There’s always something to howl about.

Category: Big Mother (page 12 of 15)

The “cap and trade” bill is full of outrageous proscriptions on private property rights — so the NAR is campaigning against honest appraisals instead of fighting the growth of the nanny state

If you had your blast email spam from NAR President Charles McMillan, you know what’s important to the Grand Poobahs: Appraisers are all of a sudden just too dang honest, and that’s bad for business. Meanwhile, the so-called “cap and trade” bill that narrowly passed in the House of Representatives last night is full of nightmare provisions impinging on the rights of private property owners to do what they want with their land and structures. Where was the NAR? Elsewhere, of course. Where else?

From JammieWearingFool:

Beyond what it will do to our economy, at the end of the debate House GOP Leader John Boehner took to the floor and started reading from the 300 page amendment that the Democrats drafted and dropped on the legislatures at 3 AM, there was literally hundred of items to impose federal control over your life. Here are some highlights.

Want to replace a window? Not so fast. First you must pay for an appraisal of your house to measure its energy efficiency and receive calculations of both before and after the proposed change. Hey, it may be a great excuse for those guys trying to avoid putting in that big bay style window that the missus has been bugging you about.

Are you having a new house built? Back up, Skippy. This bill includes language that tells you exactly where you can put your electrical outlets.

Did you know that for one sort of appraisal service related to determining energy efficiency there is only one company you can use? Yup, it is right in there along with the name of the company. How is it that this one company managed to land the only contract to service 300 million Americans? Who is this company?

I wish I could answer those questions, but all of those provisions and more, Rep. Boehner went on for almost an hour citing them and still didn’t get through the whole 300 pages, is not available. You see because of when the Democrats dropped this amendment at 3 AM the text of it is not available. So much for that transparency. The total bill runs on Read more

Getting a $15,000 tax credit when you purchase your next home could be as easy as stealing candy from a baby…

This from my Arizona Republic real estate column (permanent link):

So we started with a $7,500 tax deduction for first-time home-buyers.

But that didn’t juice the real estate market enough, so we bumped the number up to $8,000 and made it a full-blown tax credit. If you owe $8,000 in taxes next April, your slate is wiped clean.

But even that didn’t juice the the real estate market enough, so this week Republicans — the alleged party of fiscal responsibility — proposed bumping the tax credit up to $15,000 and making it available to everyone — including billionaires.

How cool is that? You buy a $150,000 house, you get 10% back when you file your taxes. And you can file an early return to get the money now. And you can even finance the tax credit now and pay it back when you file your return.

You can’t — quite — use the tax credit as your down payment, but that “reform” can’t be more than inches and hours away. And a $15,000 down payment on an FHA loan buys you a $428,500 house.

Unfortunately, that’s more than the FHA limit for metropolitan Phoenix, so that limit will need to be “reformed” as well.

Paying people to buy houses would be insane if we actually had the money to back up our promises. But, since we don’t, these “reforms” are the mark of true statesmanship.

I’m helping an ambitious young couple buy their first home right now. We’re late to close, a common enough situation.

They just had their second child, an event mere bureaucracy cannot delay. Their baby boy — his name is James — is sweet and beautiful, healthy and smart, a perfect specimen of incipient humanity.

They’re taking the $8,000 tax credit, of course, as they should. The government doesn’t become less insane if you shoot yourself in the foot.

But it is sweet little Baby James who will pay for that tax credit, and for millions of others, and possibly for millions more at $15,000 a pop. Our economy runs on theft — and we’re running out of people to steal from.

Swiss Accounts, Condo Developers, and an Open Door

Americans who hide money offshore have a almost mystical belief in foreign bank secrecy laws. Whether it is Switzerland or the Carribean they believe that these countries’ laws and bankers will protect them from the U.S. government’s investigators and tax collectors.

Secrecy has crumbled. You wouldn’t know it from the people who come to my office looking for advice. They have faith that their bearer shares and banking arrangements will stay invisible to the IRS. They believe that the U.S. government is pursuing the Swiss bank UBS. They don’t have their money in UBS, so they think they are safe.

There is no such thing as secrecy. The likelihood that the IRS will find Americans with hidden offshore bank accounts increases with each passing day. Let’s look at recent history.

