Wall Street Bailout or Democrat Handout?

Enough is Enough. I am sick and tired of watching all the lies and distortions about who is to blame for what is going on with Wall Street.

It isn’t the fault President Bush or Senator John McCain. They both had enough foresight to warn a America of an impending financial disaster. Unfortunately, it fell on deaf ears or was shouted down by leaders in the Democrat party that were busy padding their pockets while helping their friends get rich and Senator Barack Obama is in it up to his neck while wagging a finger of condemnation and blame at the Bush Administration and Republicans in general.

Now I don’t expect Barack Obama to nationally accept blame for this Wall Street crisis personally or for his party. Honesty and being forthright have never been a priority for Mr. Obama however to blame this Administration and the Republican party is much like an arsonist accusing the Firemen of torching the house.
What is even worse is the fact that Obama is lying about it and the Main Stream Media is swearing to it. “Give Me a Break!” said President Clinton about Obama during the primary and he was right! We have ventured so far from reality and truth that I am not sure that there is enough time before the election to set the record straight.

I have bit my tongue on this subject until it is raw. Now we have “Obama Truth Squads” running amuck in the state of Missouri with Prosecutors and Sheriffs threatening reprisals on Obama detractors. So much for freedom of speech.
Speaker Pelosi and Senate Majority Leader Harry Reid continue to spew their partisan venom any time they are in front of a camera or microphone. The majority of which are half truths or outright lies. An honest Bipartisan effort will be needed to pass this legislation and Pelosi and Reid can’t shut up long enough to get the job done.

Senator John McCain – Stop attempting to be a Statesmen during this campaign. The McCain I know is a warrior, a scrapper and speaks the truth regardless of who it offends. A straight shooter that will stick up for me! Stop playing nice with someone that endangers the financial and physical security of my family. When Sen. Obama lies, call him out on it. Show us some passion Senator! Don’t show up at a gun fight with a pocket knife! We are counting on you!

Senator Barack Obama – Stop looking into the camera and telling me that you are going to reduce taxes for 95% of Americans when 40% of Americans do not pay taxes. I may not have graduated from Harvard but I can do simple math so stop insulting my intelligence. I have researched your paper thin resume and find you sorely lacking. How many days have you actually served on the job as a US Senator? I believe it is less than 150 actual days on the job. That is less than 6 months actual service as a US Senator. The rest of your time has been spent running for the Presidency. Not only do you have very little experience may of the proposed bills that you have cosponsored shows that you are not only naive when it comes to the economy you are dangerous. You are dangerous on the economy, dangerous on your foreign policy views, show no character with your consistent lies and misrepresentations, demonstrate lack of judgment with by your past associations and your radical socialistic views and associations present a “Clear and Present Danger” to our great nation Sir.

Our financial house may be on fire do to the policies of liberal congressmen forcing banks to generate low income and sub-prime loans while protecting Fanny & Freddy from closer scrutiny but increasing taxes on business and capital gains as Sen. Obama proposes will be like nuking Wall Street.

The Republicans have a plan to help Wall Street with a “Work Out” not a “Bail Out”. By suspending Mark to Market accounting and removing capital the gains tax Wall Street will realize instant liquidity and credit will again be accessible. Other responsible proposals like Federal Insurance on bad loans make more sense and reduces exposure for the tax payers.

The rescue Bill needs to be a stand-a-lone piece of legislation. We don’t need to send billions to a partisan political group like Acorn as proposed by the Democrats or keep home owners in homes that they can not afford at my expense. House Republicans need to make sure that the “Wall Street Bailout” does NOT become another billion dollar “Democrat Handout” so they can buy votes with tax payer money.

Do I agree we should bailout Wall Street? No I do not however our financial house is on fire. Let’s do what is needed to put the fire out THEN look for the arsonist. Unfortunately that will be well AFTER the election is over. I hope everyone takes some personal responsibility to research the real cause of this crisis before they vote on November 4th. If they don’t the only “Change” we have may be what is left in our pockets.

Wake Up America!

In my first article in this mini-series I touched on Sen. Barack Obama’s STOP FRAUD Act. As it turns out he is not the only Democrat that is clueless on the economy and real estate.

There is pending legislation out there that could throw an already crippled real estate industry into cardiac arrest.

Clinton and Obama on the Campaign Trail

We see Hillary Clinton’s and Barack Obama’s smiling faces plastered all over the news while they campaign their hearts out to ensure they receive enough delegates to fight for the Presidency of the United States. However, Democrats need to pay attention to what is going on behind the scenes of these nominees. As Senators, they vote on various bills and even cosponsor bills that can and many times are enacted into the United States law books. Instead of watching these two candidates shaking hands, making promises, and talking about what they would do in order to save the US economy and keep America out of recession, you need to see what is going on behind this façade and learn about the bills they are endorsing or even co-sponsoring.

