consultants are sandburs

Friday, September 28, 2007

As one taking on years, today I focus on The Ramsey Town Center Old Folks Home.

Sure, political correctness says, "Senior center," and not "Old Folks Home."

Leave politically correctness for those who cherish it. Old Folks Home is the term here. I am one. So the term is not intended to be pejorative. Only descriptive.

The people wanting to build the Ramsey Town Center Old Folks Home, right there next to the busy, busy, busy railroad tracks, were praised for an effort in Blaine, presumably not by a loud and busy rail line in Blaine.

I hope the sound insulation is good or they cater to the hard of hearing in Ramsey.

If it were me, my aim would be to retire to a quiet retreat, not adjacent to the BNSF Railroad's busiest track in the nation. If it's not that, it seems so. How the "planners" planned that one is a neat question. Perhaps one of them might answer it sometime. Right next to the tracks ---

And putting it and the morgue next door to one another ---

That's indelicate. I would not in my dwindling years want the morgue next door.

Would you? The feeling the people next door are waiting.

Anyway, here's the ABC Newspapers link and excerpt, make of it what you will:

Blaine senior campus gets a positive review
Thursday, 27 September 2007
by Tim Hennagir
Life Editor

The corner of Paul Parkway and Ulysses Street in Blaine has become the proposed site of a new senior housing retail, restaurant and office space mixed-use development.

According to background provided by Bryan Schafer, community development director, Woodbury-based BrightKeys Building & Development Corp. initially made a presentation last spring involving the location.

While that proposal was conceptual, it outlined a senior campus containing a variety of housing and service options, according to Schafer.

BrightKeys has since partnered with Crest View Senior Communities and during a Sept. 13 city council workshop, Brightkeys and Crest View representatives shared proposed development details for the 16-acre site.

Crest View is a charitable Christian organization that helps develop, market and manage senior communities.

Christians in the old folks home business. I'd like to see the balance sheet, and the shareholder track-down, see whose pocket is being served in all this.

Continuing the excerpt - and wouldn't you expect, Jesus does not just save, he TIFs.

Two issues that would need attention or require council action would be a land use amendment and the developers’ request for tax-increment financing, Schafer said.

“They want tax increment assistance on the senior housing portion only,” he said. “What’s being proposed is fairly typical with a senior housing project of this type.”

Chief Executive Officer Shirley Barnes represented Columbia Heights-based Crest View at the Sept. 23 Blaine City Council workshop.

BrightKeys was represented by Vice President Philip Dommer.

NOW -- Brightkeys? Brightkeys? Isn't Brightkeys the genius group that inflicted "Town Center Gardens" on our community, over much community objection? If they have a part of this thing in Blaine; watch out Blaine. It may end up looking ugly on the ground, is my thought. Unless I am mistaken, Town Center Gardens is the Brightkeys "track record" in Ramsey, and we should be unforgiving.

That Dommer guy talked for them in front of the Ramsey council. Elegant marketing.

Good luck Blaine. The article continues:

As proposed, private investment of $25 million would be used to finance a three-building campus at the site.

A total of 110 senior apartments, a mix of one- and two-bedroom units, would be built in one, four-story building.

Sixty memory care units, assisted living and future nursing beds would be included in a separate three-story building.

A total of 72,000 square feet of retail and office space would be featured in separate three- and four-story buildings.

Restaurant space of approximately 8,000 square feet would also be included in the proposed mixed-use project.

According to Schafer, the proposed site’s land use is currently designated planned industrial and commercial.

While that designation is appropriate for office, retail and restaurant use as well as assisted living and memory care, Schafer said the 110 senior units would require a land use modification as high-density residential.

Previous senior housing projects in Blaine have not been completed without some form of assistance to lower costs, reduce interest or provide tax reductions, Schafer said in his background memo to the council.

“We did this for the senior housing at Cloverleaf Courts and other senior housing projects in Blaine,” Schafer said.

BrightKeys and Crest View are proposing use of a “pay-as-you-go” housing tax increment financing plan with a term of 25 years, according to Schafer.

And in case you did not already know:

TIF is a mechanism used by cities to fund land redevelopment, acquisition, demolition and renovation work.

City officials calculate how much tax revenue new developments can generate and then borrow money against the future income.

Over time, the tax revenue generated reimburses a developer for the cost of work on the improved site.

TIF support would guarantee a rent write down for approximately 20 percent of the independent units as well as the base housing cost for 20 percent of the assisted units.

Schafer said this would make the entire senior project more feasible.

According to Schafer, an early estimate indicates 80 percent of the available tax increment would be returned to the project.

That means the city of Blaine would provide total TIF support of $200,000 annually over the 25 years.

The old folks won't likely last as long as the TIFing, but is that anyone's surprise?

The article continues:

Details of proposed BrightKeys and Crest View’s proposed plan would need to be reviewed and approved by the Blaine Economic Development Authority and made part of a TIF assistance agreement, Schafer’s council memo concluded.

The 80,000 square feet of commercial office and retail would not be part of any TIF arrangement with the city.

BrightKeys and Crest View would pay an expected $200,000-$250,000 per year in annual property taxes

“There’s a lot of positives with this,” said Councilmember Katherine Kolb. “I’d like to see this happen, but we still have to talk about the tax increment financing request first.”

Councilmember Dick Swanson said the project is needed by the Blaine community.

He agreed use of the “pay as you go” financing would be critical so there would be no lump-sum payment involved if the city participated in the project.

“I like the project,” said Councilmember Russ Herbst. “I think it’s a heck of a deal. Let’s get it set up.”

Barnes provided supporting demographics for the project during her brief remarks to the council.

She said 23.6 percent of people age 75 and older in Blaine have incomes of $15,000 or less.

Another 25 percent, Barnes said, have income that range from $15,000 to $25,000 annually.

According to Barnes, the senior housing project would bring 55 new jobs to the city with a $1.3 million annual payroll.

Crest View also will be developing and sponsoring a continuum of care retirement community at the Ramsey Town Center, according to information posted on its Web site.

That facility is scheduled to open in 2009, the Web site stated.

How the old folks income demographics factor into the thing is unclear. Perhaps the numbers show how much they can be taken down for before rock bottom's reached. Why report that anyway? Old folks usually don't have high incomes. That's not exactly news. Unless they're old Crabgrass, I guess. Then they are wealthy. I wonder who the landholder - land speculator is in this Blaine deal. I wonder if there's a relative on the Blaine city council. The Crest View website, has this to say, with a mention of Town Center:

Our Mission
Crest View Senior Communities, founded as a charitable Christian organization, in cooperation with the community and Member Churches, exists to serve people by offering a continuum of quality care and services and by providing for their spiritual, emotional and physical needs.

Crest View Senior Community at Ramsey Town Center is currently taking applications. [see opening photo, above, that's advance reservations - well in advance] We are blessed to be able to caring out our ministry of serving older adults.

We continue to be pioneers today in carrying out our strategic plan, which is based on our mission and vision. We welcome you to Crest View Senior Communities and hope that you experience a feeling of what we call the "Ruth Experience", which is carrying out our mission through a sense of calling, not obligation. We are called to serve and we are blessed. If you ever wish to reach me, you may call 763-782-1645.