In early 2008 it was revealed that the German government had paid an informant 4 million euros for stolen information about “safe” accounts in Liechtenstein. This information was passed on to other governments. Including the USA. One hundred U.S. taxpayers were caught in this net…so far. Bribery by the German government put U.S. taxpayers in the cross-hairs of criminal charges.

What about resentful ex-employees doing dumb things? Rudolf Elmer worked at Bank Julius Baer, a prominent Swiss bank. He lost his job. The normal legal back and forth followed. Except that in a fit of pique Mr. Elmer released hundreds of internal bank documents on the internet. Including the names of bank customers.

Now the elephant is dancing. The U.S. Department of Justice is pursuing UBS, trying to get UBS to turn over the names of as many as 50,000 names of U.S. account holders. A UBS executive was arrested, pleaded guilty, and is cooperating with the U.S. government.

I’m guessing that more than a few of BHB’s readers have clients with offshore bank accounts. Asset protection trusts. Etc. People whose tax strategy is “How will the IRS ever find out?” Especially condominium developers. 🙂 As sure as night follows day, construction defect litigation by homeowners associations will follow the successful completion of that condominium project.  And Read more

Q: Why is taxpayer-funded education in the United States so poor? A: Johnny can’t read, but he sure can vote…

TCSDaily:

It goes beyond a failure to find ideas that increase education; many have embraced ideas that are clearly destructive. Our experts really don’t seem all that interested in education as most people understand this term. Reading, writing, arithmetic, and geography, for example, don’t seem to be priorities. What we see in education makes sense only if we assume that our educators have an agenda we don’t know about, or that they are malevolent, or both.

So what agenda, you’re wondering, are they actually focused on? What’s the answer to the mystery? Here is my deduction: that those at the top of the Education Industrial Complex, since the time of John Dewey, have been collectivists first, and educators second or third. The goal of creating an educated child was too often superceded by the goal of creating a cooperative child.

Broadly speaking, they undermined educational success in two ways. First, they found reasons to delete and dilute the curriculum. Second, the things they did teach, they often taught in confusing, unhelpful ways. I could reel off a list of 50 failed pedagogies, none of which lived up to the hype or the hope, things such as New Math, Reform Math, Constructivism, Bilingual Education, Self Esteem, et cetera.

The paradigm of bad pedagogies, of course, is Whole Word, I.E. any non-phonics way of teaching reading. Around 1931, every public school in the country was told that phonics was out, and the children should be taught by Look-Say (think Dick and Jane). This switch is one of most amazing (and revealing) events in American educational history. Try to think of another instance where a profession abruptly decided to reverse everything ordinarily done for centuries.

Once you assume that all these conclusions are true, you find there’s no mystery at all. Everything that’s happened in American education is as logical as 1 + 2 = 3. My estimation is that if we tossed out the ideological admixture, we’d see steady improvement. Don’t think we can improve things by tweaking around the edges. We need an intervention. We need surgery.

Reds

[Brian Brady asks for advice. This ain’t it. I wrote a book in 1988 about human civilization, a condition I believe human beings can but so far have not attained. I’m thinking of revisiting the topic, if only because I fear those kinds of ideas might have to transcend a dark age. I wrote the following essay seven years ago, and, of course, by now everything it addresses is just that much worse. Tyranny is an avoidable fate — but not if you don’t know how to recognize it. –GSS]

 
My son is a Cub Scout. A few weekends ago he had his yearly ScoutORama, a sort of Scout convention and trade fair. The theme of this year’s event was ‘American Heroes,’ and it turns out that American Heroes, for the most part, build small catapults and cook in Dutch ovens. One Cub pack took the theme rather more to heart, with a huge display called ‘Freedom In Unity’.

To an attending Cub Scout I said, “Is it conceivable to you that unity and freedom might conflict?”

After a moment’s thought, he said: “Huh?”

As a father of an eleven-year-old, I fully expected this retort. Undismayed, I pressed on: “Isn’t it reasonable to suppose that the quality best represented by the word ‘freedom’ is freedom from other people?”

HUH?!

And my wife pulled me away, arguing, quite correctly, that it is unfair to expect children to regurgitate, much less competently defend, the horseshit they are force-fed by adults.

They do so eventually, of course, and thus become the adults who do the force-feeding of the next generation of helpless victims — unminded before they can be fully mindful, starved and stuffed at the same time, gorged forevermore on horseshit.