Clinton and Obama both are cosponsoring a bill that has been introduced that will do damage to the US economy, the real estate market, the housing industry, and future homeowners.

S.2136 The Helping Families Save Their Homes Act, which was introduced by Senator Dick Durbin and cosponsored by both Hillary Clinton and Barack Obama along with the S.2133 Home Owners’ Mortgage and Equity Savings Act introduced by Senator Arlen Specter, will do more damage than good if enacted.

S.2136 would do away with a stipulation in the bankruptcy code that forbids adjustment to the debtor’s primary residence mortgage during Chapter 13 proceedings. Under this bill, Bankruptcy Judges would have the right to change the principal, interest rate, and terms of mortgages. Along with handing these abilities over to Bankruptcy Judges they would also have the power to extend the length of the loan, waive the counseling requirement for those whose homes are already in the foreclosure process, fight the excessive fees, preserve legal claims against greedy lending companies while debtors are in bankruptcy.

S.2133 is almost the same; it would give power to Bankruptcy Judges to amend mortgage loans on a debtor’s primary residence during Chapter 13 proceedings. However, under this bill bankruptcy judges are only permitted to decrease the principal of the mortgage when both the lender and the homeowner agree to the amount. The bill also allows bankruptcy judges to delay, stop, or roll back increases in mortgage interest rates, to relinquish prepayment penalties and to recover interest, fees, and fines when the creditor committed fraud or did not disclose the loan limits. Credit counseling would be postponed until after bankruptcy filing when foreclosure is forthcoming.

With these types of laws on the books, Americans will have a much harder time qualifying for home loans, as lenders will tighten their lending. Qualifying will become a nightmare for middle income Americans as larger down payments and higher FICA scores will be needed. Lending companies are not going to be left holding the bag when individuals end up in bankruptcy court.

This means, the fewer loans will be given due to lending companies being overly cautious which means less home sales, thus interest rates will rise. The higher priced homes will sit longer due to an increase in interest rates, as Americans will not be able to afford their mortgage payments on higher priced homes. The longer these homes are on the market, the lower the price of the home will go. When the housing industry is hurting so does our economy.

Instead of choosing a candidate for the Democratic candidate for Presidency based on what you hear and see on the campaign trail, vote by what the candidates are really doing to aid in helping Americans behind the scene.

Do your due diligence and investigate what types of legislation the candidates have either introduced or cosponsored. It will speak volumes about his/her common sense and appropriate responses to common issues.

~Rhonda McMillan
Broker

I was in total shock when I stumbled on Sen. Barack Obama’s proposed legislation STOP FRAUD Act S. 1222.

The implications for the real estate industry are terrifying. It would have been more appropriately named “Stop Real Estate Sales Act” because that is exactly what it will do.

It lumps real estate and mortgage professionals in a vague all inclusive manner to expose them to civil and criminal litigation for fraud on any transactions that utilized sub-prime loans. Penalties can be as high as $5,000,000 and up to 35 years imprison or both.

(1) CRIMINAL PENALTIES- Any mortgage professional who violates subsection (a) shall be fined not more than $5,000,000, or imprisoned not more than 35 years, or both.
(2) CIVIL PENALTIES- Any mortgage professional who violates subsection (a) shall be liable for an amount equal to the sum of all finance charges and fees paid or payable by the natural person, financial institution, or purchaser who was defrauded unless the mortgage professional demonstrates that such violation is not material.

The Stop Fraud Act defines a “mortgage professional” as;

(e) Definition- As used in this section, the term `mortgage professional’ includes real estate appraisers, real estate accountants, real estate attorneys, real estate brokers, mortgage brokers, mortgage underwriters, mortgage processors, mortgage settlement companies, mortgage title companies, mortgage loan originators, and any other provider of professional services engaged in the mortgage process.

This Will Open the Flood Gates On Litigation Against REALTORS®

Any one that has been foreclosed on would be able to sue their real estate agent and/or real estate broker for fraud in addition to asking criminal charges are brought forward.

This Bill also contains mandatory reporting for “any suspicious activity by an individual or entity”. Now we really go down a slippery slope here. I have been involved in real estate litigation before. The case of “if I did not know I should have known” was brought forward by the plaintiff’s attorney. Now while I did prevail, I would be at risk any time I walked into a court room.