I am not too sure about that "able to caring out" sentence, but I think it means something about "able to be carrying out," apart from any concept of outsourcing care, or any other such possible meaning. The ABC Newspapers article did not link to the old folks home business website, but I found it with Google. Would you believe, ""? Isn't that sweet? They care. There must have been a bunch of "crestview" URL registrations already, hence the

Interestingly, in Googling, I found a "Crestview Manor" old folks home in Escondido California - "gracious living for the retired" - so it, "Crestview," must be a popular name in the trade, single word as in Escondido, or "Crest View," as the Minnesota variety calls itself. My favorite Google hit is this one, "Senior Music Show," which will be touring, and playing at Crest View, at the existing Columbia Heights [yes, Nedegaard land] locale.

Springsteen is coming to town soon, playing downtown. By now, he's "Senior Music," isn't he? Getting on in years like Bob Dylan. Springsteen probably has an AARP card, as well as a musicians' union membership card, Visa, and Capital One.

But "The Boss" he is not like that neat "Senior Music" act Crest View's booked.

"Jim is the best Elvis impressionist I have heard in Minnesota" - Marilyn Andersen

That's one of the credits/endorsements the act posts on its website. Good luck, old folks with that act. Probably the Alzheimer's patients will enjoy it. Lawrence Welk probably was pleasing to Terry Schiavo while she was hooked up. A failing mind makes it sound better, all that, I guess.

"Senior Music," indeed. I'm old. And I'm insulted. Old does not equal "likes schlock."

And by the time it's built in Ramsey, we'll have that Community Bank, across the street. Whoever owns it. By then. In Jim Deal's building. Maybe he's buying the bank. Maybe renting out the space. All a stone's throw from City Hall. And when the old folks get tired of that perpetulal train whistle and the enduring accompanying rumble, they may be throwing stones at City Hall, trying to hit those who thought it a fine idea to make "Crest View By The Tracks" a part of a glittering Ramsey Town Center extraveganza experience.

Live Here. Play Here. Work Here. Bank Here.

Saturday, September 22, 2007

MY BET: A real warm place will freeze over before a nuisance enforcement ordinance in Ramsey is passed to quell this eyesore.

If you read Orwell's Animal Farm, all the animals on Animal Farm were equal but the pigs thought they were more equal than the others. Four legs good, two legs better, etc. We all read it, right?

Soooooo -- If you are a reader feeling a threat from the efforts afoot on nuisance vehicle crowding, regardless of lot size, well, at least all the people should be at risk together - Right? Like a rising tide lifting all boats? It's a pile of cliches so far, but should some get hassling and others skate - based on WHAT?

What exactly is "RAMSEY fairness"? I don't think it means pigs are more equal than the others. Orwell doesn't live here, does he?

Here's the evidence. The camera does not lie. A fact is a fact:

Now --- if this were a six or eight acre lot with privacy screening, etc., would it make a difference? On an "urban size" or I call them "Peterson size" lots, is it a place for a big honking RV in the driveway, ever? Operable or not? Licensed or not? Out front this way? Not on the back three acres. Is that "operable" or "licensed" criterion a legitimate litmus test, or a "way around" for guys like this? What are the real sensibilities at play - and will an ordinance be fair - and fairly enforced like the DUI laws, which apply to each of us equally, and it's how you blow a score on the machine, etc. Fair and square, and everybody faces the same set of rules. Right?

How can this ordinance effort be done FAIRLY AND SENSIBLY? That's my question.

I won't name names. But I would be astounded if a Ramsey ordinance gets passed that quells this guy doing as he wishes.

And a real big worry -- if the immediate neighbors don't complain, what if someone with a grudge, at a distance, makes a complaint? How can that "retalitory" situation be prevented - those with a higher profile, however attained, are more the target -- as this photo montage can be argued to show. Is that "RAMSEY fairness"? It's not a simple or easy question. The council members should lead carefully, to earn our respect and to earn our following their lead.

That's all. An ordinance can be written several ways. There can be unconscionable dinking around with the wording so as to have this guy not ending up curbed or constrained. But others ... the wording might not equally favor other situations.

A guess. A question. A concern. Is this Ramsey:

What me worry? I've got pull.

I am not saying the guy should not have his RV and trailer on the lot. I just don't want to see any of my friends disadvantaged by hyper-hairsplitting on the ordinance wording and passage - not if this guy skates. It would not be fair. That's the point.

Thursday, September 20, 2007

House acts to pass FHA reform. Senate moving quickly. Ellison and Bachmann both are on House Financial Services Committee. Contact them NOW.

The Bill, HR 1852, was to increase the lending reach of the FHA (Federal Housing Administration). Anyone who has gotten or applied for FHA financing on a home knows who they are and what they do.

The vote was Tuesday, Sept. 18, in the House. I held off on posting until I had assured the voting nose count was posted by the government. (If you check the link, Dems in the majority are in regular type, and GOP as the minority are in italics. You can see the crossover was substantial with "NO" votes all only in italics. That shows GOP opposition was more numerous than the GOP crossover, but it was, nonetheless, a resounding vote favoring housing consumers nationwide.)

In Ramsey, Michele Bachmann, GOP, is our Rep., and voted against.

The House vote was 348 - 72, clearly indicating the measure had bipartisan support to command that great a majority.

Bachmann's vote was a major disappointment. I had posted her response to an email I had sent her about housing. She offered a quick response that was generic, but indicative of an understanding of how important the issue is now, and for the 2008 election. I had anticipated more, from her expressions of concern for families facing risk of ruin.

Col. Kline, GOP, did the same as Bachmann, voting against, and Bachmann's vote very often tracks Kline's. My "moderate" GOP barometer, Ramstad, voted for, as did Ellison, DFL, the neighboring MN 5 Rep. I expect all "moderate" Republicans in the House swung their vote in favor of the measure; given the size of the supporting vote count. Musgrave, R. Colorado, is another voter Bachmann tracks regularly, and she was "against" along with Bachmann and Kline.

The NTU, National Taxpayers Union, has posted:

(Alexandria, VA) -- Some policymakers are pressing for government intervention to nurse ailing "subprime" mortgage markets and consumers back to health, but a new study commissioned on behalf of the nonpartisan National Taxpayers Union (NTU) is delivering a warning: don't overmedicate.

"Any issue that touches upon home ownership, and the fear of losing one's home, is bound to generate passionate discussion," said study author Jacob Vigdor, Associate Professor of Public Policy Studies and Economics at Duke University. "While many agree that the current wave of delinquencies and foreclosures will strain households and communities, there is considerable disagreement as to whether government involvement is advisable, and if so, what shape it should take."

Recent tremors in the housing market have significantly impacted some subprime mortgage lenders and borrowers, leading to many proposed "fixes" from state governments, Congress, and most recently President Bush. But Vigdor, a Harvard-educated economist and expert in housing issues, believes that intervention in this market could have unforeseen consequences.

[...] # According to recent data, about 7 percent of subprime loans originating in 2006 were in danger of being held for sale, foreclosed upon, or going delinquent. Those not facing such problems may be squeezed, but, as Vigdor notes, "The only sure way to eliminate the high rate of foreclosures in the subprime market would be to eliminate the market entirely," depriving the other 93-95 percent of subprime borrowers of their American Dream.

# Public officials have called for foreclosure moratoriums, taxpayer-backed loans to troubled borrowers, and lender-restrictions that effectively rewrite mortgage contracts - all of which socialize the risk while encouraging recklessness by borrowers and lenders. This "moral hazard" means that "wealth is redistributed from the responsible to the irresponsible, from the ethical to the unethical," Vigdor observes.

