The Idiocy in Washington Reaches New Heights!!

[AZGrizFan]

These are the kind of idiots we've elected:

On January 6, Senator Durbin (D-IL) and House Judiciary Committee Chairman John Conyers (D-MI) reintroduced the “Helping Families Save Their Homes in Bankruptcy Act of 2009," S. 61 and H.R. 200. These bills would allow a bankruptcy court to modify a debtor's mortgage. Senator Durbin has been working to include the legislation in the larger economic stimulus package to be considered in the coming weeks; Chairman Conyers held a hearing on H.R. 200 and has planned a mark-up of the legislation for Tuesday. These bills are similar to legislation that introduced in the House and Senate in the 110th Congress, but was not considered by either chamber.
This legislation would allow bankruptcy courts to rewrite mortgage terms by lowering the value of a mortgage to the current market value of the property, reducing interest rates and extending loan maturity. This "cramdown" provision is not limited to the predatory loans that caused the current housing crisis - it would apply to all existing mortgages.

Our credit union (a $400+ million shop), is currently sitting on about $40 million in capital (reserves) and about $30 million in home equity loans that, because of the decline in housing values in the state of Arizona, are basically UNSECURED at this point. If these IDIOTS are stupid enough to actually PASS this legislation, the stampede of people to bankruptcy lawyers will be UNPRECEDENTED. Our $30 million HELOC portfolio will be completely crammed down, our entire reserves will be wiped out, and our credit union will no longer exist---along with HUNDREDS AND HUNDREDS OF OTHER FINANCIAL institutions in exactly the same position.

THIS is the kind of short sightedness we have in Washington, people. They want to look "good" to their constituents, and have no CLUE as to the impact of their actions.

This is gonna get REAL ugly.

[ASUMountaineer]

These are the kind of idiots we've elected:

On January 6, Senator Durbin (D-IL) and House Judiciary Committee Chairman John Conyers (D-MI) reintroduced the “Helping Families Save Their Homes in Bankruptcy Act of 2009," S. 61 and H.R. 200. These bills would allow a bankruptcy court to modify a debtor's mortgage. Senator Durbin has been working to include the legislation in the larger economic stimulus package to be considered in the coming weeks; Chairman Conyers held a hearing on H.R. 200 and has planned a mark-up of the legislation for Tuesday. These bills are similar to legislation that introduced in the House and Senate in the 110th Congress, but was not considered by either chamber.
This legislation would allow bankruptcy courts to rewrite mortgage terms by lowering the value of a mortgage to the current market value of the property, reducing interest rates and extending loan maturity. This "cramdown" provision is not limited to the predatory loans that caused the current housing crisis - it would apply to all existing mortgages.

Our credit union (a $400+ million shop), is currently sitting on about $40 million in capital (reserves) and about $30 million in home equity loans that, because of the decline in housing values in the state of Arizona, are basically UNSECURED at this point. If these IDIOTS are stupid enough to actually PASS this legislation, the stampede of people to bankruptcy lawyers will be UNPRECEDENTED. Our $30 million HELOC portfolio will be completely crammed down, our entire reserves will be wiped out, and our credit union will no longer exist---along with HUNDREDS AND HUNDREDS OF OTHER FINANCIAL institutions in exactly the same position.

THIS is the kind of short sightedness we have in Washington, people. They want to look "good" to their constituents, and have no CLUE as to the impact of their actions.

This is gonna get REAL ugly.

What? Maybe Obamessiah can get your CU a bailout. I'm still waiting on mine, but you know, I am middle class, so I don't need any help--I'm responsible.

[AZGrizFan]

These are the kind of idiots we've elected:



Our credit union (a $400+ million shop), is currently sitting on about $40 million in capital (reserves) and about $30 million in home equity loans that, because of the decline in housing values in the state of Arizona, are basically UNSECURED at this point. If these IDIOTS are stupid enough to actually PASS this legislation, the stampede of people to bankruptcy lawyers will be UNPRECEDENTED. Our $30 million HELOC portfolio will be completely crammed down, our entire reserves will be wiped out, and our credit union will no longer exist---along with HUNDREDS AND HUNDREDS OF OTHER FINANCIAL institutions in exactly the same position.

THIS is the kind of short sightedness we have in Washington, people. They want to look "good" to their constituents, and have no CLUE as to the impact of their actions.

This is gonna get REAL ugly.