By rising the bar on possible offenses to the level of fraud it would considerable lengthens the timeline on statutes of limitations. In the state of Missouri the statute of limitations on fraud is 10 years. In some instances in can be expanded to 15 years. The State only requires that I keep records for 5 years and the IRS only requires 3 years so how am I to defend litigation on a 10 year old transaction?

If Sen. Barack Obama’s Stop Fraud Act is passed it will also raise interest rates and make home loans extremely difficult to obtain. Mortgage companies and banks will scrutinize borrowers like NEVER before.

The main stream media has really dropped the ball on this story. Sen. Barack Obama introduced this Bill back in April of 2007. This is actually Sen. Barack Obama’s second attempt to pass such a bill. His first attempt was Bill S. 2280 [109th]: STOP FRAUD Act introduced Feb. 14, 2006. So if you know anyone involved in the real estate or mortgage industry, PLEASE sent them a link to this blog and make them aware of the professional danger they may be exposed to.

To read the Bill in it’s entirety you can do so at the PREN Real Estate Forums.

~Rhonda McMillan
Broker

Project Lifeline was yet another disappointing program that was launched this week with the pretense of a temporary solution to the ever growing foreclosure crisis faced by the housing industry.

Project Lifeline consist of six of the ten major mortgage companies giving a 30 day reprieve on foreclosures to homeowners that are 90 days or more delinquent on their home payments. This 30 day grace period is intended to allow homeowners that are in default to secure refinancing. Obviously the planners of this new program have not attempted to seek financing in today’s market let alone try to shop a bad credit loan in 30 days or less.

Who is kidding who here? This is no more than an attempt to curve the bad mortgage press on the 6 o’clock evening report. This is going to help very few distressed home owners.

A popular Las Vegas real estate blog has called for the government to either come up with real solutions or be honest with the American public and tell us they intend to do nothing. I agree completely. Put up or shut up but stop pretending to care and giving homeowners’ false hope that the Calvary is on the way. To do otherwise is prolonging the anguish of countless Americans and the recovery of the real estate market.

While the Columbia Missouri real estate market has not been impacted to the extent other regions of the country have the effect is still obvious. Uncertainty in the market destabilizes home prices. Home owners are increasingly stunned as they watch their equity in their homes diminish. Before we can begin recovery we need to hit bottom. Prolonging this market inevitability is doing a disservice to those affected and is causing more of the population to suffer as the problem is exacerbated by the possibility of government intervention.

I agree completely with my Las Vegas colleague. It is time for our government to quit riding the fence. Either step in or step aside.

~Rhonda McMillan
Broker

Recently one of our sons, Chad, started classes at Columbia University. Although Chad was extremely excited about returning to school he was also very apprehensive. The reason for his anxiety was the fact he was a freshman at the age of 25.

You see Chad is a Former Marine and a Veteran of the Iraq War. He was but one of the thousands of Marines that were the first to go into Iraq during the invasion. Chad was fresh out of Salem High when he went to Boot Camp in 2002. He was still in high school when he enlisted after 9/11.

Now as he struggles to adapt to “Civilian” life he wants to finish his education. For that I as a mother am both thankful and proud. He hopes to one day join me selling Columbia real estate and I do indeed look forward to that day.

In addition to Chad’s anxiety about his age as a college freshman he admittedly has a few cobwebs in the “grey matter” area. He came over to the house to discuss these concerns with his father and myself. His father told him to grab a tablet and he did. His father then said “I never was very good at math but I was lucky enough to learn the formula for success.” On the paper my husband scribbled the following formula: W x (K+S+A) = X. He then said “this formula applies to anything you do including school. Any trade, any business.”

My husband then explained the formula:

W = Work Ethic
K = Knowledge
S = Skill
A = Ambition
X = Success

Each of us needs to rate ourselves in my husbands formula. Use any figure you wish for the first 4 parts ie 0 -10 or 0 -100. It matters not how high you rank on “K”, “S” or “A”. If you rank 0 on “W” the answer to “X” is 0.

The reason I share this little private story with you is that not only did it help Chad overcome his anxiety after only one day in college the young man learned two valuable lessons….. The formula for success and that Dad is much smarter that he ever imagined.

~Rhonda McMillan
Broker

Morgan Carey (aka SEO Guy) who operates one of the largest real estate forums on the Internet admitted publicly Friday November 2nd on his real estate Blog that his Canadian based company did hack into the Pro Real Estate Network Forum also known as PREN.

