http://www.zoomerang.com/Survey/WEB22E47V5J5E6″

Here’s the final question. I’d be interested to hear what you all think about this. It goes back to the root issue we all face that is the stumbling block for many of our legislators – how do you feel about putting your own issues on the table? We’re quick to encourage cuts to other areas of ‘obvious waste’ – but what about those issues that are near and dear to us?

Which of these statements most closely reflects your opinion on NAR response?

* When it comes to changes in tax deductions, real estate tax preferences and federal spending, we must all share in the sacrifice to reduce our national debt (including reducing or eliminating some real estate related deductions) to assure the future health of our nation.

OR…

* Existing real estate related federal tax deductions and preferences, including mortgage interest deduction and the $250,000/$500,000 capital gains exclusion, should be preserved in their current form despite concerns about federal deficits and national debt.

We’re having some fun now, eh?

Norris has over 30 years of real estate experience and more than 2,000 real estate transactions as a buyer, seller, builder and capitol partner. He is an award winning author, hosts a weekly radio program, is a frequent speaker throughout the state and is the founder of The Norris Group, one of the premier real estate investment resources in California. The ‘I Survived Real Estate’ event brings together a number of industry leaders to discuss their often disparate views of the housing industry and answer questions posed by Norris.

This year’s panel included Fannie Mae Chief Economist Doug Duncan, Foreclosure Radar President Sean O’Toole, National Association of Realtors First Vice President Gary Thomas, Chair-elect of the Mortgage Bankers Association Debra Still, President-elect of the Appraisal Institute Sara Stephens and iTulip Founder Eric Janszen.

Duncan, recently named one of the nation’s top four most accurate economists by the Wall Street Journal, discussed the future of his organization in light of President Obama’s call to eliminate Fannie Mae and Freddie Mac within the decade. Duncan believes this will be a positive step forward as a way to minimize the government’s role in the housing industry and promote private industry’s participation in the market.

This has been a very controversial position as Fannie, Freddie and the FHA, currently underwrite more than 90% of mortgage loans on the market today. Many would argue that there would not be a mortgage market without them. Duncan acknowledged the validity of this claim but offered that the gradual phase-out as called for by the administration will allow alternative financing methods to be developed and that negative impact to the market would be minimal.

Thomas, in line to be the President of the National Association of Realtors in 2013 indicated the industry is very concerned with the plan, or lack there-of. “Without Fannie & Freddie in place there would not have been a mortgage written since 2007,” according to Thomas. “Private lenders are risk averse right now as a result of getting burned by their own exotic inventions during the early part of the decade and stepped away from the market at a time we needed them most. NAR will work very aggressively to make sure whatever programs remain in place are in the best interest of the American consumer.”

The panel also addressed concerns over the massive bail-outs orchestrated by the federal government and their impact on the economy. Janszen, a long-time financial and economic market analyst, added ‘there is really no consensus on the efficacy of the programs’, noting that many believed the programs were little more than ‘print and pray’ exercises with our money. Duncan and Still took some exception to that characterization pointing out that at the very least the programs helped stabilize a rapidly declining market and that much of what was loaned to banks as ‘bail-out’ has been repaid with interest.

Legislation and the global economy figured prominently in the evening’s discussion with Duncan concluding that ‘the likelihood of Greece defaulting on its obligations today is 100%.’ “It’s not a matter of ‘if’ they will default, it’s simply a matter of ‘when’. The only questions is will it be done in an orderly manner which will allow the European economy to hit the bump and continue on, or if it’s done chaotically which will likely result in another worldwide recession.”

O’Toole, whose Foreclosure Radar website is considered to be the pinnacle of information on future trends in the distressed property market, drew some of the evening’s loudest applause when he called on banks to step up their efforts to take back properties and clear out the backlog. “Is it fair for you and I to keep making payments on our home, whether underwater or not, when the family next door can live there without making a payment for a year or two or three? And, face it, many of them just made bad decisions and should not have been in those homes to begin with. They knew it, their lenders knew it and now we all know it but the problem keeps dragging on. Until that backlog of non-performing loans is cleared off the books, banks can’t move forward. And until we get all these homes back into the hands of real home-owners or investors and renters, the market cannot stabilize.”

For more information on The Norris Group and to hear the more than 7 hours of interviews and commentary by this year’s panel, please visit http://www.thenorrisgroup.com/.

And one of the problems, as you’ll recall, is that some 90% of our Democratic legislators (who comprise the majority in both houses) have NEVER held an honest job. In one fashion or another they have been on the public dole their entire career, public office holder, commissioner, union organizer – some facet of public employment which has never forced them to meet a payroll, be responsive to the desires of customers, never required that they produce a product or a profit. Honest!

So it was no wonder during a recent discussion of the far-reaching costs of our landmark AB32 Greenhouse Emissions bill, that Democratic legislators referred to one of the by-products of the bill as ‘leakage’. Know what leakage was a euphemism for? JOBS! Yeah. Our state, with consistent unemployment of 12+% and these a-holes are referring to further job loss as ‘leakage’.

They were voting on some final rules to this horrendous piece-of-crap bill that will drive more businesses out of state and put even more people out of work but to them it’s simply leakage. Implementing this bill has already cost long-haul truckers and construction crews their jobs and resulted in increased costs for consumer goods from food to gas in the state. The last phase, slated for implementation in 2013 and 2014 sets in place the cap-and-trade emissions system whereby companies will either cut their emissions levels back to what they were in 1990, OR pay for emission credits from companies that emit below their cap OR pay substantial fines.

So the exodus of jobs from California will not only continue but probably expand. We already have more than 5 times as many companies leaving the state, reducing their footprint in the state or just going out of business as we did just 2 years ago. Aww, it’s just leakage says the California Air Resources Board. Oh, and the manufacturing and other jobs that are being over-regulated and over-taxed out of state – they’re going to Mexico or China or other states that have more realistic goals for emissions. So not only is California losing jobs but by our intransigence we are also INCREASING the amount of pollutants in the air.

So to get this straight, our never-held-a-job legislators passed an overarching landmark bill designed to reduce greenhouse gas emissions in the state. Notice I didn’t say pollutants – that’s not covered specifically – just greenhouse gasses which they claim will reduce manmade global warming – if you still believe in that. And the appointed-not-elected wing-nuts on the California Air Resources Board have taken on the challenge of putting teeth into all these rules. And they admit that at times they have relied on specious science to formulate their rules. In fact they admit that AB32 will not reduce global warming even if they shut down every business in the state. But according to their logic – it is a beacon that was passed to encourage other states and countries to follow California’s lead.

Oh Puh-leeze.