What? Maybe Obamessiah can get your CU a bailout. I'm still waiting on mine, but you know, I am middle class, so I don't need any help--I'm responsible.

The final KICK IN THE ASS, Mountaineer, is that Credit Unions weren't ELIGIBLE for the bailout money, because, by law, we're not allowed to raise secondary capital. It's part of that tiny little fine print in the law that the banks have maintained over the years by funneling millions of dollars to congressmen and senators.

[wideright82]

I can't see that being passed. Would be one of the worst decisions that have been made thus far.

[ASUMountaineer]

What? Maybe Obamessiah can get your CU a bailout. I'm still waiting on mine, but you know, I am middle class, so I don't need any help--I'm responsible.

The final KICK IN THE ASS, Mountaineer, is that Credit Unions weren't ELIGIBLE for the bailout money, because, by law, we're not allowed to raise secondary capital. It's part of that tiny little fine print in the law that the banks have maintained over the years by funneling millions of dollars to congressmen and senators.

Well, yeah. But, he can re-write the law. Nevertheless, that's true though. At the same rate, you're able to offer better rates to members and such because of less tax consequences, aren't you guys technically "Not for profit?" Or is that not the case? I'm a member of a credit union, so I have money in both places, just curious.

[AZGrizFan]

The final KICK IN THE ASS, Mountaineer, is that Credit Unions weren't ELIGIBLE for the bailout money, because, by law, we're not allowed to raise secondary capital. It's part of that tiny little fine print in the law that the banks have maintained over the years by funneling millions of dollars to congressmen and senators.

Well, yeah. But, he can re-write the law. Nevertheless, that's true though. At the same rate, you're able to offer better rates to members and such because of less tax consequences, aren't you guys technically "Not for profit?" Or is that not the case? I'm a member of a credit union, so I have money in both places, just curious.

You're spot on. Not for profit, member/owner, that sort of thing.

Who can rewrite the law? Obama? That ain't gonna happen...we've been trying to get a secondary capital provision for 20 years.

[ASUMountaineer]

Well, yeah. But, he can re-write the law. Nevertheless, that's true though. At the same rate, you're able to offer better rates to members and such because of less tax consequences, aren't you guys technically "Not for profit?" Or is that not the case? I'm a member of a credit union, so I have money in both places, just curious.

You're spot on. Not for profit, member/owner, that sort of thing.

Who can rewrite the law? Obama? That ain't gonna happen...we've been trying to get a secondary capital provision for 20 years.

No, I know he won't, I was being facetious...he's the Obamessiah!

Yeah, we lost a lot of business a year or so ago when CD and MMA rates started plummeting. We couldn't keep up with the CU rates. Which, is understandable, but luckily I was able to keep many investments, one thing we had on you guys.

[HI54UNI]

I can't see that being passed. Would be one of the worst decisions that have been made thus far.

Remember we're dealing with a Congress run by these two dimwits:



I wouldn't count on it not passing.

[AZGrizFan]

I can't see that being passed. Would be one of the worst decisions that have been made thus far.

Remember we're dealing with a Congress run by these two dimwits:



I wouldn't count on it not passing.

That's my fear. And unless I'm wrong (and I am NEVER wrong), am I detecting the fact that ASUMountaineer is a damned BANKER????

[ASUMountaineer]

Remember we're dealing with a Congress run by these two dimwits:



I wouldn't count on it not passing.

That's my fear. And unless I'm wrong (and I am NEVER wrong), am I detecting the fact that ASUMountaineer is a damned BANKER????

HAHA, used to be. Not anymore. See, you should offer me more than Bud Light and minimum wage, I have experience...no homo! I now work with businesses getting them set up to pay local taxes.

[dbackjon]

That would be a HORRID thing to do.

[ASUMountaineer]

That would be a HORRID thing to do.

It's not that bad, it helps me get in and work to change tax assessments and such locally. I have already brought to our county attorney a different intepretation in business licensing that will be saving businesses thousands of dollars each year. He concured that the way the county was taxing certain businesses was unfair and now the county has began licensing specific business the way I suggested. It will cost the county some money, but it will benefit the business, and I think make the county more attractive in the long run for attracting these types of companies.

[houndawg]

That would be a HORRID thing to do.

It's not that bad, it helps me get in and work to change tax assessments and such locally. I have already brought to our county attorney a different intepretation in business licensing that will be saving businesses thousands of dollars each year. He concured that the way the county was taxing certain businesses was unfair and now the county has began licensing specific business the way I suggested. It will cost the county some money, but it will benefit the business, and I think make the county more attractive in the long run for attracting these types of companies.

Will the attractiveness be reduced by the reduction in services the county can provide?

Question for our financial friends: Why not take the trillion dollars we're handing out to banks with no strings attached and pay off residential mortgages?

[AZGrizFan]

It's not that bad, it helps me get in and work to change tax assessments and such locally. I have already brought to our county attorney a different intepretation in business licensing that will be saving businesses thousands of dollars each year. He concured that the way the county was taxing certain businesses was unfair and now the county has began licensing specific business the way I suggested. It will cost the county some money, but it will benefit the business, and I think make the county more attractive in the long run for attracting these types of companies.

Will the attractiveness be reduced by the reduction in services the county can provide?

Question for our financial friends: Why not take the trillion dollars we're handing out to banks with no strings attached and pay off residential mortgages?

Because there's LOTS more $$ in deliquent mortgages than there are dollars being handed out.

[ASUMountaineer]

It's not that bad, it helps me get in and work to change tax assessments and such locally. I have already brought to our county attorney a different intepretation in business licensing that will be saving businesses thousands of dollars each year. He concured that the way the county was taxing certain businesses was unfair and now the county has began licensing specific business the way I suggested. It will cost the county some money, but it will benefit the business, and I think make the county more attractive in the long run for attracting these types of companies.

Will the attractiveness be reduced by the reduction in services the county can provide?

Question for our financial friends: Why not take the trillion dollars we're handing out to banks with no strings attached and pay off residential mortgages?

Find me a county that isn't having a reduction in services. See, that's the difference between a big government ideology and a small government ideology. It's not a question of "taking money away from the county" it's a matter of following the law. What I mentioned was a benefit for new in-coming businesses. But, yeah, I don't think it will hurt the attractiveness. The companies will have more money, thus helping them pay for those services themselves, and probably in a more efficient manner. Again, my situation was about doing what is right.

It boiled down to this (this is the change I worked on):

Burger King has a stand alone restaurant, it is charged a flat fee of $42.50 per year for a business license because it is considered a restaurant. Fair enough. The problem arose with food courts in malls. Burger King, in a mall, was being charged based on how much money they earned in gross receipts, per year at $.60 per $1000. Those Burger Kings were paying a much higher license fee than the stand-alone Burger Kings. Why, you ask?

Well, a [stand alone] restaurant in the county/ city will pay one of two rates $21.25 for "less than four seats" or $42.50 for "5 or more seats." At a mall, the seats in a food court are owned by the mall, not the restaurant, so the city/ county was taxing them based on "having no seats, thus Burger King in a food court is not a restaurant, they're providing a service." Which puts that business under the gross receipt classification.

My argument was, "less than four seats" would include zero seats. Therefore, they should still be classified as a restaurant. They are preparing food, the exact same way as a stand alone restaurant. The county attorney agreed with me and the change has been made. We're talking, probably about, $500k - $1M) or so in lost revenue for the county based on the new interpretation (our license fees tied to gross receipts cap out at $10,000). So, 1) we did what is right and 2) may prevent a law suit in the future.

It seems you're looking at it from a government side, as if I helped companies steal money from the government. That's not the case, it is a situation where I thought the law was clear and was not being followed. The county attorney agreed, so either I was correct or he is a government hater too.

[houndawg]

Will the attractiveness be reduced by the reduction in services the county can provide?

Question for our financial friends: Why not take the trillion dollars we're handing out to banks with no strings attached and pay off residential mortgages?

Find me a county that isn't having a reduction in services. See, that's the difference between a big government ideology and a small government ideology. It's not a question of "taking money away from the county" it's a matter of following the law. What I mentioned was a benefit for new in-coming businesses. But, yeah, I don't think it will hurt the attractiveness. The companies will have more money, thus helping them pay for those services themselves, and probably in a more efficient manner. Again, my situation was about doing what is right.

It boiled down to this (this is the change I worked on):

Burger King has a stand alone restaurant, it is charged a flat fee of $42.50 per year for a business license because it is considered a restaurant. Fair enough. The problem arose with food courts in malls. Burger King, in a mall, was being charged based on how much money they earned in gross receipts, per year at $.60 per $1000. Those Burger Kings were paying a much higher license fee than the stand-alone Burger Kings. Why, you ask?

Well, a [stand alone] restaurant in the county/ city will pay one of two rates $21.25 for "less than four seats" or $42.50 for "5 or more seats." At a mall, the seats in a food court are owned by the mall, not the restaurant, so the city/ county was taxing them based on "having no seats, thus Burger King in a food court is not a restaurant, they're providing a service." Which puts that business under the gross receipt classification.

My argument was, "less than four seats" would include zero seats. Therefore, they should still be classified as a restaurant. They are preparing food, the exact same way as a stand alone restaurant. The county attorney agreed with me and the change has been made. We're talking, probably about, $500k - $1M) or so in lost revenue for the county based on the new interpretation (our license fees tied to gross receipts cap out at $10,000). So, 1) we did what is right and 2) may prevent a law suit in the future.

It seems you're looking at it from a government side, as if I helped companies steal money from the government. That's not the case, it is a situation where I thought the law was clear and was not being followed. The county attorney agreed, so either I was correct or he is a government hater too.

No, you're reading that in. I'm looking at it from the point of who makes up for reduced revenue or what services get reduced. I agree with your solution of the issue you described.

[JoltinJoe]

But Griz, these positions are already underwater.

What are the HELOCs going to get if the homes get sold at foreclosure? Of if the homes get sold through a bankruptcy sale?

The law intends to keep people in their homes, so if it gets passed, cut your deals with borrowers and salvage what you can of your position. Or risk having the bankruptcy court do it.

But if the property is sold, these positions are going to get little or nothing anyway.

Keep in mind that in order to utilize the bankruptcy provisions, you must be eligible to file a bankruptcy case. It's not enough that your mortgage is higher than the value of yoru house. So the credit unions should move to dismiss petitions where the debtor is not really eligible to file.

[houndawg]

Will the attractiveness be reduced by the reduction in services the county can provide?

Question for our financial friends: Why not take the trillion dollars we're handing out to banks with no strings attached and pay off residential mortgages?

Because there's LOTS more $$ in deliquent mortgages than there are dollars being handed out.

More than a trillion?

[AZGrizFan]

Because there's LOTS more $$ in deliquent mortgages than there are dollars being handed out.

More than a trillion?

I've heard numbers that high....can't find a source right now. If I find something (higher or lower) I'll post it.

[slycat]

More than a trillion?

I've heard numbers that high....can't find a source right now. If I find something (higher or lower) I'll post it.

I thought we were foregoing sources around here

[ASUMountaineer]

Find me a county that isn't having a reduction in services. See, that's the difference between a big government ideology and a small government ideology. It's not a question of "taking money away from the county" it's a matter of following the law. What I mentioned was a benefit for new in-coming businesses. But, yeah, I don't think it will hurt the attractiveness. The companies will have more money, thus helping them pay for those services themselves, and probably in a more efficient manner. Again, my situation was about doing what is right.

It boiled down to this (this is the change I worked on):

Burger King has a stand alone restaurant, it is charged a flat fee of $42.50 per year for a business license because it is considered a restaurant. Fair enough. The problem arose with food courts in malls. Burger King, in a mall, was being charged based on how much money they earned in gross receipts, per year at $.60 per $1000. Those Burger Kings were paying a much higher license fee than the stand-alone Burger Kings. Why, you ask?

Well, a [stand alone] restaurant in the county/ city will pay one of two rates $21.25 for "less than four seats" or $42.50 for "5 or more seats." At a mall, the seats in a food court are owned by the mall, not the restaurant, so the city/ county was taxing them based on "having no seats, thus Burger King in a food court is not a restaurant, they're providing a service." Which puts that business under the gross receipt classification.

My argument was, "less than four seats" would include zero seats. Therefore, they should still be classified as a restaurant. They are preparing food, the exact same way as a stand alone restaurant. The county attorney agreed with me and the change has been made. We're talking, probably about, $500k - $1M) or so in lost revenue for the county based on the new interpretation (our license fees tied to gross receipts cap out at $10,000). So, 1) we did what is right and 2) may prevent a law suit in the future.

It seems you're looking at it from a government side, as if I helped companies steal money from the government. That's not the case, it is a situation where I thought the law was clear and was not being followed. The county attorney agreed, so either I was correct or he is a government hater too.

No, you're reading that in. I'm looking at it from the point of who makes up for reduced revenue or what services get reduced. I agree with your solution of the issue you described.

Fair enough. Right now, the services that would get reduced--by that one act--are probably slim if at all. Where it's coming into play locally is with property taxes and local sales taxes. Less stuff being bought = much less revenue.