According to administrators of PREN and Mr. Carey’s REW Forum Hacking Apology sites someone from REW used a password from a former Client that is now a Forum Moderator at PREN to hack into the system and delete threads that openly discussed many ethic violations and misconduct of Morgan Carey and Real Estate Webmasters. PREN immediately discounted the Carey apology as little more than damage control and called for Morgan Carey to name the employee, dismiss him/her and file a criminal complaint with the Canadian authorities. This has not taken place as of the time of this posting.

It seems as though passwords can be harvested from these public real estate forums and inasmuch as we all tend to reuse the same passwords it leaves us open for identity theft. It is recommended by industry experts to use passwords that are unique to any public forum and to NEVER reuse any password on bank or email accounts.

Although SEO-Guy (Morgan Carey) blames an unnamed employee for the forum break-in and has downplayed the incident law enforcement agencies have now been involved since Federal Statutes have been violated.

The recent fire storm in the real estate forums is an unwelcome distraction for those of us that are already besieged by an industry slump and poor press. This classic “David vs Goliath” reenactment is certain to gain more negative press for the housing industry as Agents from several states have been adversely affected by REW Forum Hacking and deletion of these threads.

According too many experts in the field of “Search Engine Optimization” back-links from these forums aide in search engine rankings for real estate websites. When these aged pages and agent links were deleted it negatively impacted the rankings of the Agents involved and the PREN forum itself. Since most real estate transactions begin on the Internet these prized search engine rankings can be worth a great deal of income to any Agent or company fortunate enough to have them.

I was also informed that Morgan Carey and REW has SEO and link Clients competing from many of the same markets of the Agents that were impacted in PREN. In my humble opinion the action taken by REW gives SEO Guy’s Clients an unfair advantage and is outright Industrial Sabotage.

Please remember to change your passwords if you belong to any of these public forums to protect yourself from identity theft. This is becoming an extremely cut throat industry I am ashamed to say and all precautions need to be taken.

~Rhonda McMillan
Broker

This week we have all watched in horror as thousands of homes have been lost in the recent California Wild Fires.

While the wild fires are almost an annual event now do in part to mismanagement of public and private lands as well as urban sprawl, this year was especially devastating with over 1 Million residents evacuating thus far.

Why does a Columbia Missouri real estate Agent pay so much attention to a natural disaster in California you ask? Simple economics for us in Mid-Missouri is the short answer. In my almost 20 years of involvement in the Missouri real estate market I have noted a substantial surge of California property buyers after every major natural disaster and I predict this one will be no different.

Why do California residents choose Missouri? That answer is simple as well. California property owners are some of the savviest home buyers in the nation. They generally do their home work when faced with relocation. Missouri offers more bang for their buck than most competing states and their dollar has considerably more buying power than it did in California. Once a California home owner cashes out they are surprised at just how far their proceeds will go. Funds from the sale or insurance settlement for a modest 2 bedroom ranch style home on 5 acres in southern California can be converted to a ranch consisting of 200-300 acres with a 4+ bedroom modern home with all of the necessary outbuildings. This is an example but I have seen it happen time and time again.

Another major reason that California property owners relocate to Missouri is for the same reason they are in Southern California to begin with. They tend to be lovers of nature. While Missouri does not have the desert landscape and terrain they are accustom to, our hardwoods, forests, pristine rivers and wildlife are enough to please any nature lover.

Southern Californian’s typically are horse lovers. There is an estimated 300,000+ horses in San Diego County alone. Missouri’s hardy pastures and rolling hillsides are well suited to horses, cattle or any other type of livestock.

And as for cattle, Missouri is second only to Texas for cattle production and even leads Texas as the number 1 state in the nation for cattle per acre.

According to one of our biggest referral partners Al Rosson of Cabrillo Mortgage & Realty Services, property owners have begun inquiries in to selling before the fires are even out. Al says that this is not unusual and that even home owners that did not suffer a loss often consider selling due to the fact they are simple tired of all the near misses.

When I asked Al about the future of real estate in San Diego he replied “With the natural beauty of San Diego and weather that is remarkably similar to the Canary Islands San Diego County will continue to have some of the most sought after property in the nation. While many residents will relocated soon after this fire, there are many more that are waiting to move in. We will recover and be stronger than ever. We always do”.

So while our hearts go out to all of the home owners in Southern California that have suffered a loss I can assure them there is a brighter road ahead….the road to Missouri.

~Rhonda McMillan

Since my last post “Lending Crisis May Soon Be Over” I have been inundated with phone calls and emails for an explanation of why I feel that the worst may be behind us in this recent housing market crisis.

We will undoubtedly feel the affect of the sub-prime fiasco through 2008. However, the figures of mortgages in default are minute when you look at the number of sub-prime loans and even smaller when you look at the total housing market. The figures simply do NOT justify the “Chicken Little” “the sky is falling” mentality of the liberal press.