What my Momma used to say – ‘just cause that other knott head jumps off a cliff, you gotta go do the same thing?’ Not me. And especially when I can just as easily follow the out-migration of businesses and jobs and people to places where the politicians s still have a brain cell or two, where my congressman might actually have held a job in the not-too-distant past and where the human tragedy of job loss is not simply dismissed as ‘leakage’.

Of course that’s just my opinion – I could be wrong.

Another cluster **** from a government reeling from one uninformed decision to the next. It seems every time you turn around someone from the administration is bemoaning the state of housing in the country today. Housing has pulled us out of 6 of the last 8 recessions – why not this one?

Why? Because Washington says one thing and does the complete opposite. Or one branch does one thing while another branch acts to negate the first (see: PACE Program). Is it any wonder confidence is at record lows? If you people are going to screw up, at least do it consistently so we can move forward with confidence that you’ll continue to screw up the same way – we can deal with that. It’s the multiple levels of screw-ups and misdirection that has us lost.

For those of you that live in the middle of the country, I know it makes no difference. It’s not your fight. But at least get out of the way for those of us that do have a dog in the fight, OK?

Here’s a primer – prior to 2007 GSE loan limits were low. Even though we were in higher cost California, for our county it was about $355,000. Some very high cost areas got 115% of the median price of the market up to $417,000 and some areas as high as $525,000. Problem was, in 2005 – 2007 the median price for a home in our state was approaching $600,000. In our little backwater, medians were in the low $500,000′s for 2 years. That meant that anybody coming to our area COULD NOT GET a conforming loan for even a median price home. They were increasingly pushed into the jumbo market with higher fees, tighter qualifying and higher interest rates. Use of FHA and GSE backed mortgages plummeted from as high as 55% to around 7% by mid-2007.

But where there’s a problem, there’s also an opportunity so lenders came up with ways to address people’s inability to get conforming loans by inventing a whole new category of loans – the exotics. And it worked so well, they kept inventing new features. Can’t qualify for an Alt A or subprime, how about if we ask for ’0′ down? No? How about interest only for 3 years? Still don’t qualify? How about if we just tell you how much you need to make in order to qualify and then you tell us you make that much? Better?

And the GSE’s saw their market share falling even more and the geniuses on Capitol Hill saw that that was bad so just as things started to implode they made a corrective move to increase conforming loan limits. Had they done that 3 or 4 years earlier while maintaining the relative quality of the loan qualification process, we would not be in the trouble we are today.

Now many of the same geniuses who got us into the problem are charged with getting us back out. And they look at the higher loan limits and see that very few people are using that higher limit today. Duh. So their conclusion is not that they tanked the market, but that the higher limits must no longer be needed. And many Republicans are against the higher loan limits because they see this as a way to ‘reduce governments stake in housing’. Great time to be worried about this, ya schmendrakes. Why not just drive that stake right into the heart of the market while you’re fiddly-farting around trying to make us believe you actually have principles.

YOU DULLARDS! First of all, you are absolutely killing any nascent move-up market that may be starting to percolate. In my area we’re down from $500,000 to $355,000 as a conforming cap and sales of $400,000 – $600,000 homes, which were damnably slow to begin with have dried up completely.

It is true that it has not impacted the broader base of our business because our median price has fallen from the mid-$500′s to the high $200′s or low $300′s. But what about when the market snaps back? And it will. It always does. Even Obama can’t kill the innate drive for the American Dream of Homeownership. So what happens in my little market, or the broader California market, or the other 593 higher cost counties in 42 states when the median price again creeps over that cap?

Well, lenders are working on a solution to that even as we speak. The only question is – what are they going to call sub-prime next time? That name’s probably played out.

Of course that’s just my opinion. I could be wrong.

This morning I joined the Mayor of Murrieta, Randon Lane, Wildomar Mayor Pro-Tem Ben Benoit, Menifee City Council member Darcy Kuenzi, Lake Elsinore Finance Director Allan Baldwin and League of Cities rep Dave Willmon in providing our statements to the assembled press. Here is my statement:

Good morning. My name is Gene Wunderlich and I’m Chair of the Southwest California Legislative Council, a coalition of businesses and Chambers representing more than 3,000 small, medium and large businesses in Southwest Riverside County.

Communities throughout our state are facing crisis. In Riverside County our unemployment rate is 14.7%, statewide it is 12.1%, and that’s only the people they count. Like many other cities and counties across California, we each face problems that are similar in nature, yet unique to each locality. We must be able to make decisions that are best for our communities, our families and our friends.

Our elected leaders in Sacramento don’t seem to know what’s going on in Temecula, or Wildomar, or Menifee or communities across Southwest Riverside County. SB469 is a perfect example of that with its bureaucratic roadblocks and overreaching state authority. It’s a one=size-fits-all bill and it will not help us create jobs in our community – although it may well keep several attorneys busy for years.

This bill takes away the power of a community to build and define itself and gives that power to the state, having local land use issues defined in Sacramento. The state SHOULD NOT be imposing more regulations on local governments right now. The state SHOULD NOT be telling us what kinds of businesses we can and cannot approve and the state SHOULD NOT be interfering in our ability to help reduce the high unemployment rate in our own community.

We are asking Governor Brown to help Southwest Riverside County and cities and counties across the state. Join us in helping create new jobs, not destroy more jobs.

VETO SB469.

This bill is also opposed by the California Association of Realtors® and dozens of other pro-jobs, pro-business & pro-local rights groups throughout the state.

The Federal Trade Commission (“FTC”) has recently issued its Mortgage Acts and Practices – Advertising, or “MAP”, rule (“Rule”). The Rule imposes requirements on those that provide information about mortgage credit products to consumers by prohibiting misrepresentations during these communications and also imposing recordkeeping requirements. The Rule will impact real estate professionals that provide this information to consumers, such as giving a consumer a lender’s rate sheet. The Rule takes effect on August 19, 2011.

Click here to read the Rule’s text and accompanying commentary.

Background

The FTC published an Advance Notice of Proposed Rulemaking in 2009, and issued a proposed rule relating to unfair or deceptive acts and practices that may occur with regard to mortgage advertising in September 2010. NAR filed a comment letter seeking an exemption for real estate professionals from the Rule- click here to read NAR’s comment letter.

The Rule is intended to regulate unfair or deceptive practices in the advertising of mortgage products, and covers all entities involved in the process such as mortgage brokers, lenders, and home builders. The Rule will also cover real estate professionals when they are providing information about a mortgage credit product to a consumer, as outlined in this article.

Rulemaking authority for the Rule has now transferred to the Consumer Financial Protect Bureau (“CFPB”). Enforcement authority for the Rule rests with the CFPB, FTC, and state attorneys general.

