Arizona Representative Jack Harper has absolutely stumped the panel, as they say.  If you had asked me what the Arizona legislature might do to make things MUCH worse this coming year, I’m not sure I could have come up with much.  I’m sure I wouldn’t have guessed this development even if given a hundred chances.

Like, what could you do to INCREASE foreclosures in a state where at least 50% of the mortgages are already underwater?  This year, Arizona came in #3 in the nation for declines in property values at 8.1%.  Unemployment is rock solid steady at 9%, assuming you stop counting those no longer looking for a job or those under-employed.  Now, I realize that Nevada is slightly in the lead here, but is Arizona that determined to win the race to the bottom?  Awfully competitive, if you ask me.  You’re already showing up Florida.

Currently, Arizona is a “non-recourse” state, meaning that if a homebuyer walks away from a house that’s underwater, meaning that the amount owed is more than the value of the property, the lender CANNOT recover the difference from the homeowner.

I AM NOT MAKING THIS UP.  YES, I’M BEING SARCASTIC, BUT EVERY SINGLE FACT IS CORRECT.  I’LL BE PROVIDING LINKS AT THE END SO YOU CAN READ IT THE BORING WAY.

The Arizona Bankers Association has been trying to change that for years so banks could go after the homeowners for the amount of the deficiency, and finally they’ve found their boy in Jack Harper.  Inconceivably, Harper says he will introduce a bill that will make Arizona’s homeowners responsible for deficiency judgements after foreclosure.  That could mean, if you owe say $500,000 and your home sells at auction… for say $100,000… like, in 2025 or whatever… now the bank will be able to come after you for the $400,000.

Harper, who by the way is no slouch legislatively speaking… he’s the Chairmoron (is that how you spell that?) of the powerful House Ways and Means Committee, has decided that Arizona’s status as a “nonrecourse” state is what’s keeping its real estate market from recovering. He says that people abandoning their homes further depresses the value of nearby homes… and he’s not happy about that.

According to Harper…

“The idea is to keep people from being encouraged to just walk away from their house any time they’re a little bit upside down on their mortgage,” said Harper, chairman of the House Ways and Means Committee.

Go back and re-read that sentence.  That sentence may very be a once in a lifetime opportunity.  And if it neither makes you feel enraged or sick to your stomach… you have already died inside.

The Arizona Bankers Association has been fighting for years to repeal the current law.  They say that when borrowers default, that means less money available for new loans.  They claim that lenders “get stuck with repossessed homes they cannot sell for enough at auction to recoup their losses,” and they want more than anything to be able to go after the borrowers for the difference.

Just so we’re clear… AND I DO WANT TO BE DAMN CLEAR ABOUT THIS… that is a complete and total LIE.

We should all know by now that our loans were “SECURITIZED,” sold off in complex securities to European banks and state pension plans.  Repossessed homes don’t decrease the amount of money there is for mortgages in Arizona.  The money for mortgages in Arizona NEVER came from Arizona… it never came from the bankers either.  If you meet anyone that believes that, walk away from them immediately, and for God’s sake keep them away from children.  ”They” are the best argument ever for forced sterilization.

Oh, and by the way… essentially ALL of the lending in this country today… and for the last four years… is from the U.S. government… Fannie, Freddie, FHA, VA… that’s it.  If anyone says otherwise, please refer them to me.

NOW FOR THE BEST PART… and Hat-tip to one of my favorite Arizona foreclosure defense attorneys, Beth Findsen…

Arizona’s laws that allow homeowners to walk away from mortgages were part of a legislative deal made in 1971, says Arizona Association of Realtors’ CEO Tom Farley.

Until then, a bank that wanted to foreclose on a home because of nonpayment on a mortgage had to go to court, a lengthy and cumbersome process.

That year, Arizona became a “deed of trust” state. The change, sought by the banks, meant lenders could foreclose on a property simply by giving notice and then taking possession 91 days later.

What the lenders gave up in exchange for that law was the ability to go after the home-loan borrowers, Farley said.

Yes, the bankers wanted Arizona to be a non-recourse state.  They wanted Arizona’s homeowners to be able to walk away and not owe the difference, because they didn’t want to hassle with the whole judicial foreclosure process.  They wanted to be able to foreclose faster.  And since they never lend their own money anyway, who cared…. foreclosing faster was better for them.

