Scott Harshbarger, "No You Can't!"

Hi folks. I hope everyone is well.  I've been really busy but saw a blog entry on Boston.com by former Massachusetts attorney general Scott Harshbarger that is so profoundly stupid, I just had to write.  In  it "YES WE CAN Reduce Urban Violence Part 1" (kind of reminds me of Archie Bell and the Drells "Tighten Up (Part 1)"".. we're from Houston Texas and we can dance just as good as we walk!")  Unfortunately,  the stupidity that Mr. Harshbarger is trying to pass off as logic, makes Archie Bell, et al sound like Miles Davis or Art Tatum.  It's really unbelievable to me that someone like Luther is still talking about nonsense that thinking people dismissed a decade ago.

There a million different theories on how to reduce crime and each proponent can drag up statistics to support their own cause.  But when Mr. Hashbarger drags up a theory and presents it as fact, and it is patently wrong, it just casts doubt on everything else he said.

He drags out of the wastebasket, the "Boston Miracle"!! Once again he's taking credit for the methodology (he describes in the article), and carried out by many agencies, community and religious groups to bring down violent crime by as much as 66-75% from it's Boston peak in 1986.  And yes, crime did drop in Boston over that period of time.

There is just one problem, crime also dropped in New York City, further and faster than Boston, but Mayor Giuliani used a very different tactic .. the "Broken Window" theory.  But there is more, crime dropped in Philadelphia, Chicago, St Louis, Atlanta, Baltimore, Washington DC, Los Angeles, and in every major and mid sized city in the country.  Even traditional crime basket cases like Detroit, Newark, and New Orleans saw huge drops in violent crime.  So, either every city did something equally effective as Boston and New York or, crime dropped no matter what you did.  That's hardly an endorsement for the "Boston Miracle".  Metaphorically, "the tide went out", and Harshbarger is still taking credit for it.

Part of the irony is that Giuliani's supporters in New York still blame the previous mayor, David Dinkins, for being soft on crime. But the rate of crime in New York started dropping during the last two years of Dinkins' administration ... it was still within the range of variability and just wasn't obvious at the time.

So what happened?  Here too there are plenty of theories of what REALLY took place.  In "Freakonomics", Steven Levitt and Stephen Dubner suggest that Supreme Court's 1974 decision "Roe vs Wade" legalizing abortion as the cause.  In a February 2004 Scientific American article by Richard Rosenfeld suggests that all the theories are wrong (or incomplete) because there were actually two different drops in crime ... first a drop in crime by young perpetrators (under 25) followed several years later by a drop in crime by older "lifelong" criminals.  No theory could yet explain both.

Needless to say, for any reasonable person (clearly that leaves out Scott Harshbarger) the cause of the nationwide drop in violent crime that began in the mid 80's is still open for debate.  But if the best Harshbarger can bring to the table is the long since refuted  "Boston Miracle" (refudiated to Sarah Palin) ..... then he truly has nothing to add.

Boston Globe "Bad", New York Times "Much Worse"

In my last post I made mention of the fact that, since neither the Boston Globe nor the Globe editorial board had made any resoundingly stupid comments on Boston real estate lately, I had been reduced to writing about other stupid comments and articles on other issues.  (There is no shortage of "Stupid Boston Globe Tricks" there!)

It's not that I don't have opinions about other issues i.e. global warming, the fate of the Euro, the BP Deepwater Horizon fiasco off the coast of my beloved New Orleans, the CLEARLY blown call at first base that cost Detroit Tigers pitcher Armando Galarraga his earned perfect game, and more.  Nor is it that I don't keep up on those issues, I try to keep up on the latest of a host of issues getting information from myriad sources on-line (I'm hooked on "Politico.com, reading the Boston Herald and the Boston Globe (which I used to subscribe to when I lived in Boston)), The Wall Street Journal, The Economist, Scientific American and Nature ... I really try to keep up.  But real estate is what I know best and feel in my bones (well, sometimes it's the arthritis in my knees .... but besides that) and it's real estate I'd like to stick with when possible.  Fortunately, in the midst of a fallow period at the Globe, their corporate parent "The New York Times", presented me with a piece of lying, half truth, leaving out pertinent facts, garbage story on Boston real estate that really demonstrates how little they care for the facts, especially  when it might interfere with their do-good dogma.

I was googling some information on mortgage foreclosures when I stumbled upon  an article that ran in the New York Times on March 21, 2010 titled "Finding in Foreclosure a Beginning, Not an End" by John Leland.  

Those of you that have been with me a while will recognize the misinformation fairly quickly.  In Mr Leland's essay he gives us examples of persons who, we're led to believe, acted in good faith to resolve defaults and foreclosure issues with the banks that held mortgages that, given the collapse of the real estate market (especially in minority urban areas)  now had principal balances well in excess of the value of the secured real estate.  In some cases the homes were worth half of the mortgage balances.

While the banks played "hardball" when negotiating prior to foreclosure, now that the foreclosures had taken place and the banks (or mortgagees) had taken possession of the properties, those foreclosed (prior) owners that had not moved out of their former homes, or who were fighting their evictions, had more leverage now then before the actual foreclosure (of course, nowhere in the article does it mention that they're being foreclosed because THEY WEREN'T PAYING THEIR BILLS!!!).  And now, these persons  have powerful allies like "..  Boston Community Capital, a nonprofit community development financial institution, and a housing advocacy group called City Life/Vida Urbana, working with law students and professors at Harvard Law School."

So, who are these do-gooders helping?  The first two words in the article introduce us to Jane Petion who owned her home at 3 Cardington Street in Roxbury and saw the value of her house rise for 15 years before  "..   the housing bubble burst, .. (prices) .. plunge at a sickening pace that left her owing $400,000 on a house worth closer to $250,000.

Fortunately Boston Community Capital is able to put together a deal where the  property was purchased from the mortgagee, then they sold it back to Ms Petion for $286,875 (64% less than the original principal on the foreclosed mortgage .... NOT including unmade payments, principal, penalties and legal costs)  and financed with a mortgage to Aura Mortgage Advisors, a non-profit mortgage lender, for $279,000.  Ah, bliss.  Out of uncertainty and despair ... peace and stability.  Ain't liberals wonderful?

 

Further we learn of Ursula Humes.  Ms Humes is a "transit police detective" (MBTA) who's $440,000 mortgage now dwarfs the value of her home after the real estate market crash.  She has been foreclosed and has now gotten her notice that she will be evicted in 48 hours.  Her boxes are packed and she's hoping for a miracle ... one that, despite every effort of this subset of "do-googer nation", isn't going to happen.   Though the mortgagee had agree to sell the property to Boston Community Capital for $260,000, after further "... assessing Mrs. Hume’s finances, the nonprofit asked for a lower selling price, and the lender refused. "

"Many commercial lenders, similarly, would shy away from such a program because it involves writing mortgages for borrowers who have already defaulted once — a high risk for a small reward.", the Times tells us. (Italics and color accent mine)

(There is also one other person listed, Roberto Velesquez, who's story is not nearly so misrepresented, so I won't spend any more time on it.)