But: It’s not the what, it’s the where, the who, the how. And most especially: The why.

When the French, to pick an odorous example, rail against Individualism, we know what we’re hearing. When radical feminists — or radical environmentalists, or radical vegans — heap scorn upon Liberty, it doesn’t take much acuity to see right through them.

But to listen carefully — and I am cursed with the skill of listening Read more

From Russia, With Love (How Americans Could Learn A Thing Or Two From The Former Subjects of the Soviet Union)

Stanislav Mishin writes a weblog called Mat Rodina.  His email address suggests that he is in his  late 30s which means he grew up “back in the U.S.S.R.”   Stanislav was probably one of the kids the nuns made us think of when we prayed for “the children in Godless Russia”, back in my grade school days.

Stan, ol’ buddy…if you’re reading, please pray for me.  Your article in Pravda was right on the money.

It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.

As much as this arrogant American hates being punked on the pages of Pravda, I’m terrified and I need your petitions.  This economic recession is like a New York City power outage and our politicians are walking away with a television set on each shoulder….but Stan, ol’ buddy, you already know this.

The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America’s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.

These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?

Precisely.  I visited with my parents last month and they asked me what I thought of President Obama’s first 100 days.  I replied, “Well, you gotta respect the speed and efficiency with which he’s looting our country“.

Stan, ol’ buddy, your conclusion is scary:

The Read more

Is NAR Criminal or Clueless? What difference does it make?

I  read the give and take between Greg and Mike DiMella (full disclosure, Mike is a client) with interest, because I respect them both, and it is always interesting when smart people agree to disagree and do so with civility and eloquence and without resorting to the ad hominem.

When that single MIBOR director derailed a policy change that went against them, even though it was unanimously approved by the NAR’s own technology committee, we were all left to discern a motive.

Was this the result of a long-standing “criminal conspiracy” (Greg)? Is this an attempt by some local MLSs, who see Google’s handwriting on the wall, to remian relevant by competing with their own members (me)? Or was this a consequence of the realities of trying to pull coherent policy from the collective mind of a large membership organization in a timely fashion (Mike)?

Its an interesting question, but the answer, it seems to me,  is irrelevant in the discussion of what to do next.

One thing we all agree on, I think, is that the MIBOR director used his knowledge of  NAR parliamentary procedure to work the system to MIBOR’s benefit and to the detriment of brokers and agents.

The prima facie evidence is that, at least for the next 6 months, Paula Henry is still being forced to dis-allow Google from indexing her site.

That means the damage is real.

Yes, it is contained to Indianapolis for the moment, but will it stay that way? My guess is that MIBOR will be huddling with other MLSs who share their control fetish over the next 6 months, and our friend the objecting director from Indianapolis will have a quorum come November.

Now that NAR has proven itself to be subject to the whims of directors who are nostalgic for a paper-bound MLS that brokers kept behind their desks, modern brokers and agents need to aggressively defend their own interests because, clearly, the organization that is supposed to do that is not.

I see signs of this happening now, with people getting fed up enough to get involved with their boards at the local level, but is that enough?

Perhaps Read more

$8,000 Tax Credit Advance Friend or Foe?

I have been following the $8,000 Federal Tax Credit with great interest this year. Currently it is the most talked about topic that I am discussing with potential home buyers. There is a lot of interest in receiving $8,000 when a first time buyer files their taxes for 2009. Now that many states (Washington being one of them) are discussing ways to use the $8,000 tax credit as a way to help first time home buyers get into their homes through bridge loans the discussions have really become spirited. When HUD announced that they would allow the $8,000 tax credit as collateral for “bridge loans” to cover the down payment on FHA insured mortgages the pot literally boiled over with opinions.

Currently it seems on a daily basis that the $8,000 tax credit advance is in the news for one thing or another. Yesterday the Arizona Republic announced that the tax credit would be ineligible for down payment. Later in the afternoon the Seattle Post Intelligencer announced that the Feds still plan to allow use of tax credit for down payments.  Today the Arizona Republic reports the HUD bridge loan program hasn’t been killed. So what exactly is going on with the $8,000 tax credit advance? It would appear that nobody even HUD and FHA really know. I am sure that by the time I actually publish this post there will be something new to report.

