Urban Institute’s publication titled, Reforming the Mortgage Interest Deduction by Eric Toder, Margery Austin Turner, Katherine Lim, Liza Getsinger suggests that
Only individuals who itemize deductions can benefit from the Mortgage Interest Deduction (MID), and the value of the deduction increases with the marginal tax rate. If the government wishes to promote home ownership, a refundable tax credit available to all taxpayers would be more effective.
Henry Paulson, former US Treasury Secretary, recommends that → continue reading Reduced Mortgage Interest Deduction (MID) coming?
The City of Solon Planning Commission is discussing an ordinance proposal which will require that owners or agents obtain Occupancy Permit for rental units.
 Signature of Solon Golf Community Subdivision A Signature of Solon resident approached City of Solon Planning Commission and stated that she believes there have been builders in the Signature of Solon neighborhood who have built homes and rented them prior to obtaining an occupancy permit. Additionally, many Signature of Solon model homes were built but not sold and have become rental properties. Many of these Signature of Solon rental homes are neglected and improperly maintained which is damaging to the Signature of Solon community. → continue reading Signature of Solon rental properties cause concern
 Mammon, the God of Subprime Lending The following is the testimony of Patricia Lindsay for the Financial Crisis Inquiry Commission Hearing on April 7, 2010:
Credit, Collateral, Capacity and Character
Thank you for inviting me to speak this afternoon. My hope for today’s session is that I give you a unique perspective into Subprime lending. I know I was not alone in not understanding the steadily increasing risks taken in the years before my employer New Century Financial Corp. stopped making loans in March of 2007. I grew up in the real estate business where my father was a Broker and a hard money lender. A hard money loan is a short term loan to a borrower who has a significant amount of equity in the property and cannot qualify for a traditional bank loan. I became an Account Executive at Beneficial Mortgage the end of 1996. Beneficial was one of the original subprime lenders who held their loans in their portfolio rather than selling them. There were a lot of similarities between Beneficial and my experience with hard money lending, Beneficial and the various hard money lenders with whom I worked were very aligned in their thought process on how to evaluate a loan. We had three things that we used to evaluate a loan; Credit, Collateral and Capacity. We would look at these three C’s and if any were lacking, like credit, a borrower better have some compensating factors, like great collateral. There was a fourth C, character, that went missing when → continue reading The nature of subprime mortgage lending
 Thornbury and Preserve of Solon Ohio It dates back to September 2007, when Cuyahoga County prosecutor, Bill Mason’s office did a press release about four morgage fraud cases in Solon. These cases involved the following Solon properties:
- 35895 Sedge Circle in Preserve Subdivision, Solon
- 6749 Winston Lane in Thornbury Subdivision, Solon
- 35532 Nightshade Lane in Preserve Subdivision, Solon
- 38710 Flanders Drive in Thornbury Subdivision, Solon
Recently, Thornbury subdivision residents spoke in support of the proposed Rental Occupancy Permit before Solon’s Planning Commission. The residents cited their observations and experiences with 38710 Flanders Drive before the commission. → continue reading After effects of mortgage fraud in Thornbury and Preserve of Solon
 A real estate player and a naive home buyer They might tell you that you don’t need a real estate attorney. They might tell you that its a waste of money to hire a real estate attorney because the home buying process uses standardized forms. They might tell you that its not the practice to hire a real estate attorney in your town, city, area or state. They might tell you that most people do not hire a real estate attorney.
One or more of the following parties may have a vested interested (they eat from the same trough) in a home buyer, buying a home, any home: → continue reading Be naive, don’t hire a real estate attorney
It was the best of times, it was the worst of times; it was the time when borrowers would do anything to pay their mortgage, it was the time when some borrowers walked away from their home mortgage; it was the time when lenders held onto home mortgages for 30 years; it was the time when lenders promptly sold home mortgages.
Business Strategic Mortgage Defaults
Roger Lowenstein, author of The Way We Live Now, Walk Away From Your Mortgage, gives an example of strategic mortgage default in the business world. A Morgan Stanley fund decided to stop making payments on a real estate purchase in San Francisco because the value of the real estate had decreased. He suggests that the owners of any company that defaults on bonds and chooses to let the company fail rather than invest more capital in it are practicing “strategic default”. → continue reading Strategic Home Mortgage Default in Recourse States and Non-Recourse States
The glory of financial innovation
The fundamental lesson of this crisis is that, given the complexity of the division of labor required of modern global economies, we need highly innovative financial systems to assure the proper functioning of those economies. But while, fortunately, much financial innovation is successful, much is not. And it is not possible in advance to discern the degree of future success of each innovation. Only adequate capital and collateral can resolve this dilemma. If capital is adequate, no debt will default and serial contagion will be thwarted. We can legislate prohibitions on the kinds of securitized assets that aggravated the current crisis. But investors have shown no inclination to continue investing in much of the past decade’s faulty financial innovations, and are unlikely to invest in them in the future. The next pending crisis will no doubt exhibit a plethora of new assets which have unintended toxic characteristics, which no one has heard of before, and which no one can forecast today. But if capital and collateral are adequate, and enforcement against misrepresentation and fraud is enhanced, losses will be restricted to equity shareholders who seek abnormal returns, but in the process expose themselves to abnormal losses. Tax payers will not be at risk. Financial institutions will no longer be capable of privatizing profit and socializing losses – Testimony of Alan Greenspan, Financial Inquiry Commission, April 7, 2010
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About  I am a Civil Engineer from Louisiana State University. I coined the compound word, Americaneer, as an expression of my tribute. |
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