Where is the moral outrage? Both presidential candidates are soaked in lobby money, one with a quasi Marxist agenda, the other with quasi free market agenda and both sleepwalking through a financial dilemma that attacks every property taxpayer and American.
Selling an expensive assets such as a houses to those who are unprepared financially to deal with making mortgage payments, insurances and property taxes is foolish. But that is exactly what president Jimmy Carter did by passing legislation encouraging such loans. This started the disconnect between reason and reality and utter foolishness. Political meddling into economic issues and sound lending practices kills the golden goose every time.
President Bill Clinton put this bogus practice on steroids. He enacted legislation that punished mortgage lenders that would not comply. He deregulated risk by legislating against it causing a complete abandonment of sound lending practices.
Who bought these artificial high risk loans? Fannie Mae and Freddy Mac. They, furthermore, became a root for sending political contributions to politicians encouraging this bad credit homeownership cancer to keep growing. Mortgage company lobbies’ threw hundreds of millions of dollars to politicians’ greed in order to perpetuate this circus even as residents of high-foreclosure neighborhoods suffered additional pain from high property taxes.
AIG and other insurance companies insured these loans. Their cardinal goal is to evaluate and insure against debt risk. Their leverage was set at 12 to 1 meaning that they had to have one dollar in assets to cover 12 dollars or risk. They threw millions of lobby money to leveraging its recirculation rate at a reserve rate of more than 30-1. With such a high-risk and profit expansion levels, any big bump in real estate valuation put those assets at risk.
This fraud was given the stamp of approval by chief economists Greenspan and Bernanke and the ship of fool’s balloon took off. Socialist organizations such as Acorn (Association of Community Organizations for Reform Now) and other related groups pressured banks into giving even more misguided loans.
SEC Chairman, Banking Committee Chairman, The House Finance Chief and scores of public official’s rubber stamped this cancer because of the easy lobby money directed at them. Greed for lobby money tempers sound judgment it seems. The only way to end this type of self perpetuating system is to put anyone who accepts lobby money into prison and banish them from government service.
When the hot air balloon runs out of fuel used to create the hot air, the balloon crashes. When the easy credit real estate market turned and foreclosures climbed, the balloon was punctured and stopped climbing; it crashed. Humpty Dumpty and the 700 billion dollar bailout that was weighed down with pork project bought and paid for by additional lobby money show how corrupt these weasels are. Where is the ethical outrage?
The other news: Lower real estate prices has many towns raising tax rates to compensate for lower real estate assessment values. If you compare your home’s value to comparative values of recently sold homes there is a good chance you qualify for a property tax appeal. At least, you should investigate whether you have a case.
Before you pay your property taxes, look at a property tax abatement guidebook that could lower the amount you pay in property taxes. Property tax records have a high chance of error and a property tax appeal can lower your property taxes for years.
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