BloodhoundBlog

There’s always something to howl about.

Category: Big Mother (page 9 of 15)

January 14, 2010

2010 Mortgage Broker Renaissance

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Is the business of broking mortgage loans dead?  About two years ago, Morgan Brown predicted our demise on Blown Mortgage.  His conclusion was that the industry would need a scapegoat for the poor lending practices and that “blaming” mortgage brokers was convenient (and not necessarily fair).  His conclusion suggested that the big lenders were trying to gobble up market share to the detriment of the consumer.

Morgan predicted that the brunt of the regulatory changes would be aimed squarely at the mortgage broker; he was correct.  He predicted that the big lenders would tighten up their standards and practices in the wholesale lending channel; he was correct.

That scheme backfired on the big banks. Congress is really pissed that they haven’t been doing more with the TARP funds federal largesse to make loans and they are coming down hard on whom President Obama calls the “fat cat bankers on Wall Street”.

Bawld Guy Axiom:  Lenders Lend

Brady Corollary: Lenders lend unless it’s more profitable to do something else.

Government-subsidies proved that in 2009.  The TARP funds allowed big banks to borrow money at a ridiculously low cost-of funds.  The government guarantee on all agency products indemnified those big banks from losses.  Essentially, the big banks could buy their product  (a dollar) for $1.01 and sell it for $1.05; that’s a 500% markup and a helluva business.  It would be natural for them to “crowd out” mortgage brokers, through poor pricing and horrible service, to benefit their retail lending channel.

Here’s what those big banks didn’t expect:  public outrage over bonus pay and a proposed “windfall profits tax” on their guaranteed profits.  While I hate excessive government interference, you gotta wonder why the bankers thought they could get paid like Gordon Gekko as wards of the Government.  One would think they’d lay low at a GS-15 salary, for a year or two, after they repaid the TARP money.

The profits party is over for bankers and now they have to EARN those bonuses.

Guess what they’re doing?  They’ve turned to mortgage brokers again as a viable loan delivery channel. How do I know this?  The biggest banks (Bank Read more

December 31, 2009

You know what? Despite everything: Happy New Year!

by

Suburban Phoenix Real Estate Broker

Author website

I wrote this last night in a comment to a post:

The United States is being run as a kleptocracy, but instead of plundering the treasury and the accumulated wealth of the nation in behalf of a small criminal conspiracy, we rob from a rapidly-diminishing productive sector in behalf of a vast and ever-burgeoning population of moochers — at all strata of society.

You can’t flip on the television without running across a cipher for your own grandmother proudly announcing how some politically-connected vendor has taught her how to rape the taxpayers — which is to say you and your kids, her own great-grandchildren — in her own behalf. This will be the real triumph of Obamacare — to turn every last resident of this once-proud nation into sniveling beggars, each one trying to snap up more benefits than his neighbor.

We don’t have to eat each others’ flesh to be cannibals, and it seems plausible to me that we will not be suffered to live a life of freedom and independence, in the very near future. The entitlement mentality is such a shameful thing that the people who use it as a means of enslaving each other will not suffer the contradiction of an objective renunciation of their creed. In any case, once you’ve eaten a meal taken by theft, you’re not as apt to make noises about law and order, property rights, all that sanctimonious nonsense. Who am I do judge, once I’ve drunk my neighbor’s blood?

That’s dour, but I’m afraid it’s much too exact. Yes, I know that things are always worse than they seem, that the doppler effect of the noise that is the news makes the onrushing crisis sound more ominous even as receding events seem to race away harmlessly. But I fear we are at a tipping point, a place where the grasshoppers so far outnumber the ants that there really is no hope, going forward, for a life based on self-reliance, on philosophical egoism, political individualism and economic free enterprise. The United States has resolved to resolve the contradiction of chattel slavery by making slaves of Read more

December 30, 2009

Why are people in New York and Connecticut unhappy, while the folks in Louisiana and Tennessee are more satisfied with their lives? The obvious answer is the true one: Taxes and spending.

by

Suburban Phoenix Real Estate Broker

Author website

More from The Wall Street Journal: People in high-tax states are less satisfied with their lives than those in low-tax states.