Of course, that was when Arizona’s property values were ALWAYS GOING UP in the future.  Hold onto the house and get more for it later.  Now that prices are in a free fall, make the deadbeat homeowners pay… f#@k ‘em!  They haven’t lost EVERYTHING yet.  Some of them still have cars we could repossess and sell off for scrap metal, and just think how that would help the traffic problems in the Valley of the Sun.  And jewelry… I’ve heard some may still have wedding rings and crap like that.

Jack “Jackass” Harper is a special kind of moron, however, as evidenced by his supporting statements.  Are you ready?

From the Arizona Daily Star, Saturday, December 10, 2011…

“Harper, a Republican lawmaker from Surprise, acknowledged that lenders may have ignored normal underwriting standards. But he said that’s not their fault.”

Keep going, if I had to read it so do you…

“The federal government uses the Community Reinvestment Act to intimidate the federally chartered banks,” he said. “They give them goals about how many loans you have to make in underserved, low-income areas. And the banks then start making risky loans to meet the goal.”

I can’t believe I have to do this but please stay with me.

1. The Community Reinvestment Act… OF 1979, by the way… had NOTHING to do with anything in 2008.  It was not a sleeping time bomb waiting for almost 30 years to destroy the planet’s economy.  And it doesn’t have any impact on Spain, Ireland, Italy, Australia… you get the idea, right?

2. If it were something related to the Community Reinvestment Act of 1979, then it would stand to reason that the foreclosures would be mostly in Community Reinvestment Act areas, right?  Is Scottsdale one of those?  I didn’t think so.

3. The Community Reinvestment Act only applies to federally chartered banks… NOT mortgage companies and Wall Street investment banks like New Century, Option One, Ameriquest, First Alliance, Lehman Bros., Bear Stearns, Washington Mutual, World Savings, Downey Savings, and the rest of the sub-prime shitheads that made all of the loans he’s talking about.  And no… it wasn’t Fannie and Freddie either… look it up for yourself if you don’t believe me.

4. The Community Reinvestment Act is about preventing discrimination and “redlining.”  Is Harper suggesting that what we need more of is discrimination and redlining?

I could go on, but my fingertips are already bleeding from pounding on the keyboard I’m going to replace as soon as I post this.

How about some more Harper from the Arizona Star?

He also said he DOES NOT believe that the banks bear some responsibility for the bad loans and should have to absorb some of the losses when borrowers default.

“The banks are taking all the risk and the buyer is taking none, other than what their down payment is,” he said.

Nope, I’m done.  I’ve got nothing else to say.  But, get this…

Harper says he’s willing to compromise and allow the banks to only go after an amount considered “fair market value,” and all I can say is that’s mighty white of him.  So, if you owe $500,000 and you walk away or lose your home to foreclosure… and your house is said to be worth say $250,000… even though God couldn’t sell it for that amount… all they can chase you for is the $250,000.

And just in case some of you are thinking… so what, I’ll just file bankruptcy… think again.  Ever since the new bankruptcy laws of 2005, that’s no easy answer or panacea.  Harper’s new law would make sure that you who already feel like you’ve lost everything… would actually be forced to LOSE LITERALLY EVERYTHING.

The really crazy thing is that Jackass Harper doesn’t even win the prize for elected morons in Arizona.  Besides him, Nancy McLain, and who could forget Carl Seel… the corporate seal, as I like to call him ever since he got his hundred grand principal reduction right before he arrived too late to propose an amendment to help homeowners in foreclosure… but at the federal level there’s Republican Senator Jon Kyl.

On the subject of extending unemployment benefits through this coming year, since there are NO JOBS, and some 25 million Americans hopelessly out of work… Senator Kyl recently claimed that…

“Continuing to pay people unemployment compensation is a disincentive for them to seek new work.”

YEAH!  You are a lazy group out there in Arizona, and if they keep allowing you to collect unemployment, you’ll never get off your butts and look for work.  Hey, don’t look at me, you guys elected him.

IN CONCLUSION…

Well, I will say one thing about this economic crisis… it’s certainly bringing out the CRAZY in some folks.  Like Republicans, for example.  And don’t even think about accusing me of being some kind of loony-left, Democratic partisan hack because not only did I vote for Reagan and the first George Bush, but I voted for Dubya TWICE.  (I also voted for Obama in ‘08, but that only proves that I’m a pragmatist… not a crazy person.  McCain/Palin didn’t even deserve to come in second.)

I used to be a Republican because for some reason I was under the impression that they were pro-business.  They used to be pro-business, didn’t they?  I could have sworn…

Anyway, this past year you might remember that I was the one who broke the story about SB 1259… the bill that vanished into thin air after passing the Republican controlled Arizona State Senate 28-2, courtesy of the inconceivably insensitive and I would say at least brainwashed, if not entirely corrupt, Rep. Nancy McLain.

The whole thing was a big misunderstanding actually… I didn’t realize that Arizona used some other kind of government … I had always assumed the state was using the same kind of democracy thing the rest of the states were, but come to find out, I was wrong.  I’m not sure what they call it, but apparently, in Arizona they let Nancy McLain decide on which bills legislators get to vote.  If Nancy doesn’t like it, Arizona doesn’t get it.  Hey, it’s okay with me, I don’t live there and Democracy’s not exactly winning any awards lately anyway.

One more thing…

A Personal Message to Senator Harper…

Okay, here’s the deal Jack.  I hope this embarrassed you.  What you’re proposing is going to hurt so many people that I cried writing about it.  It is either the product of some highly uneducated thinking, or you are a corrupt piece of crap bought and paid for by banking lobbyists.   For the moment, I choose to believe that you don’t know any better and actually have your state’s best interests at heart.  I’m going to assume that you are misguided or misinformed… that you are not a misanthrope.  (Look it up.)

So, if that’s the case, I want to help.  Get in touch with me confidentially.  No one will ever know.  I’ll help you understand what you are missing, what you should consider if you want to: Stabilize homeprices and stop people from walking away from underwater loans… at no cost to taxpayers.  And, supplement the state budget deficit without raising taxes.

I’ll even help design a graceful and strategic way out of your idiotic statements about the bill you shouldn’t have proposed… I’ll take down my post, and say wonderful things about you… and never tell a living soul you contacted me… ever.  I’ll sign any confidentiality agreement you want.

Or, stay on the track you’re on, in which case I’ll be writing about you constantly.  If anyone ever looks you up on Google, they’ll have to wade through page after page of my articles about your shortcomings… the Internet sucks that way, I know.  Eventually, even your own mother will vote for a Democrat.

Think about it, Jack… Google search is forever, and there’s still time to course correct.  I’m a very reasonable guy… I’m a communications strategist that has worked for some of the largest investment banks on Wall Street and some of the largest corporations on the planet for 20 years.  I’m smart as a whip about these subjects… ask around, you’ll see.

I’ve had a hard year, Jack… trying to change things for the better in this country… you can just imagine, right?  So, I’m cranky and would welcome someone to take out my frustration on in writing.  Don’t let it be you, Jack.  It won’t be any fun at all, my facts are never wrong, and you are the definition of a public figure.  Are you feeling me, Jack… I wouldn’t say any of this if it weren’t that important to stop what you’re doing.

At least sleep on it.  My email is mandelman@mac.com.  I’m here for you, if you’ll just give it a try, I’ll have you running for governor or the U.S senate within 5 years.

Mandelman

Do you think that was too subtle?  I sure hope he comes over from the dark side.  He looks like such a nice young man.  In fact, I printed him out, and I’m putting his 8″x10″ glossy on top of our Christmas tree this year.  God Lord, Arizona… WTF do you have going on over there.

And you know how much I love your state too.  You know what this means, don’t you?  Now, I’m going to have to go to Vegas or New Mexico… come on fix this… I love the Camelback Inn.

Mandelman out.

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And lest anyone think that I embellished a single fact in this story, I NEVER do that and you can read the straight news for yourself at any of the links below.

Planned Arizona Bill lets Banks Go After Homeowners Who Bail (This is on Beth Findsen’s blog, so please read this one first.)

Arizona Senator Wants to Penalize Those Who Strategically Foreclose

New Bill Could Prohibit Homeowners from Walking Away

State lawmaker wants to restrict mortgage walkaways

Lawmaker wants to change state’s non-recourse status