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Financial and Mortgage Reform? Nah. Who Needs It?



Bailout MoneyThis week the House of Representatives passed a sweeping financial reform package that would deter, in part, some of the most egregious practices of the financial and mortgage industries. In essence, it would curb, or try to curb, some of the sub-prime and other “exotic” mortgage products as well as create a bit of transparency for the average consumer of these products — home buyers.  Yes, there is a ton of other stuff in the bill.  Consumer protection against “smoke and mirrors” credit card fees and the like.  However, it is the mortgage stuff that caught my attention and the rabid (and rapid) response of the “‘Just Say No’ to Everything” party.

Rather than acknowledge that ” …risk management without the management…” bought the entire American economy to it’s knees and required massive Government intervention to prevent total economic meltdown, the financial industry along with their Republican allies in the Congress are prepared to spend whatever it takes to stop the bill from becoming law.  Excuse me?  Has anyone been awake for the last three years?

Big banks and other enormous “too big too fail” financial institutions played fast and loose with mortgages and people’s home and shelter in the name of “capitalism” and making the really big bucks.  When they failed — and, by the way, they did fail — they came crawling to their kindly Uncle Sam for billions in bailout dollars.  When the new majority stock holder balked at the gargantuan bonuses these gamblers were demanding to try and repair the damage, the money boys — nary a girl in sight — threw a tantrum.  Now, that the Government wants to implement some oversight to make sure this sort of thing doesn’t happen again, they’re really throwing a hissy fit.

The Wall Street lobby machine is being oiled and greased to stop what, in many ways, is modest reform.

Don’t Worry. There’s Still Time to Stop the Bus.

Since this has really only passed the House of Representatives, it still needs to go through the Senate and, perhaps, a conference committee before it reaches the President’s desk for signature and enactment.  My guess is that it won’t make it through the Senate.  There will be lots of talk about self-policing and free markets and yadda, yadda, yadda.

The lobbyists will be out in full force and the members of the Senate from the “‘Just Say No’ to Everything” party along with Joe Lieberman will put a halt to any meaningful reform. Unfortunately, the Democratic majority in the Senate is not as large as it is in the House and it’ll be easier to slow it, morph it or outright kill it.

Can I Have That 100%, Interest Only, No Doc, Neg Am ARM at 4.5%, Please

Think that’s a hoot, huh?  It really wasn’t that long ago when stuff similar to this was a way of life.  Lots of people were making money hand over fist and now we’re all crying the blues.  The thing that is wrong with “capitalism” as it is espoused by most of these folks is that it really isn’t about equal opportunity or the mythical “up by our own bootstraps” mentality.  It is about the wealthier and better educated preying on those that don’t have a chance in the same arena. This is exploitation and deception in it’s rawest form.

Yes, it’s time for the Government to step in and protect the American nation, as a whole.  Financial and mortgage reform is needed and it’s needed now.

“Loves sunrise walks on the beach, quaint B & Bs, former Barbie® boyfriend..." Ken is a sole practitioner and Realtor Extraordinaire in the beautiful MD Suburbs of DC. When he's not spouting off on Agent Genius he holds court from his home office in Glenn Dale, MD or the office for RE/MAX Advantage Realty in Fulton, MD...and always on the MD Suburbs of DC Blog

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  1. Missy Caulk

    December 13, 2009 at 12:01 pm

    And don’t forget where the “right to own a home came from” and who benefited the most from the let everybody buy a house.

    I thought those types of loans were already gone? I haven’t been able to find them in my area.

    Salaries of GM, Citi, AIG, et all….bonuses…. yea they make me sick. But, not enough to want the government telling them what to make or cutting them. They were not too big to fail and should of been allowed to. Now because “we” bailed them out and in some cases own them, “we” can tell them what to do.

    As far as the GFE…I’ve looked at it. Somewhat confusing but for the most part I like the way things are disclosed. Basically we will get used to it. Better for the consumers.

    Now if you can find one of those no-doc loans for self employed folks out there anywhere, let me know. We have always used one prior to them being called liar loans and abolished.

  2. Bob Wilson

    December 13, 2009 at 12:26 pm

    Ken, while your editorials are an entertaining read, what I see is blind faith in one party fueled by disgust for the other. I think it would behoove you to be original instead of a print parody of Rachel Madow and Kieth Oberman. That would require that you do more than regurgitate the same spin and actually do some research. If you did, you would learn that the allies of the financial institutions live on both sides of the aisle and the White House is still cutting back room deals.

  3. Bob Wilson

    December 13, 2009 at 12:51 pm

    The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway

    That quote is from an article entitled “Obama’s Big Sellout” published this week on December 9th in Rolling Stone, not exactly the flag bearer of the right.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?



NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<


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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.



young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.


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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.



gas tax


Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.


Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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