The larger problem is the lack of confidence by consumers all of this negative press has brought about. Perception is the key and the perception of the crisis is far worse than the crisis itself.

Even for home owners that find themselves owing more on their home than it is worth can simply sit it out and wait for the market to rebound. And unlike finding yourself with stocks that have been devaluated your home is a usable and necessary asset that provides utility while you await a market correction.

In addition to pending legislation to assist distressed homeowners the suggestion by the Bush Administration that lenders work with troubled borrowers appears to have resonated. If you are in a situation where your ARM (Adjustable Rate Mortgage) has raised to a level that is no longer sustainable simply contact your lender. You will in all likelihood discover they will work with you. This will enable you to keep your home and credit rating which is far more desirable than the alternative.

Just remember that history teaches us that the real estate market will rebound. It always has. And you will once again find yourself with equity in your home. Stop listening to the doomsayers and research the REAL figures for yourself.

While I follow real estate markets nationwide I of course pay special attention to Columbia real estate trends. Just like the rest of the nation, new home starts in Columbia MO are down. This will reduce inventory and cause housing prices to stabilize. Sales of existing and new homes are down slightly but by no means dead. The only viable explanation for the recent downward trend in home sales is the negative press the housing industry is receiving nationally. Once excess inventory is absorbed the local market will get back on track.

With fewer housing starts in recent months in combination with stronger consumer confidence the panic selling should subside and the market stabilize.

But the worst is only over if we ignore an extremely biased main stream media and research the facts for ourselves.

~Rhonda McMillan
Broker

The darkest days in the housing industry may soon be behind us. Although the National Association of REALTORS® has reported dismal figures for existing home resale’s for June, July, August and September for this year other figures such as new home and condo sales hint of renewed consumer confidence on the horizon.

With the drop in both interest rates and the median home price nationally it may be time to purchase as the cost of housing is more affordable now than in recent years.

While the sub-prime lending fiasco made great headlines for the liberal press the reality is that it affected a very small segment of the housing market. Even a smaller portion of the market was affected here in Missouri as the sub-prime loans were never truly embraced by local lenders. Missouri banks and mortgage companies based in Missouri primarily stayed with conventional loans requiring income verification and down payments of 10-20%.

The indirect affect on the local housing market was the shaken confidence of home buyers with all the media attention given to the credit crunch created by sub-prime loans going into default even though it was a national, not a local phenomenon.

While the Dow quickly soared back to over 14000 shortly after the Federal Reserve dropped interest rates by a half of a point, today Wall Street fell 140 points at the time of this article after Citigroup’s dismal earnings numbers and news of a potential $100 billion emergency fund to help out three of the largest U.S. banks hit by the chaos created by sub-prime mortgages.

So is the worst behind us? That depends entirely on consumer confidence really and unfortunately the media can all too easily sway and shaken this confidence. The press has begun irresponsibly throwing about the “recession” word of late. Keep in mind that a recession is defined by two consecutive quarters of negative GDP (Gross Domestic Product) and we have yet to log the first. Is this once again an attempt of the media to create rather than report the news? Given the deep hatred of President Bush by the liberal press it is a distinct possibility.

Before you decide not to buy another home or continue to put off a purchase you should do the research for yourself. This is far too important of a decision to leave up to a clearly biased media. And while researching check out how much new housing starts have declined in the past few months. This will lead to a much lower inventory in months to come and could begin a substantial increase in new home costs. Especially if the Federal Reserve again cuts interest rates soon as has been predicted by many.

~Rhonda McMillan

As anticipated on September 18th, the Federal Reserve cut interest rates. To the delight of many the expected quarter point reduction was doubled with a half point reduction in the “Prime” rate.

This will give welcomed relief to many homeowners laboring to pay increasing monthly mortgages created by the sub-prime lending debacle. While the decrease in interest rates may not be enough to save all distressed homeowners the fact that the Fed was willing to intervene was more than enough to spark this year’s highest daily gain in the stock market of 335 points.

In an unrelated press conference today President Bush stated “these are unsettling times in the housing market”. President Bush reiterated that steps are being taken for the government to assist some homeowners refinance and again stated that the tax code was being revised to exclude any debt forgiveness by financial institutions in mortgage refinancing as income to the borrower.

The current tax code views this type of debt reduction as taxable income and would only add to the woes of distressed homeowners.

The President’s proposal of the tax code revision is a positive step for the housing industry and will help curtail the rising tidal wave of foreclosures.

~ Rhonda McMillan
Broker