Magic home loans

In a post on the blog Credit Slips, the writer notes a development in Massachusetts. There, the supreme court essentially held that a home loan that was designed to be refinanced instead of repaid is inherently predatory and can’t be foreclosed on.

One of my favorite I don’t really feel guilty about it at all pleasures is watching Judge Judy. One type of case that comes before her a lot is where person A loans money to person B who had no job and no income. Ms. Sheindlin often rules against person A in those cases. “Well how did you expect them to repay you? Magic?” If you expected magic, then you really didn’t have a loan. You made a gift.

The situations described are similar and bring up something I hadn’t considered before. If the bank was expecting magic then they weren’t really making a loan, they were making a gift. And that’s the rule in Massachusetts now. If the person had the income to pay the loan terms, it’s a valid loan. If the person’s income at the time of the loan origination was insufficient to make payments, it’s a gift. The bank expected the value of the house to go up, the house to be refinanced, and they’d get their money out of the increased equity. In other words, Massachusetts says that is “magic.” Which has stopped happening pretty much.

The parallels between the home loans and the personal loans handled by Judge Judy aren’t complete of course. Judge Judy’s loans have no explicit collateral. And the amount in question is a lot greater. The Credit Slips blog post says the banks have to rework the terms under the ruling. So there has to be some incentive even under it for a home owner to re-work as well. Normally that’s foreclosure. If that isn’t available, I don’t know what is.

But it’s still interesting.

Sound Transit Proposition No. 1 Mass Transit Expansion

The Sound Transit Board passed Resolution No. R2008-11 concerning an expansion of mass transit. This measure would expand and coordinate light-rail, commuter-rail, and (beginning 2009) express bus service, and improve access to transit facilities in King, Pierce and Snohomish Counties, and authorize Sound Transit to impose an additional five-tenths of one percent sales and use tax, and to use existing taces to fund the local share of the $17.9 billion estimated cost (includes construction, operations, maintenance, interest and inflation), with independent audits, as described in Resolution R2008-11 and the Mass Transit Guide. Should this measure be approved?

Yes.

I would dearly love to see them pick better neighborhoods to serve. Rainier Valley was good choice. West Seattle, Ballard, Bellevue, Lake City, the Aurora corridor, and other places would have been better. Nevertheless, buses aren’t the answer. And we’re not getting a monorail. So light rail it is. One light rail train can carry far more passengers than a host of cars. Seattle will never be a world-class city without this. It will spur economic growth along the rail lines. It will reduce congestion. It will give us a lot without taking anything away except a little bit of money temporarily.

City of Seattle Proposition No. 2 Parks Levy

The City of Seattle’s Proposition 2 concerns increased property taxes for six years for parks purposes.

If approved, this proposition would fund acquiring, developing and restoring parks, recreation facilities, cultural facilities, green spaces, playfields, trails, community gardens, and shoreline areas; all as provided in Ordinance 122749. It would authorize regular property taxes higher than RCW 84.55 limits, allowing collection of up to $24,250,000 in additional taxes in 2009 (up to $145,500,000 over si years). Taxes collected in 2009 would be limited to $2.60 per $1,000 of assessed value, including approximately $0.19 of additional taxes.

Should this levy lid lift be approved?

It’s kinda pricey, but there’s a good argument for it. If Seattle is going to become a world-class city, it’s going to get a lot denser. The additional people will not have the single family home and yard that has been Seattle’s reason for being for a century. We’ll need open spaces and green spaces for people. That means parks. And we need to start developing them now, so that we will be ready when we are a bigger city.

I will vote yes.

City of Seattle Proposition No. 1 Pike Place Market Levy

The City of Seattle’s Proposition No. 1 concerns increased property taxes for six years for Pike Place Market.

If approved, this propsition would fund seismic, safety, energy-saving, and other basic infrastructure improvements at the publicly-owned Pike Place Market, last renovated in the 1970s; all as provided in Ordinance 122737. It would authorize regular property taxes higher than RCW 84.55 limits, allowing collection of up to $12,500,000 in additional taxes in 2009 (up to $73,000,000 over six years). Taxes collected in 2009 would be limited to $2.60 per $1,000 of assessed value, including approximately $0.10 of additional taxes.

Should this levy lid lift be approved?