Rule’s Requirements

The Rule prohibits misrepresentations in a commercial communication about any term of a mortgage credit product. A “commercial communication” is broadly defined within the Rule, covering both oral and written statements designed to “create an interest in purchasing goods or services”, which in this case would be a mortgage credit product. A “mortgage credit product” is “any form of credit” that is offered to a consumer and secured by the consumer’s dwelling. The Rule’s coverage will include information about all mortgage terms and the Rule contains an extensive list of possible mortgage terms, including interest rates, products sold in conjunction with a mortgage such as credit insurance, amount of taxes, variability of interest rates, and prepayment penalties.

Application of Rule to Real Estate Professionals

The Rule will apply when a real estate professional provides information about a specific mortgage product to a consumer. An example would be providing a consumer with rate sheets containing the current interest rate from a lender or providing a consumer with applications or other information for a specific mortgage product. All statements about the terms of a mortgage will be covered by the Rule, and will need to be retained for two years. In addition, the statements should have the disclaimer language discussed in this article in order to protect against later misrepresentation claims.

The FTC has stated in its comments that the Rule does not apply to purely informational communications not designed to cause the purchase of a good or service because these are not commercial communications. So, providing a consumer general information about market rates for different types of mortgages products will likely not be subject to the Rule because these are not related to a specific mortgage product. However, providing a consumer with the daily rates from a specific lender would trigger compliance with the rule. Similarly, going through the prequalification process with a consumer in order to determine the range of properties that a consumer may be eligible to purchase won’t require compliance with the Rule; however, providing a consumer with the documentation needed to apply for a preapproval from a lender for a mortgage loan will be covered by the Rule.

Disclaimer or Qualifying Statement

In the preamble to the final Rule, the FTC notes that a disclaimer provided with a covered statement “may correct a misleading impression, but only if it is sufficiently clear and prominent to convey the qualifying information effectively”. Therefore, real estate professionals should always include a disclaimer when providing information to consumers about the terms of a mortgage credit product, as a properly crafted disclaimer can protect against later misrepresentation claims.

The disclaimer will need to be prominent, as the FTC notes in its comments that disclaimers in small type placed at the bottom of a document will not protect against misrepresentation claims. The disclaimer text should be separated from the other text in the covered statement, as language buried within the text may not be effective to protect against misrepresentation claims. Click here for a model disclaimer.

Note that the disclaimer should be tailored to the type of information that you are providing to a client. If you are providing other services beyond transmitting basic mortgage information, you will need to tailor your disclaimer to cover those services.

Recordkeeping Requirements

If a real estate professional is subject to the Rule, the real estate professional is required to keep all covered commercial communications for 2 years from the date that the communication was made to the consumer. In order to comply with this section, the real estate professional should put all covered statements into writing and include the statements in each consumer’s file (paper or electronic) with the brokerage. This record retention system should become part of the brokerage’s overall record retention program.

Dan Walters, Political Columnists for the Sacramento Bee, recently wrote about the slew of Democratic legislation aimed at eviscerating the initiative process in our state. You know, the initiative process – whereby ordinary citizens have the opportunity to get measures on the ballot that legislators don’t like? Yeah, that process. Democrats complain that ‘the initiative process is being abused’ and they want to protect us from ourselves.

Now granted there are too many initiatives on our ballot sometimes – there were 10 on last Novembers ballot alone, But in its 100 year history, the initiative, referendum and recall petition has produced many beneficial results in addition to a few clinkers. Prop. 13 comes to mind, and last years successful Prop 20, which removed the redistricting process from the hands of our legislators, and failed Props 19, to legalize marijuana and  23, which would have overthrown the onerous AB 32.

But the Democrats don’t like us to have that much say in our government – because they know what’s best for us and how best to spend our money without any pesky input from us. Heck, they already control our legislature, our governor, and every major elected office in the state – they just don’t want to contend with the actual voice of the people.  They’re also afraid of public backlash against their incompetence and malfeasance in office which is threatening to put bills on upcoming ballots mandating pension reform, restrictions on political fundraising by unions, education entitlement and reform and a host of other issues that citizens are pissed off about but that the legislature refuses to act on.

Now in an act of craven insincerity, they are backing radio ads aimed at inducing fear of signing initiative petitions. You may have heard them – a sweet female voice just signed a petition outside the local grocery store while the wise male voice tells her she probably just gave her signature to an identity thief, all her pertinent information will be shared on the global network of signature gatherers/identity thieves, and she should never do that again. Listen closely at the end, after the terrified woman promises never to do such a stupid thing again – listen to who is paying for the ad. It’s a  group called - Californians Against Identity Theft,  ALONG WITH backing by unidentified labor groups. The origins of the group are murky but the goal is not.  Identity theft is a major issue and cause for concern for everybody, I’ve written about it numerous times over the years, But the SOLE FOCUS of CAIT appears top be  signature gatherers and the initiative process. Sound like a well rounded group focused on the real issue – or some special interest? Yeah, that’s what I thought.

Maybe I’m just cynical but could the liberal labor movement and their Democratic lackeys in the legislature be in cahoots on this? Could they actually be waging a concerted campaign both in the legislature and on the airwaves to further their agenda of coercion and control? Naw, I’m probably just being paranoid. Of course just because you’re paranoid doesn’t mean they really aren’t  out to get you.

How much do like being manipulated? You must – you keep voting for these people.

Read more: http://www.fresnobee.com/2011/08/03/2487995/calif-democrats-attack-initiative.html#ixzz1UqBID2Lb

The opinions expressed in this blog are solely the purview of the author and in no way represent the views or policies of SRCAR, or any other reputable organization or asylum I am associated with.

Making sense of the story

*     A short sale – a transaction in which the homeowner sells the property for less than is owed on the mortgage – must be approved by the lien holder or lien holders, if there is more than one.

*     Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short-sale payment as full payment for the outstanding balance of the loan, but the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.

*     The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) sponsored the bill and urged lawmakers to pass this much-needed legislation.

*     “The signing of this bill is a victory for California homeowners who have been forced to short sell their home, only to find that the lender will pursue them after the short sale closes and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce.  “SB 458 brings closure and certainty to the short-sale process and ensures that once a lender has agreed to accept a short-sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full, and the homeowner will not be held responsible for any additional payments on the property.”

Read the full story <http://www2.realtoractioncenter.com/site/R?i=Y7pJy-rwyTJMoTmgvOXhDA..>

Viola – sub-prime, Alt-A, exotics. 

You’ve probably already heard that B of A is already operating under the new/old loan limits assuming that Congress will let them expire. This means larger, more costly jumbos are back in place for many buyers. You think our move-up and upper end market is dead now? Just wait. 

