Monday, October 25, 2010

Is Foreign Campaign Money a Concern, But Not Non-US Citizen Voters?

7 Cities Allow Non-Citizen Voters Now & 2 Have Ballot Measure This Nov 2 Mid-Term

Photo Credit - Flickr Common
If you stood on a busy street in downtown Chicago or New York City and asked passing U.S. citizens “Should those that are not U.S. citizens be able to vote?”; realistically a large majority would answer anywhere from “No way.” to “That’s illegal.” to “Not according to our consitiution.” to “Become a citizen first.” to “Voting is a right of citizens only.” to “Hell No.”

Most Americans see the right to vote in U.S. elections as a sacred right “as an American citizen” and one that should not be politicially handed to anyone that is not a citizen – legal or illegal non-citizen residents. Most Americans relate the right to vote to a freedom Americans have sacrificied for and died for throughout our national history. Most Americans feel it is a priviledge given by our constitution to be excersised only by those with the right to shape political policy – citizens of the United States.

Most Americans do not realize the U.S. Constitution does not prohibit non-citizen voting rights on a local level. All 50 states allow only citizens to vote in state or national elections legally. Legislation signed by President Clinton made it a crime for any non-citzen to vote in a federal election with the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.

Federal elections have always restricted voting rights to citizens; however, many states and territories have allowed non-citizens to vote in their local elections as long as residential requirements were met since colonial times.

With heavy legal immigration in the early 20th century, states began eliminating legal non-citizen voting rights. There are several cities in the U.S. currently estimated to have a population comprised of up to 40% non-citizens – legal and illegal. Today, legal non-citizens may vote in six municipalities in Maryland in municipal elections and in the city of Chicago’s school elections.

Within the past few years, cities and other local jurisdictions in California, Connecticut, District of Columbia, Massachusetts, Maine, New York, and Texas have put forth local political discussion and proposals to allow legal non-citizens to vote in school or local elections with varying political outcome.

On the ballot this November 2, two cities have measures asking voters if voting rights should be extended to legal non-citizens. In San Francisco, Proposition D if passed would allow non-citizens to vote in school board elections if they are the parents, legal guardians, or caregivers of children in the school district. In Portland, Maine, the ballot measure if passed would allow city residents who are not U.S. citizens to vote in school board and budget matters, city council elections, and on other local issues.

Extending the right to vote to legal non-citizens in New York is being put forth via the “Resident Voting Rights Act” bill by the city council as opposed to being put on a ballot for voters to decide. The bill if passed would allow any legal resident to vote in municipal elections. The bill is expected to be put to a politician vote in the next few months.

According to an October 19, 2010 U.S. Census Bureau press release, “36.7 million of the nation’s population (12 percent) were foreign born, and another 33 million (11 percent) were native-born with at least one foreign-born parent in 2009, making one in five people either first or second generation U.S. residents.” The 2010 Census goal was to count all U.S. residents including citizens and legal non-citizens. It is widely accepted a significant effort was made to include illegal residents in the population counts also.

Maybe because these non-citzen voting rights extensions are most often spearheaded by Democrat politicians and liberal immigration or youth progressive organizations, many political cynics see them as the start of a political push to revise voting rights at all levels, including federal ultimately, to be extended to all U.S. residents possibly including illegal immigrants under federal comprehensive illegal immigration reform ultimately. The cynics see sanctuary cities leading the way to extend voting to non-citizens. They see Democrats as wanting to change the national voting demographics and dynamics in hopes of increasing what they see as voters for their party.

Non-political class opponents most often cite that legal non-citizen residents and legal immigrants should adopt the U.S. as their country by becoming legal U.S. citizens before being given the right to vote in any election. They believe legal immigrants will not have an incentive to become citizens if they are given the right to vote without becoming a citizen. They see loyalty to the U.S. as minimized if voters are not citizens first.

Political class and non-political class supporters most often cite legal non-citizen residents and legal immigrants are more invested in and loyal to the U.S., and in particular the schools and community, if they have the right to vote. They find the argument that Democrats are simply looking to increase their voting demographics and dynamics absurd. They note the voting right extensions being discussed are for local elections only taking into account the 1996 federal legislation that includes no state or federal voting rights law. They note there is a history of non-citzens voting in local elections.