That's only an excerpt and the website link is given before the quote, if you want to read more. Perhaps that "socialize the risk" language is a worry over creeping socialism. It sounds that way. Hard to say, but they have a study paper, 18-pages long, for those wanting to invest the time to comb through it to see what the probable genesis of the Bachmann viewpoint is, if she will explain her vote in taxpayer protest - taxpayer revolt terms. Perhaps she has other explanations, and I would hope she posts her voting reasons on her congressional website.

That's what it's there for - explaining things our Representative does so we, the voters in Minnesota's Sixth District, can better understand what is happening.

I sure would not want to see many people in the Saint Cloud to Stillwater range of the Sixth District, reaching through Ramsey and all of Anoka County, lose their homes in foreclosure because of some lawmakers' worry over creeping socialism. Not these days. After all, the Soviet Union is history, and mortgage foreclosures are today, now, newspaper news, not something from history books.

But the NTU does have its White Paper, and I leave you to decide whether it interests you enough to have a look.


The day before the vote, Sept. 17, and you know how "Developers are Crabgrass" states my feelings; that day, however, in anticipation of the vote the NAHB, the National Association of Home Builders, published this view:

September 17, 2007 - The National Association of Home Builders (NAHB) today called on the U.S. House of Representatives to approve legislation this week that would allow the Federal Housing Administration to insure more home loans and address problems in the subprime mortgage market.

Underscoring the importance of this issue to the housing community, NAHB sent a letter to every House member urging them to support H.R. 1852, the Expanding American Homeownership Act of 2007, when the bill goes to the House floor later this week.

“Because this measure is so vital to restoring the FHA’s capacity to support affordable mortgage financing and to allow the agency to address problems in the subprime mortgage market, NAHB has designated passage of H.R. 1852 as a key vote,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif.

Faced with a deepening constriction in the availability and affordability of housing credit at time when FHA’s programs have failed to keep pace with competing conventional mortgage loan programs, NAHB told lawmakers that “Congress now has the opportunity to modernize the FHA and enable it to play a key role in stabilizing the mortgage markets, while offering borrowers a safe and fair mortgage alternative.”

In addition, NAHB is also urging House members to support a bipartisan amendment to H.R. 1852 offered by Reps. Barney Frank (D-Mass.), Gary Miller (R-Calif.) and Dennis Cardoza (D-Calif.) that would enable more creditworthy borrowers to purchase an FHA-insured home in major metropolitan markets by raising the FHA loan limits in high-cost areas. Currently, the FHA loan limit is too low to allow many potential home buyers to utilize the FHA program in markets where housing costs run high.

Bachmann, Kline and Musgrave got the builders' letter. I am sure it concerned them, but it did not alter their vote. Builders and consumers are together, on this need for U.S. consumers to be able to buy and keep what the builders build for them. It's that simple. The Chairman of the House Financial Services Committee on the day of the vote noted the cold comfort the Fed has grudgingly provided homeowners:

Washington, DC - Rep. Barney Frank, Chairman of the House Financial Services Committee, today offered the following statement regarding the Federal Reserve's interest rate cut:

“I am pleased the Federal Open Market Committee decided to cut the federal funds rate and the discount rate; I am surprised, however, that their continued concern about inflationary risk outweighs what I believe to be growing risks to sustained growth. I hope that, in this instance, markets and consumers will pay more attention to what the FOMC did than to what it said.”

Also, Tuesday on the day of the vote, the committee issued press release explaining:

The measure, originally introduced by Representative Maxine Waters, Chairwoman of the Subcommittee on Housing and Community Opportunity, and Barney Frank, Chairman of the Financial Services Committee, will enable FHA to serve more subprime borrowers at affordable rates and terms, recapture borrowers that have turned to predatory loans in recent years, and offer refinancing loan opportunities to borrowers struggling to meet their mortgage payments in the midst of the current turbulent mortgage markets.

“There is an affordable housing crisis in America. In recent months, that crisis has exploded beyond the poorest renters and homeowners, to threaten the domestic economy. H.R. 1852 is a necessary step in walking us back from the brink and in the direction of meeting the housing needs of all Americans,” said Chairwoman Waters.

“A revitalized FHA program will help future homeowners realize the dream of home ownership, and will prevent many first time and inexperienced home buyers from being pushed into loans that are unaffordable or difficult to understand,” said Chairman Frank. “The bill we passed today will help people all across America because we have enacted provisions to allow the FHA to insure loans in high cost areas.”

Press coverage is in now, and I leave the local two papers alone and look nationwide. L.A. Times carried a Reuters feed:

September 19, 2007

WASHINGTON — -- The U.S. House of Representatives voted Tuesday to overhaul the Federal Housing Administration and allow the mortgage insurance program to help more homeowners in danger of losing their homes.

The FHA, set up in 1934 during the Depression, was designed to help first-time home buyers win favorable loan terms by guaranteeing mortgage payments to lenders.

The new legislation would broaden underwriting standards so that current homeowners could refinance before they lose their homes.

Lawmakers passed it by a vote of 348 to 72. The Senate Banking Committee is due to vote today on its version of the legislation.

If the full Senate passes the bill, lawmakers from both chambers will meet to draft compromise language for consideration by President Bush.

Although the Bush administration has spoken in favor of overhauling the FHA, it has opposed some calls to raise the value of loans that can be insured by the program.

Fannie Mae and Freddie Mac, two major government-sponsored mortgage funders, can invest in loans of $417,000 or less. The Bush administration supports raising the FHA loan limit to that level but no higher.

The legislation passed by the House on Tuesday would allow for the loan cap to reach $829,750 in some circumstances.

Under existing rules, loans that exceed $362,000 are not FHA eligible, which has effectively eliminated the program along the East and West coasts.

Perhaps opposition in the midwest might be of a "let them eat cake" tenor, with regard to the higher priced home markets on the coasts. I would hope not. It is not a regional thing, not at all.

East Coast, The Hartford Courant (printing "Stories from 1764") yesterday focused on the Senate follow-up situation:

The Senate Banking Committee today agreed on compromise legislation that will make it easier for consumers to get Federal Housing Administration-backed loans.

The "FHA Modernization Act of 2007," considered one of Washington's most important efforts to ease the subprime mortgage crisis, won easy approval and is headed to the Senate floor.

"We need to make sure that credit is available, including for subprime borrowers, on fair terms so that the people of this country have an opportunity to build wealth for the future," Committee Chairman Christopher J. Dodd, D-Conn., told his colleagues.

"A revitalized, strengthened, and modernized FHA can be -- and, under this legislation, will be -- a source of this constructive, wealth-building credit," he said, "both for new homeowners and for people who are seeking a way out of the abusive loans in which they are currently trapped. "

Among the bill's provisions:

# Higher FHA loan limits. Limits on an FHA loan can rise to 100 percent of the median home price in an area, up from 95 percent, or $417,000, whichever is lower.

Currently, FHA loans cannot exceed $200,160 to $362,790, depending on the housing market in certain areas. In Fairfield County, for instance, the cap is at the high end, but in Windham County, it's the lower amount.

The White House has said it "strongly opposes" any provision to back mortgages above $417,000.

A policy statement said the program "should remain targeted to traditionally underserved homebuyers, such as low and moderate income families."

# Smaller down payments. Currently, such loans require at least 3 percent down. The Dodd bill cuts that to 1.5 percent, in most cases. The down payment reduction had been a source of controversy, and the 1.5 percent limit is seen as an important compromise. Some senators wanted to allow no money down.

# Easier-to-get reverse mortgages. Elderly homeowners would find the loan limit up, a key provision championed by Republican committee members.