So, by now, some of you are asking yourselves "Just how complete a misanthrope must Anderson be that he knocks people helping those that have been foreclosed, considering ALL of the economic dislocations that have taken place during this "Great Recession"?" (Misanthrope?? you can fill in the adjective of your choice)

So lets start with the poor Jane Petion.  As I've mentioned before, if there is a name or an address I go right to the pertinent registry of deeds, here Suffolk County.  It's here we learn that Ms. Petion's mortgage which was foreclosed was originally for $448,000 to SLM Financial recorded on 05/20/2005 and was secured by the real estate at 3 Cardington Street in Roxbury (near Egelston Square).  But it wasn't her first mortgage on the property, nor was it her second .. or third ... or .... it was her 7TH!

You see, the reporter, John Leland nor any of the editors at the Times that reviewed the article, seemed to think it was important to let the reader know that Ms Petion purchased the above noted two family house way back on 10/31/1994 for the earth shattering price of $43,000 (Book 19414 Page 079) with a low down payment do-gooder mortgage to Bank of  Boston for $40,850 (95% L/V)  In the early 90's prices rose slowly but as they started to rise faster, Ms Petion was able to start using her home as an ATM ...... and she did with a vengeance!

Normally I'd give a running narrative about the mortgages she gets but, to save time writing (and you reading),  I'll just list them so you can see why Ms Petion's foreclosure plight leaves me less than sympathetic:

10/29/1997 Citizens Mortgage Corp.   $82,000

05/06/1999 Citizens Mortgage Corp.   $23,000 (2nd Mortgage)

12/05/2000 Massachusetts Co-op Bank   $130,000

09/30/2002 Wells Fargo Home Mortgage $200,000

05/27/2003 Wells Fargo Home Mortgage $304,000

11/24/2004 Wells Fargo Home Mortgage $360,000 and finally

05/20/2005 SLM Financial Corp.   $448,000

So The New York Times didn't seem to think that, the fact that Ms Petion cashed out $407,250 in mortgages TAX FREE (less closing costs) and still didn't pay her mortgage which lead to her being foreclosed, might be a pertinent part of the story?  I don't know how you felt before, but I'll bet you feel a lot less sorry for her now!  This is not a person deserving of sympathy, and certainly not deserving of the assistance of scores of do-gooders .... she a deadbeat!! a stiff!!  a bum!! AND I'd like to know what the hell ever happened to the $400,000!!!!

But believe me, we're just getting started with Jane Petion.

You see, while she was spending $400,000 of tax free money, she also bought a piece of investment property at 36 Cobden Street just around the corner from her home.  She (or a person with the same name who's signature on the mortgages look identical to her's) bought the three family house on 06/29/2005 for $375,000 (37431/125) with piggy-back mortgages to (the previously mentioned) SLM Financial Corp. totaling $365,250. (95% L/V)  Unfortunately, (I know you'll be shocked by this ... where's Claud Rains when we need him?) she wasn't a whole lot better at paying the mortgage on her investment property and lost it to foreclosure to the mortgagee, LaSalle Bank, Trustee, on 01/20/2009.  

No I'm not done ... you see she also used 36 Cobden Street as an ATM!!! She borrowed:

$371,000 from SLM Financial on 06/29/2005,

$388,500 from Prime Mortgage Financial on 07/31/2006,

$471,750 from Prime Mortgage Financial on 10/20/2006 (two piggy-back mortgages)

before losing the home to foreclosure.  So this time she walks away with an additional $106,500 dollars (before closing costs).  That means she cashed out more than a half million dollars!!!! and still didn't pay her bills!!!

How could ANY thinking person believe that is some sort of victim that needs to be helped to buy her home back?  She does need help ..... help to learn how to pay the bills she agreed to take on and promised to pay back.  She might also need psychiatric help .. but that's for others to determine. 

And I know you were afraid I was going to say this ..... "But wait!!! There's More!!"

One of the things I didn't mention was that Jane purchased 36 Cobden Street with Ricardo Petion.  The deed for Cobden Street refers to them as "tenants by the entirety" so they must be husband and wife, but that throws another wrinkle in the plot line.  You see, while Jane Petion owned 3 Cardington Street, Ricardo Petion owned 2 Cardington Street, a different 2 family home directly across the street !!!!! I swear .... you can't make this shit up!!!  And it gets even better.

Ricardo Petion purchases 2 Cardington Street from Paulette Johnson (aka Paulette Partin aka Paulette Martin) for $128,000 on 02/21/2001 (26532/200) with a mortgage to GMAC Mortgage for $159,850 (I have to assume it was a purchase money mortgage with construction funds to improve the property ...... or something else that could be perfectly legit!)  I know that you'll again be shocked, just SHOCKED to learn that Ricardo is not very good at paying bills either and he loses 2 Cardington Street to foreclosure on 03/19/2008 (43271/018).

Now your probably saying , "No, he didn't?" ... but I have to add, not only did he ... but, because of several $1.00 deeds between them, he and Jane Pation, cashed out more money in the form of the following mortgages:

12/19/2002 New Century Mortgage Corp. $205,000 and

12/02/2005 SLM Financial Corp (Look familiar?) $371,000.  

So these two deadbeat's cashed out $734,900 .... that's right ... ALMOST 3/4 OF A MILLION DOLLARS (less closing costs) ....... spent the money on god knows what ....... then they're helped by the above mentioned "sitting at the right hand of the father" do-godders to buy their home back.  In fact .. it's kind of sweet in that, after $725,000 spent, they're finely together as joint owners of the same home, 3 Cardington Street.  Kind of nice and homey .... and I think I'm going to puke.  

All you people out there that didn't take those vacations you really wanted because you were being frugal, or perhaps the extra job you took to make enough money so you didn't succumb to the temptations of using your home as an ATM,  Jane and Ricardo Petion just showed you how big a fool and what suckers you were!!!!   You could have spent every penny like they did, you could have had vacations ... cars.... spoiled your kids rotten ...  (a little sweetie on the side maybe?) anything you wanted and Boston Community Capital, etal, would have helped you buy your home back at a fraction of the last mortgage!!!!   (And the left thinks Wall Street perverted capitalism??)

And the New York Times didn't think ANY of this information was pertinent to the story ....... or would it have been inconvenient to the paper's ideology?? ..... or did they check anything at all?

Please don't worry ... Ursula Humes doesn't have as long a story but almost as perverse.  As I mentioned above, despite all of the efforts of do-gooder nation, Ms Humes acquiesces that, “I depleted my retirement account and everything I owned, but I’m still going to lose it.” Dave Grossman, director of the Harvard Legal Aid Bureau adds, "This is a case that doesn’t have a happy ending,”.

So what was so special about Ms Humes case that SHE couldn't buy her house back?  There could be a thousand different issues but the article mentions one that I'll address.  Though the article mentions that lenders are not really happy to be lending to "... borrowers who have already defaulted once ..."(remember .. the italics and highlight color is mine), but since the program is set up to help people buy back their homes after they have been foreclosed ... EVERYBODY in the program must have defaulted ONCE!  So let's look at Ms Humes' case.

Ursula Humes lost her large single family home at 18 King Street with a foreclosure deed recorded on 05/22/2009 (44967/099) because of her default on her mortgage to Wells Fargo Bank, NA for $440,000 and recorded on 05/31/2005.  Now, I'm sure I won't surprise you by pointing out that this was not a "purchase money" mortgage .... of course, it was a refinance "cash out" mortgage ....... like the 6 mortgages  before it!!

Again, we have a person who, instead of being careful and frugal, used her home as an ATM, spent every dollar that came in for everything but (obviously) paying her bills and lost her home because of nothing other than their own deadbeat behavior. 