What I want to know is what the readers of Bloodhound Blog think of the $8,000 tax credit and in particular what you think of allowing the tax credit to be used towards a buyer’s down payment?

I will go on record that I feel that this makes sense in some particular situations and with some additional requirements on the borrowers.

  • Potential home buyer has the income to cover the complete cost of home ownership out of their current income. The ratios must be well within the FHA guidelines.
  • The credit score of the home buyer is greater than 675. There is no need to allow marginal credit worthy buyer’s even easier access to borrowing money that they Read more

NAR Backs Off Labeling Google a “Scraper”

I’m basing this on a flurry of tweets out of NAR Mid Year, but it looks like the NAR rules committee came to its senses.

I await the actual verbiage. It will be interesting to see what twisted hedge they come up with to distinguish an “indexer” from a “scraper”.

Still, the question remains: Was the original decision to back MIBOR a deliberate attempt to see if they could rally the Luddites to hobble IDX?

Or was it just plain vanilla cluelessness?

Either way, it begs the even bigger question that was asked hundreds of times on blog posts over the last week: What are NAR members paying for?

UPDATE: Not so fast. See Malok’s comment below. It’s not a done deal, apparently, and the twits are silent.

Stress Tests and Wells Fargo: A Tin Foil Hat Production

Today the Fed releases the results of the banking industry “stress test.”  You remember this test right?  The Fed created a scenario of economic failure well beyond what is already the worst economic downturn in seventy years.  They then evaluate the banks’ ability to withstand this Armageddon against the Fed’s own made-up base line.  (Let’s not cloud the issue with the idea that the economy is already turning around.)  They then tell the banks which failed the made-up test to take some very not made up actions: increase assets.  How?  Well, that’s the easy part: you can raise private funds (a very tough hill to climb in this credit market), you can accept more TARP funds (that many of them didn’t want in the first place) along with the business stifling, government mandates that go with them, or… you can simply convert the government’s preferred stock into common stock (thus increasing the government’s control of the bank – sometimes to a majority stake).

Interesting results: Bank of America needs roughly 35 billion dollars (despite the $45 billion dollars already given them by the Fed in exchange for preferred stock).  Isn’t this the same bank that took over Countrywide at the Fed’s behest and backing?  It seems that by following the Fed’s request, Bank of America is now more likely to be owned by the Fed.  But let’s leave that bit of conundrum alone.  Let’s take a look at Wells Fargo – by far the strongest of the major banks.  Let me ask you: which was the only major bank to have their results leaked way back on Monday?  Wells Fargo.  Which was the first major bank to ask to return the TARP funds they were forced to accept?  Wells Fargo.  Which is the only major bank not on life support?  Wells Fargo.  When the Fed tested the various banks’ liabilities, which is the only major bank with a portfolio that does not contain 100% financing, option arms and teaser rates?  Wells Fargo.

I don’t know what the Fed’s intent was because I’m not in the group creating the long term plans of this Read more

Handling a deal with a foreign buyer or seller

I am an international tax lawyer. I handle lots of real estate transactions with foreign sellers and buyers. I don’t have a real estate license, and I don’t ask for a piece of the commission. Got that out of the way for ya, didn’t I? Here are a few things to keep you sane when you handle a deal like that

Two mothers

“When Mama’s happy, everybody’s happy.” And in a real estate deal with foreign players, you have two mothers. Keep them both happy and you’re likely to close your deal on time.

Mama number one is your title officer. Ask a simple question. Demand a yes/no answer. “Have you handled a real estate transaction with a foreign seller/foreign buyer in it before?”

Don’t say “Can you handle one of these transactions?” Because of course they CAN. Right? And they will.

Right up until 5 days before closing and they figure out that the seller is a Bahamas corporation and they start insisting that you register the corporation with the Secretary of State and get a certificate of good standing from Sacramento and the Bahamas and oh, who are these people who claim to be the officers?

Mama number two is escrow. Especially for a foreign seller. Call up your escrow officer and ask the same question: have you done one of these transactions before?

Loyalty matters. But business is business. You don’t want your deal to be the crash test dummy. Let them learn on someone else.

War story: two summers ago, I handled two very similar deals in Southern California at the same time. Different title companies. One inexperienced title officer, one experienced. The novice title officer cost the buyer an extra $5,000 in legal fees to get the deal done.