In the discussion, some wonder whether or not people would come into the U.S. on a legal Visa expecting the right to vote. Some wonder whether voter right extension to those that are not U.S. citizens would increase voter and election fraud at all levels by making voting right identification harder to determine.

One thing that should be asked and answered by both sides realistically is “Would giving non-citizen voting rights dilute the meaning and therefore the value of U.S. citizenship and sovereignty?” If politicians are as concerned about foreign money campaign contributions stealing our democracy as expressed by the Obama administration against Republicans in this mid-term elections season, are they equally concerned about foreign votes and increased voter fraud as well? Only time will tell.

Friday, October 15, 2010

Companies Help Employees Cope with the Recession & Tough Economic Times

Photo Credit - Flickr Creative Common
Many are struggling in today’s economy. Even those with jobs are dealing with financial stress from cut hours, wage freezes, and perhaps an unemployed spouse. Employers see employees that are often stressed and preoccupied by financial troubles at home.

Some employees are just trying to make ends meet; trying to avoid foreclosure, trying to save for retirement, having financial marital discord, or are stressed by other family financial situations.

One unique way employers are helping is by providing a new employee benefit – recession themed personal financial management classes. Happier, less stressed people are happier, more productive employees.

Financial literacy leader LFE Institute, Inc. specializes in unbiased workplace financial education tailored to the employer and employees. They have offered employee training for over 20 years, and more than 500,000 employees have taken LFE Institute classes. In the last couple of years, LFE Institute has extended their footprint nationally and their focus to meet the specific needs in a tough economy.

Stress is reduced by learning basic skills on how to stretch paychecks, “find” an extra $4,000-$7,000 annually from current income, reduce debts, ease family conflicts over money, avoid financial traps, and master core investment principles. The results are sustainable by providing knowledge and skills that change defeating attitudes and behavior.

An Interview with Alice Whinnery, CEO of LFE Institute, Inc.:

BKH: How do employer clients typically hear about your services?
AW: Primarily through strategic partnerships with synergistic businesses such as benefit providers, CPA, outplacement firms, EAPs, 401(k) providers, and HR consultants. Their clients want to increase profits and minimize liabilities through unbiased workshops and money coaching.

BKH: What are the primary reasons companies are interested in providing personal financial class to their employees?
AW: Employers are not looking for general financial “information.” They want solutions that change behaviors and solve problems which are negatively impacting the bottom line, such as:

* Retention & Turnover
* Healthcare & Garnishment Costs
* Productivity & Engagement
* 401(k) Participation & “Top Heavy” Retirement Plans
* Liabilities – ERISA, Workplace Violence, Accidents, Product Liability

BKH: An employer can expect a 3 to 1 return on their investment (ROI). How is this measured?
AW: The research was done by the Founder and former President of PFEEF, Dr. Thomas Garman. The non-profit foundation, PFEEF (Personal Finance Employee Education Foundation) uses the 3:1 statistic. They have also created a ROI Calculator for employers to measure the price points important to them. PFEEF’s calculator can be found on the LFE Institute home page.

BKH: How does LFE Institute’s class focus differ from a company's internal Human Resources Department or benefits group?
AW: First, we teach numerous strategies, systems, and techniques that cover a broad range of critical financial issues employees struggle with today. Most benefit providers only focus on company-specific topics related to the retirement or benefit plans.

Second, the LFE Instructors go through an extensive selection and training process to learn how to deliver interactive, skill-based curriculum. Having taught over 500,000 employees, we’re experts in taking complex financial concepts and making them easy for employees to understand.

Lastly, my experience says, internal HR personnel should never teach financial strategies to employees due to company liability reasons.

BKH: How many types of classes do you offer?
AW: Each of our workshops solves specific problems but can be customized to incorporate client-specific content. Our most popular series are:

* Managing Your Money! – Teaches employees unique strategies to stretch their paychecks, reduce debts, ease family conflicts, and avoid financial traps – without budgeting.
* Investing for a Great Retirement – Teaches investment basics, gives employees the confidence to save, and minimizes ERISA liabilities for employers.
* Find More Money Series – Relieves specific financial stressors throughout the year. For example, employers are currently sponsoring “Find More Money for the Holidays.”
* Money Roadblocks! – Designed for teenagers 17 to 19 to help them avoid financial traps.