So please take a moment to respond to this Call to Action. This week the Senate will be considering an amendment to the Military Construction Appropriations Bill (don’t ask), to maintain the current loan limits for another year. Both CAR and NAR support this effort. This Call to Action urges our Senators to work to maintain the current loan limits to help fan the flames of the recovery they so desperately need. 

Please help us ensure that your clients have access to affordable mortgages. 

I hope that you’ve all taken a minute to respond to the latest call-for-action from NAR. (That goes double for those who are always complaining that NAR doesn’t do anything for you.)

A bill, H.R. 1309, is being debated in Congress right now that would re-authorize, reform, and extend the National Flood Insurance Program for 5 years.

The NAR Land Use Committee, has been working on getting this bill in place for years – it’s been a top priority. Finally we have a bill that will truly make a difference if passed, or the NFIP program will sunset on September 30 of this year.

If that happens, it would be catastrophic for many areas, coastal regions, mid-west areas prone to flooding, etc. This program is the ONLY SOURCE of flood damage protection for 5.6 million home and business owners today, not to mention the millions of affiliated jobs like builders, remodelers, movers, mortgage lenders, insurance agents, real estate professionals and more. In the last 3 years alone there have been 9 stopgap extensions and 5 shutdowns. Just last year a shutdown of just a few weeks resulted in more than 47,000 home sales delayed or canceled – in a market that is way down to begin with.

Do we need MORE uncertainty from our leaders on this issue? We actually have a chance to provide some long term stability to at least one segment of our market, let’s not blow it. Take a minute – click on the page below and lend your voice to the chorus.

1.1 million strong. Very little we can’t do if we put our minds and hearts to it.

Thank you.

According to an email from Bank of America, conventional loans that exceed the permanent loan limits will now be required to use non-conforming programs.

Barring Congressional action, the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.  The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.  Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

Again, barring congressional action (heh), conforming loan limits in Southwest California will likely revert to about $425,000. Not that big a deal right now but in a couple years we’ll be priced out of the market again and looking for alternatives. How do you think Subprime and Alt-A loans got so popular out here? Couldn’t get a conforming loan for a median price home.

The newest Drum Major for California’s ‘A**holes on Parade’ has to be Assemblymember Tom Ammiano. Let me just say three words about Tom – San Francisco & Democrat. Adding the term ‘liberal’ to that would merely be gilding the lily – an exercise of which Tom might approve.

Ammiano has risen through San Francisco politics from educator to Supervisor to Assemblymember having never actually held a private sector job. He’s been on the public dole his entire career. This is also the same district that gave us Nancy Pelosi, so we would not be remiss to flavor their political judgment with a grain or three of salt.

(unretouched photo – can’t say the same for that face)

Ammiano’s main claim to fame in the assembly is his perennial bill to legalize marijuana in the state. If the general public outside San Francisco has heard of him at all, it’s probably for that. But that pales in comparison to some of the bills he routinely introduces. Just in this legislative session alone he has produced more than his share of clunker bills that should be relegated to the outhouse instead of the state house – for example:

• Earlier this year landlords, apartment owners and Realtors united against a bill that would have extended a landlords  ’pay or quit’ timeframe from 3 to 14 days. That means if you own a home or an apartment complex and somebody decides not to pay you, rather than tack a notice on their door telling them they have 3 days to pay up or leave, they would now have 2 weeks to live off you rent free – more if they contest the eviction. Why did he propose this? His ‘constituents’ are going through some hard times and just need some more time and a little understanding.

HELLO! We’re all going through some hard times. What about the hard times your landlord is going through? But it’s OK for him to carry your deadbeat constituents for 2 weeks, is that right? How about the small landlord who has a house rented and suddenly he’s in default because your constituent decided not to pay? That’s OK too? Well, as long as your constituents aren’t inconvenienced I guess. After some considerable pressure, he amended the bill to remove the most onerous language and it now simply says the eviction process can be halted at any time as long as they pay the rent owed and landlord attorney fees capped at $350. Property managers across the state are still against the measure.

• Earlier this year Ammiano declared that ‘sports are a vital economic activity’ and proposed that the legislature create a ‘statewide sports authority’.

• Ammiano has proposed a bill which would limit the number of charter schools in a given area to 10.

Let’s see – charter schools traditionally have a higher success rate, produce more college bound students, enjoy smaller class sizes and attract more motivated teachers. Yeah, let’s limit them and force those kids into Californian’s superbly under-performing and over-funded public school system where 60% to 70% of students in your constituency fail to graduate. That makes sense? Well, it makes sense I guess if your former colleagues in the teachers union helped get you elected, otherwise -ehhh, not so much.

• Here’s a fun one. Ammiano has proposed a bill to let California counties ‘opt out’ of the federal Secure Communities Program. The SCP mandates that when people are booked into local jails their immigration status is checked to see if they are deportable. “We’ve got to improve the RIGHTS of the people who are the foundation of our society”, according to Ammiano.

That’s wrong on so many levels. Of course he has the backing of both Los Angeles and San Francisco counties, who prefer not to check anyway and would rather just let these people remain here to commit more crimes I guess. And of course our new Attorney General, also a strong supporter of illegal immigration, supports the bill. A spokeshole recently declared that some 25% of people brought to jail end up not being convicted of a crime but may end up being deported anyway because of their immigration status. Hmmm, perhaps nobody explained to the nimrod the definition of the term ‘illegal immigrant’. By definition they have broken the law and should be deported.

Just one of the many reasons California continues it’s downward trajectory – people unclear on the concept who are elected to positions of authority. Ammiano is one of those who has never held a private sector job, has never had the pressure of meeting a payroll or producing a product or service in a competitive marketplace. Among his notable accomplishments prior to getting elected to the Assembly was the expansion of diversity and sensitivity training to include gay and lesbian curriculum to the kindergarten level for San Francisco schools. Oh, and as a Supervisor one of his great contributions was permitting the Sisters of Perpetual Indulgence, a charity group of drag queens, to close Castro Street for their Easter Parade. Attaboy Tom, way to focus on the important stuff.

Perhaps it’s no surprise that Ammiano’s first exposure outside his limited constituency, came in 2009 when he yelled ‘you lie’ at then Governor Arnold Schwartzenegger at a public event. He followed this up saying Arnie could “kiss my gay ass”. Apparently Arnie wasn’t interested and promptly vetoed a bill of Ammiano’s that had passed both houses of the legislature unanimously. His note to Ammiano explaining the veto is attached for your edification. If you read down the left side of the page you find an acrostic message from the then Gov. Statisticians put the odds of a message like that appearing randomly at over 2 billion to 1.

We should be saying that to more of Ammiano’s bills.

Of course that’s just my opinion. I could be wrong.

