Editorials -- October 2009 -- the [HOLT] group, RE/MAX Sonoran Hills AZ Real Estate

When I was a kid I loved reading comic books, my all time favorite was Superman. My favorite editions involved the villain Bizarro, from Bizarro World, a place where everything was the opposite of what it should be. There was an alter ego for Superman, who was evil; bad was good; day was night; right was wrong; up was down; etc. When I look around our country I can’t help but feel like I’m…we’re all, living in Bizarro World.

I recently received an email that read, “The new health care plan will be written by a committee whose head says he doesn't understand it, passed by a Congress that hasn't read it and whose members will be exempt from it, signed by a president who smokes, funded by a treasury chief who did not pay his taxes, overseen by a surgeon general who is obese and financed by a country that is broke. What could possibly go wrong?” I’m not trying to make a political statement, whether you’re left , right, or center, you can’t help but feel things are not right. I go back to my starting point; we are living in Bizarro World,

Maybe it’s just me, but not much of what is happening in this country/world makes any sense lately. Case in point, President Obama, who can give a great speech, but who has not ended a war much less slowed the rising unemployment rate or created any peace I know of has just won the Nobel Peace Prize. The world has witnessed great individuals who fought in wars, ended wars, torn down walls, and raised this country out of serious economic turbulence who were never even nominated. Again, I'm not trying to be political, maybe someday President Obama will accomplished great things, but in Bizarro World, you get the award first. I don’t know about you, but when I hear about a safe school Czar who failed to report the statutory rape of a 15-year-old boy or the chairmen of the committee that writes the tax code who doesn't pay his taxes or the chairmen of the committee that writes bank regulations who gets sweetheart mortgages I become just a little angry (to put it mildly)! I mean you just can't make this stuff up.

Think about it, our world is turning upside down. We have been told our entire life that real estate can never go down, but now it feels like it will never go up. Banks tell homeowners they cannot adjust their $400K loan down to $300K, but then they accept a trustee sale for $160K. The banks have received Billions and Billions of United States citizen’s taxpayer dollars, but as we process short sales we spend hours on hold in India??? Perhaps the banks of America could set up a giant call center in Michigan where unemployment will likely breach 20%. Why does a normal real estate transaction take 30-45 days and a “short” sale take 4-6 months? Bizarro World!

Nothing seems to make sense anymore. The banks tell you, “You’re not eligible for a loan modification until you stop making payments,” and then they say, “You don’t qualify because you have late payments.” This housing debacle was created by risky loans and no down payments, however, new stimulus programs allow borrowers 22% of free down payment money from government grants. FHA loans only require a 3.5% down payment and that can be a gift. We are told to be responsible and live within our means while the government printing presses run 24/7.

I guess common sense is out the window. The stimulus package was supposed to fix everything, yet unemployment continues to rise. Now there is talk of another stimulus even though the first one hasn’t been spent. And, could someone tell me how, if every elected politician opposes deficit spending… How in the world do we have deficit spending??? Bizarro World is the answer. I only hope it goes down like the comic book and Superman wins.

Robert Holt & Phil Mills, RE/MAX Sonoran Hills. Please call 623-748-9583 or visit www.TheHoltGroupAZ.com & tell us your thoughts…

Wednesday, 10.28 2009

“Real Estate for Real People”

Living High on the Hog…

The current U.S. economy now, more closely resembles the parting of the Red Sea than a land where the average Joe has a shot of getting ahead. The misers on Wall Street are raking in massive amounts of money, while millions of Americans lose jobs and homes. As unemployment and foreclosures continue to spiral out of control, the Dow Jones reaches 10,000, which simply illuminates the fact that the efforts to save Wall Street have far surpassed the support for the people of this great country.

As wreckage from the mortgage bubble continues to increase and as wage cuts & layoffs become more widespread today than in any era since the Great Depression, bankers benefit from taxpayer bailouts to reap blockbuster profits and scandalous bonuses.

So how can the same companies that “we the people” are “bailing out” now report billions in profit while the rest of us suffer? Well, we know the profits are not being generated through lending since access to much needed capital is still not available to the average small business. No, it looks like the new formula for the Big Banks is a toxic combination of selling off assets, laying off employees and rolling the dice. As it turns out, the banks are not lending all of the cheap money because they are using it to make bigger and bigger bets on financial instruments that are no less risky than a game of craps in Vegas.

The Wall Street casino is thriving, fresh with taxpayer dollars, while the rest of us are fending for ourselves in a financial nightmare created by the same clowns now living high on the hog. As an example, JP Morgan Chase (TARP fund recipient) just reported $3.6 billion in 3^rd quarter profits and Goldman Sachs (TARP fund recipient) reluctantly announced recently that they would be paying out $23 billion in bonuses. How do I get that job?

I have never had a problem with any company making money, even a lot of money as long as it does not come at the expense of someone else. The problem here is that we just bailed these same companies out for excessive gambling debts and now they are back at the blackjack tables letting it ride again. So much for oversight, Mr. Frank.

In other words, the banks are gambling with taxpayer money. I guess it is easy to make big bets when you know you cannot lose – even when you lose. There is no risk for the B of A’s and Goldman Sach’s of the world when all they have to do is turn to their friends in Congress or at 1600 Pennsylvania Ave. to be bailed out. It is no wonder people across this country are angry. I hear it everyday from ordinary hard working Americans that are losing their home due to no fault of their own and getting zero help from their lender or their congressperson. The worst part of all of this is that the lenders that are doing nothing to help the little guy are the ones still holding the bailout money and the elected officials continue to do nothing, but appease the hogs.

Personally, I do not think anyone would have a problem fending for themselves if the playing field was even, BUT, it is not and that’s the problem. Clearly, this “Bailout” has not done what it was designed to do which was to help the people. The Stock market might be going up as big corporations score short-term profits from cost cutting (namely from mass layoffs), but your neighbor who is losing his/her house is sure not benefiting.

Ironically, the same banks that are now reporting billions in profits (many still holding taxpayer bailout money) are doing nothing to help struggling homeowners. Meanwhile all we get out of Washington is tough talk and weak action. We hear awe-inspiring speeches, but get policies with no teeth. We watch Senate hearings where politicians act like the school bully, but do nothing. Until our elected officials find some backbone and demand more positive action from the banks, (at least the ones the taxpayers are propping up) then the foreclosure epidemic will continue to wreck havoc on everyone.

Obviously, what the government and the banks are doing is not working since despite a multi-trillion-dollar bank bailout, foreclosures are surging to all-time highs. In fact, the latest numbers show there were more foreclosures in the 3^rd quarter than ever before. Sadly, we all had better hold on to our hats because according to many of the predictions (10 million in 2010, 11 in 2010 and 12 million foreclosures projected by the end of 2012) things are just getting warmed up.

Through the years I have learned that not much in life is certain, however, I have never been more certain that if the banks and the government do not make radical changes in the way they are dealing with this crisis, then there is much more misery ahead for all of us.

I once heard that an economy should be a measure of social well-being. If that is true then our current society is in pretty bad shape. Maybe it is time for our government to stop bailing out the Big Banks and start helping those it was designed to help – the citizens of the country. After all, the 17.5 Trillion (recently reported as the real number the banks have received in loans and guarantees) would have been more than enough to pay off every mortgage and all student loans in the US. I think that sort of stimulus package might have worked?

Robert Holt & Phil Mills, RE/MAX Sonoran Hills. Please call 623-748-9583 or visit www.TheHoltGroupAZ.com & tell us your thoughts…