Every course also includes six months of “HotLine” to answer employees’ specific questions. This is an important part of skill-based training, since it continues the learning process long after the workshop is over.

BKH: How do you define "high quality financial education" in the real-world results for employers and for employees?
AW: As experts in corporate adult education curriculum design for over 24 years, we define it the way employers do. There are a lot of criteria, but their essential ones include:

* It solves problems. – Teaches specific strategies. They are not looking for general financial information.
* It is skill-based. – Teaches by “asking” not by “telling”. It is the only way to change employee behaviors and to ensure sustainable results.
* It addresses all types of adult learners. – Uses the latest accelerated learning methodologies. This ensures that visual, auditory, tactile, and kinesthetic learners build the same level of skills by the end of the class.
* It is unbiased. – Teaches with no product sales bias or pitch. We do not sell any financial or insurance products, so there is no hidden agenda to our educational solutions.

BKH: Who are the employees that clients offer these classes generally?
AW: The LFE workshops are primarily offered to employees from minimum wage through middle management. However, we have also taught key executives in our workshops or through one-on-one coaching. As one client bank President stated, “We had to make the programs mandatory since unfortunately, our Senior VPs needed it as much as everyone else.”

BKH: What is the most asked employee question in a financial class?
AW: Many of the questions revolve around one of the unique systems we teach – a flexible alternative to budgeting. One employee question we hear in almost every class is, “This may just save my marriage. How can I help my spouse learn this System?”

BKH: What are the top 3 employee interest areas?
AW: With the recession, employees like:

* Reducing debts and learning easy ways to find more money to make ends meet
* Easing family conflicts over money
* Staying current on the latest financial trends. We get this a lot, which is why companies subscribe to our weekly educational series titled “Money Minute!”.

Clients from varied industries recommend the LFE Institute program:

“If this workshop keeps just one employee from walking down the street, it’s worth the price of the class.” Regional Bank Client

“Over seven years, our workforce was able to find an extra $7,900/year using the strategies they learned in Managing Your Money.” Manufacturing Client

“We spend $1 million on benefits, and our employees don’t think we do anything for them. We bring in LFE’s ‘Managing Your Money!’ workshop, and they think we’re wonderful.” Construction Client

“This course should be a requirement for anyone who earns a paycheck.” Bank Manager Client

“We increased our 401(k) participation by 27% in the 1st quarter after working with LFE.” Communications Client

Employers that have offered the LFE Institute’s employee classes believe the money is well spent by providing a timely personal benefit to their employees and in promoting loyalty and goodwill in their employer – employee relationship.

They also agree this added employee benefit lives up to the ROI with increased retention and decreased liabilities by having less recession stressed, more financially empowered employees. Review LFE Institute’s services at or call 877-LFE-5557.

Monday, October 11, 2010

Thank NJ Gov Chris Christie for Likely GOP Governors Majority in 2010 Elections?

Photo Credit - Flickr Creative Common
When voters go to the polls on November 2, to cast votes in the mid-term elections for House and Senate candidates, they will also be deciding the governorships in 37 states and 2 territories. Many political pundits are predicting the GOP will have a majority of the 50 gubernatorial seats when the 2010 election is over. Likely voter polling indicates the GOP could turn several current Democrat held governor seats to Republican. This is being driven by stand-still economic growth, high unemployment, and massive deficit spending being blamed on Democrat liberal ideology and progressive policy.

Up for decision in November are 18 gubernatorial seats currently held by Republicans, 1 currently held by a Republican turned Independent to run in the 2010 senate race in FL, and 20 currently held by Democrats. There are 6 incumbent Republicans running for reelection – AK, AZ, ID, NE, TX, and UT – and 8 incumbent Democrats running for reelection – AR, IL, IA, MA, MD, NH, OH, and U.S. Virgin Islands.

In 25 races there is no incumbent running due to retirement, term-limits met, and 1 incumbent Republican governor defeated in the Nevada primary. In these 25 races, 13 have leaving Republican governors – AL, CA, CT, FL, GA, Guam, HI, MN, NV, RI, SC, SD, and VT – and 12 have leaving Democrat governors – CO, KS, ME, MI, NM, NY, OK, OR, PA, TN, WI, and WY.