She purchased her home on 06/10/1994 for $129,000 financed with a mortgage to Shawmut Mortgage Co. for $129,000.* Again, I'll spare you my usual pithy narrative and just list the "cash out" mortgages and other "interesting" public documents:

05/30/1995 Bankruptcy (That didn't take long!)

03/27/1997 Intent to Foreclose Mortgage

04/20/1999 Intent to Foreclose Mortgage

05/23/2000 Intent to Foreclose mortgage to Beneficial Mass Inc. (What?)**

09/06/2000 First Franklin Mortgage $170,000

12/07/2000 Lien Boston Gas Company $8,707 (What other bills aren't being paid?)

01/26/2001 MBTA Employees Credit Union $200,000

02/20/2001 MBTA Employees Credit Union $24,500

10/18/2001 Beneficial Massachusetts Inc. $15,000

05/06/2002 East-West Mortgage Co. $256,000

10/16/2002 MBTA Employees Credit Union $300,000

12/22/2003 Washington Mutual Bank FA $375,000

05/31/2005 Wells Fargo Bank NA $440,000

Again .. another dead beat that cashes out and spends $311,000 (less closing costs) and again isn't paying her bills!   Now remember, the Times article gives the information that she is a detective at the MBTA.   Nobody is going to confuse an MBTA salary with that of an investment banker .... but a nice union gig for the "T" is nice upper "blue collar" ... lower "middle class" paycheck so, she spent more than $300,000 IN ADDITION TO WHATEVER SHE EARNED AT THE "T" .. AND CLEARLY SPENT. 

We also know that she cleaned out her retirement and STILL she wasn't paying her bills.  WHERE THE HELL DID ALL THE MONEY GO!!!!!

Now, of course, she didn't get a new mortgage and couldn't buy her house back ....... WHAT MADE ANYONE THINK SHE SHOULD!!!!!

And you were afraid I was going to say it ..... "BUT WAIT .... THERE'S MORE!!!"

You see, in the early 1990's, not only were banks being hammed for not lending in minority areas, they were being brought to task for those that (allegedly) didn't have access to "traditional" banking so sought out the lenders that were sort of "pre-subprime".  This included the Main Street (but high cost) lenders like Beneficial Finance and Household Finance (HFC), but also a wide array of lightly regulated lenders the do-gooders thought only  small step up from loan-sharks.  Because of this banks were encouraged (really extorted) to give those that lost their homes to these ersatzes loan-sharks another chance, that brings us back to Ursula Humes.

You see, while John Leland and the New York Times point out that lenders don't want to deal with mortgagors that have defaulted "once" ... they conveniently fail to tell us that Ursula Humes had been foreclosed on TWICE!!!!! (Was that an oversight ???? I don't think so.  They either "conveniently" overlooked it ..... or simply didn't bother to check anything.  You know, when god whispers in your ear .... why check the details?  Did Moses check to see if the Red Sea would open??)

Ms. Humes' first home purchase was at 23 Duke Street in Matapan that she purchased on 02/09/1987 for $100,000 (13394/003), along with co-buyers Craig Humes and Hilda Johnson, with a mortgage to Home Owners Federal Savings & Loan for $95,000 (Aren't we told over and over again that banks weren't lending in black neighborhoods ..... and if they would they were requiring large down-payments???  I guess this is just another in a LONG list of anomalies.  Because the do-gooders couldn't be wrong ... could they???  Or do they just lie?

And again .... I'll just list the recorded detail:

11/18/1987 Financial Statement  BayBank Norfolk (replacement windows) sadly, almost a guarantee of a future foreclosure.

03/16/1988 Lien Baybank Boston NA (default of replacement windows loan)

05/01/1990 Intent to Foreclose Mortgage

01/18/1992 Lien Household Finance Corp. $5,099 (unsecured debt)

08/18/1992 Intent to Foreclose Mortgage

So here we have the ultimate perversion of home-ownership .... deadbeats that lose their homes time and time again .... deadbeats that cash-out more than $700,000 and spend it on whatever and DON'T pay their bills ..... and they are helped by do-gooders because of ...... what?????  Because they're victims? Of what .. their own stupidity?  Wait .... maybe WE'RE the stupid ones?

You want to see examples of why minority neighborhood fail to prosper ..... this is it!!! ... and this systemic economic failure is enabled by half wit do-gooders who don't seem to have clue what they're doing except that they know it's "right"!

When did our noble desire to help ..... to help the weak .... to help the downtrodden ... to help those that have been all too clearly discriminated against, or even those who just never seem to get a break, trans-mutate into helping people that have been handed what they need .... and then piss on and destroy that which they got from our help.  When did helping the disenfranchised become helping those that were skillful enough to walk away with $700,000 in cash but end up not paying their bills and losing their TWO HOMES AND THEIR INVESTMENT PROPERTY.  I don't remember that being being how we determine who needs to be helped!!  And the woman that lost TWO homes to foreclosure because she didn't pay her bills, but sure as hell knew how to flush cash out of her homes.  IS THAT A NEW PROTECTED CLASS!!!

I read a long time ago that "perverse incentives are incentives for perverse behavior".  Helping habitual deadbeats and "stiffs" .. is an incentive for people to be, deadbeats and "stiffs".  Welcome to contemporary urban America.

*(PLEASE NOTE: At this time Banks were still reeling from the 1992 study by the Federal Reserve Bank of Boston that purported to clearly show that banks were discriminating on the basis of race when it came to approving mortgages in the metropolitan Boston area (AGAIN  PLEASE NOTE: The Fed study ONLY looked at Federally charted lending institutions ... not all lenders).  In this environment there were hosts of organizations like Bruce Marks' UNAC (now NACA), ACORN and many others that were trying to get banks to cooperate with them so they could act as "originators" for the mortgage lenders.  Though Bruce Marks later became famously (or infamously) associated with Fleet Bank, some his earliest "test" mortgage originations were with Shawmut Bank and a few of those were 100% L/V mortgages.  Though this LOOKS as if it might be an UNAC originated mortgage ... the lack of any documentation  to that effect makes it imposable for me to state that it is or it isn't ..... though it looks like other similar documented UNAC originated mortgages.  Further, at least two other properties were purchased by this speculator and flipped to buyers that definitely were buyers who's mortgages WERE originated with UNAC, at big profits to the seller with accordingly larger mortgages to the "helped" buyers.  See "Shocking" Round up the usual cliches ... er ... suspects.)

** Those of you that were REALLY paying attention might have wondered how Beneficial Mass Inc. could have filed a notice to foreclose on Ms Humes home on King Street ..... but there was no mortgage to Beneficial recorded.  You'll notice that Household Finance places a lien on her first home on Duke Street that is never discharged.  Household was purchased by Beneficial Mass then files a civil action to foreclose the King Street house to satisfy the previous debt that must have grown to $15,000 as time has passed (interest and penalties).  Interestingly, though she declared bankruptcy in 1995, she must have forgotten about the Household debt such that it doesn't seem to have been released in bankruptcy.  She then gets a $15,000 mortgage secured by King Street that is discharged by subsequent refinances.  Beneficial 1, Humes 0!

Just admit it, "Bowdoin Street IS no place for children!"