# Lower origination fees for elderly homeowners. The current fee is 2 percent; it would drop to 1.5 percent.

The FHA measure has picked up strong support. Dodd's chief collaborator was Sen. Mel Martinez, D-Fla., general chairman of the Republican National Committee, and letters of support came from the Mortgage Bankers Association, the Realtors, the Homebuilders, and lenders such as Bank of America, LendersOne, JP Morgan Chase, Wells Fargo and Countrywide.

August was a devastating month for homeowners across the nation. A national coverage paper, Christian Science Monitor, had these graphics with its story today, Sept. 20:

This week, in response to a record and rising pace of foreclosures, Washington is offering the first signs of legislative relief.

As the Federal Reserve cut interest rates by a surprising half percentage point Tuesday, Congress has begun moving on the first of several bills to help at-risk homeowners. Votes this week involved the expansion of federal insurance for home loans.

Even so, neither the Fed nor Congress appears likely to contain the foreclosure wave that is on pace to hit 1 million or more home­owners next year.

Rate cuts by the Federal Reserve, after all, can go only so far toward resolving issues that extend far beyond the price of credit. Over time, Fed rate cuts should help open the money spigot for people buying or refinancing homes. But Tuesday's reduction in the federal funds rate to 4.75 percent doesn't mean mortgage rates will fall immediately by that amount.

And even boosters of legislative action see the new bills as initial steps.

What the policy moves might do is make the rise in foreclosures less severe.

"It'll probably make a dent in that number, but just a dent," says Patrick Newport, a housing expert at Global Insight in Lexington, Mass.

Brian Montgomery, who heads the Federal Housing Administration, says more than 200,000 homeowners could be helped by the new legislation regarding the FHA, according to an Associated Press report.

[...] Legions of borrowers, however, have a problem that the legislation doesn't directly address: Their homes are "under water," Mr. Newport says, meaning the homes are now worth less than the balance on the loan. In such cases, even an FHA guaranty and the desire of lenders to avoid the costs of foreclosure don't open the door to refinancing.

"Prices are dropping a lot," he says, in four key states: California, Arizona, Nevada, and Florida. The buyers who bought near the price peak, in 2004-2006, were also the most likely to hold the riskiest mortgages. These loans featured big resets and were made with little or no down payment.

Some housing experts, in fact, say that federal policymakers should do much more, given the scope of the problem.

"We've got a crisis," says Jeffrey Lubell, executive director of the Center for Housing Policy, a Washington, D.C., research group. The proposed expansion of federal insurance for loans is "a good start but is not aggressive enough."

And, he says, the rate cut offers reassurance but not a solution.

"It will get more credit flowing," he says. But "it doesn't ultimately forestall the foreclosures that are going to happen."

Any housing-crunch relief, whether provided by politicians or the central bank, raises difficult questions of how far officials should go toward a bailout of private-sector lenders and borrowers who, by many accounts, acted unwisely.

Congress, the White House, and the Fed are all navigating that issue cautiously. The Bush administration, for one, is wary of any moves that would make taxpayers liable for a big housing rescue. But none of these parties is taking a do-nothing approach. Several reasons stand out:

•Many at-risk homeowners didn't realize the risks they were taking. Many others, it's true, were buyer-investors, who knowingly took loans with risky terms. But often mortgage brokers focused borrowers on the initial "teaser" interest rate, or promised that borrowers could refinance later to avoid a steep reset.

•Lenders and borrowers are paying a price already. Foreclosure rates have risen to record levels, and some mortgage companies have collapsed. This week the largest home lender, Countrywide, said it has virtually exited the business of making subprime loans to people with poor credit histories.

•The risks to the economy have grown in recent weeks. Foreclosure is just one of the forces affecting home prices. But economists at Goldman Sachs estimate that the rise in foreclosures over the past year translates into a decline in home prices of about 6 percent by next year. A continued decline in home prices could affect consumer spending.

Such a decline also threatens to further expand the number of foreclosures. If home prices are falling, more recent buyers go "under water." If a rate reset pushes them into default, they can't pay off their loan by selling the house.Congress is also mulling other moves, including letting two government-created agencies, Fannie Mae and Freddie Mac, buy risky loans once they're renegotiated, to keep borrowers in their homes. Another proposal is to enable bankruptcy judges to adjust loan terms. Mr. Lubell says other steps should include more money for nonprofit foreclosure counseling and the creation of innovative mortgage products for homeowners at risk.

Bloomberg, carried its report today:

Bob Ivry / Bloomberg

New York
: As many as half of the 450,000 subprime borrowers whose mortgage payments increase in the next three months may lose their homes because they can’t sell, refinance or qualify for help from the US government.

“Short of the cavalry riding in over the hill, a lot of these people are just stuck,” said Christopher Cagan, director of research and analytics at Santa Ana, California-based First American CoreLogic, the risk management unit of the biggest US title insurer.

The number of borrowers whose mortgage payments jump in the next three months will be the second highest ever for a quarter, according to Credit Suisse Group, Switzerland’s second biggest bank. 27% have already missed a payment, said First American LoanPerformance, which owns the largest database of US mortgages. That makes them ineligible for the federal housing administration (FHA) bailout proposed last month by President George W. Bush.

There’s no lifeline in sight for subprime borrowers, who face an average increase of 26%, or $400 (Rs16,200) a month, according to CoreLogic. Falling prices and a rising inventory of unsold homes make it difficult or impossible to sell or refinance without losing money and government programmes aren’t designed to aid the most desperate.

That leaves foreclosure as the only alternative, and one that will deepen and prolong the worst housing downturn in at least 16 years.

Vanishing equity

Robert Murray of Middletown, New Jersey, said he didn’t pay enough attention when he took out a five-year adjustable-rate mortgage in 2002. This month, his payments ballooned to $1,800 from $1,300. Because he makes about $90,000 a year at his Newark Liberty International Airport maintenance job and hasn’t missed a payment, he said he hoped he might be a good candidate to refinance.

Since the value of his home has declined from the $265,000 he owes on two mortgages, Murray’s equity has vanished. If Murray were to apply for an FHA-insured refinance, he’d be out of luck.

The FHA bailout programme, called FHASecure, requires the borrower to have at least 3% equity in the home. Some borrowers can get a second mortgage in addition to the FHA loan to cover the entire value of their houses. Murray borrowed more than his home is now worth, so he would have to write a check of at least $45,000 to close a refinance. He doesn’t have the cash.

“I’m way upside down,” Murray said. “The payments will kill me now. I don’t know what I’m going to do.”

Home prices

About 48% of subprime borrowers wouldn’t qualify to refinance into a mortgage that conforms to the underwriting rules established by government-sponsored agencies Fannie Mae in Washington and Freddie Mac in McLean, Virginia, according to a report by New York-based analysts for UBS AG, Switzerland’s largest bank.

“There are a number of people who have mortgage debt that’s more than the value of their house, and a lot of those people are going to walk away,” said David Olson, president of Wholesale Access Mortgage Research & Consulting Inc. in Columbia, Maryland. “That will put more homes on the market, which already has too many.”

The Federal Reserve’s half-point benchmark interest rate cut on Tuesday will have little impact on borrowers whose mortgages are adjusting, said Ed Leamer, director of the UCLA Anderson Forecast in Los Angeles.

“It’s not going to alter the housing situation, or clarify defaults and delinquencies,” Leamer said.

US home prices fell by a record 3.2% in the second quarter, according to the S&P/Case-Shiller Index. Lawrence Yun, chief economist for the Chicago-based National Association of Realtors, has warned that year-over-year prices will fall for the first time since the Great Depression of the 1930s.