As of October 7, Rasmussen reflects an “Election 2010: Gubernatorial Scorecard” post-election results for the 50 state gubernatorial make-up nationally as 28 Republicans, 15 Democrats, and 7 toss-ups. The toss-ups states are FL, MN, NH, OR, RI, VT, and WI. Currently Rasmussen predicts, “ Hawaii is the only state with a Republican governor that is considered likely to elect a Democrat in November. But seven states now headed by Democrats – IA, KS, ME, OK, PA, TN, and WY – are seen as likely GOP pickups.”

Rasmussen foresees 17 states as solid Republican - – AL, AK, AR, IA, ID, KS, ME, MI, NE, NV, OK, SC, SD, TN, TX, UT, and WY – and 5 states as lean Republican – GA, IL, NM, OH, and PA. For the Democrats, they foresee 2 states as solid Democrat - HI, NY – and 6 states as lean Democrat – AR, CA, CO, CT, MA, and MD.

As of October 7, Cook Political reflects an incredible 18 states as toss-ups with 9 currently having a Republic governor – CA, CT, FL, GA, MN, NV, RI, TX, and VT – and 9 currently having a Democrat governor – IL, MA, MD, ME, NH, NM, OH, OR, and WI.

Cook Political also reflects 7 states now headed by Democrats as possible GOP pickups – IA, KS, MI, OK, PA, TN, and WY. They foresee 7 states as solid Republican – AK, ID, KS, NE, TN, UT, and WY – and 8 states as lean/likely Republican – AL, AZ, IA, MI, OK, PA, SC, and SD. They foresee 2 states as solid Democrat – AR and NY – and 2 states as lean/likely Democrat – HI and CO.

As of October 7, Real Clear Politics predicts there are 7 toss-up states – FL, IL, MA, MN, OH, OR, and VT. They foresee 8 states as safe Republican – AK, AL, ID, KS, OK, TN, SD, and UT- and 11 states as lean/likely Republican – AZ, GA, IA, ME, MI, NM, PA, NV, SC, TX, and WI. They foresee no states as safe Democrat and foresee 9 states as lean/likely Democrat – AR, CA, HI, CO, CT, MD, NH, NY, and RI.

One of the leading political analysts nationally is Director, U.Va. Center for Politics, Larry Sabato. As of September 30, his Crystal Ball is saying there are 9 toss-up states – CA, GA, FL, MA, ME, MN, OH, RI, and VT. He foresees 3 states as safe Republican – AK, KS, and UT – and 16 states as lean/likely Republican – AL, AZ, ID, IA, IL, MI, NV, NM, OK, OR, PA, SC, SD, TN, TX, and WI. Larry foresees no state as safe Democrat and 7 states as lean/likely Democrat – AR, CO, CT, HI, MD, NH, and NY.

Before the 2010 mid-term election, our 50 states have 24 with Republican governors and 26 with Democrat governors. There are 13 states with no 2010 gubernatorial elections – DE, LA, IN, KY, MN, MO, NC, ND, NJ, VA, WA, and WV. Of the 37 states with a 2010 gubernatorial election, many in the political know believe the Republicans will pick up at least 7-8 governorships that are now Democrat and up to as many as 11-12. Many are predicting 31-35 states will have Republican governors in 2011.

Perhaps they are basing this on the two gubernatorial elections in 2009 that resulted in both turning from Democrats to Republicans - NJ Governor Chris Christie and VA Governor Bob McDonnell – in what were considered majority Democratic states.

Governor Christie has proven out to be a highly visible positive example of a politician for fiscally concerned voters nationwide. He has taken a tough stand on cutting spending and not raising taxes as the way to solve NJ’s budget deficits. Republican and Independent voters have taken pleasure in Governor Christie hitting back hard at what many feel is a liberally biased, double-standard backing mainstream media without pussyfooting around them.

He is loved by taxpayers for standing up to the powerful teacher union in NJ with reality and tough love. He is not allowing what many see as continued public employees’ entitled demands at taxpayer’s expense that have never really been affordable. Governor Christie is an example for voters in all political parties of someone who came into office to get a job done as promised in his campaign.