First of all, I want to start off by apologizing for getting away from my regular perspective which is real estate and how the "Boston Globe" NEVER seems to represent what is happening in the City's real estate markets correctly.  It's not my fault that the Globe, particularly the Globe editorials, hasn't said anything stupid about Boston real estate lately.  They HAVE said things that are stupid, and avoided commenting on other events that mighty cause them to correct previous positions they've taken, but it hasn't been about real estate.*

By now I'm sure just about everyone has heard about the poor 14 year old "child" that was knocked off his brother's scooter on Bowdoin Street and shot and killed by a few of the local punks on Monday the 31st of May. (Not even animals kill for no reason). "Nightmare Comes True"

In today's (06/02/2010)  Boston Globe editorial "No Place for children" the Globe admits that ".. social pathologies that infect the Bowdoin Street area of Dorchester.." are deep seeded and won't succumb to easy solutions", but then goes to add that at, ".. least the city could provide a few safe places for children in the area to play."  So they suggest a new "playground or park".  Huh???

Here we see the Globe at it's pop-pseudosociology "politically correct" best.  While a playground won't solve the problem it at least shows the residents that "... the city is looking out for them." WHAT??  (Can't you just hear someone saying, "My son was killed but, hey, we got a new playground.")  The Globe also adds that the playground, or park, will instill a "... community culture that points lives in a more positive direction."  (Or, "I gonna shoot yo' sorry ass, but I gotta new playground so I let you go.")

Has the Globe decided that, because the problems are huge and the solutions are difficult, that we just go around and do things that are stupid?  Just what are they smoking over on Morrissey Boulevard??? (And how can I get some?)

Now, as usual, you may agree or you may disagree with me.  That's fine.  But there is just one major problem with the story,  though the editorial lauds the City saying that  parks and playgrounds are one thing they generally do well, the Globe goes on to add "... but not in this part of Dorchester."  Could somebody kindly get the writer of this essay a map?

The child that was killed lived on Norton Street (The exact number isn't important).  But if you start at his house and head up Norton Street and turn left on Bowdoin Street, and then right on Mount Ida Road, it's a  whopping .4 miles to Ronan Park ... an 11.65 acre park with playground areas for small children,  there are basketball courts for older kids, there are large expanses of grass for just running and baseball fields for just having fun.  In effect, the Boston Globe has suggested for the neighborhood, what the neighborhood already has, and is underutilized.

It's good that, at least, the Globe admits that the playgrounds aren't a solution, Ronan Park is not without it's own crime problems.  There have been muggins and murders on abutting Juliette Street, Draper Street, a triple killing on Mount Ida Road last year and the high profile murder of John Beresford in 2005 (an activist working to improve the quality of life in and around Ronan Park) resulted in the installation of emergency phones to the police in the park.
 
And even if the Globe editorial writer thinks a "tot lot" would be nice to have even closer than Ronan Park, THERE IS ONE .2 miles away on Tebroc Street (that the writer makes reference to).  And though the writer quotes the young murder victim's father as  saying he " couldn’t remember the last time the lot was anything but empty, fenced-in space.  And he’s been living in the area since 1970."  Did the writer check??  I remember when that 'tot lot" was built on the site of a lot long vacant since the house on it was torn down.  I don't remember the year but it was during the Menino administration.  A Boston Globe article of 12/28/2002, following one of the "let's make Menino feel good" Christmas walks through the neighborhood,  was titled "A BOUNCE ON BOWDOIN St.".  In it the Globe "puffed up the administration" in  that "A tot lot stands on Tebroc Street where the Vamp Hill gang once reigned."

So why does the Boston Globe feel ANOTHER park will be any more successful than the gang "spray painted" dump Menino's Tebroc  Street "tot lot" has become?

Maybe it's about time to admit that, since nothing can be done about the violent crime in the area,  if you really care about your child's safety ... it's time to leave!  The large show of force by the Boston police will fade after a few weeks and move elsewhere ... it always does .. till the next high profile murder.

Moron Men ... I mean, Mayor Menino can say all he wants that the Bowdoin Street area "...  is a good neighborhood .."    and that crime in the area is "... not out of control ..." as he did in yesterday's Boston Herald.  He's wrong!  The shooting of an Innocent child on the streets in broad daylight, EVEN IF IT WAS AN EXTREMELY ANOMALOUS EVENT (unfortunately it's not), means things have gotten out of control.  That there are good hard working families in the area is true, but that doesn't make it a good neighborhood, as the list below of nearby violent crimes during the last year testify.

(1) Stabbing Inwood Street 09/04/2009
(2) Two shot 56 Norton Street 10/31/2009
(3) Two shot, Norton and Bowdoin Streets 11/16/2009
(4) Shooting 35 Westville Street 11/17/2010
(5) Murder 315 Geneva Avenue 01/01/2010
(6) Murder 85 Draper Street 03/03/2010
(7) Teen killed in gunfight with police 11 Navallus Terrace 04/03/2010

This isn't "out of control"??  This is a "good neighborhood"??

As usual, the only accurate part of a Globe editorial is the title.  It's time for Boston's clown mayor (and his enablers at the Boston Globe editorial board) to admit, Bowdoin Street has become "No Place for Children".

"Shocking" Round up the usual cliches ... er ... suspects.

I may have to reconsider the name of this blog .... maybe it should be "Stupid Derrick Z. Jackson" tricks considering his latest hypocritical blathering in today's "Boston Globe" (May 18, 2010)An elusive payoff   Gains elsewhere belie a wealth gap for black families

In his essay he brings up anecdotes to demonstrate the progress blacks have made in the pursuit of the "American Dream" of housing.  More than 50% of blacks now live in the suburbs instead of core urban areas and even a black president has moved into the White House.

But he then cautions that all is not as it appears because of HUGE disparities in the amount of accumulated wealth between blacks and whites. He mentions a study just released by Brandeis University’s Institute on Assets and Social Policy that shows the gap  in wealth (between blacks and whites .. excluding housing equity) has been growing and has almost quadrupled in the last 25 years.  It's here that Jackson seems to have rounded up all the "usual suspects" of hackneyed cliches and arguments based on racism that either don't stand up to the most perfunctory analysis or that are so incompletely thought out that I wouldn't have allowed my teenage kids to use them in an high school science project.

To Mr. Jackson, the " ..the asset gap is probably embedded in America’s housing and lending structure.." and he then goes on to add the "factoid" that "which still rejects African-American households at higher rates than similar-earning white households for housing and home equity loans. That disproportionately forces black families into more onerous financial arrangements."  "Yawn"  (I don't think Derrick Jackson is stupid but, if he's not, I'm glad he's so intellectually lazy .... it makes debunking him that much easier.

In the article it's impossible to tell if it's one of the studies co-authors (Thomas Shapiro) claiming, or it's it's Mr Jackson who says, the study " ..belie the stereotype that African-Americans are less wise with their money, since savings rates of black and white households are similar by income."  That's just nonsense.  That the savings rate for blacks and whites is similar by income means only that the savings rate is similar by income ... nothing more nothing less.  And it is explicitly lacking in any information on how the rest of income is spent!!  ANY disparities in the handling of money NOT SAVED (that is, the money spent) may very well lead to spending patterns that some may deem "less wise"  and result in differential "wealth accumulation" outcomes.  See how easy it is Derrick?