Who knew?

That’s not a fair question. Everyone who can do math already knew this. But what’s interesting is that it points the way forward for all states, especially the ones currently losing their high-earning tax-slaves to less onerous tax-plantations: Cut taxes. Cut spending. Get rid of your kleptocratic union laws.

Or: In the words of John Galt, “Get the hell out of my way!”

The study suggests that quality of life heavily influences happiness. This may seem obvious, but until this study, social scientists have struggled to develop a model that supports this hypothesis. Now we know that people who say they’re satisfied with their lives aren’t just delusional or overly optimistic, and people who say they’re unsatisfied aren’t just pessimists. People have legitimate reasons to be happy or unhappy.

And well, high taxes seem to be a big reason — ostensibly an even bigger reason than weather given that California is one of the unhappiest states and inclement Louisiana is the happiest. Further, considering how much New York’s crime rate has dropped and schools have improved in the last decade, taxes seem to overwhelm even these two critical factors in the happiness equation. According to the Tax Foundation 2008 analysis, three of the top five unhappiest states—New York, Connecticut and New Jersey—have the highest state-local tax burdens. On the other hand, four of the top five happiest states—Louisiana, Florida, Tennessee and Arizona—are among the states with the lowest state-local tax burdens. True, correlation doesn’t prove causation, and high taxes alone don’t always make people miserable, but there’s something going on here.

In states with high property, income, and sales taxes like New York, people have less money to spend on other things that make them happy. They have less money to spend on vacations, hobbies, home improvements, eating out and child care. Another problem may be that people receive a low return on their tax dollars. The study’s authors note that people are least happy in states that impose high taxes but don’t provide Read more

December 27, 2009

What’s wrong with California? Nothing anyone left in the state has the fortitude to fix. What’s the Golden State’s future? Ask Detroit.

by

Suburban Phoenix Real Estate Broker

Author website

From a lengthy diagnosis of everything that is wrong with California from The Claremont Institute:

Three of California’s last four governors, and six of its last nine, have been Republicans. The politicians who secured those victories immediately found it necessary to cooperate with a dominant opposition party; California is, in every other respect, a state that has been becoming more Democratic for as long as its oldest residents have been eligible to vote. California has not given its electoral votes to a Republican presidential candidate since 1988, or been represented in the U.S. Senate by a Republican since 1992. Of the 53 Californians in the U.S. House of Representatives, 34 are Democrats. In the past half-century, each of the two chambers of the state legislature has seen a Republican majority—once. The GOP’s state senate majority endured for two years, the one in the lower house for less than a single year.

The evidence is incontestable: the liberal strategy of waiting for the public’s anger to subside is far sounder than the conservative strategy of hoping it will gather strength. The liberal calculation rests on a shrewd assessment, not only of human psychology but also of modern mobility. California is not yet East Germany, which means that one of the ways Californians who are mad as hell can decide not to take it any more is by moving away. The Census Bureau shows that California, the state that used to be a magnet, has experienced negative "net domestic migration" since 1990. Between 1990 and 2007 some 3.4 million more Americans moved from California to one of the other 49 states than moved to California from another state.

States don’t conduct exit interviews, so there’s no way to tell how many ex-Californians left paradise because the taxes were too high, the public services too shoddy, and the unions too overbearing. Whatever the tally, one problem for conservatism in California is that the conservative critique of the state’s governance argues as strongly for flight as it does for fight. It is possible to advocate a national policy agenda by invoking patriotism, but "state-riotism" is a far weaker Read more

December 26, 2009

Interest rates have been trending upward, but what happens when Uncle Sugar quadruples the sugar supply at Fannie and Freddie?

by

Suburban Phoenix Real Estate Broker

Author website

From the Wall Street Journal:

The Obama administration’s decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday.

The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each.