Price reductions

It would take 9.6 months to sell off all the existing homes on the market, the longest amount of time in at least eight years, according to the Chicago-based realtors group.

Listings in the Orlando, Florida, area show 26,300 homes for sale, a 20-month supply, said Gary Balanoff, a real estate broker with ReMax Select in Oviedo, Florida.

“I’ve been in business 23 years, and I’ve never seen some of the price reductions we have here,” Balanoff said. “It’s painful for people.”

[...] Subprime mortgages are available to borrowers with bad or incomplete credit histories. They made up about 20% of home loans issued last year and about 11% in the first half of this year, according to Inside Mortgage Finance, an industry newsletter.

The number of adjustable-rate subprime mortgages rose to 72.5%, or $1.26 trillion, of all adjustable-rate loans outstanding in the first quarter, a 17-fold increase over 2001, UBS said.

About 57% of mortgage broker customers with adjustable-rate mortgages were unable to refinance into a new loan in August, according to a study by Campbell Communications, a market research firm in Washington.

Adjustable-rate mortgages to subprime borrowers account for 44% of all new foreclosures, according to the Mortgage Bankers Association in Washington.

Adjustable rate mortgage

“A lot of the folks who are in trouble are in trouble even before their mortgage rate resets,” said Bert Ely, a banking consultant in Alexandria, Virginia. “They can’t refinance because they shouldn’t have gotten their mortgages in the first place.”

Adjustable rate mortgages of all kinds worth $139.2 billion, the most ever, are scheduled to reset at higher interest rates in the next three months, according to First American LoanPerformance in San Francisco. Subprime adjustable-rate mortgages make up $84.4 billion of that total.

In the third quarter, $136.7 billion of mortgages were slated for reset, with subprime comprising $87.4 billion.

About 2.91 million subprime borrowers have adjustable-rate mortgages, about 90% of which will have reset at higher interest rates by the end of 2008, LoanPerformance said.

There's a host of other reporting, but one closing item, a DC beltway insider, with experience, writes a letter to the editor, yesterday's

Regarding the Sept. 9 editorial "Revitalizing the FHA":

An expanded role for the Federal Housing Administration is needed to help resolve problems in the subprime mortgage market. A revitalized FHA could help families refinance their homes and avoid foreclosure while once again giving the agency a leadership role in meeting housing needs that the private mortgage market is not filling.

The need, however, far exceeds the Bush administration's limited proposals. The FHA can and must play a far more robust role in aiding the hundreds of thousands of families facing foreclosure.

One promising approach suggested by the National Housing Conference's Center for Housing Policy is "shared equity," through which the FHA would provide fixed-rate mortgages, at affordable amounts, to families facing foreclosure. The balance of such a loan would be converted into a mortgage that would be repaid when the home is sold, along with a share of any home price appreciation.



The writer is a senior resident fellow at the Urban Land Institute and chairman of the Center for Housing Policy.

That "shared equity" is but one effort to find an answer, and the efforts go, as the stories suggest, beyond the recent House effort which was, unfortunately, itself too much for Michele Bachmann to favor. What will she say about other more aggressive moves to protect people from homelessness? We can only wait. And see.

Please contact Bachmann or Ellison, if you read this and are represented by either. Bachmann in particular needs input, to alter her position to favor homeowners and consumers over the lending interests that have enriched her reelection coffers greatly. She needs to hear from US. The voters. Those perhaps facing an "ARM-twist."

Each has a "contact me" page on their official Congressional website; Bachmann here, Ellison here.

With the teaser low initial rates of the ARMs, Adjustable Rate Mortgages, soon to ratchet up to higher monthly payment levels, having a better shot at refinancing via an FHA conventional fixed rate loan might be a help to some. The more extreme subprime borrowers, as reporting suggests, those who might not qualify - well, they face foreclosure now and possible homelessness, because they perhaps would not qualify for tighter credit via FHA aid at the levels planned now, or otherwise.

This is not a partisan issue. It is a homeowner protection issue. Families own homes and being for reform that helps our families is what we expect from our Representatives, from either party. Even the Crabgrass has grown to know that.

Thursday, September 13, 2007

Steps to End Domestic Violence.

Learn more about Alexandra House, city website, or the organization's homepage. The specific event:


As part of National Domestic Violence Awareness Month, Alexandra House will hold its third annual Walk for Hope: Steps to End Domestic Violence. The 5K run and 2 mile walk will be held on Saturday, October 6 at Bunker Hills Regional Park.

The 5K run starts at 9:30 a.m., with the 2 mile walk following at 9:45 a.m.

Registration begins at 8:00 a.m., with a kick-off presentation at 9:00 a.m.

For more information, or to sponsor the October 6 event, please contact 763-780-2332.

Registration before September 28 is $15 for adults, with youth under 18 free. After September 28, the cost is $20. Scholarships are available.

Any proceeds from the Walk for Hope will support shelter programs along with services in the schools and in the community.

ALEXANDRA HOUSE --- Crisis Hotline: 763-780-2330

One bad apple.

One bad apple, on Rivlyn Ave., down by the River, South of Hwy 10 - an offensive mess. Drive down there and have a look. Make it a shaming tour for people in the city to go and look.

John Dehen's ward. Ward 3. Interestingly, Councilmember Elvig and the mayor at the recent televised meeting were the loudest voices defending this nuisance situation. Defending this individual. Saying cut some slack. That's arguably to be expected, given the individual's ways and means of mailing things in the past.

However, that bad apple is the cause of current effort to put enforcement teeth into ordinances against "nuisance" or "property rights of others," depending how you look at it.

During the 2008 Comp Plan session, in the hallway, last night, Wed. Sept. 12, an interesting debate about this between Hendriksen and Dehen. People moving here to be left alone, vs. growing as an area and a need to have rules and to police the rules.

Strangely, two of the leading council mavens of growth-is-good prejudice were the two speaking against harshness toward the particular precipitating nuisance situation causing the new ordinance enforcement effort; which Dehen linked to growth being a factor for needing changing ways and for harsher and less lax attention to "rules."

It reminds me of grade school, and my propensity to get demerits, over "rules" incompatible with my energy and will and spirit.

At home, there's a back boundary situation where the people due north have exotic birds and chickens cooped across the property line, onto the north end of the property I live on, without regard for setback and minimum lot size for such activity. And without regard to our not wanting their "stuff," on our land. It will be helpful - Having enforcement there, for Ramsey Code Sect. 5.09.01 where a 75 foot setback from dwellings is required and where absent a Conditional Use Permit no lot smaller than 3 acres can be used this way. They are on 0.85 acres, impinging on a 200' x 400' lot, with our larger lot of the two having buffering woods appraoching the back boundary. Probably it would not be a problem if they'd simply kept their "stuff" on their side of the property line. Then, we would care very, very much less about what "stuff" they were keeping. They want their full yard, their bird coop, and use of someone else's woods as if theirs. It doesn't work that way.

Acreting land that way, over time, can lead to adverse possession and your owning less than you thought you did. It's something you have to defend against.

So Hendriksen saying live and let live - if you cannot see "stuff" from off the property what city interest exists in mandating how it is stored or kept as long as it is not an impingment on the neighbors, on wetlands, or on protected areas for other reasons - why is it anyone else's business? There's sense to that.

Observing that for unrelated political or "grudge" reasons people can complain about those living at a distance, those they don't like, neighbors or not, means the more active voices in Ramsey risk the most being a target of such pettiness.

Dehen and Hendriksen both liked trying to see if they could convince the other. I don't think either succeeded. Me, I agree with my friends.