Foreign seller

If your seller is a foreigner, here’s your checklist:

Tax ID number

The seller needs a U.S. tax identification number. More often than not they don’t have one. Go to the IRS website and pull down Form W-7 for a human seller. Get in Read more

“Americans today are taxed at levels most of our forebears would have considered unthinkable. By our own nation’s historical standards, we are outrageously, insanely overtaxed. And yet we shrug our shoulders and say, well, at least we’re not France…”

The American Spectator:

How did it become “fair” for an American family to give to government a third of its income? How did it become “fair” for an American family to give to government half of its income?

When Parliament passed the Stamp Act in 1765, Americans had never before experienced direct taxation. They rebelled. In 1767, Parliament passed the Townshend Acts, which levied taxes on an array of British goods. The colonists responded by boycotting British imports. Parliament repealed most of the Townshend Acts in 1770 (except the tax on tea), and in 1773 passed the Tea Act, which essentially told Americans they had to buy their tea from the East India Company through government-approved merchants. Though the act actually lowered the cost of British tea, Americans were so outraged at Britain’s assertion of authority that they forbade tea-bearing ships from docking. And, of course, in Boston they threw 342 chests of tea into the harbor.

All of these taxes, by the way, were passed to finance the British Army. The newly independent United States taxed its people directly to pay off the war and ongoing conflicts with France, but in 1802, under President Jefferson, all direct taxation upon the American people was ended. That lasted for a decade, until we had to finance the War of 1812. That war was paid off by 1817, and Americans experienced no direct taxation from their federal government until 1861.

That means that “Manifest Destiny,” including James K. Polk’s war with Mexico, and the expansion of the country from coast to coast, was financed without a single direct federal tax being levied upon the American people.

The federal income tax imposed to finance the Civil War had two tax brackets — 3 percent and 5 percent — and was repealed in 1872. It remained off the books until 1913, when the 16th Amendment was ratified. The federal income tax rates in 1913 ranged from 1 percent to 7 percent. That highest rate applied to people earning $500,000 a year or more. Today, a married couple earning that much would pay a federal income tax rate of 35 percent, Read more

California Proposes to Regulate REALTORS Alongside Pawn Shops, and Lenders, and Banks…Oh MY!

Assemblyman Pedro Nava sponsored a bill (CA-AB33) to reorganize our state’s financial services’ regulators to be under one umbrella, the newly created Department of Financial Services.  The idea is to save a bunch of money for the State.

Of course, CAR is going nuts.  Amy Steele reports via ActiveRain.com:

AB 33 (Nava), which C.A.R. opposes, was approved yesterday in the Assembly Banking Committee. This bill would abolish the Department of Real Estate, the Department of Corporations, the Department of Financial Institutions, and the Office of Real Estate Appraisers. AB 33 proposes to transfer the powers, duties, purposes, jurisdiction and responsibilities those departments to the Department of Financial Services, which would be a newly created overarching department. C.A.R. opposes AB 33 because the function of a real estate licensee is not to provide financial services, but to list and show houses for sale, sell or manage investment properties and raw land, and manage and oversee residential rental properties. Real estate licensees, regulated by the DRE, should not be blended in with the banks, credit unions, consumer finance lenders, residential mortgage lenders and pawnbrokers because, unlike these other licensees, real estate licensees are individually licensed agents that have a fiduciary agency relationship with their clients.

Pawnshops and lenders and banks, Oh MY! Pawnshops and lenders and banks, Oh MY!  Pawnshops and lenders and banks, Oh MY!

What CAR (and Amy) conveniently left out is the subsequent bill (also sponsored by Nava); AB 34- Licensing of Individual Loan Originators:

Requires all mortgage loan originators to be individually licensed.  Also requires all loan originators to register with a national database and submit criminal history background checks.

CAR has been calling for a bill like AB34 for a number of years but only if it fell under the Department of Real Estate.  California was one of the first states to license individual originators, under the California Department of Real Estate.  Let me re-highlight a key phrase to the opposition of AB 33:

Real estate licensees, regulated by the DRE, should not be blended in with the banks, credit unions, consumer finance lenders, residential mortgage lenders and pawnbrokers because, unlike these Read more