Governor Christie has shown a much needed view from reality, whether politically correct or not, that taxpayers from a cross section of America respect and admire. Voters have watched him instill faith in the political process by being a “mean what I say and say what I mean” politician actually living up to his campaign promises.

He serves as a breath of fresh air to many turned off by the void of true leadership strength in governing. He is a light at the end of the tunnel for those that want a smaller, more affordable, and more accountable government at all levels.

Governor Christie is a big draw on the campaign stump for fellow GOP gubernatorial candidates. For many Republicans and Independents, Governor Christie is in fact emerging as a favorite 2012 presidential GOP candidate. Many want him to bring his same political will and brashness to Washington. He has consistently indicated he has no plans to run.

Many wish Governor Christie was the governor of their state. More and more voters want spending cuts instead of tax hikes as fiscal policy to reduce their state budget deficit. They want a governor with the will to make that a reality. They can’t have Governor Christie, but they can vote for the Republican in their gubernatorial election in hopes they will uphold the Christie fiscal accountability example. Many are predicting voters will. Most believe a Democrat governor will continue tax and spend policies.

Friday, October 8, 2010

Real Estate Trend Expert Tom Ruff's Take on the Bank of America October Surprise unexpected, but popular, political act made just prior to a November election, in an attempt to win votes… Wiktionary Definition of October Surprise

“Bank of America has extended our review of foreclosure documents to all fifty states. We will stop foreclosure sales until our assessment has been satisfactorily completed. Our ongoing assessment shows the basis for our past foreclosure decisions is accurate. We continue to serve the interests of our customers, investors and communities. Providing solutions for distressed homeowners remains our primary focus.” Reporters May Contact: Bank of America Home Loans 1.800.796.8448

Bank of America

I must admit that I never saw this coming. Don’t quite understand how a company responds to the laws of a deed-of-trust state and the laws of a mortgage state in the same manner, but hey—it must be October, and to a voter, a foreclosure is a foreclosure.

In a New York Times article which quickly followed Bank of America’s press release, Representative Edolphus Towns, the New York Democrat who is chairman of the House Committee on Oversight and Government Reform, applauded Bank of America’s move and said, “I expect to see every other responsible banking institution follow their lead.”

Senator Harry Reid, the Nevada Democrat who is the Senate majority leader, thanked Bank of America “for doing the right thing” and urged other lenders to follow suit. I don’t know whether or not Bank of America’s actions fit the definition of an October surprise, mainly because I’m just not certain how popular this decision is going to be. People who have managed to stay in their homes for months without making a payment are applauding this decision; the 85% making their mortgage payments, maybe not so much.

As for the over 100,000 in Maricopa County who have left their homes due to foreclosure in the last 30 months, they are probably indifferent and happy that they no longer face a mortgage that’s underwater. Personally, I’m tired of politics, and I find today’s news a tad bit depressing. I’m not a political pundit; I’m a guy that tracks housing numbers, and a foreclosure moratorium, as we’ve learned from previous moratoriums, simply delays the problem. Let’s look at the numbers.

Bank of America by the Numbers

We define a Bank of America notice of trustee’s sale as any notice filed in Maricopa County that lists the beneficiary’s address as 400 Countrywide Way, Simi Valley, CA, and ReconTrust Company as the trustee. ReconTrust Company, N.A., is a wholly-owned subsidiary of Bank of America. In Maricopa County there are currently 39,042 single family residences or condos with an active notice of trustee’s sale, and 12,198 of them, or 31.2%, show Bank of America offices as the beneficiary as well as ReconTrust as the trustee.

When reviewing last month’s numbers, we saw 7,116 homes with notices filed in Maricopa County, 1,997 of which coming from Bank of America offices. When reviewing the 4,877 single family residences and condos that went to auction, we saw 1,104 from the Countrywide address.

So, what does today’s press release mean? Quite simply, foreclosure activity in Arizona should decline 25% to 30% in October and remain there until some time after an “assessment has been satisfactorily completed”—I’m guessing sometime after the first Tuesday in November. That’s what we know today, and if Edolphus Towns gets his wish, we’ll see an even more dramatic drop in October’s foreclosure numbers.