I am torn on this one, but ultimately I think I will vote for it.

Mostly I just don’t know that the benefit to Seattle is worth the public cost. I don’t think Pike Place Market really brings in that many tourists. Sure they’ll go there once they get here. But I don’t think it brings additional tourists who wouldn’t have come otherwise. On the other hand, I like the market (I used to hang out there every day after high school) and I like the ability to buy fresh foods and handmade items. But I don’t go there that often anymore. I’d love to see businesses renting there put up more of the infrastructure money.

Count me for this one, but reluctantly.

King County Superior Court

Position No. 1:

Position No. 22:

Position No. 37

I wouldn’t know these candidates from Adam. And I wouldn’t know how to evaluate a judicial candidate for the most part. So I’m just going to vote what The Stranger tells me to vote in these races.

Bradshaw, Hill, and Rietschel. Other folks, sorry for not knowing your strengths. You might have been good.

Washington State Representative District 43 Position 2

Choices are:

  • Frank Chopp (Prefers Democratic Party)
  • Kim Verde (Prefers G O P Party)

Chopp isn’t a bad representative. But he could be doing so much more. As Speaker of the House, he could have used the super-majority the Democrats held to enact some amazing things. Instead, he’s held back for fear of losing the majority. In other words, don’t overstep. Well, that makes some sense. However, we elected Democrats for a reason. If they don’t do anything, what’s the point. He’s also enthralled by the B.I.A.W., an anathema to good business and good government in the state.

Kim Verde is worse. And she won’t even use her party’s name, Republican.

Hold my nose and vote for Chopp? Or skip this race? Does it matter, given that Chopp is popular?

Washington State Representative District 43 Position 1

Choices:

I rarely vote for or endorse candidates running unopposed. There doesn’t seem to be much point. However, I make an exception for Jamie Pedersen. His cause celebre is marriage equality. He’s been the leader in the legislature getting a domestic partner registry law passed, and then expanding it the following year. The stated plan is to add more and more of the rights and privileges associated with marriage to the domestic partner law, until it’s indistinguishable from marriage. Huzzah!

I vote twice for Jamie Pedersen.

Washington State Insurance Commissioner

Choices are:

This position is the watchdog for the insurance industry. Why anyone would think putting an insurance agent (Adams) in place as a watchdog for the industry is a mystery to me. John A. Adams believes in creative solutions to expand insurance coverage. Coming from an agent, I suspect that means he wants to unfetter the industry so it could (in theory) offer all sorts of new insurance options at lower cost. Possibly. But the way insurance works, someone needs to hold their feet to the fire to pay up when disaster strikes. The idea that the free market will force them to honor their obligations is ludicrous. Consumers pay up front. Insurance companies can take the money and run. There’s just too much incentive to meet profit objectives by denying claims. You want someone independent of the industry like Kreidler to be the watchdog.

Washington State Superintendent of Public Instruction

My choices are:

So here’s the thing, I’m note sure there’s anything seriously wrong with Washington State’s schools. I don’t know if they are being run well either. And if they are being run poorly, what can be done to fix them? I don’t think the education establishment has acquitted itself very well on it’s attempts to improve education. Both candidates are members of that establishment, from somewhat different perspectives. Whether or not we have the WASL in it’s current form I think is of little import, despite the arguments pro and con from teachers and whatnot. From my experience mentoring high school kids at Chief Sealth (one of the poorer performing and under-supplied schools in Seattle) the WASL is neither causing anyone’s downfall nor proving to be anyone’s savior. (I do wish the SPI would ban the gimmicks the Seattle Public Schools use to drop badly performing students from the official WASL statistics, but that’s not going to actually fix education.) And lastly, I don’t really know how much influence the Superintendent of Public Instruction really has on the individual school districts in the state.

So unless someone posts something really insightful here, I’ll not be voting in this race. I know I changed my mind on the Lt. Governor race, so maybe I will here too. But I’ll definitely need better arguments than either of the candidates’ web sites or the newspaper endorsements I’ve seen. Comment away, if you care.

Washington State Commissioner of Public Lands

My choices are:

An overly pro-business anti-environment Republican who has issues with harassing female interns, or a pro-environment rancher (agricultural credibility!). Goldmark all the way.