But -- It does need thought.

Many moved here to be away from officiousness over things and thoughts, and to have room on land to use it "one's own way" without some intrusive official inventing problems and reasons to enforce things over-vigorously. But then there's that chicken coop crossing for no sensible reason the property line, and the coin has two sides.

The best answer might be if the immediate neighbor does not complain, and it is not something like a loud obnoxious noise reaching far down a street, why entertain a distant person's complaint?

Over the Limit. Under arrest.

From the Ramsey website, a link from the homepage.

September 7, 2007
Sgt. Tom Lueck

Ramsey Police Department to assist in lowering the death toll due to impaired drivers. In Anoka County 82 people were killed between 2003-2005 in traffic crashes. Many of these were alcohol related. Our county has also consistently been in the top 10 deadliest counties for traffic crashes in Minnesota. Anoka County law enforcement agencies find this fact unacceptable. The City of Ramsey Police Department in conjunction with all other law enforcement agencies in our county have gotten together to form a DWI task force in order to try and lower our death toll.

And, City Councilmembers, you are the example for the entire community. Lead the effort. Drive sober.

One caveat: Okay, a good aim. A very good aim. Good intentions. Roads lead wrongly sometimes from good intentions. There is an old saying that way. Badge heaviness is not a thing I have seen in Ramsey. Yet, it should always be a worry. Statistics are in the city post. They make you wonder. Gentlemen, do the job but avoid entrapment or other problems. Do not stop any vehicle just because it leaves the lot at Diamonds near bar-break. Have probable cause, or don't make the stop. A sound case of impaired driving can get thrown out on appeal, if lacking probable cause for a stop. It's not hypothetical. It's happened in Ramsey. And it's the law. Citizens have the right to be free of stops, free of unwanted police encounters, if circumstances show a lack of probable cause. I hope the council, and new City Administrator agree. The law sets rules. The officials follow, and we and they benefit. Open Meeting law. Public Data law. The constitutional requirement of probable cause. It is all there to protect citizen rights and privileges.

Wednesday, September 12, 2007

Michele Bachmann shows concern over the subprime lending and excessive foreclosure situation in her District.

Those who know me are aware I am no fan of Michele Bachmann, our representative in the House in DC. So I want to be fair, but not to appear praising.

The subprime lending collapse, and the home mortgage foreclosure frenzy has captured attention as a likely major issue for the 2008 elections and the fact that a taxpayer league favorite such as Bachmann is willing to discuss any federal level consideration of the situation is a sign of how not being consumer-sympathetic is a third-rail position for a congressional candidate.

That is the prelude. I got a prompt and cogent response to an issue contact I entered on the official Congressional Bachmann website [source of the opening Bachmann photo]. It was what I would call "Bachmann Lite," leaving you not feeling filled-up, when finished.

She favors the American Dream, homeownership for families, and considers contact from constituents about the problem important enough for a prompt, but prewritten generic say-nothing response. Still, it is prompt. And it is a recognition of the existence and seriousness of the problem. In its entirety, you be the judge, the non-position paper, agreeing with her friends, full text follows:

Subject: Responding to your message

September12, 2007

Dear Eric,

Thank you for contacting me about mortgage foreclosures. I appreciate hearing from you on this important issue.

The availability of housing finance is critical to helping American families obtain homeownership and maintaining the strength of our nation's economy. In this country, we are fortunate that the dream of homeownership is real for many Americans. Currently, homeownership rates are at nearly 70% of all households in the United States. Through low interest rates and policies that encourage homeownership, our nation has maintained a competitive housing marketplace. Lending in the sub-prime mortgage market has contributed to this high rate of homeownership as many borrowers would not have had access to financingin the prime or conventional market.

Unfortunately,it is clear that some sub-prime lending has been excessive and some borrowers have been subjected to abusive lending practices. In the Twin Cities', we have seen the rate of foreclosure and mortgage payment delinquencies increase this year, and the trend is not unique to Minnesota. In the U.S.,delinquency and foreclosure rates for sub-prime loans have continued to rise since mid-2006. Currently,the Government Accountability Office (GAO) is conducting an important investigation to determine the root of the cause for this rise, and I look forward to reviewing their assessment.

The growing number of mortgage foreclosures across the U.S.has been the catalyst for an important policy discussion on how to balance enhanced consumer protections without restricting the accessibility of loans to creditworthy borrowers. As a member of the House Financial Services Committee, I am committed to addressing this issue and believe in a twofold approach: we must consider policies that weed out bad apples and enhance a safer sub-prime mortgage market, while ensuring communities do not lose access to needed credit services and financing choices. Mortgage lenders should embrace responsible practices to curb predatory and abusive lending. Concurrently, borrowers shouldnot have to face the loss of homeownership due to excessive efforts to restrict sub-prime lending.

I believe we must achieve an important balance amongst these issues and promote reasonable policies that will help more Americans obtain homeownership, and keep it. Be assured, I will keep your thoughts in mind when making decisions regarding this issue in the future.

Once again, thank you for contacting me. Please keep in touch.


Michele Bachmann
Member of Congress

So she is against "bad apples" and for "reasonable policies." She "will keep my thoughts in mind when making decisions regarding this issue in the future." I had hoped she by now had things more specific in mind, since the matter has been worsening for months and months.

That to me is a wishy-washy bland non-committal response. To me it means no stance of substance, no policy ideas for present, but assurance that anybody against homeowhership will not get far - November 2008.

I wish there were more substance to the response. Such as whether the prepayment penalties and some of the Countrywide Financial practices reported Aug. 26, 2007 by Gretchen Morgenson in the New York Times are things she finds okay, or condemns.

That is the sort of gutsy stand I would rather see, the kind of thing a Bruce Vento or Paul Wellstone would not waffle on. Please, write Ms. Bachmann about the issue, about specifics, and see if she has any in mind or only cares to weave vague generalities. I am not saying Patty Wetterling at this point would have been more specific and creative, had she won. I believe it might have been the case, but for now Ms. Bachmann is my representative and I am at least assured she recognizes a big splat on the windshield of consumer goodwill, and does not want her splat next to it.

Mark Knopfler noted, it is better to be the windshield than the bug, the Louisville Slugger than the ball. If Barny Frank and Kieth Ellison on the committee Bachmann serves on can count on her support of ameliorative effort, it will be good for the nation. Leave it there.

Tuesday, September 11, 2007

Do we want Peterson Density all the way to the Burns Township border and beyond? Or do we want something better, more attractive?

Shared wall tanked out at Town Center, and the subprime lending bubble's put it into question. Couple that with Met Council still wanting to sell flushes and with the property rights rhetoric from the north-enders indicating a desire for Peterson density on their acreage, to maximize profits. I distrust the "property rights" ideology mongering far, far more than I distrust the present council, and that says a lot. I don't see it as pure coincidence that the multi-member Hunt family has been showing up in droves for the RAMSEY3 and City-run Comp. Plan sessions. They've meat in the fire, for Peterson density, seeing themselves making Kurak-like profits from "the farm" and such. Bless them, if we let them do it to us we deserve it being done.

I fully agree with the fiscal responsibility voice that some of the property rights rhetoricians offer. They would not have created a Town Center debacle. I give them credit there.

However, they will create a problem of stuff that looks no different than the fradulent stuff that New Prague is suffering through these days, wanting to attrack buyer dollars while shared-wall Ramsey stuff is being remaindered by the builders.

