought our first house) you can see that he had this press conference essentially criticizing mortgage discrimination based on "financial credit history". Now I'm not sure what the main criteria should be for giving loans, but especially for something like real estate, I'd like to think that credit history is sort of a very important judge of someone's financial sensibilities. Or maybe I'm racist too for suggesting that credit history should be considered for giving mortgage loans.

So the banks had agreed (due to pressure from the CRA) to lower their standards for mortgage lending. This is despite the fact that (starting at around minute 3:04ish), Cuomo even admits that they expected more defaults due to this affirmative action. Why do I keep mentioning Cuomo? I'll get to that in a bit.

So who enforced and pressed for these loans to be given? Minority groups- minority groups with strong legal counsel. That's right, organizations like ACORN of which Barack Obama is so proud to have fought for. Now I've seen a lot of youtube videos with liberals mocking conservatives for not really knowing what ACORN stands for, but it's pretty simple. ACORN, among other endeavors legally fought for standards to be lowered so that more shaky loans could be given out to uncreditworthy people- specifically, minorities. And this was despite protests by Fannie and Freddie who thought it was a bad idea- the same Fannie and Freddie who are being bailed out by yours and my tax dollars for bad decisions that they made.

Now if you stand up to someone who's arguing for minority rights- regardless of what's the right thing, and they have a smooth talking lawyer, guess what- you're a racist. And you get Gloria Allred and Al Sharpton making you out to be the second coming of Hitler, and nobody wants that sort of PR nightmare. So unfortunately, the lenders had to succumb to the pressure of ACORN. And then subsequently Fannie and Freddie had to give in as well.

But with these loose credit standards available to minorities, guess what- those sort of loans started becoming available to practically anyone. And lending standards loosened even more. Using my own personal example above, we got a loan on a $600k house while we still owned our old house- and I was unemployed. We then bought our Arizona house while we still had our huge mortgage payment in California- and I didn't have to provide any documentation. And guess what, I'm not black! And I'm not Mexican!

And not to sound like too much of a connect the dots conspiracist, but as clearly described, Obama was significantly involved in the actions of ACORN. He pushed for these loans based on discrimination. Now again, not to sound racist, but there's nothing really immoral with what he and ACORN was doing is there? I believe in giving people the benefit of the doubt. I'm a forgiving person. I believe in the good in people. But giving a bunch of money to people who shouldn't have it in the first place? Is that smart? Not to mention that the loan payments changed over time to unaffordable levels. But will Barack Obama admit that he is a major contributor to our mortgage meltdown? At about minute 7:00 of the video, he fails to accept any blame- of course not- HE'S A POLITICIAN!

Now I've actually heard a lot of people say it's predatory lending, or fraudulent appraisals, or bait and switch tactics. And there is no doubt whatsoever that these sorts of thing occured. But why did they occur? Because with these mandated lending practices FROM THE TOP and from ACORN and Clinton, and yes Greenspan too, and yes the politicians who turned the blind eye, now you have so much competition to get these loans done that it was a mad scramble to all of us minnows. If I couldn't appraise a home in time for a value that was needed, there were a zillion other Appraisers who would be happy to. If a loan officer couldn't get the right loan for the client, then there were a zillion others who could (and by the way, unlicensed loan officers in Arizona- because it's not required). If the realtor couldn't make the deal work, then there were a zillion other realtors available. But who created these NINJA loans (No Income, No Job). Who forced everyone else to offer the same loan program in order to stay competitive? If WAMU had that loan program and Countrywide didn't, then Countrywide would lose a lot of potential business.

So who is to blame? In my book it's pretty clear that it's guys like Obama who are to blame. No, not him alone, but by gosh, he sure did fight tooth and nail to make sure that those sorts of loans were available.

Now getting back to Cuomo, let me tell you why his remarks on this video got me so riled up.

I am a Certified Real Estate Appraiser. That means that I took a certain amount of classes, took a few tests, paid some fees and most importantly, I spent 2 years in training under the supervision of an experience Appraiser. For two years, he reviewed every single appraisal that I did to make sure that it passed muster. After the S&L meltdown in the late 80s, appraising became a federally regulated industry with its own set of standards that must be upheld by Appraisers. And the good Appraisers in the world are honest people who do the right thing.

Now earlier in 2008, Mr. Cuomo- who is now the Attorney General for the state of New York has decided that the blame of the mortgage meltdown is a result of bad Appraisers. The most heavily regulated part of the real estate equation is the one who must now pay the price- for loan fraud, inflated values, and otherwise bad loans. Per his logic, it's not the fault of the mortgage companies. It's not the fault of Fannie and Freddie. It's not the fault of people like Barack Obama, Bill Clinton and Jimmy Carter for pushing to create potentially fraudulent loan types. And by gosh, it sure as heck isn't his fault. How was he involved in this whole process? Oh wait, why don't you watch the video again and listen to what this fine specimine helped mandate 10 years ago.

Now my rant is done and I feel like I've made my point on why Obama is NOT the answer.
  • If you want a fast exit from Iraq with defeat as our legacy- Obama is the man
  • If you want more corporations to leave America or outsource their operations because they don't want to get taxed so much- Obama is the man
  • If you want a president so heavily responsible for the mortgage meltdown that it's laughable- Obama is definately the man.
  • If you want to see more government spending- Obama is the man
  • If you want to see socialized medicine- Obama is the man
  • If you want to see more kindergarden teachers making their 5 year old students vow to defend gay rights without even consulting with their parents first- Obama is the man
  • If you want more "entitlements" for lazy people- Obama is the man
  • If you feel that rich people should pay more taxes to support the public schools that they don't even use and the social programs that they don't even use- Obama is the man
  • If you want a president who will actually polarize our country even more due to the crazy militant redneck racists that still exist in droves in our nation- Obama is the man. (for a guy who is hated so much and has such a low approval rating, George Bush seems to have fared pretty well in the physical threats against him category- Obama hasn't even been elected yet, and he's already had at least 3 thwarted plots against him. I'm telling you, there are some messed up retarded people in our country
Don't worry, I'm done for tonight. I'll save my Cuomo rant for later.

Oh yeah, and you know he's a Muslim too? ;)

No comments: