Former Real Estate Attorney’s Explanation of the Market Meltdown

Neal Boortz, attorney and talk show host, addresses the issue of the failures of banks, lenders and brokerage firms.  He hits the nail on the head and gives us something to think about.  He writes: 

“What in the world is going on here? 

You’ve seen the headlines, and you heard of the failures and buyouts. Lehman Brothers, Bear Stearns, Merrill Lynch, AIG; all big names and all in big trouble. Then those mysterious quasi-government agencies with names like Freddie and Fannie become wards of the state and you learn that you and your fellow taxpayers are potentially on the hook for tens of billions ofdollars. At the end of the week Washington Mutual is looking for a buyer, and you start to wonder about the security of your own bank and your own savings account. Let’s change that ad copy to WaMu — boo hoo.Somewhere in the back of your mind you understand that this is all tied somehow to bad mortgages. If you start reading a bit further to enhance your understanding you run into terms like Mortgage Backed Securities (MBS) and credit-default swaps, whatever in the world those are. Read further and you find out that a combination of falling home prices and mortgage defaults have put many investment banks and other financial institutions in deep puddin’. All this reading, all this watching the talking heads on TV, and you still don’t really know what in the world is going on here.Fear not. I’m here to help. I know … I’m just another talk show host; but the fact is that when the stage was being set for the problems we’re seeing today I was making most of my money as a real estate lawyer .. closing loans for some of the very institutions that are the tank today. This rather unique combination – closing lawyer and radio talk show host – gave me a front row seat to the politicization of mortgage loans that led us to today’s headlines.

 

OK .. so we all know that a lot of really bad real estate loans were made. The political class would sure love for us to believe that the blame here rests squarely on “greedy” (try to define that word) mortgage brokers and lenders. The truth is that most of the blame rests on political meddling in the credit decisions of these mortgage lenders.

Twenty years ago the buzz-word in the media was “redlining.” Newspapers across the country were filled with hard-hitting investigative reports about evil and racist mortgage lenders refusing to make real estate loans to various minorities and to applicants who lived in lower-income neighborhoods. There I was closing these loans in the afternoons, and in the mornings offering a counter-argument on the radio to these absurd “redlining” claims. Frankly, the claims that evil mortgage lenders were systematically denying loans to blacks and other minorities were a lot sexier on the radio than my claims that when credit histories, job stability, loan-to-value ratios and income levels were considered there was no evident racial discrimination.Political correctness won the day. Washington made it clear to banks and other lending institutions that if they did not do something .. and fast  ..to bring more minorities and low-income Americans into the world of home ownership there would be a heavy price to pay. Congress set up processes (Research the Community Redevelopment Act) whereby community activist groups and organizers could effectively stop a bank’s efforts to grow if that bank didn’t make loans to unqualified borrowers. Enter, stage left, the “subprime” mortgage. These lenders knew that a very high percentage of these loans would turn to garbage – but it was a price that had to be paid if the bank was to expand and grow. We should note that among the community groups browbeating banks into making these bad loans was an outfit called ACORN. There is one certain presidential candidate that did a lot of community organizing for ACORN. I won’t mention his name so as to avoid politicizing this column.
 

These garbage loans to unqualified borrowers were then bundled up and  sold. The expectation was that the loans would be eventually paid off when rising home values led some borrowers to access their equity through re-financingand others to sell and move on up the ladder. Oops.Right now this crisis is being sold to the American public by the left as evidence the failure of the free market and capitalism. Not so. What we’re seeing is the inevitable result of political interference in free market economics. Acme bank didn’t want to loan money to Joe Homebuyer because Joe had a spotty job history, owed too much money on his credit cards, and wasn’t all that good at making payments on time. The politicians told Acme Bank to figure out a way to make that loan, because, after all, Joe is a bona-fide minority-American, or forget about opening that new branch office on the Southside. The loan was made under politicial pressure; the loan, with millions like it, failed – and now we are left to enjoy today’sheadlines. 

So … why aren’t you reading the whole story in the mainstream media? Come on, are you kidding me? Do you really expect the media to blame this mess on deadbeat borrowers and political interference in the free market when it is so easy to put the blame on greedy lenders and evil capitalists? Remember … there’s an election going on. One candidate is decidedly anti-capitalist. Do the math.”This message was originally sent from Don Loyd, Oregon Association of Professional Real Estate Investors, 34 SE Bridgeford Blvd, Bend , OR 97701 . 

Fort Worth Club offers Friday night dining and dancing

Members of the Fort Worth Club and their guests are in for a treat! Beginning September 16th the club will offer dinner and dancing on Friday nights with the music of the Crawfish Band and Trey and the Tritones.  The evening entertainment will take a break during the holidays, but then we hope it will be back in January.  If you are a dancer, you’ll love this!

The Vault re-visited…

We finally made it into the Vault last night to see (and taste) for ourselves. If you like a quiet atmosphere, stay upstairs in the dining room. If you are the life of the party (or just like to be around the one who is) the downstairs area may be more your style. Each floor has its own fireplace (okay, so what if we won’t get to use it until next February?)… and these are the only real fireplaces we have seen in the downtown area. When it was cold last winter we kept looking for a place to go warm up with a brandy in the evening, but we were disappointed in other restaurants/bars that what appeared to be a fireplace was all for show (no flue, no warmth).

The downstairs just screams “take me to the kasbah!” There are cool nooks and crannies to hold intimate conversations where you can hardly be seen, but there is also flatscreen tv for those inclined to stay glued to a screen. The food proved to be traditionally Mediterranean —- we were very happy to see a wide range of fish on the menu with few high-carb offerings —- which means we can go there after vacation and remain on a much-needed diet after living (and eating out in) downtown for the past couple of years! The tidbits we sampled had a burst of flavor worthy of making the mouth water just hoping for more — lamb with a honey-saffron coating, bruschetta and small but spicy potato pieces (that I couldn’t pronounce the name of much less spell). The menus are varied — lunch, tapas and dinner-sized plates — with plenty to please the palate whether you want a small or large meal, even including burgers for the kids and a steak for the meat-and-potatoes types. We can’t wait to get back from vacation and go downstairs for the actual Grand Opening!
http://www.PrudentialTexas.com/MarieFerguson

Proper use of the term “y’all”…

OK, all you native Texans out there help me out on this one! When we were kids, most of the people you met were from Fort Worth or nearby…. a few were from Dallas, but they didn’t really count. I mean, there was a reason for that bumper sticker that said “If you love New York, take I-35E”. It was all over Fort Worth. Anyway, back then there was no need to explain what “y’all” meant. As transplanted Texans began to move in, they began to complain that ’sometimes youse-guys say “y’all” when you are talking to only one person….why is that?’ Nope, sorry, that’s only in the south. Maybe East Texans use “y’all” like someone from Georgia (or Dallas??!!??), but in Fort Worth if you say “y’all” when you are talking to one person it is only because it would be rude to exclude the rest of their group or family. “Hi, Johnny, how are y’all doin’?” is a inquiry about the whole family, not just John-boy.

After a few years went by, the transplants “got it” and started to sound a little more like they belonged here. Then more and more of you Yankee-types decided, August heat or not, Texas was the place to be. Whoa! Not only do we have to explain about ‘y’all’ again, but now we gotta explain ‘fixin’ ta’….. as in, “Hey, what’re y’all gonna do for dinner tonight?” The proper answer in Fort Worth is, “Oh, we’re just fixin’ ta go over to Reata Rooftop for a martini and some calf fries. Y’all wanna come along?” That’s called Fort Worth hospitality!

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Best Steakhouses in Downtown area

First, I have to tackle the misconception that there are 7 new steakhouses coming to the area, for a total of 11, as reported by the Fort Worth Star-Telegram… the last time I ate at Eddie V’s Edgewater Grill in Austin, it was an excellent seafood restaurant, and I don’t recall seeing steak on the menu….. there may have been a steak, but no one seemed to be ordering it. Same idea with calling the upcoming Vault…. the sign on our building says it is going to have mediterranean food and martinis. Anyway, here goes…

1. Del Frisco’s Double Eagle Steakhouse is the mainstay
2. Ruth’s Chris Steakhouse is a new contender just across the street, so we’ll see what that does to Del Frisco’s prices and reservation list…
3. Mercury Chop House is excellent (and Tower residents get a 20% discount —- hint, hint, you other guys!)
4. Reata — while this really is a steakhouse, their other dishes are much more unique, so try the tamales instead and go to one of the earlier ones for steak! And go upstairs on the rooftop for a nice view, too!
5. Texas de Brazil — really a churascaria rather than the traditional steakhouse —- is a unique place to eat dinner, but since it is all-you-can-eat the general belief is that adding so much salt to their meat is how they keep you from eating too much to put them right out of business.
Coming soon to an Omni Hotel/Residence near you (if you live downtown, that is) will be Bob’s Steakhouse. I’ve never been to a “Bob’s” before. I hear they are excellent from people who love Del Frisco, and may also give the reigning champ a run for their money and their customers. (Not to build it up unduly.)

Not in Downtown…. OK, I know the “Startle-gram” (remember, I used to be a journalism teacher, so it’s ok for me to call them whatever I please) says it is downtown, but if I can’t walk there…… duh, it’s not! Lambert’s Steakhouse is excellent and very new to the “near-downtown” area, near Angelo’s Barbecue. There are other restaurants that serve steak, and some are near the downtown area, but if you are a Fort Worth native, much less a true Texan, a lot of them don’t count as a steakhouse…..just because they have a steak on the menu…. then a friend emailed me a couple of days ago and asked why his favorite, Silver Fox, was not on the list. (Not to slight anybody, but it is not really downtown, is it?)

Not many places could support this much beef….. we think Fort Worth will do just fine!
http://www.PrudentialTexas.com/MarieFerguson

Security in the building…

When the Tower first opened, a friend asked me about the security in the building because he was working on plans to write a novel set in downtown Fort Worth and he wanted to have reliable information on how things operated here for the plot. I had explained that we have 24-hour concierge service and other amenities, with quasi-New York City style greeters at a desk (they don’t open the door for us like the doorman does …. yet anyway) and electronic key fobs that are required to unlock the doors to the building. You can’t get around easily anymore without one of those fobs to allow access — not just to outside doors, but to a different floor on the elevator. (This has caused a few moments of concern for many who have dropped their keys down the elevator shaft and couldn’t get to their floor and couldn’t get in their condos once they found someone to scan them up to their floor.) In the midst of telling my friend about the security in the building, I began to feel concerned that if he put too much information into the book it might urge a security breach by local ‘bad men’.

As time went on, I realized that it is only through elementary error that we have had any problems of this sort. All the common areas going from the elevator to the condo doors look exactly alike by design, as we are prevented in our condo agreements to place anything outside the door (like a doormat, maybe?), so it has happened on more than one occasion that a misguided resident would get off on the wrong floor, go to his door, find it unlocked, open it and then realize, ‘OMG this is not my condo!!!’ So far nothing detrimental has come from this, but I try to remember to keep the door locked, not because it is unsafe, but because there might be a surprise visitor otherwise! http://www.PrudentialTexas.com/MarieFerguson

Links to 76102 Downtown Fort Worth Condo websites

Links to 76102 property websites:

Le Bijou Townhomes: lebijoufw.com/

Montgomery Plaza Condos: www.montgomeryplaza.com

Museum Place Condos: www.museumplaceliving.com

S-T News article on One City Place: www.onecityplacefw.com/news_aug_01_04.html -

The Palisades Townhomes: http://www.palisadesfw.com/

Pecan Place Townhomes: pecanplacetownhomes.com/default.aspx

T&P Lofts: www.texasandpacificlofts.com

The Neil P Anderson: http://www.theneilp.com/news/08252004.phpOmni Residences: www.1301throckmorton.com/

The Tower: originally [www.livingatthetower.com – no longer in operation] call 817.291.8823 or www.PrudentialTexas.com/MarieFerguson

Villa de Leon Condos: www.villadeleon.com/

Westview Condos: http://www.condo.com/Pre-Construction_Condo_Fort-Worth_76102_Westview_1658234-TrackFrom=MapSearch

Note: Not all properties have their own website. Please go to www.PrudentialTexas.com/MarieFerguson for more information on those not listed here.

Public perception of what it costs (and why you’d want to)

It’s just one of those things that you either love or hate. Some people walk into our condo, see the long hallway with the beautiful floor-to-ceiling glass and head straight for the balcony to stand outside and gaze at the view, saying “Wow! I could SO DO THIS!!”

Others cringe as soon as the door opens, get that wide-eyed deer in the headlights look on their faces and ask if we feel the building sway, what we did with all our stuff from the house in Colleyville, and can’t wait to set foot on the ground level again.

Whether it is a fear of heights or claustrophobia, some people just have to have some dirt to dig in — we know of several couples who lived in the Tower for a couple of years, then sold and moved so they could grow a garden again or have space to entertain the grandkids, cook large Christmas dinners, etc.

Downtown living is not for everybody, but if you think it might be for you, go check out what some of the properties have to offer. Not all are highrise, not all are small, not all are particularly pricey, but you will have to choose how important particular issues are for your circumstances.

A friend recently called me to ask about seeing some property downtown. I asked what was most important to her, what kind of place she wanted. Her reply summed up public perception. ‘I want to be high up, with lots of twinkling lights and I need a minimum of 1600 square feet —- I’d like to get that for about $200,000-$225,000.”

Have you ever heard the adage in business, ‘fast delivery time, best price, highest quality — pick any two’? That pretty much works here, too. You can have more space and be up high, but it’s pricey. You can have a larger space for less money, but you’ll have to walk a good way to get to Sundance Square. You can have a smaller space in the clouds for less money, too. So you have to decide what is really important for you and what you can afford. Space in the Tower ranges from around 800 sf to 4500 sf for a penthouse —- with prices ranging from vaguely over $200K to around $2 million, and the prices for an equal number of square feet go up a bit the higher into the clouds you go. Go to www.PrudentialTexas.com/MarieFerguson to check out MLS listings and prices for zip code 76102.

Away from Sundance Square, and not in the clouds, there are lots of other locations that give more space for less money (but some cost more) — of course, you may have to drive to get to the downtown action, which kind of defeats the purpose. My husband and I joke that we never get in the car together unless we are going on vacation. There is very little we need to do that is not in walking distance (except for work in some cases).

Watch for related links to downtown properties. http://www.PrudentialTexas.com/MarieFerguson

Not all the gas in Fort Worth comes from the Mexican food…

Yeah, OK the Mexican beans can have some ill effects on the digestive system… but one of the things that is keeping Fort Worth way more than solvent right now is the Barnett Shale. It’s gonna last for years, and hopefully will get us through the credit/lender epidemic that plagues much of the country. Sideways drilling, duh….. I guess if you live downtown you don’t have enough acreage to make any money from the drilling…..maybe you kept your mineral rights when you sold before moving here. At least your not sitting in the traffic anymore. Meet me at Cantina, Mi Cocina or (OMG I’d have to get in the car) Joe T’s….. and let’s have some good ole Mexican beans!!! http://www.PrudentialTexas.com/MarieFerguson

Liquor Laws and filling commercial space in The Tower

For months, we had heard the rumor that a convenience food store was going to be included in our building. Along with those plans came the explanations of why there was NOT going to be one in the only location which wasn’t already spoken for —- Texas liquor licensing laws were going to keep us from being able to buy milk and bread so close to home. Because there is a church a block away facing that side of the building no place that sells alcohol was likely to move in. That includes a food store because it’s not the milk and bread they make money from, it’s the beer and wine that brings the profits. Okay, we understand that there is a law on the books that makes this difficult, but there is also another restaurant which sells liquor even closer to the church’s front door. What about them? They had to move the location of their door to the side street in order to comply with the laws! How stupid is that?!? It’s ok for the restaurant/bar to be there as long as the door is not in plain view? I guess the fact that it is not open while church is going on has nothing to do with it? We would love to see the law revised so that people who live in a multi-use building can have available the things they need without driving 2.5 miles to the SuperTarget —- actually, you have to drive a lot farther than that because while the SuperTarget usually stocks milk and bread, they hardly ever have club soda anymore for the Scotch drinkers in the Tower — I guess we bought it all. (There is one convenience store downtown, but they don’t have soda either, so we have never actually bought anything there.)

So if those who change laws are listening… you already have plenty of booze in the building across the street and a block down from the church (although it is not being sold unless you walk around the building to the side where the restaurants are open on Sunday serving brunch)! Now you guys are talking about allowing liquor sales on Sundays like other states. Could you please include revising the part of the law that doesn’t let us have our little store in the building?!? We are tired of driving to a liquor store to find the club soda!! http://www.PrudentialTexas.com/MarieFerguson