Yes, blacks are rejected for loans and mortgages at higher rates than whites and, "in general", are accepted with rates that are not as good as whites.  This was pointed out clearly in the 1992 Federal Reserve Bank of Boston study that "allegedly" found patterns of lending discrimination in the Metropolitan Boston area.  That same study also clearly stated that whites had higher credit scores than blacks.  In fact, the Boston Fed had to wade through reams of data to find out how much of the difference could be attributed to "real" differences in how people handled their money (REAL credit worthiness), job stability, down payment, ratio of income to anticipated debt .... all the REAL issues that determine an application's fate.  In fact, it was only after these factors were taken into consideration and 85% of the "apparent disparities" disappeared, did the Boston Fed determine that the small amount left was the result of discrimination.  Thus,  85% of what Mr Jackson might alleged is discrimination the Boston Fed found represented REAL differences in credit worthiness.

(Please note, that Boston Fed study has been reexamined and many claim that the methodology was so flawed that even that small remaining disparity might be a mirage.    One critic even hinting the study was "consciously fraudulent" (Roberts 1993).  I was always shocked that almost 30% of the mortgage applications that were declined,  the Fed didn't use in the study because the applications were so incomplete as to be statistically useless.  I always wondered how not using 30% of one subset might have affected the final result.)

More importantly, this notion of "discrimination in lending" also fails to address that REAL discrimination is not new or that there is a very easy way to bypass the discrimination and access capital ....... racial and ethically based banks and credit unions.  In the early 20th century, when those loud, coarse, "clever" Jews were denied mortgages at traditional banks they established their own banks like the Grove Hall Savings Bank in Roxbury, the Blue Hill Credit Union and others.  Those loud Italian thugs had the same option with Italian run institutions like the Haymarket Co-op Bank, Noodle Island Credit Union (East Boston) and others.  And even those brawling loutish Irish drunks who were not welcome in much of Boston, let alone the "Yankee" banks, could get banking services at Irish run Meeting House Co--op Bank, Massachusetts Co-op Bank, and myriad credit unions.  And those neighborhoods of immigrants grew as those banks supplied capital for mortgages, loans for small businesses, and a places for the these immigrants and their children to safely keep their new earned wealth.  Surly Grove Hall Savings might deny a Dorchester Jew a mortgage .... but just as surly,  it had nothing to do with antisemitism.

Blacks in Boston did not take that option (or were denied that option) until the Unity Bank and Trust Company was established in Roxbury in 1968.   Unity Bank quickly became a major lender for mortgages and business loans in Boston's largely black neighborhoods.  Further, to make sure a bank lending to a lower income group wouldn't be under capitalized, all of the guilty conscious do-gooders (and their businesses, Boston Gas, Boston Electric, Prudential, Harvard, Polaroid (remember them?), and numerous others)  put deposits in Unity Bank.  But instead of prospering while it's long denied core target population finally got the capital input it wanted ... Unity was soon on life support and finally failed in 1982 under the weight of massive mortgage foreclosures and failed business loans.

(I've long lost the source of the quote, but I remember it as if it was just yesterday) one of Unity's board members claimed, after the failure that, "We loaned with our hearts, not our heads."  THAT quote speaks volumes because,  if there were enough good credit risks in the Boston area black population Unity would never HAD to make a loan using their heart instead of their head.  As opposed to the "Grove Hall/antisemitism" example I used above, in this case "Unity Bank" DIDN'T deny loans it should have ..... and it specifically had to do with race!

Unfortunately, this evidence of financial dysfunction didn't end with Unity Bank's failure.  Phoenix-like, of out Unity Bank's ashes rose the Boston Bank of Commerce (BBC).  For a short time it was also a lender of mortgages and business loans and like Unity, was crippled by waves of defaults and foreclosures.  Though it's impossible to prove, to many it seemed that the only thing keeping BBC alive was the idea that the Fed didn't want Boston's only black run bank for fail for the second time in 15 years and that the mid 90's heralded in the era of banking mergers.   So bad was BBC's  banking business that it's "business plan" seemed to be having State Senator Dianne Wilkerson petition the Federal Reserve Bank of Boston to make the merging banks put capital in BBC as a requirement for allowing  the merger.  (Ironically, Senator "Cash in her bra" Wilkerson forgot to disclose she was a paid lobbyist for BBC while she was extorting money out of the banks.)  So, again Derrick, where were all the creditworthy borrowers when BBC couldn't seem to find them??  Certainly it had nothing to do with racism.

Boston still has a black run bank.  The Boston Bank of Commerce was kept alive long enough to allow the arrival of the fabulously successful Kevin Cohen, his wife and their management team in 1995.  The bank has been so well run that it set out to acquire other black run banks and become (I believe) the largest black owned bank in the country and it's name has been changed to OneUnited Bank.

Ironically, something odd has happened since the Cohee's arrived ... it has virtually abandoned residential mortgage lending in Boston's black neighborhoods.  It is a well run bank and tries not to make stupid loans .... is that why it's written fewer than a dozen standard residential mortgages in Suffolk County in the last decade ... and many of those outside of  predominately black areas of Roxbury and Dorchester?  Since OneUnited Bank isn't a racist bank, is THIS what creditworthy mortgage lending looks like in minority neighborhoods?

So, Derrick, since even the Boston Fed report that "finds" discrimination exists but also finds that about 85% of apparent disparity is legitimate, does this really  ".. disproportionately forces black families into more onerous financial arrangements.." or are these disparities LARGELY a result of something other than discrimination?  And if it's not discrimination, might the disparities be the result of blacks being, at least to some degree, ".. less wise with their money"?  Hell, not even Kevin Cohee loans to them!

And while Mr Jackson continues with the old tired (flawed) arguments about discrimination, he fails to mention the horrific outcomes of the programs thought up by liberals, do-gooders, those whites with a conscious guilty over their success and other halfwits (you know, Liberals), intended to ameliorate the racial disparities in our society.

Will he ever remind us of 1968, following years of similar sounding complaints about the Federal Housing Administration home mortgages favoring new suburban development and denying mortgages of older urban homes, the FHA announced plans to adjust eligibility to make mortgages easier to get in urban homes?  Locally it was administered though a collaboration called the Boston Banks Urban Renewal Group ..... the rightfully loathed BBURG.  So poorly was it planned and executed that  it resulted in the large scale flight of the  largest Jewish community northeast of New York City,  and the collapse in the value of home purchased by blacks because of a rise in crime and waves of foreclosures.  As I've said so often ... "White's get the money (on the sale of the home) and blacks get the mortgages." that are now larger than the value of the homes.  Liberals pat themselves on the back for programs like these.

But this wasn't just a Boston phenomenon.  Though the Hart Commission, the congressional investigation into what went wrong, found there had been 1,800 foreclosures in the BBURG sold homes in Boston, the program was adopted on a larger scale in other cities with even more disastrous results ...... St Louis 3,000 foreclosures, Philadelphia 18,000 forecloses and good old progressive Detroit more than 26,000 foreclosures leaving dozens of square miles virtually uninhabited.  (See the Boston Globe's snide editorial about Mitt Romney's comments on what happened to Detroit. Romney: Liberals destroyed my house  Why doesn't the Globe remind people of the 1968 FHA housing and "doom black homeowners to failure" program?  Yet another stupid Boston Globe trick)

Those looking for racism as a factor in America's racial disparities rarely mention the "Savings & Loan" scandal of the 1980's as a causal factor ... that's because they don't know what they're talking about.  Though people still state with moral certitude that "black's couldn't get mortgages" or "banks weren't writing mortgages in Dorchester" ... they are still wrong.  YES, the federal charted institutions were being "parsimonious" with mortgage lending  in Dorchester and Roxbury (though people could and did get mortgages from them  (and see Boston Bank of Commerce above)) it was relatively easy to get mortgages from smaller state charted banks.  Dorchester Savings Bank (later First American Bank) had it's "Dorchester First" mortgage program and was a major lender in the late 70's early 80's.  Workingman's Co-op Bank, Boston 5 Cent Savings and others had branches in Dorchester and were lending ...... I know, I was selling real estate in Dorchester at the time and the local banks were MUCH easier to work with.  (I bought my first home in Dorchester with a mortgage from First American and my second with a mortgage from Workingman's) 

But by the mid 80's as the real estate market heated up and bank lending standards dropped (or disappeared in some cases) the desire to make sure the sale would go through led people to refer buyers to lenders like Northeastern Mortgage Co. University Bank, Progressive Consumers Federal CU, Dime Savings, Comfed and others that simply wouldn't turn down a loan.  When those banks started failing, and mortgage qualifying standards started rising, and those mortgages that never should have been written started defaulting, prices collapsed.  And those, in largely minority neighborhoods,  that didn't lose their homes to foreclosure  were left with mortgage principals far in excess of the value of their homes.  Voila !!  Less wealth for blacks!  Told you it was easy.

(I sold a house to a black couple in 1990 and by chance, there was a mortgage originator in the office when the P&S was signed, so I asked the originator to talk to the couple.  The originator (who I will not name because he still lives in and is active in Dorchester's civic life) put together a deal where we would "puff" the price so they wouldn't need a down payment (they would get the money back after the closing), lie about why they had a few late payments, falsify their income ... and then the husband interrupted, "I'm a minister ... I don't think I should be doing those things."  The originator shifted gears, and put together a legitimate mortgage package, it was approved, and the house sold.  But he was the ONLY person I ever heard object.  It was easier to put together a bogus mortgage than a legitimate one!)

But again, when banks cut back on lending following the real estate collapse in 1988-1993, the usual group of half-wits, morons and mental defectives (again, Liberals)  came out from under their rocks and pushed for banks to institute first time home buyer programs so all buyers (but with a healthy bias toward "traditionally undeserved buyers" .... minority buyers) could become homeowners.  This "democratization of home ownership" resulted in scores of programs like those run by Bruce Marks' NACA, ACORN (RIP), and others and programs like the "soft second" mortgage and, early on, the "InCity" loan program from Fleet Bank.  But these programs were, like BBURG 25 years earlier,  leaped upon by crooks, speculators and opportunist to turn the programs to their favor at the expense of "largely" minority home buyers.

Though Bruce Marks continues to claim the wonderful things he  is doing to help low income "largely" minority home buyers (and was named "Bostonian of the Year" a few years ago by the halfwits at the  Sunday "Boston Globe Magazine" ), he refuses to allow anyone access to NACA's raw data to analyze the success of the mortgages and the "helped" buyers home ownership.  I suspect the reason could be to keep people from seeing the truth.

One of the first homes in Dorchester that I know conclusively was purchased with a NACA originated mortgage was on Old Morton Street.  The NACA assisted buyers purchased the home from a speculator that bought the house two months earlier for $75,000 less and did no improvements.  So the white seller gets $75,000 and the minority buyers finance the seller's gain with a $75,000 larger mortgage and Bruce Marks pats himself on the back and tells everyone how wonderful he is.  Less than a year later the same speculator did the same thing on a house on Tonawanda Street and, again, walked away with $75,000 the black buyers had financed with their NACA originated mortgage.  I could give example after example but you get the point.  You know this happened  .. don't you Derrick??

Fleet's "InCity" program was even better taken advantage of.   "InCity" allowed buyers to use a 5 %  down payment but, up to 2 1/2% of the down payment could come from another  family member or from a "non-profit".  There were many doing essentially the same thing but there were two who really developed scamming black home buyers with Fleet mortgages into an art form.

One would buy three deckers and do some work (give the devil his due) but at a time when the median price for a three decker in Dorchester was $85,000, he was selling them for $180,000 and more (and these properties were in pretty crummy neighborhoods ... not the areas to justify a 100% premium).  But what he would do for the buyer was take her (almost always a single woman) to the Bank of Boston in Field Corner and open a savings account in the buyer's name and make a small deposit.  Then, week after week, take her to make an additional deposit to make it look as if she was saving for a down payment.  (Of course, HE kept the savings book).  After enough was saved she could buy his grossly overpriced home ..... hell, for a fee, he'll even get the tenants and manage the building (for another fee) and if things don't go well ..... he'd buy the building back!!! What a nice guy!!!  Unfortunately, the one buyer I spoke with that WANTED him to buy the building back found out he only want to pay what the building was worth ... which was half what she paid.  White guy rich .. black woman poor.   Keeping up with me Derrick?"

The second scam took advantage of the 2 1/2 % down payment from a "non-profit" opening.  The other developer would, again buy building or condo cheap from the plethora of foreclosures left over after the housing collapse in 1988-1992, and sell them to buyer's who could get a 2 1/2 % down payment from a black church in Dorchester (a non-profit).  There was only one catch, the down payment was only good for buyers of his own properties .... the ones he would purchase and resell for 2 to 3 times what he paid with little, if any, improvements.

You see, the seller was giving the church the down payment and using the black church to "launder" the down payment to his own buyers!  And since churches are one of the few organizations with an exemption from submitting financial statements with the Secretary of State .... there was no way to trace the money.  Genius.  White guy money .... black home buyer gets the mortgage to finance the white guy's gain.

These guys flipped about 90 properties in Dorchester before Fleet cut them off, but you knew that Derrick?  Didn't you??

(Mind you, Fleet's defense was that the properties in the second scam were "substantially renovated".  I pointed out to the Boston Fed the properties that had been sold one or two days after they had been purchased and one condo that the white speculator bought at foreclosure for $15,000 and sold to one of the "church" helped buyers for $70,000.  The two deeds were recorded five minutes apart.  I asked, "How much renovation can take place in five minutes".  The result ... one guy in Fleet lost his job and all the black buyers still owned grossly overpriced properties.)

Similar stories happened with loans through ACORN and through the "soft second" program,  but all of these programs defend themselves with data that "seems" to  show that their loans actually perform better than regular loans ... hence, the borrowers needed the loans and the loan programs are good.  BULLSHIT.  I have a few cornerstones to my intellectual pursuits and one is "A really well framed question is infinitely more interesting  than a well framed answer."  Do-gooders get the answers they want because they ask (and the Boston Globe accepts) lousy questions.

The loan programs mentioned above MAY be very well run and the defaults and foreclosures I see may be an aberration based on my "stop at the Boston city limits" perspective ...... but I don't think so.  The reason these loan programs appear to be a good thing is the way they pose the question .. that is, "If we loan a person money and they make the payments on time and pay off the loan ... then the loan is good and we've helped this person."  WRONG!!  All that line of reasoning means is that the loan was paid back .. nothing more nothing less.

As in the cases I've mentioned above, there was the sale of a two family house on Beech Street in Roslindale with a "soft second" mortgage and a grant from the City of Boston as a third mortgage.  The problem is that the buyer paid a speculator $125,000 more then he paid 5 weeks earlier for the house.  (Again, $125,000 to the white seller financed with a $125,000 larger mortgage by the Hispanic buyers).  BUT, if the buyer makes every payment on the mortgage and the mortgage is paid off it's considered a good mortgage.  Let me tell you, a mortgage who's principal is $125,000 more than the property is worth is NEVER a good mortgage to me ...... especially if the difference is paid by somebody I was pretending to help!  And that was BEFORE housing prices collapsed in 2008!

But it's even more nuanced than that.  Let's say a buyer with any of the "do-gooder" loans decides to do any of the normal things homeowners do .... put on a new roof,  add a deck, paint, new kitchen .... they can get a "line of credit", a second mortgage, or they can just refinance the first and get a new, slightly larger mortgage.  If they refinance, the purchase money mortgage(s) are paid off and are forever a "good mortgage".  No problem there ... perfect sense.

But what if the owner with the "do-gooder" mortgage is having trouble.  They pay the mortgage on the 14th .. before the late charge kicks in or, even paying the late charge, are paying on the 28th day so the mortgage is never 30 days late ... but all their other bills are late.  In the last decade, with property values rising and the easy access to "sub-prime" mortgages, it would have been simple to refinance with a sub-prime mortgage, forever establishing the original mortgage(s) good mortgages, even while the home buyer spirals from larger mortgage to larger mortgage with even more egregious terms ... perhaps ending in foreclosure.  Ironically,  the worse the original do-gooder mortgage,  the greater the probability it could have been paid off with sub-prime lending (again making the original mortgage forever a good loan) and the greater the probability of ultimate financial failure by the "helped" buyer.

What SHOULD have been done was to institute a longitudinal study to determine the ultimate success of the "helped" buyer.   Jim Campen (a  staunch supporter of the "soft second" program and a proponent of the notion of overt discrimination in mortgage lending) referred me to a woman in the Massachusetts Housing Partnership who clearly had no patience for anyone with the temerity to question the success of their programs.  When I explained my concerns and that a longitudinal study would have been better, she replied "We didn't have the money for a longitudinal study".  When I asked if they had requested enough money to do a longitudinal study she tersely replied "We didn't have the money for a longitudinal study".

To me that says they didn't ask so now they really don't know how many people they may have helped ... or hurt.  Ain't liberals great.  Still there Derrick?

And now the mortgage fraud in condos (See Globe Article)that set up hundreds of minority home buyers for negative equity and/or mortgage failure.  And since the failure of the sub-prime mortgage market in 2008 prices in Dorchester and Roxbury prices have collapsed.  While prices in the greater Boston area are down 15-18% from the 2005-2006 peak, prices in minority neighborhoods are down 40-70%, depending upon housing type and neighborhood.  But those mortgages these "helped" buyers have NOT come down so they are far further "under water" then others .... including whites.  You might say there is an "underwater" disparity.

Remember all my phone calls Derrick?  Trying to warn you of how black homeowners were being set up for failure and what did you do???  Nothing.  Who's worse Derrick, the asshole that sets out to screw blacks ... or the asshole Boston Globe columnist that has an opportunity to stop the guys and does nothing ???? I guess it just makes it easier for you to always cry racism.

Next time you want to bring  something about racial based housing inequities to people's attention ... why don't you start by finding out what you're talking about.  Of course, in that case, we might never hear from you again.

Pssst! Hey Slick. Wanna Buy a Condo?

A few years ago, at Mardi Gras in New Orleans, some moron was having so much fun he decided to take out his gun and start firing shots into the air.  Unfortunately, one of the bullets came down a few blocks away and hit an innocent woman in the head and killed her.   Now, if I HATED someone and really wanted them dead, I could take a gun (I'd have to get one first) and I could sneak up behind the guy and put my gun against his head, pull  my trigger now he's dead.  (sorry, channeling Freddie Mercury for a few seconds).  Though the clown in N'awlins and I would BOTH be responsible for the death of a person, we would be charged and tried to VERY different standards based on our motivation.  Unfortunately for the persons killed, our motives have no bearing on how dead they are ..... they're both just as dead.

So when the Boston Globe gets a story wrong and people who use the story as a basis for their behavior, or tell others of the story and THEY go along with the inaccurate story, and people get hurt, the Globe is responsible.  But mistakes are inevitable and are made by everyone .... I know I've made my share.  But when the Boston Globe reporter writes a story and NONE of the details in the story match the narrative, that means the reporter and editors , nobody, checked to make sure the article was accurate.  THAT would make the personnel involved FAR more culpable then if they just made a mistake.  This brings us to an absolutely astonishing inaccurate piece by Globe reporter Gail Ravgiala titled  "Triple Deckers get a second life" from April 24, 2005 (Don't worry, it ties into more recent articles)

Ms Ravgiala's essay presents to us (Michael) David Scott, a native of Trinidad that is rehabilitating three deckers into condos and who's business plan is to : "establish a reputation for quality, make a reasonable rate of return, and then leverage both by reinvesting in a community."  So committed is he to the neighborhoods that, instead of focusing on the top of the market, Scott is focusing on people who  " .. work for the Boston Public Schools or the MBTA or a nonprofit agency. They have a commitment to the community. Some of them grew up in these neighborhoods and are looking to move back."  (Don't you just know something is wrong when you see hackneyed cliches like "commitment to the community")

And, despite the upbeat tone, there are things that are either wrong or that just don't add up.  As I've said before, if there is a Globe article with a name or an address I'll check the information and the description the Globe gives is invariably wrong.

The project he and his partners are  working on at the time of the article is called the "Dorchester Elite Condo"   on Dix Street but they don't give an address ..... so I go to my real estate tax data (I buy from the city every year) ....but I can't find Scott's name anywhere or the name of his partner "Michael Hecker".  So I go to the registry of Deeds on-line and still can't find those names on any recent transactions on Dix Street, nor can I the name of his company " Metro Property Partners LLP".  Now that's odd.

Well, the article mentions another property they are developing at 465 Ashmont Street in Dorchester  but still no Scott, Hecker, or the corporate name but here we do get a hit at the Registry,  the owner is listed as Gene Mitchell ..... who the hell is he??  But more odd is that Mitchell purchased the home on 02/24/2005 with "piggback" mortgages to Gateway Funding Diversified totaling $474,050 and these mortgages have clauses that state the mortgage is for an owner occupied building (#6.  Occupancy.  Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days ...")  So who is Mitchell, why is he supposed to be an owner occupant, if Scott and Hecker say it's their development??  Clearly the reporter NOR the editors checked this out because they didn't seem to have checked anything!

We also get the names and quotes from buyers of Scott's developments, but they don't seem to be in the registry of deeds either.   Now it's getting really strange.  And then, I just got lucky.  My curiosity piqued, I went back to recheck the information  on the registry web site and Voila!!!!  the Master deed for the Dix Street property is recorded the following day April 25, 2005 but now I'm stumped again, the property is  74 Dix street but again Scott or Hecker ain't the owners ... It's April and Michael Walton who bought the three decker on 12/14/2004 for $550,000 with piggyback mortgages to Greenpoint Mortgage Corp totaling $495,000 and again with that owner occupant clause (#6.  Occupancy.  Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days ..."). So who are the Walton's?  But more so, it's becoming clear ... something is very wrong here!  Or, as I asked myself, "What are they hiding?"

You see, lets just assume that Scott, etal ARE pouring their money into rehabbing these properties.  The money could be lost in a second if, for example, Gene Mitchell has an accident and a person is hurt or killed and Mr Mitchell is at fault.  Any lawyer worth their salt would have a lien on everything Mr. Mitchell owned in seconds ..... and Scott and Hecker would risk losing every penny they put in  it.  For people who are already getting legal advice (They set up a LLP) they are unnecessarily being far too risky in the form of ownership they chose!