“The Right of property is the guardian of every other Right, and to deprive the people of this, is to deprive them of their Liberty.” – Arthur Lee

The current continuing resolution (CR) providing funding for government operations is set to expire on April 8, 2011. If legislation providing for funding is not signed into law to extend funding after April 8, the federal government could shut down. This means many, but not all, government programs, including some that impact federal housing and mortgage programs, could grind to a halt as early as April 9, 2011. While the true impact of a shutdown is unclear until it actually begins below is a synopsis of how federal housing programs will likely operate in the event of a shutdown. The Office of Management and Budget (OMB) requires each agency to have contingency plans in place and reportedly has instructed agencies to not provide specific information on impacted operations.

Federal Housing Administration

FHA cannot offer endorsements for any new loans in the Single Family Program and cannot make commitments in the Multi-family Program in the event of a shutdown. FHA will maintain operational activities including paying claims and collecting premiums. Management & Marketing (M&M) Contractors managing the REO portfolio can continue to operate.

VA Loan Guaranty Program

Lenders may continue to process and guaranty mortgages through the Loan Guaranty program in the event of a government shutdown.

Internal Revenue Service (IRS)

Should the federal government shut down, the IRS cannot process federal income tax returns or issue refunds (but it can deposit tax payments). Consumers who were expecting to use their tax returns as part of the down payment for a home purchase will temporarily not have access to these refunds.

Flood Insurance

The Federal Emergency Management Agency (FEMA) confirmed that the National Flood Insurance Program (NFIP) will not be impacted by a government shutdown.

Rural Housing Programs

For the US Department of Agriculture programs, essential personnel working during a shutdown do not include field office staff who typically issue conditional commitments, loan note guarantees, and modification approvals. Thus, lender will not receive approvals during the shutdown. If the lender has already received a conditional commitment from the Rural Development office, then the lender may proceed to close those loans during the shutdown. A conditional commitment, which is good for 90 days, is given to a lender once a USDA Underwriter approves the loan. If a commitment was already issued, the funds were already set aside and the lender may close the loan at its leisure. If Rural Development has not issued a conditional commitment, the lender must wait until funding legislation is enacted before closing a loan.

Government Sponsored Enterprises

Fannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency.

Treasury

No official word as of yet, but the Making Home Affordable program, including HAMP and HAFA, may not be affected as the program is funded through the Emergency Economic Stabilization Act which is mandatory spending not discretionary.

Background Information on Government Shutdown

HJ Res. 48 extends the Continuing Appropriations Act, 2011 (Public Law 112-6) to April 8, 2011. If another continuing resolution (CR) or budget is not signed into law, the federal government could shut down on April 9, 2011. This requires the furlough of non-emergency personnel and the curtailment of federal agency activities. Federal contractors cannot be paid. Programs funded by annual appropriations are directly impacted though programs funded by laws other than appropriations (such as Social Security) may also be impacted. The last government shutdown occurred during fiscal year (FY) 1996 and lasted 21 days, from December 16, 1995 through January 6, 1996.

The Anti-Deficiency Act is the primary law preventing government activity when no budget or CR is enacted. The act, found in 31 U.S.C., prohibits:

• Making or authorizing an expenditure from, or creating or authorizing an obligation under, any appropriation or fund in excess of the amount available in the appropriation or fund unless authorized by law.
• Involving the government in any obligation to pay money before funds have been appropriated, unless otherwise allowed by law.
• Accepting voluntary services for the United States, or employing personal services not authorized by law, except in cases of emergency involving the safety of human life or the protection of property.
• Making obligations or expenditures in excess of an apportionment or reapportionment, or in excess of the amount permitted by agency regulations

Basically, the government may not make payments or commitments unless there is enough money in the bank. According to the US Office of Personnel Management, an agency must shut down activities not excepted by the US Office of Management and Budget (OMB) when it no longer has the funds to operate. OPM recommends that agencies:

1. communicate with employees and representatives about a potential shutdown;
2. prepare draft furlough notices;
3. determine which positions are excepted from the furlough according to OMB guidance.

Federal agencies have been required to complete contingency plans since 1980. OMB has three different bulletins that agencies may reference in the development of their shutdown plans. Plans must include, among other things, estimated time to complete a shutdown and the number of employees to be excepted. The President, Members of Congress, presidential appointees, certain legislative branch employees, and federal excepted employees are not subject to the furlough.

Sources

House Resolution 3082, “An Act making appropriations for military construction, the Department of Veterans Affairs, and related agencies for the fiscal year ending September 30, 2010, and for other purposes.”
http://www.gpo.gov/fdsys/pkg/BILLS-111hr3082eas2/pdf/BILLS-111hr3082eas2.pdf

Antideficiency Act Background. US Government Accountability Office.
http://gao.gov/ada/antideficiency.htm

Guidance and Information on Furloughs. US Office of Personnel Management.
http://www.opm.gov/furlough/furlough.asp

You may recall a couple years back when CAR tried to get our legislature to pass a bill prohibiting private transfer fees. We were aligned against an odd coalition involving our some-time allies the Building Industry Association who were allied with a variety of environmental groups like the Sierra Club and others. Our bill was defeated but we did manage to get a corollary bill passed that at least required properties with private transfer taxes attached to them to at least disclose them to prospective buyers. Prior to that it was just one of those hidden items on page 57 of your title report that most people didn’t find out about until they went to sell their house.

SURPRISE!!! Here’s a bill for another $2,749 that you, Mr. Seller, or you, Mr. Buyer, or you Ms. Agent, get to pay..

Now you might be asking yourself – ‘Self, why would the building industry be in favor of an additional transfer tax on a home – especially a private transfer tax?’ Well according to the BIA, ‘private transfer taxes are used to finance a variety of environmental mitigation, community amenities and affordable housing requirements’. According to their website – if  the current FHFA proposal is enacted the following results may occur:

• Property values could suffer (already have. Will suffer more in areas with additional taxes attached to the property)
• Home sales transactions will become cumbersome (really? Having another tax on the property will make the transaction easier?)
• Lending will be harder to obtain (and having another tax on the property will make it easier? Come on!)
• Taxes and home owners association dues will increase (too late. You’ll just be one more tax)
• Environmental conservation efforts will be stifled (no, environmental extremist agendas will be stifled)
• The real estate market will suffer further (yep, another tax on housing will really help us climb out of this hole)
• An individual’s ability to choose where they want to live will be inhibited (well yeah, they might choose not to live in an area with a transfer tax)
• Community programming and quality of life will be compromised (yeah, a tax that has no direct benefit to the community will really compromise it)

Sounds pretty dire, doesn’t it? But don’t be fooled. There are areas of the country where private transfer taxes are needed and I’ve heard from fellow Realtors in some of those areas. But those areas are excluded from this legislation. Why? Because there’s a nexus between the funds being collected from the fees and where they are spent – which is right on the same project. For example, Condo developments that rely on these fees for maintenance and amenities upkeep are exempt as are a variety of other direct benefit uses.

