The Foreclosure Crisis

March 13, 2008
There is a lot in the news these days about the real estate industry and the breath-taking number of home foreclosures. As the number of foreclosures spiraled upward nationally, Washington was said to be relatively protected from this trend. We are now however rapidly climbing the ladder of state rankings in number of foreclosures per capita.There are two aspects of this crisis that receive a great deal of attention.
First the lending practices of banks are roundly assailed now. Our legislature just passed laws curtailing certain home lending practices of state regulated institutions. On the national level Fannie Mae and Freddie Mac just signed an agreement that says they will not accept a loans based on an appraisal originating at the bank. This will affect the industry and should serve to delay closings a bit, at least in the short term. In order to help a stagnating home lending industry the FHA has revised its rules.There has also been publicity about foreclosure rescue scams, the practice of preying on people going through a foreclosure by taking their title to their homes, paying off the defaulted mortgage, renting the home to the former owner and eventually evicting the former homeowner. This is structured so that the “rescuer” receives all of the equity in the house and the home owner receives nothing. This term our legislature passed laws closely controlling this activity.
Something that has received almost no attention is the research into fraudulent practices of borrowers, usually home buyers. The Mortgage Bankers Association announced a report that attributes a portion of the current crisis to fraudulent credit applications. The most frequent false statements in credit application in 2007 related to employment history and income. There were also a great number of false statements related to the borrower’s intention ot occupy the home. It should be anticipated that there will be heightened scrutiny in those areas.

Rifts Between the Clintons

March 13, 2008

The Clintons are at odds on the necessary qualifications for the oval office. Bill believes that Obama is better qualified than McCain, while Hillary believes that she and McCain are better qualified than Obama. In fact she believes that Obama is not qualified for the position at all. This dispute between the Clinton’s has apparently been long-standing, as in 1992 Bill contended that experience in state government was abundantly adequate for the job of president. Hillary’s brooding silence on this topic during the campaign foreshadowed the expression of her present position.

As First Lady she became accustomed to Bill’s 3:00 a.m. calls, although presumably Bill excused himself after receiving them. The Obama’s cannot claim any such experience, although I’m a little surprised that Hillary brings up Bills nocturnal calls. Bill publicly stated that he did not feel that this was relevant to his ability to govern.

Hillary voted to authorize Bush to go to war but has since said she did not think that he would precipitously do it after calling for the emergency authorization. This is much like Bill admitting he smoked marijuata but saying that he didn’t inhale. But once again the Clinton’s part ways, as Hillary has questioned Bush’s war authorization, while Bill didn’t think that you needed any authorization at all to bomb Iraq.