Final Thoughts

Without even knowing it, Representative Towns may have uttered the greatest oxymoron to come out of the entire housing crisis: “responsible banking institutions.” If we apply the same analysis to our REO file, of the 20,850 bank- and government-owned homes currently in our database, 4,551 homes were 400 Countrywide Way foreclosures, of which 2,684 are now owned by Fannie Mae, 240 by Freddie Mac, 91 by HUD and 9 by VA. Sorry, foreclosing on a home and delaying handing the majority of your losses off to a “government” agency does not fit my definition of responsible.

Finally, for those of you following the much publicized chess match of Valley Realtor Darrell Blomberg and his 32 months without making a mortgage payment, we’re predicting that his October payment gets postponed and that his streak is extended to 33 and 34 months. Yes, you guessed it; his mortgage is with Bank of America. In the case of Mr. Blomberg, DiMaggio’s record is in play.

Contact Tom Ruff at The Information Market.

Tom is a graduate of the University of Nebraska. He founded "The Information Store" in 1982 and quickly became known as “The Source” of publicly recorded real estate data in Maricopa County. In August 2005 he formed "The Information Market" specializing in foreclosure data and housing studies.

Mr. Ruff is an expert on publicly recorded data and is known for his monthly housing opinion which shares an inside and sometimes irreverent look at the Phoenix Housing Market. He is often quoted in local and national publications.

Why Americans are Angry & Don’t Believe Economists or Politicians Any More - Sept Jobs Report

Photo Credit - Flickr Creative Common License Watz
Job losses continue confirms the latest September, 2010 Job Report figures released October 8 affecting a 95,000 net job loss. This news affirms the unemployment rate has remained at 9.5% or higher for 14 consecutive months. This is the longest record of increased joblessness since monthly employment recordkeeping began in 1948.

According to a Bloomberg Businessweek article, “The number of jobs lost last month was 19 times the median estimate of economists in a Bloomberg survey. It was led by a decline in government payrolls that shows the damage being done by rising budget deficits.”

In this same article noting the damage of rising budget deficits is “It indicates that we’re still in this soft patch, and in order to get out of that and minimize the risk of a double dip, we need more fiscal and monetary stimulus.” Is this why most Americans don’t believe economists any more and don’t trust politicians actually know how to create an environment that allows private sector job creation? Is the fact the Dow topped 11,000 on the September Jobs Report why Americans remain angry at Wall Street?

In mid-September the National Bureau of Economic Research (NBER) announced the official end to the recession noting it actually ended in June, 2009. Treasury Secretary Timothy Geithner and investment oracle Warren Buffett have not embraced this message. Neither has the 15 million unemployed Americans still looking for jobs that no longer seem to exist and are not being recreated.

The everyday reality of the non-elite and non-political class in America remains painful. 2010 was a year most will be happy to leave behind. The housing crisis continued with record foreclosure levels and home value losses. The commercial real estate sector is reflecting big problems ahead too.

More than a year after the banks were bailed out by taxpayers, loans and credit to small business needed to grow and hire have all but disappeared. These same banks doubled and tripled consumer credit card interest rates and minimum payments while shrinking credit limits for the majority of customers including the “never late, never missed payment, never over limit” customers. This, combined with high unemployment and underemployment, resulted in record payment delinquencies and personal bankruptcies.

Record federal government stimulus spending resulting in trillion dollar deficits went mainly to congressional pet projects and to bail out state and local government to ensure special interest public union jobs were more secure. Even with the federal money, state and local governments all across the U.S. still have billion dollar budget deficits. Public unions still decry any budget cuts or restructuring that will affect them.

Americans are angry as the new normal for many now includes a place in life they never thought they would be and don’t want to stay: 1 in 5 are in foreclosure; 1 in 8 are on food stamps; 1 in 7 are now living in poverty. Having lost their retirement accounts through stock market losses or having had to cash it in early to pay current living expenses, many Americans now believe they will never be able to retire in this life time. Those losing their jobs in their 50s are not sure they will ever work at a normal level again.

