Wednesday, February 16, 2011

Condo Owners Up a Creek

The Register informs us today of a bit of fallout from the late great Grand Educational Mortgage Banking and Housing Explosion, illustrated at the right.

Where was I? Oh. I remember now.

It seems that when Regency Homes, you know, those wild and crazy guys who were the biggest home builders in Iowa until they exploded in 2008 went bust, a number of the properties they owned were foreclosed on and repossessed by the banks.

One of these was a condominium project in Johnston known quaintly as Providence Pointe. The Two Rivers Bank, which repoed the project, sold it off to Haverkamp Properties, which promptly turned the project into apartments, seeing as condominiums aren't selling very well.

The only people left were 12 owners in two buildings, and thereby hangs the Problem. Although these folks would like to refinance and obtain the benefit of very attractive 30 year interest mortgage rates-currently below 5 per cent this morning-but in the interim Fannie Mae changed its regulations concerning condominium mortgages to allow for writing mortgages only if 70 per cent of the units in a condominium project were owned or under contract.

The takehome from this is that the owners can't get refinanced because the project is now a mere apartment complex.

They're suing the Two Rivers Bank, alleging that the bank should have known that selling the property to one individual would cause problems for the existing owners-don't expect an answer anytime soon.

Monday, February 07, 2011

Cranky Five Year Old, Still Not Ready For Prime Time?

This month more or less marks the fifth anniversary of the founding of the Dougloid Papers.

You can tell this by the ceremonial use of the photo of the little guy, no idea who he is, but it seems to fill the bill pretty well. Is he squawking because he's really angry, or because his diapers need changing? You can speculate all you like.

I haven't been scratching the itch as much lately-politics is hibernating here on the prairie but there indeed are stirrings in the ashes. A parade of Republican hopefuls all channeling the shade of St. Ronald Reagan is set to descend on the Tall Corn State.

Over on the Hill, they're up to their usual antics. Elected on a promise of good responsible government, they're wasting their time bloviating about gay marriage, the health care reform bill and making sure everyone's packing heat whether they want to or not.

Anything but getting down to the business of running a state that's overspent a little but not to the extent some places like Texas are. That paragon of Republican good government is in deep deficit, to the tune of 31 per cent of projected revenues.

People just love free lunches but don't like paying for them. So the challenge for Republicans who've climbed up on the back of that tiger is whether they take the kid's cookie jar away, whether they start charging what it's worth, or whether they shove the whole mess down the road into the future.

They're talking like they're going to take the kid's cookie jar away but in reality it's going to require more than an act of will-much more-to get anything of substance accomplished.

I think I know the answer, and that is in the willingness of the tea party to suspend disbelief, particularly when it comes to miracles.

The Figure On The Wall: A Play In One Act

The scene is an office park somewhere in south Florida. Many people have come to believe that a large water stain on a window is a representation of the Virgin Mary. A large crowd has gathered, bringing offerings and praying loudly for miracles to heal the sick.

A Cynic: Sorry to disappoint you all, but that's not the Virgin Mary.
The Crowd: Well, who is it then?
A Cynic: Well, it's nobody. It's a water stain that left deposits on the window glass.
The Crowd: How do you know this, you nattering nabob of negativity?
A Cynic: I'm the building maintenance supervisor. That window's been leaking for years.
The Crowd: Shut up. You're the last person we want to hear from.

Wednesday, February 02, 2011

Reflections On the Little Pink House.

Word has reached the Dougloid Towers that Pfizer-you know, those wild and crazy guys who gave us dirty old men with hardons courtesy of Viagra-are in the process of a retrenchment or maybe some re-engineering or maybe rightsizing their operations in mesne places, including Groton, Connecticut.

It seems that Pfizer has shed around 40,000 jobs in the past six years or so, and many of Groton's jobs are on the chopping block.

And thereby hangs a tale.

The Little Pink House is the story of Suzette Kelo and her battle with Pfizer to keep her home in the Fort Trumbull neighborhood of New London, Connecticut-a hardscrabble town like a lot of other ones along the coast of New England.

The city, it seems, had taken an extra large swig of koolaid and determined that if they could assemble a large enough parcel of land in New London, right along the waterfront with all those nice views, you understand, that the folks at Pfizer would see fit to locate a research center right on that spot.

Along with this would come fancy condominiums, restaurants, and other amenities for the kind of folks who extend their pinkie when sipping their tea, don't you know.

The problem was, of course, that there were all these pesky people like Suzette Kelo and others of modest means with small houses in the Fort Trumbull neighborhood who liked the water views just as well as the folks who, the city was assured by Pfizer, would be coming to spend oodles of cash and thereby bulk up the coffers of New London.

The city instituted the process of eminent domain condemnation against the homeowners, and in a hard fought battle, prevailed against the pesky people.

The struggle made it all the way to the Supremes in Washington, and to his everlasting credit Mr. Justice Clarence Thomas said this in his dissent to the majority opinion:

"The consequences of today’s decision are not difficult to predict, and promise to be harmful. So-called “urban renewal” programs provide some compensation for the properties they take, but no compensation is possible for the subjective value of these lands to the individuals displaced and the indignity inflicted by uprooting them from their homes. Allowing the government to take property solely for public purposes is bad enough, but extending the concept of public purpose to encompass any economically beneficial goal guarantees that these losses will fall disproportionately on poor communities. Those communities are not only systematically less likely to put their lands to the highest and best social use, but are also the least politically powerful. If ever there were justification for intrusive judicial review of constitutional provisions that protect discrete and insular minorities, surely that principle would apply with great force to the powerless groups and individuals the Public Use Clause protects.

The deferential standard this Court has adopted for the Public Use Clause is therefore deeply perverse. It encourages “those citizens with dis-proportionate influence and power in the political process, including large corporations and development firms” to victimize the weak."

To her credit, Madam Justice O'Connor had this to say:
Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result. “[T]hat alone is a just government,” wrote James Madison, “which impartially secures to every man, whatever is his own.”

After all was said and done and the modest homes had been bulldozed, the Pfizer caravan abandoned New London, to place its money in Groton-a much tonier zip code for folks who probably didn't want to move to a shot and a beer sailor's town like New London anyway.

In the end, it was vain to have imagined they would. It is never a wise idea to rise too far above your station in life, and that's as true for cities as it is for people.

The Fort Trumbull neighborhood at last report was still a bunch of vacant lots alongside the water treatment plant, and Pfizer has itself a new chief executive who brings with him a whiff of a fellow whimsically called "Chainsaw Al".

Ian Read has promised to slash the budget and to close their research facility in Sandwich, England among other things.

If there's a moral to the story it is this, and the city fathers of New London and a thousand other wide spots in the road ought to heed it well: When you lie down with dogs, you'll get up with fleas.