But for California, and indeed much of the country, you need read no further than the first sentence in the BIA claim – ‘finance a variety of environmental mitigation.’ Translation ; it’s a way for developers to knuckle under to environmentalists demands without incurring any cost themselves by passing it along to future home purchasers.

Here’s the typical California scenario: A developer has an option on a tract of land where they would like to build new homes. An eco-mill (environmentalist group set up to find out about this kind of stuff, see – ambulance chasing lawyer) finds about about this developers plan and approaches the builder.

Eco-mill: “We don’t want anything built there because there are maybe endangered species or trees or we just want to preserve the wildlife there. If you move forward with your plans we will sue you from here to kingdom come and even though you might eventually prevail in court, you will spend a ton of money and ultimately it will drive your cost to build these homes up past the point where they are economically feasible.”

Developer: “Jeez, what can we do. There’s a need for houses in this area and we’ll be building a good affordable product that will be really good for young families?”

Eco-:mill “Well, maybe we can reach an accommodation – and it won’t cost you a dime.”

Developer: “That sounds delicious – what do we have to do?”

Eco-mill: “Just attach this private transfer tax to your homes. Every time that home gets resold for the next 30 or 50 years, that tax will be collected and we’ll rake in millions of dollars over the life of the property.”

Developer “And what will you do with the money?”

Eco-mill: “Oh don’t worry abut that.”

Developer: “But will you spend it in the area, maybe help build a new road or a park for the development, contribute to a school or help build a new fire station or something to benefit the residents who will be paying the tax?”

Eco-mill: “Are you friggin crazy? We are totally unregulated. We might spend part of it on new Prius’s for our members, and we might raise our own salaries and we’ll probably spend part of it to research other poor schmucks like you who are thinking about building somewhere else and we’ll no doubt spend part of it suing developers who don’t just fold up like a cheap card table when we threaten them.”

Developer: “Hmmm, well I don’t like that one bit but as long as you promise to leave us alone I guess we’ll just go along and get along.”

Eco-mill: “Thatta boy. Next.”

Think I’m making that up? That exact scenario plays out numerous times throughout our state – less now that developers are building fewer homes, but it was so prevalent during the boom days that whole eco-mills were set up around the product. There was even a Texas company on-line offering the opportunity to help you set up an individual private transfer tax on your own home so that after you sold it, any future sellers would have to send you a check.Yeah, really.

The scenario also happened right here in Temecula with a group that was threatening to stop a well known developer from building a big box store in South Temecula. In that case, because it was a  single store rather than a development with future resale, the settlement was for an upfront fee and the organization went away.

And that’s how it works.

So if you get an email from colleagues at the Building Industry asking to help defeat this FHFA proposal for a private transfer tax, pass on it. NAR has been fighting hard to get this provision included at a national level and at least 11 states have passed a similar measure prohibiting these private transfer taxes. States like California that have no political will (balls) to step up and take a stand against these eco-terrorists, will only benefit from the passage of this proposal.

Well, that’s just my opinion. I could be wrong.

Posted: 30 Mar 2011 07:18 AM PDT

But that’s all about to change. Californians voted last fall to form a commission to draw the new districts – unlike the last time they were drawn when we let the politicians draw their own. The Commissions report is due out by August and our area will be in for some changes because our region has grown faster than most regions of the state. Our County Supervisor boundaries will be redrawn to reflect the growth in Southwest County and, with the potential election of current Assemblyman Kevin Jeffries to a supervisorial seat, our region could see 2 Supervisors representing Southwest County for the first time EVER. That’s good.

At the state level we probably won’t see much change but the district  boundaries will definitely be redrawn to make some sense by keeping contiguous city interests in one sphere. Right now Jeffries has a district that runs in skinny strips hither and yon, crossing over Nestande’s district in places, running into San Diego County – makes no sense. Our Senatorial District may also see some shifts as Emmerson keeps a more contiguous area of Riverside County while Anderson gives up some of the northern portion of his San Diego District that starts in Chula Vista.

Our regions also stands to pick up an additional federal representative as more of the population has shifted inland from coastal areas. With out region currently split between Calvert, Bono-Mack and Issa, we’ll have to see what that means.

Further complicating the political landscape is the new open primary rule, again resulting from the last election. There will no longer be Republican and Democratic primaries, just one big free-fer-all. The top two candidates will run against each other in the fall. The theory is that this will draw more candidates from the middle of the road rather than the ideological edges of party politics. One thing it will do for sure is cost way more money. The rest we’ll just have to see about.

Nationally known prognosticator Charlie Cook has recently published his first blush on what that all means to us. His exhaustive report covers the entire country as well as every district within the state. I’ve included an excerpt here dealing only with our immediate area. Stay tuned. This is going to be an interesting season leading up to next years election.

The Charlie Cool Political Report

California
Redistricting Authority: Commission
Ideal New District Population: 702,905
Current Partisan Breakdown: 34 D, 19 R
2012 Cook Redistricting Forecast: 35 D, 18 R

San Bernardino and Riverside

San Bernardino County has almost enough people for three districts, and commissioners will almost certainly need to draw a Hispanic majority seat anchored by the cities of San Bernardino, Fontana, and Rialto. The question is whether commissioners will try to split Democratic Rep. Joe Baca’s current 43rd CD into two parts, paring his district down to his home base in those three cities, and putting Ontario in a separate Hispanic majority district. There will almost certainly need to be a Republican-leaning district anchored by the fast-growing Victor Valley area to the north, and the fate of Chino to the south is anyone’s guess.

Riverside County grew 42 percent in the last decade and surpassed San Bernardino, adding enough people for slightly over three whole districts. There is very big redistricting upside for Democrats here: Riverside gave President Obama a majority of its vote in 2008, yet all four of its districts are represented by Republicans. The most talked-about scenario calls for commissioners to create a new Hispanic majority district taking in Corona/Norco, Riverside and Moreno Valley. This seat would have a significant Democratic edge and could include the Corona home of GOP Rep. Ken Calvert, whose 44th CD is already 43 percent Hispanic.

In fact, surging Hispanic population and political participation in Riverside County explains why Calvert, who routinely had cruised to reelection since 1992, was nearly caught napping in 2008 when underfunded Democratic teachers’ union organizer Bill Hedrick took 49 percent of the vote. Calvert’s 44th CD needs to lose 141,851 residents, so it’s possible a new GOP-leaning district in southwestern Riverside County will complement a Hispanic majority district to the north. Calvert could run here, but he would almost certainly have to overcome primary competition in a vastly new district; Calvert took only 66 percent in his 2010 primary against a challenger who spent just $17,000.