Americans are not sure social security retirement benefits and Medicare are viable for them in the long run. They don’t believe the health care reform passed by the Democrats will retain current medical care quality, and many have already seen just the tip of the iceberg in the coming cost increases in their health insurance premiums. They know ObamaCare will only become another unsustainable entitlement program that Americans can not afford. They knew it all along.

Americans know liberals will try to control what they eat, lifestyle choices, and medical procedure availability under the guise of civic duty to collective lifestyle mandates and health care costs. Progressives have already shown the coming control methods of isolate, demonize, and encourage scorn from others with American adults who still choose to smoke cigarettes. They have seen the hypocrisy in hating smoking, but rallying pot legalization. They have seen the choice control progressives see as their right to impose within government dependency in the current discussion to ban buying soda with food stamps. Americans realize this is just the beginning of lifestyle mandates in a nanny state.

It’s not a pretty picture. We have gone off course. Congress has created a mess. Many believe the Obama policies’ socialistic tendencies have confirmed once again you eventually run out of money and stifle real economic growth. With the doubling down of the Bush deficit spending by the Obama administration, most Americans now see the dollar devaluation and inflation as a given in the very near future. Can we all finally agree what has been done has not only not worked but has killed any hope of a meaningful economic recovery until we get government out of the center of the economy?

It’s time to let all industries know no one is too big to fail. It’s time to stop telling banks they will be bailed out again and again in advance through slush fund legislation. It’s time to stop ordering banks to loan money while insisting on stress tests that penalize for lower reserve levels. It’s time for government to stop taking over private companies. And, don’t even think about making all federal taxpayers bail out the bad habits of failing states even though they may not live in those states.

If you have been watching the mid-term election political ads on television and the Internet this week, it’s hard not to notice the Democrats are distancing themselves from their economic policies and massive spending record of the past two years. It’s easy to note the Republicans only want to talk about the deficit and job creation while blaming the pain of a prolonged recession on liberal Democratic rule. In a New York Times article the other day, a top advisor to President Obama recommends “that his party’s candidates should confront anger about the economic crisis head on — and then blame Republicans.”

Evidently its business as usual in Washington, and ultimately no matter who wins in the mid-term elections, this needs to change or it is what will prolong the pain for Americans if not put the last nail in the coffin. The 2011 Congress needs to grow up, put up, and get over the party politics. Liberals - Americans want opportunity not more government dependency and nanny state control. Conservatives – Americans want cooperation and accountability within solutions that work for every American. Whoever wins in the mid-term election - you wanted the job, so roll up your sleeves and get the job done. Deficit reduction and creating a pro job creation environment must be your only focus in 2011.

Monday, October 4, 2010

Real Estate Trend Expert Tom Ruff's "Real Estate & the Mid-Term Elections"

“Guard against the prestige of great names; see that your judgments are your own; and do not shrink from disagreement, no trusting without testing.” - Lord Action, an English historian

An economist and a professor walk into a radio station to do an NPR interview. When asked about housing, the economist explains that now is not the time to buy a house. When the professor is asked his opinion, he communicates that now is the time to buy a house. The sophisticated NPR audience members, after hearing both interviews, congratulate themselves for patronizing a radio station that clearly communicates with unbiased clarity.

Economist: Now not the time to buy a house.
Professor: Now is the time to buy a house.

The links above will direct you to the transcripts from September 11 on for a pair of interviews—one with economics blogger Eric Ritholtz, the other with Professor Karl Case, the inventor of the Case-Shiller housing price index. Their opinions are indicative of headlines today: falling prices versus unparalleled opportunity.

Mr. Ritholtz is correct; prices are falling, and they will most certainly continue to fall in the near future. On the other hand, how can you deny the opportunities available? Bargain prices are paired with historically low interest rates—it is easy to understand Professor Case and his belief that this is possibly the best time that he’s seen in his lifetime to buy a house.

If you’re a prospective homebuyer, heed the words of Lord Acton: do not trust, test. Gather information, call an experienced Realtor, check with a knowledgeable loan officer, and review your options. You don't need an economist from IHS Global Insight to confirm that "housing is as affordable as it's been since at least the 1970s" to buy a home any more than you need to dissuade you. Look around and gather information; only you can make the decision of what works best for you.