Unlimited access to bailout funds through 2012 was “necessary for preserving the continued strength and stability of the mortgage market,” the Treasury said. Fannie and Freddie purchase or guarantee most U.S. home mortgages and have run up huge losses stemming from the worst wave of defaults since the 1930s.

“The timing of this executive order giving Fannie and Freddie a blank check is no coincidence,” said Rep. Spencer Bachus of Alabama, the ranking Republican on the House Financial Services Committee. He said the Christmas Eve announcement was designed “to prevent the general public from taking note.”

Treasury officials couldn’t be reached for comment Friday.

So far, Treasury has provided $60 billion of capital to Fannie and $51 billion to Freddie. Mahesh Swaminathan, a senior mortgage analyst at Credit Suisse in New York, said he didn’t believe Fannie and Freddie would need more than $200 billion apiece from the Treasury. But he and other analysts have said the market would find a larger commitment from the Treasury reassuring.

What’s your take? Are we looking at another two years of 30-year fixed mortgages under 5%?

December 22, 2009

Looking for the beacon of progress for American cities? Forget Portland. Forget Houston. The road we’re on leads to Detroit.

by

Suburban Phoenix Real Estate Broker

Author website

From PJTV.com, a bone-chilling exposition of how the entitlement mentality killed one of the great American cities:

There but for the grace of god? Not quite. Detroit is just the leading edge of a wave of entitlement thinking that is engulfing what was once the beacon of human liberty for the whole world.

We scorn philosophy at our peril. For more than a century and a half, Americans have been asking profoundly important philosophical questions — and giving the wrong answers.

“What do the rights of the individual matter when people are starving?”

“How can you worry about private property rights when people are homeless?”

“Health care is a collective responsibility. Why should you be free to escape it even if you can pay your own way?”

“How dare you claim a right to personal autonomy when your personal autonomy is destroying the planet!?!”

Don’t bother to ask yourself what America will look like when the concept of individual rights has finally been eradicated from our philosophy. We already know the answer to that question. It will look like Detroit.

December 17, 2009

Looking for reasons to be cheerful this Christmas? Thanks to the free market, everything is better than it was when you were a kid

by

Suburban Phoenix Real Estate Broker

Author website

From Reason.TV:

It’s worth thinking about as statists strive to destroy innovation in medicine (via Obamacare) and industry and transportation (via environmentalism). If it gratifies you to weep about how bad things are, compare the America of your youth to the police states of Communist Europe in that same epoch. Whatever complaints you might have with liberty, things could be — and will be — a lot worse when you have unleashed the leviathan state on every aspect of your life.

December 7, 2009

What’s in a name? That Which We Call a “Job” Summit, by Any Other Name…

by

Real Estate Renaissance Man

Author website

“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”

“The question is,” said Alice, “whether you can make words mean so many different things.”

“The question is,” said Humpty Dumpty, “which is to be master — that’s all.”

Through The Looking Glass – Chapter VI

Lewis Carroll

Small business accounts for over 65% of all new jobs.  If you wanted to create new jobs (I mean, if that was your actual goal and not just a cover story) you might decide to sit down with people who represent small business interests.  The guest list for an actual, according to Hoyle, “Job Summit” then, might look like this:

  • The Chamber of Commerce
  • The National Federation of Independent Business
  • The National Association of Manufactures
  • and so on…

If, on the other hand, your actual goal was to consolidate power and become the de facto benefactor of jobs, you might want to sit down with the people who kill small business on a regular basis.  To keep things simple, you should probably limit yourself to those with whom you are already sleeping.  The guest list might look like this:

  • The Service Employees International Union (S.E.I.U.)
  • The American Federation of Teachers
  • The United Steel Workers Union
  • Policy wonks with absolutely no real world business experience
  • And of course, Paul Krugman (an economist/columnist so far to the left he can’t ever be right)

Which list do you think showed up for the White House “Job” Summit?

To paraphrase Lewis Carroll (and, quite possibly, President Obama?):
“It is a job summit damn it! It is because I say it is.  The question is, which is to be master: you… or me.  That is all.”