Here, again, is the New Prague photo, and if you do not see parts of Ramsey there in the photo, well look again. It is the same stuff the north-end "Property Rights" contingent would saddle the rest of us with, if we do not take control of the comprehensive plan and plan better.

Where are the trees?

And, where are the buyers?

Strib reported on the New Prague fraud and failures, and ended each of their two page report with a citizen's quote:

"A lot of people who were living right in the middle of all this said, 'No, that's not happening here,'" said Kristin Guerrette, who moved to Prague Estates in 2003. "Now, they're in shock."


In New Prague, residents are concerned the rash of foreclosures will drive down housing prices across the city. Some residents want city officials to hold a town hall meeting. "There aren't enough people in this town to fill all those vacant houses," Guerrette said. "So we've got to find a way to bring people here. Soon."

Sound familiar?

This present Ramsey city council, following the lead of the departed James Norman has committed Ramsey to at best a three-units-per-buildable-acre compromised future expansion mess to saddle upon the mood and feel of roomier neighborhoods in Ramsey. This council has done it to us and deserves to be uniformly voted out of office, each of the four seats open in the 2008 election, uniformly given the boot. But not to be replaced with "Property Rights" idelolgues who will muck thing up even worse. Please, not that.

All of that said, Tomorrow, the day after the 9/11 anniversary, is the next Ramsey 2008 Comprehensive Plan session on protecting our natural resources - our nice trees and swamps and wildlife habitat - from Peterson density to the town line and beyond. Let's put bigger wildlife protection buffers around wetlands beyond the very, very, very conservative and less eco-friendly boundaries that these north end folks are bleating aggressively over even now. Do it for the better of everyone's future. Do it for the children. Do it for the wildlife. THINK. Think 2-1/2 acre out there. That is the quality lot size that will attract the savvy buyers who will remain after the bubble burst has left "subprime" a word we dare not again speak. Peterson density will lead to homes that, like shared-wall, will add costs in services that will tally more than they add to tax-base income; which is a bad deal for the rest of us already here. Think instead of the 2-1/2 acre tax base increments that will yield more cash flow into tax coffers than they will suck out in services. Make it a net gain that way, for those of us already here. It's you I am talking about. Show up at the Comp. Plan sessions and stand up for your rights or you will find yourselves without any.

Here's some session info, see this link, for more, from the City's website:

2008 Comprehensive Plan Update

Proposed Agenda
August 22nd - Balancing Property Rights with Public Interest
September 12th - Identifying, Protecting & Enhancing Natural Resources
October 3rd - Housing Choices, Appropriate Density & Neighborhood Design
October 24th - Future Extension of Urban Services (Sewer & Water)
November 14th - Traffic Corridor Improvements & Neighborhood Connections
December 5th - Visioning and Marketing of Ramsey

All sessions will be held from 6:30 - 9:30 p.m. in the Alexander Ramsey Room at the Ramsey Municipal Center, 7550 Sunwood Drive NW.


Monday, September 10, 2007

There aren't enough people in this town to fill all those vacant houses

Photo courtesy Saturday's online Star Tribune. And if you enlarge it, the water tower is "New Prague" and not "City of Ramsey." Not that you could tell from the fungible housing pictured. Strib has had recent ongoing coverage of the south suburban Twin Cities metro mortgage foreclosure problems centered upon the U. S. Attorney's actions involving builder and promoter-developer, Parish Marketing and Development Corp. - see Saturday's quite thorough Strib account, here, see, also, here and here. There has been further coverage in recent days, for example, here, here, here and here. And a few blogs have the story, e.g., here, where I got some of the other links and where there's a correct note, Parrish Marketing is based in Eagan, not New Prague, where many of the troubled homeowners live in "Prague Estates," a particularly hard hit detached single family [not shared wall] subdivision.

And it is in a place like Ramsey in the north end, a suburban setting where one commentator said "you can get away with more," but this time not the Town Center, but:

[...] in the Twin Cities' southern suburbs caught in what state regulators believe is the largest case of mortgage fraud in Minnesota history.

The alleged scheme involves at least one established home builder, Parish Marketing, and more than a dozen real estate professionals who allegedly inflated property values and falsified documents, according to sources close to the investigation.

Investigators suspect Parish Marketing used so-called straw buyers, often relatives, to purchase multiple homes at inflated prices. The scheme unraveled as the housing market slowed, new buyers could not be found and houses ended up in foreclosure.

That this alleged fraud has occurred in small, distant suburbs such as New Prague and New Market, far from the urban neighborhoods that have been the traditional target of such schemes, comes as no surprise to market observers. "The lights may be too bright in cities like Minneapolis, so they are moving out to rural areas and two-tier cities," said Merle Sharick, vice president of Mortgage Asset Research Institute, a firm in Reston, Va., that verifies parties in mortgage transactions. "You can get away with more in those places."

By Chris Serres, Star Tribune
Last update: September 08, 2007 – 8:29 PM

If Bruce Nedegaard were alive, would he dispute that last bolded assessment? Would either of the Kuraks dispute that? Would John Feges, with files in the courthouse in Anoka, from the 1990's? Feges who was close to Nedegaard and the Kuraks.

A subheadline, of Saturday's story, "The FBI Came Knocking."

Would Feges and the remaining Nedegaard people on Central Avenue, in Columbia Heights, or folks at the originating North Branch bank for the Nedegaard financing, dispute that subheadline assessment? Not likely.

And a question, are you sure you have good title to your home if you had the deal closed through Powerhouse Title?

That was the title and closings company that Pioneer Press described as dominated by Bruce Nedegaard and his lender-affiliates, and shut down already by the Commerce Department, which is investigating the south-burbs situation and other situations in the greater metro area - read the Strib's latest, for detail, or let me continue Saturday's Strib online coverage:

Bill Walsh, a spokesman for the state department of commerce, acknowledged that state regulators are investigating other large cases of mortgage fraud in several other Twin Cities suburbs, which he declined to identify for fear of tipping off the perpetrators.

The fact that the alleged scheme involves a reputable home builder makes it all the more unsettling. Parish Marketing was founded in 1980 and has built more than 2,000 homes in the Twin Cities' southern suburbs. Some of the houses were sold at prices in excess of $1 million.

Michael Alan Parish, 62, who runs the company with his wife, Ardith Ann Parish, 61, declined to comment and referred questions to their attorney, Ryan Pacyga.

Pacyga said the homebuilder built too many upscale homes at a time when demand was in decline. The situation forced the company to "seek nontraditional methods to move the properties," said Pacyga, who declined to be more specific. "This is a case that the real estate world will talk about for a long time," he said.

More than 30 houses built by Parish Marketing in New Prague and New Market have fallen into foreclosure, according to county officials. And more are expected.

In New Prague (population: 6,400), it's hard to go anywhere without bumping into someone who knows a person or business affected by the alleged mortgage fraud.

At a housing development called Prague Estates, where houses are priced at $300,000 to $500,000, rows of Parish homes sit vacant or unfinished. Some are surrounded by knee-high weeds. Several contractors who worked for Parish said they are owed more than $25,000 each. The New Prague Times is running three pages of foreclosure notices a week, twice the usual number.

Bruce Nedegaard, let us not forget, was a reputable and respected builder of quality high-end homes for a comparable time span, and an award-winning builder of single family homes and a local building council official, before being lured into the Ramsey Town Center dealings that were a big part of his fiscal undoing, before he and spouse died weeks apart late in 2006. There are parallels. Shady real estate closings operations or practices, near the end of the ride, as unraveling of the hoax progressed. That was the reported situation, according to Pioneer Press, with the condo-lofts project Nedegaard spear-headed in Columbia Heights, which reportedly was the dealing that first attracted federal search warrant attention.