The fastest growing district in the state was GOP Rep. Mary Bono Mack’s 45th CD based in explosive Palm Springs and Hemet in eastern Riverside County. The 45th needs to shed 211,304 residents. There are rumors Bono Mack may be considering an early exit from Congress to help her husband, Florida GOP Rep. Connie Mack IV, with his prospective Senate bid. If that happens, this district could be highly competitive. But Republicans would be somewhat relieved if the eastern reaches of the 45th CD, such as Moreno Valley, were lopped off into a new Hispanic majority seat, boosting the 45th CD’s GOP performance.

There’s virtually no way commissioners will draw new districts that endanger GOP Reps. Darrell Issa (CA-49) and Duncan Hunter (CA-52) in anything other than primaries, unless they draw much of the deeply conservative territory in northern San Diego County into districts with more urban areas, which would be a stretch. A continued 3-2 GOP edge in this southernmost region of the state still seems like the most likely outcome.

As if boundary fortune telling isn’t already hazardous enough, the state’s new “top two” ballot law has added a whole new layer of complication. In June 2010, voters passed Proposition 14, setting up jungle primaries for all federal and state elections in which the top two vote-getters, regardless of party, will advance to the November general election. Candidates aren’t even required to list their party on the ballot anymore. The first indication of the law’s impact could come in a July 12th special election to replace resigned Democrat Jane Harman in the Torrance-based 36th CD.

In the new “top two” era, two candidates from the same party can and will compete against each other on the general election ballot in some districts. This is highly unlikely to happen in swing seats, with the possible exception of unusual cases like open seat races where a plethora of candidates from each party would divide up the primary ballot. The more likely impact of this law will be to shut third party and independent candidates out of November elections.

Over the last few years, relatively unpopular incumbents have eked out November races with less than 50 percent of the vote thanks to minor candidates siphoning opposition votes. Unpopular incumbents won’t be able to depend on this crutch anymore.

California’s brave new world of districts and election laws could seriously endanger 15 or more incumbents. If the commission were to draw districts remotely resembling normal shapes, the incumbents at the most risk in primaries or generals would be those currently sitting in the most gerrymandered districts. Republicans with the most cause for concern are Reps. Dan Lungren (CA-03), Elton Gallegly (CA-24), David Dreier (CA-26), Gary Miller (CA-42), and Ken Calvert (CA-44). The Democrats: Reps. Jerry McNerney (CA-11), Sam Farr (CA-17), Dennis Cardoza (CA-18), Jim Costa (CA-20), Brad Sherman (CA-27), Howard Berman (CA-28), Laura Richardson (CA-37), Grace Napolitano (CA-38), Bob Filner (CA-51), and whoever wins the CA-36 special election in June.

Bottom line: Redistricting may endanger more Democrats in primaries and more Republicans in general elections. Overall, a true incumbent-blind redistricting plan may bequeath Democrats an additional seat or two, given that Republicans currently represent more marginal districts. Eight GOP members sit in districts that voted for President Obama in 2008, while no Democrats sit in districts that voted for GOP presidential nominee John McCain. And if commissioners or judges place an emphasis on maximizing Hispanic voting strength, Hispanic candidates could have new opportunities in as many as five additional districts.

High down payment requirements being proposed by federal regulatory agencies as part of the upcoming rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act will unnecessarily burden homebuyers and significantly impede the economic and housing recovery, according to the National Association of Realtors®.

Six agencies, including the Department of Housing and Urban Development, Federal Deposit Insurance Corp., Federal Housing Finance Agency, Federal Reserve, Office of the Comptroller of the Currency, and the U.S. Securities and Exchange Commission, are developing a proposed risk retention regulation under the Dodd-Frank Act that requires lenders that securitize mortgage loans to retain 5 percent of the credit risk unless the mortgage is a qualified residential mortgage (QRM); FHA and VA mortgages would also be exempted. The purpose is to create strong incentives for responsible lending and borrowing.

“As the leading advocate for home ownership NAR supports a reasonable and affordable cash investment requirement coupled with quality credit standards, strong documentation and sound underwriting,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “A narrow definition of QRM, with an unnecessarily high down payment requirement, will increase the cost and reduce the availability of mortgage credit, significantly delaying a housing recovery.”

NAR believes that Congress intended to create a broad QRM exemption from the 5 percent risk retention requirement to include a wide variety of traditionally safe, well-underwritten products. Congress chose not to include a high down payment among the criteria it specified in the Dodd-Frank Act to guide the regulators in defining a QRM. Strong evidence shows that responsible lending standards and ensuring a borrower’s ability to repay have the greatest impact on reducing lender risk.

“We need to strike a balance between reducing investor risk and providing affordable mortgage credit. Better underwriting and credit quality standards have greatly reduced risk. Adding unnecessarily high minimum down payment requirements will only exclude hundreds of thousands of buyers from home ownership, despite their creditworthiness and proven ability to afford the monthly payment, because of the dramatic increase in the wealth required to purchase a home,” said Phipps.

The definition of QRM is important because it will determine the types of mortgages that will generally be available to borrowers in the future. Borrowers with less than 20 percent down could be forced to pay higher fees and interest rates, up to 3 percentage points more, for safe loans that otherwise do not meet too narrow QRM criteria.

NAR is concerned that a narrowly defined QRM will also require severe tightening of FHA eligibility requirements and higher FHA premiums to prevent huge increases in its already robust share of the market, adding additional roadblocks to sustainable home ownership.

“Saving the necessary down payment has always been the principal obstacle to buyers seeking to purchase their first home. Proposals requiring high down payments will only drive more borrowers to FHA, increase costs for borrowers by raising interest rates and fees, and effectively price many eligible borrowers out of the housing market,” said Phipps. “We strongly urge the regulators to consider the negative consequences of setting onerous limits on the availability of credit.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

It’s entirely probable you’ve heard about the new NAR Realtor® Party Political Survival Initiative introduced at the AE Institute this past Sunday. While NAR has not made a broad announcement of the program yet, our AE’s are returning from their meetings this week with information on the initiative and word has been getting out from Inman, from the blogs, and of course on Realtor.org itself.

According to NAR, the initiative was launched partially in response to last years Supreme Court decision, the celebrated Citizens United Case. As forecast, that decision stands as a game changer in the lobbying world granting corporations the same rights as individuals to contribute to political campaigns. The price of doing business has just gone up and if you want to stay at the table with the serious players, you’d better step up your game.

That’s what NAR is proposing by instituting a mandatory $40 dues increase effective 2012. The issue will be voted on at NAR’s Mid-Year Legislative meetings in May.