November 16, 2009

How can a flat and dusty bumpkintopia like Texas outgrow a paradise on earth like California?

by

Suburban Phoenix Real Estate Broker

Author website

A clip from a fascinating City Journal article on the differences in taxes and services among the states and how that affects growth:

If California doesn’t want to be Texas, it must find a way to be a better California. The easy thing about being Texas is that the government has a great deal of control over the part of its package deal that attracts consumer-voters—it must merely keep taxes low. California, on the other hand, must deliver on the high benefits promised in its sales pitch. It won’t be enough for its state and local governments to spend a lot of money; they have to spend it efficiently and effectively.

The optimistic assessment is that things are going to get worse in California before they get better. The pessimistic assessment is that they’re going to get worse before they get much worse. As is often the case, hanging around with the pessimists is less fun but more instructive. The current recession has driven California’s state government into what amounts to a five-month budget cycle, according to Dan Walters of the Sacramento Bee. He estimates that the budget deal tortuously wrought in July should start falling apart in October, because it was predicated on pie-in-the-sky revenue estimates and because so many of its spending cuts are being challenged, often successfully, in the courts.

The recession will eventually end and California’s finances will improve, say the optimists. Given the state’s pervasive political bias against efficient and effective public services, however, the question is whether its finances will ever get truly well. States that have grown accustomed to thinking of the engine that drives their economies as an inexhaustible resource—whether it’s Michigan and the auto industry, New York and Wall Street, or California and the vision of the sunlit good life that used to attract new residents—find it tough to compete again for what they thought would be theirs forever, and to plan budgets for lean years that turn into lean decades. Instead, they invest their hopes in a deus ex machina that will rescue them from the hard choices they dread.

For California’s governmental-industrial complex, a Read more

November 13, 2009

Embrace the Homebuyer Tax Credit: Solution to the Problem

by

Real Estate Renaissance Man

Author website

The $8000 first time home buyer tax credit is a mistake.  Congress should have enacted the original idea: a $15,000 tax credit.  This goes for the repeat home buyer tax credit as well.  As a matter of fact, I would like to have seen both tax credits even higher.  If you’ll maintain an open mind for the next few minutes, I hope to show you how embracing these tax credits actually creates a “win-win” situation that benefits you and this great nation.

The inherent spirit of humankind is individualistic, creative and inclined toward action.  The heart of man is inexorably drawn toward freedom: freedom to live, freedom to express and freedom to choose.  No matter what short-term damage is effected by an oppressor or institutionalized by a government, men and women will devise ways to rebuild and overcome.  Even in countries where the idea of freedom has been systematically driven out by force, we witness people taking action toward freedom.  It is a natural state that can be delayed, but not denied.  We are DOERs.  This country, the United States of America, is the poster child for taking action toward freedom.  We are a nation made up of DOERs.

So what does this have to do with the tax credit?  It empowers us with a “win-win” opportunity.  The immoral bribes to home buyers, the unconstitutional mandate for health insurance, the socialistic bail-outs, even the very destruction wrought by stimulus packages:  embrace them all!  These are all opportunities to make that “win-win” choice.  Embrace the home buyer’s credit and ACT on it!  Be a DOER.  It’s the DOERs who create the success of our society.  A nation of DOERs – of independent, entrepreneurial, action-based DOERs – will always bring about the necessary changes to save this republic.  If you desire your own success, then you desire to become a DOER.

More specifically: every action you take to help another person receive the tax credit strengthens you as a DOER while at the same time weakening the architects – the very architecture – that imposes itself upon a free people with that tax credit.  Eventually, Read more

November 12, 2009

When the cash-for-clunkers “logic” comes to the real estate market, it’s time for every homeowner with equity to cash in big

by

Suburban Phoenix Real Estate Broker

Author website

It’s cash-for-clunkers time in the real estate market.

Last week, in addition to extending the $8,000 first-time home-buyers tax credit for another six months, Congress added a new $6,500 tax-credit for move-up buyers.