The Grateful Dead sang, "At Least We're Enjoying the Ride." Some, in Ramsey dealings, might still treasure that as a theme song.

Strib continues:

The government said the alleged mortgage fraud involves nearly 200 properties, $100 million in mortgage proceeds and as much as $50 million in losses. Some straw buyers bought more than 50 properties, according to court records. Real estate records show one investor, Christopher Troup, the Parishes' son-in-law, was involved in at least 29 transactions with Parish Marketing. Troup could not be located for comment.

State investigators suspect these straw buyers bought houses from Parish at inflated prices, often using falsified loan documents. It appears they recruited mortgage brokers, loan officers, appraisers, even notary publics, to arrange fraudulent loans. "It's similar to other cases we've investigated, where everyone at the table knew what was going on," Walsh said.

Two families said they bought houses from Parish under contract-for-deeds, only to discover later that the houses were sold to someone else and their payments had vanished. Shannon and Will Whitecotton said they made a $5,000 down payment on a home in Prague Estates as well as about $45,000 in monthly payments.

However, the contract-for-deed was never registered at the county, which meant there was no record they even lived in the home, Shannon Whitecotton said. When they went to pay off the contract-for-deed, the Whitecottons were told they had no claim to the house. An eviction notice arrived about two weeks later. "We were dumbfounded," she said.

The Whitecottons said they later discovered that title to the home at 1125 Horseshoe Lane in New Prague was under the name Bonnie Bauer, who in property records is listed on at least 23 transactions with Parish.

"I think [Mike Parish] was double dipping," Shannon Whitecotton said. "He was pocketing the monthly payments, selling the homes and then sitting back and playing banker."

Bauer, Ardith Parish's sister, according to Pacyga, could not be located for comment.

This week federal regulators handed down two indictments related to the scheme. Ramiz Yousef Saadeh, a U.S. Bank loan officer, admitted to providing falsified verifications of deposits for buyers, to make them appear qualified for loans, when the money was coming from homebuilder's funds. Pacyga later identified Parish as the homebuilder.

Kristopher Robbins, a closing agent and licensed notary public, admitted he closed scores of property transactions "in which individuals executed loan documentation in the names of other persons who were actually purchasing the properties."

Both men pleaded guilty and agreed to cooperate with the investigation.

And that sounds a lot like getting a plea to a single count from the CFO of Ramsey Town Center LLC and another Nedegaard venture, condo lofts in Columbia Heights, where there were shady down-payment situations - similar to scaring up downpayment money as reported in the south-end scam. Strib ends, including my chosen headline text:

In New Prague, residents are concerned the rash of foreclosures will drive down housing prices across the city. Some residents want city officials to hold a town hall meeting. "There aren't enough people in this town to fill all those vacant houses," Guerrette said. "So we've got to find a way to bring people here. Soon."

And it's not for me to say the Kuraks did not pass some kind of litmus test while that seat was held as the Village of Sunfish Lake and the Ramsey Town Center were being kick-started. After all, County Attorney M.A. Johnson was on the planning commission then, not quitting until after those efforts moved through that body, and he had no enforcement troubles then about Minn. Stat. Sect. 471.87, which an online AGO quotes and discusses, the statute saying:

Except as authorized in section 471.88, a public officer who is authorized to take part in any manner in making any sale, lease or contract in official capacity shall not voluntarily have a personal financial interest in that sale, lease, or contract or personally benefit financially therefrom. Every public officer who violates this provision is guilty of a gross misdemeanor.

And City Attorney Goodrich did procure a legal opinion. So, that must be a litmus test of sorts. Opinions have been procured against citizen-initiated referendum reform also, and so, the process gets honed for cutting. Go figure.

Saturday, September 01, 2007

White Elephant Non-sale --- Part 3.

Guess what? Right. Postponed again.

Another Minnwest non-event.

The unblessed mess off the foreclosure block yet again, one more time, with this story, courtesy of Pioneer Press, Nicole Garrison-Sprenger, Aug.30:

The future of the ill-fated Ramsey Town Center in Anoka County remains up in the air.

The auction scheduled for today will be called off for a third time by officials at Minnwest Corp., the bank that holds the mortgage on the land, officials said.

Russ Bushman of Minnwest cited ongoing negotiations with Ramsey city officials over the viability of completing the project according to the master development agreement created in 2003. But the bank also is considering "other options" for the land that have popped up in the past month or so. Bushman said he couldn't yet disclose the nature of those options.

Well, three strikes and you are out, in baseball. This diddling bank has its three strikes. The Ramsey government is doing the citizens a big disservice by looking to cut any deal with these inept idiots. They did not require Nedegaard to pay down the loan proportionally while granting deed releases on the past shared wall land, and Jim Deal's commercial acreage purchase - and now they want concessions for their mismanagement of the loan. And the pliant city, willing, against all reason to comply.

If the city loses its lawsuit, then it can buy the parkland, etc., and the money can come from the errors and omissions coverage of Briggs & Morgan, the negotiation specialists - hired guns - brought in to specially protect city interests. They let the mortgage get recorded in front of the Master Development Agreement, and appear to not have, after recording, taken the simple step of getting a title search to show the situation so the city could have, before much mischief, had their position preeminent by a recorded bank subordination. Briggs and Morgan did all the hemming and hawing [and billing] over word-smithing but did not check the situation at the recorder's office afterward, when even a novice, presumably, might have and the seasoned "pros" should have. So the city has that cushion to rest on, unless somehow it was signed away by someone, sometime in the past.

Wikipedia defines "White Elephant" and describes:

A white elephant is a supposedly valuable possession whose cost (particularly cost of upkeep) exceeds its usefulness, and it is therefore a liability. The term derives from the sacred white elephants kept by traditional Southeast Asian monarchs in Burma, Thailand, Laos and Cambodia. To possess a white elephant was regarded (and still is regarded, in Thailand and Burma) as a sign that the monarch was ruling with justice and the kingdom was blessed with peace and prosperity. Because the animals were considered sacred, laws protected them from labor, therefore receiving a “gift” of a white elephant from a monarch was both a blessing and a curse; a blessing because of the animal’s sacred nature and a curse because the animal could be put to no practical use.

P.T. Barnum once sent an agent to buy a white elephant, sight unseen, hoping to use it as a circus attraction. When it arrived in Bridgeport, Connecticut, it was covered with large pinkish splotches and was not white at all. The public was not impressed and Barnum had to keep his "white elephant" hidden from public view in a stable while he tried to decide how to recover some of the high cost. The elephant later died when his stable burned down.

The metaphor was popularized in the United States after New York Giants manager John McGraw told the press that Philadelphia businessman Benjamin Shibe had "bought himself a white elephant" by acquiring the Philadelphia Athletics baseball team in 1901.

A lot of snotty things could be spun out from that text. Let's just say, okay, good term, "White Elephant" for the Ramsey Town Center. There's something there.

But, with P. T. Barnum, described by Wikipedia as "best remembered for his entertaining hoaxes and for founding the circus that eventually became Ringling Brothers and Barnum and Bailey Circus," and with the bank's three strikes and out, perhaps now is fit time to rename Town Center to Clown Center, and to consider closing the post with this animated gif that explains the nature of real estate bubbles, (and animates properly in the Firefox browser and [depending on browser settings] might also work when viewed in Internet Explorer):

Town Center is the greatest show on earth. Any questions?