The following is a post by NAR stating their reasons for launching the initiative. I would encourage you to read it. I have also included the slide show presented to our AE’s in Dallas this past Sunday. I have no doubt this will be hotly debated as we approach our May meetings and I encourage you to make you opinions knows to me, to your local associations as well as your state and NAR Directors. Make sure to note that 2/3 of the funds raised will be channeled back to your state and local associations for local purposes.

Why did NAR create the REALTOR® Party Political Survival Initiative?
•  In January of 2010, the Supreme Court ruled in the case of Citizens United vs. the Federal Election Commission.
•  The ruling states that corporate dollars—so-called soft dollars—can be used to fund independent expenditure campaigns.
•  This not only changes the way elections are financed at the national level, but it also overturns restrictions that allowed only hard dollars—those funds contributed for political purposes by individuals, rather than corporations—to be used in 23 states.
•  This means political fundraising as we have known it for the past 100 years just shifted dramatically.
•  Corporate funds/dues can now be used to shape opinions about candidates in ALL 50 states.
•  It is a game changer of gigantic proportions.
•  It is as if the goal posts on a 100 yard football field were expanded to now cover 140 yards.
•  In order for “The Voice for Real Estate” to have the impact it has had for the past 100 years in terms of political advocacy, the REALTOR® organization is stepping up its game.
•  No one has spoken with more power or as passionately about protecting private property rights and fighting for opening the door to the American Dream of Home Ownership than the REALTOR® Family.
•  To maintain and grow our political power in this new landscape, NAR launched the REALTOR® Party Political Survival Initiative.
•  The REALTOR® Party Political Survival Initiative did not just happen overnight.
•  It was the result of nearly a year of careful study and consideration.

What does the REALTOR® Party Political Survival Initiative mean for members?
•  The proposal is for a dedicated dues increase of $40.00.
•  The increase would take effect in the 2012 budget year.
•  Because it is “dedicated” to this initiative, it would be used exclusively to fund political advocacy efforts.
•  In the past, NAR has already contributed funds to this initiative out of its operating budget.
•  But to undertake the initiative at this level and give it a best chance for success, greater additional funding is needed.
•  The increased dollars will be dedicated solely to advocacy purposes as outlined by the Political Survival Initiative.
•  If this dues increase is approved, over 50% of NAR budget would be devoted to political advocacy, which consistently ranks among members as the #1 benefit they receive from NAR.

What are the benefits of the Political Survival Initiative?
•  The most powerful benefit is it will keep the REALTOR® organization as one of the most influential advocacy groups in America.
•  There are monumental issues coming down the pike that will affect members in their daily businesses, such as the future of mortgage finance and keeping housing affordable in America.
•  We must have the power to shape this pivotal moment for the American Dream of Home Ownership.
•  Most importantly, these dollars will be available to state associations and local boards.
•  2/3rds of the dollars raised will be returned back to states to be used in support of local candidates and issue campaigns, and for other political advocacy needs—to help shape the opinions of candidates on real estate-related issues as they work their way up as elected leaders.
•  It will combine NAR funds with state/local funds to increase our political power
•  It will create early relationships with state and local lawmakers/policymakers
•  It will shape the political make-up of state or local governing bodies.
•  NAR President Ron Phipps often comments that “now is our time.”
•  With this initiative, REALTORS® are seizing the moment for home ownership.
•  We are doing this NOT ONLY because of the Citizens United Supreme Court decision, but because our core competency is our grass roots advocacy; it’s where we need to be investing today so our future advocacy efforts will be successful tomorrow.
•  We need to be grooming our “REALTOR® Champions” at the state / local levels now, before some of them progress to become elected leaders at the federal level.
•  The political press in Washington has already noted the emerging clout of the REALTOR® Party.
•  A recent article in Politico said: “REALTORS®… are going to want to be politically effective, and a large measure of their influence is that they are present everywhere.”
•  Now is our time to seize the day.

“Government is like a baby,” Ronald Reagan was fond of saying. “An alimentary canal with a big appetite at one end and no sense of responsibility at the other.”  If the former California governor were observing Sacramento today, he would probably add that our state government functions more like “triplets,” and has been doing so for more than ten years.

Back at the beginning of the millennium, the California treasury was overflowing due to capital gains tax receipts from what has become known as the “dot.com bubble.”  Almost everyone in the state understood that these tax producing profits were the result of a short-term business cycle, and the excessive flow of tax revenue would not be a permanent condition.  Unfortunately, there were a small group of Californians who did not understand these basic economic principles, including the majority in the state Legislature and Governor Gray Davis.

These officials responded to the increased revenue by spending it all and committing Californians to pay for expensive long-term programs, like radically increased pensions for government workers, that now have state and local governments facing nearly a half-trillion dollars in unfunded liabilities.

This profligate approach to governing was a contributing factor to the successful recall of Davis.  However, governor Schwarzenegger, and the party-hearty lawmakers that continued to dominate the Legislature carried on like there was never a problem.  When the state came up short, they used accounting gimmicks that allowed them to carry on spending as if there were no tomorrow.

Between 2003 and 2007, spending increased by one-third.  Then the housing bubble burst, and these same suspects imposed the largest tax increase in the history of all 50 states.  They had learned their lesson, they said, and pledged to taxpayers they would use the two years of massively higher taxes to buy time to reorganize and reform their spending ways.  Two years later, and in spite of California families having paid about two-thousand dollars in extra taxes, the state is now facing a $26 billion shortfall.  The “spendaholics” have fallen off the wagon, again.

All of this could have been avoided if the malefactors, who clearly lack self-control, had been compelled to work under a hard spending cap.

Because the politicians that control the Legislature and our current governor – the Department of Finance shows that Governor Brown’s budget will grow 31% by 2015 – are still in a state of denial regarding spending, there is an urgent need to take measures to restore a strict spending limit on state government.

This is why Senator Tony Strickland has introduced Senate Constitutional Amendment No. 10, sponsored by the Howard Jarvis Taxpayers Association, that would impose a firm spending cap on lawmakers.  The expenditure limit includes General Fund and special funds, and contains no exemptions for education or local government funding.  It creates a reserve of up to 10% of spending; this reserve can only be tapped to backfill revenue shortfalls in the current budget year and to fund non-fiscally related emergencies.  Funds could only be used by a Declaration of the Governor and two-thirds vote of the Legislature.  Half of the excess revenues beyond the 10% cap would be used to pay off existing debt.

Back when Bill Clinton was running for president, a big sign that read, “It’s the economy, stupid” was placed on his campaign office wall.  In an ideal world every member of the Legislature would be required to post a sign on their office wall that said, “It’s the spending, stupid.”  Sen. Strickland’s SCA 10 is the taxpayers’ way of sending this message.