The credit can be applied for homes selling for as much as $800,000, and the income limits exclude almost nobody.

You have to have lived in your home for more than five years out of the last eight, but that’s hardly an onerous restriction. And homeowners who have put down roots have equity.

Remember that capital gains on your primary residence are excluded from taxation if you have lived in your home for the past five years. But the way the government is spending money, that exclusion cannot last.

But, but, but… Your home isn’t worth what it was in December of 2005. That’s true, but it doesn’t change anything. The home that you can buy now was also selling for more four years ago.

Here’s the way things really shake out: If you have equity in your home, you can take that equity as a tax-free profit — for now. At the same time, you can snag the $6,500 tax credit. And you can do all of this at historic low interest rates.

If your house is worth $400,000 and you only paid $300,000 for it, you could reap a gain of $100,000 — which would save you thousands of dollars in taxes. If you wait for prices to go higher, you may wait a long time for a much smaller return. And the house you buy then will have appreciated, also.

I think we’re looking at a perfect storm for homeowners with equity: You can move now, take a tax-free gain, get a lot more house than you could have bought a few years ago, all financed with a low-interest mortgage. And then, next April, Uncle Sam will write you a big fat check for your trouble.

On second thought, this is less cash-for-clunkers than the taxpayer’s revenge…

 
Sell this idea! Feel free to share this idea with your clients and prospects — in your blog, by email, on the phone. This is big, and the Read more

November 9, 2009

Goldman Sachs and God’s Work

by

Real Estate Renaissance Man

Author website

I guess I haven’t reached that point in my life yet when I’m so jaded (or is it cynical) that nothing will surprise me.  I say this after reading an interesting little article in the London TimesOnline.  They had the chance to interview Lloyd Blankfein, the Chairman and CEO of Goldman Sachs.  It seems he’s convinced – or at least he’s convinced he can convince us – that Goldman serves “a social purpose.”  As a matter of fact, Mr. Blankfein is so enamored with the self-importance of Goldman that he proudly proclaims he’s “Doing God’s Work.”  Wow…

Just to refresh our memory:

  • Goldman received $10 Billion in Tarp Money
  • Goldman received $12.9 Billion of government money through AIG
  • Goldman received $20.9 Billion in FDIC debt guarantees
  • Goldman, restructured as a “bank holding company” borrows at the Fed Window (at basically no cost)

Oh, and one more thing: Goldman will be paying $21.9 Billion in bonuses for 2009.  I don’t begrudge them bonuses, after all: they’ve had a helluva year.  Although some of that might be due to their oligarchical position within the federal government.  It would be nice – every once in a while – if Goldman would send a little thank you nod our way; maybe a quick wave or even a wink.  I guess I’m saying that when you’re screwing me this bad, a little dinner wouldn’t hurt.

John Lennon stirred up quite a spot of bother when he said: “We’re more popular than Jesus now.”  Have to admit though, that seems like such a trifle compared to the CEO of Goldman Sachs.  I mean, who cares if you’re more popular than Jesus?  Mr. Blankfein is angling to BE Jesus.

« Older posts Newer posts »

Inventing Real Estate 2.0

Welcome to BloodhoundBlog, the national real estate industry marketing and technology weblog written by, for and about real estate professionals. Better yet, welcome to the wired world of real estate. We are busily inventing Real Estate 2.0 – technology, marketing, service and salesmanship. Like all Bloodhounds, we are smart, frisky and fiercely independent. We've built a spot on the earth – beloved over all – where each one of us can be who we are, no matter who that might be. We are committed to an idea of excellence that will flush the bums, the con-men and the crybabies out of the real estate industry. If you yearn to have your failures excused, your moral lapses absolved or your boo-boos kissed, seek elsewhere. But if you are sick to death of mediocrity – welcome home. Read all about us, subscribe to our feed and steel yourself for the hunt. We work hard, we play hard, we learn everything we can – and we bow to no one.

Media Contacts