The 23 States

As reported by The Associated Press, Bank of America is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents. Two other companies, Ally Financial Inc.'s GMAC Mortgage unit and JPMorgan Chase, have halted tens of thousands of foreclosure cases after similar problems became public.

The 23 states are Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, and Wisconsin. How does this affect Arizona? I don’t believe it does. What separates Arizona from the 23 states mentioned is the same thing that separates a deed of trust from a mortgage: the foreclosure process.

The 23 states mentioned above are judicial states; their foreclosure process takes place in the courtroom where witnesses are sworn in, while ours take place on the courthouse steps where people simply swear.

September Sales Numbers

September numbers looked similar to those of August: sales volume was slightly up, prices slightly down, foreclosures flat, as REO inventories continue to rise. The median home price in Maricopa County fell for the fifth consecutive month, but at a slower rate than last month. The median price of a resale home, which we define as any single family residence or condo, was $122,500—down $1,400 or 1.13% from our August 2010 figure of $123,900. In September Maricopa County saw 6,653 affidavit of values recorded in which either a single family residence or condo was sold.

The 6,653 home sales we are reporting do not include government-exempt affidavits (HUD and VA sales), nor do we include third-party buyers on the courthouse steps. September 2010 sales volume of 6,653 was 16.85% lower than September 2009’s volume of 8001. September 2010’s median home price was $7,500 below the September 2009 median price of $130,000, a decline of 5.77%. It does not appear to be a coincidence that the $7,500 decline closely parallels the removal of the $8,000 tax credit.

That Next Big Ripple

Another quarter has come and gone as has the forecast of that next big wave of foreclosures that was looming on the horizon. As each new quarter concludes, the forecast for the next big wave gets pushed back another quarter. For those keeping score at home, the latest forecast I saw called for the next huge wave to come on shore just after the first of the year. It has now been two-and-a-half years since the foreclosure ball started rolling downhill in April 2008.

The 7,501 new notices filed in September would only rank 18th in volume out of the last 30 months. Since April 1, 2008, there have been 232,546 notices of trustee’s sale filed in Maricopa County of which 115,214 have ended with a recorded trustee’s deed. When we look at 365-day running totals, the number of notices filed in a one-year period hits its peak of 103,777 on December 15, 2009.

Today, the number of notices recorded in Maricopa County in the last 365 days stands at 87,747. On the other hand, the 5,134 trustee’s deeds recorded in September ranks 6th. Applying the same yearly analysis, we see that trustee’s deeds hit their highest yearly total of 57,126 on October 1, 2010. While fewer properties have entered into the foreclosure process, the banks have picked up the pace at which they are foreclosing.


As we mentioned earlier, REO inventories are rising. This has little to do with the slight increase in properties that are returning to the banks and a lot to do with a declining demand for foreclosed homes. A loose approximation tells us that of the 4,800 homes that are being foreclosed each month, 1,000 are purchased by investors, leaving 3,800 to return to the banks, while the market is only absorbing 2,600 bank homes each month.

Our current REO database is at 20,430 homes, a number which has increased by 3,569 in the last three months. Our REO database is increasing at a rate of nearly 1,200 homes per month. In the months to come, these bank-owned properties are putting and will put downward pressure on home prices, particularly on the lower end.

What this means in an election year.

National reporting services lag local reporting services by 60 to 90 days. When July, August, and September sales figures hit their charts, national reports can only get worse. If you thought the negative news was bad the past year, brace yourself. Case-Shiller, the gold standard of housing indexes, will move from stabilization to declining values just days before the election.

Taking a page from the Democratic playbook—never let a good crisis go to waste—the Republicans will hammer home the latest housing stats. The good news: the election will be over soon. After November 3, the rhetoric will fade away, and constructive discussions will move to the forefront.

Contact Tom Ruff at The Information Market.

Tom is a graduate of the University of Nebraska. He founded "The Information Store" in 1982 and quickly became known as “The Source” of publicly recorded real estate data in Maricopa County. In August 2005 he formed "The Information Market" specializing in foreclosure data and housing studies.

Mr. Ruff is an expert on publicly recorded data and is known for his monthly housing opinion which shares an inside and sometimes irreverent look at the Phoenix Housing Market. He is often quoted in local and national publications.