And things just keep getting more weird.  One of Scott's buyers, Sonia Gilmere, praises him that "If there is something a buyer doesn't like, Scott will work with them. ''David changed the colors for me,".  So I look up Ms Gilmere and she's nowhere to be found in the Registry!!!  Almost a month later (05/13/20050 I noticed that a Sonia Gilmere buys a condo unit from Scott, etal.  Almost a month BEFORE she buys the unit she's selling Scott to others?  Didn't the reporter or the editors notice any of that??

Ms Gilmere is at least still living in her unit.  Another buyer heaping praise on Scott is Marie Firman who, with her nephew, is buying all three units in another three decker.    It turns out, also as above, the nephew Tyrone Calloway, doesn't close on his first unit at 133 Harold Street #3 for another 1 1/2 months.  He pays $253,500 with piggyback mortgages to sub-prime lender Option One Mortgage totalling $253,500 (100% L/V) and unit #2 for the same price with 100% L/V piggback  mortgages to subprime purveyors Accredited Home Lenders both on 06/08/2005.  He then purchases unit #1 on 06/13/2005 for the same price but this time with piggyback  mortgages to sub prime lender First Franklin Financial for 100% L/V.  Ironically, the lenders expected Mr Calloway to be an owner occupant in all three units. (Yep, that same Clause #6 in the mortgages)  Because nobody at the Globe checked any detail,  they couldn't have found THAT  either.

With all these red flags flying at every level in the story the Globe went ahead and published the article.  Those flags got MY attention which is why I had to sit and watch what was transpiring  right before my eyes .... like a slow motion plane crash.  And THAT brings us to the Boston Globe articles by Jennifer McKim on February 2, 2009  "Bank alleges it was defrauded of $1.5 million" and finally her piece on December 13, 2009 "Developer's easy-money pitch left a trail of ruin"

For reasons I can't yet explain I really can't say too much more about the Michael David Scott saga but I think that last article says it all.  Repeated calls to a member of the Boston Globe editorial board went unheeded (Right Larry Harmon?) and calls to others like columnist Derrick Jackson who could probably find racism in a sneeze wouldn't touch Michael David Scott.  Derrick, how may times did I call and try to explain to you that black home-buyers were getting screwed?  4 or 5 wasn't it?  And you did what ????? I guess it's easier just dragging out those NCAA March Madness schedules and comparing black graduation rates year, after year, after year ....

I did speak with a few of Scott's buyers.  The one woman who bought a condo in Roxbury  had problems from the day she moved in and took him to court several times.  She also claimed he was harassing her (I have NO way of verifying that).  But she told one thing that put the whole episode in perspective.  She saw the Globe article and referred others to Scott because of it.  She told me she was comfortable because Scott and she were both black.   Then added "But now I know he's nothing but a street thug in a three piece suit".

Remember Tyrone Calloway, he did successfully sell one of the three units he was owner occupant in, #3, but ended up losing the other two units to foreclosure.   Ms Gilmere still owns her unit but, since prices have collapsed, it's worth far less then the balances of her mortgages.   And how about 74 Dix Street, the Dorchester Elite!  One woman bought all three units for a total for (get this) $1,036,000.  Scott could have replace all the floors with marble and all the metal with gold and it wouldn't haven been worth $1 million.  But that's OK, it took her less than 2 years to lose all three units to foreclosure. And 465 Ashmont Street?  All three the units were purchased by members of the Dolly family, Agaphitus,  Lenora and Isadora of Miami ...... that's right Miami.  But unit #2 was later sold to a person that may sound familiar ..... it was purchased by one Tyrone Calloway on 10/25/2005.  Unit 1 and unit 3, owned by the Dolly's were able to be sold at a huge loss,  more then 75% less then they paid  and Mr Calloway lost his to foreclosure.

The Boston Globe has blood on their hands but keeps it as quite as possible.  And every person that I dealt with that bought from Scott was black (or is it ... "person of  color" ) so that the blood is the finances of minority home-buyers across Roxbury and Dorchester.

Some of you have heard me say it before, "You don't need the Klu Klux Klan, or the American Nazi party or Aryan Nation to keep black people poor, white liberals (and black liberals) do the job very well on their own!"  And few seem to do it as well as the Boston Globe!

Don't hold your breath waiting for the Globe to say "I'm sorry".

PS: By my work, there was about 3 times the fraud in the Dorchester and Roxbury condo markets than  is (allegedly) attributed to Mr Scott.   I haven't read about any of THAT in the Globe either.

Do-gooders help finance Roslindale eyesore!

How many times can I say it, Why doesn't the Globe tell the WHOLE story instead of trying to hide or "overlook" the parts they find inconvenient?  Today's "Stupid Boston Globe Trick" involves the article by Boston Globe correspondent Christina Pazzanese titled  "Neighbors are tired of boarded-up eyesore"

Where to start. Let's see, John J. Casciano, Jr. buys the home at 15 Maynard Street for $76,000 on 07/08/1996  (Suffolk Registry Book 20700 Page 144) but, because of the ill fated attempts to "democratize" home ownership (which the Boston Globe regularly praised on their editorial pages) he's helped to finance the property with an "affordable" soft-second mortgage product. A first mortgage to Boston Safe and Deposit and Trust for $57,000 (now part of Bank of America) and a "soft second", also to Boston Safe, for $15,200 and a grant (in the form of a 3rd mortgage) to the Massachusetts Housing Partnership.

You fine folks on Maynard Street can thank the Commonwealth for what your ex-neighbor bequeathed to you. But how come the Globe doesn't tell when programs they've long championed go wrong? Maybe that would require telling the truth!

If you want to put a face on the "Great Recession", it's 15 Maynard Street.

PS:  There is one additional twist in this tale of woe but is less certain than above so I'll add it as this post script.  You see, Mr. Casciano refinanced his home with a $140,000 first mortgage to Fleet Bank on 06/21/2005 and his original first and "soft second" were paid off and discharged.   There are no liens  or blemishes on the title to the property  until Bank of America initiates foreclosure on 09/24/2008 (Book 44063 Page 054).  Now, this DOES NOT mean he paid his bills on time.  A bank in Massachusetts doesn't initiate foreclosure until the borrower is at least 90 days late.  BUT, if Mr. Casciano made the original mortgage payments on time, the "mortgages for everyone" do-gooders would be able to claim this debacle as a success and evidence of why these loans should continue to be written.  They don't care if the house is subsequently foreclosed because of later mortgages, if the original mortgages were paid on time .... it's a success.  So Roslindale ... Stop complaining!!!  Mr. Casciano's purchase of the home WAS A SUCCESS!!!!  Can't you reproachable neighbors see that?   In fact, we should write more mortgages like his!!! 

You KNEW the Globe would never tell you this, didn't you.

Goldman Sachs Editorial, "A Laugh Riot!!"

I'm a sucker for comedy.  Growing up watching old Mae West, WC Fields, and Marx Brother movies or listening to records with the young Bill Cosby asking "Why is there air?".  Later I was hooked by Monty Python's Flying Circus,  Mel Brooks,  Firesign Theater  and just last year I was jolted by an hilarious comedy I never saw coming, "The Hangover".  But when it comes to outright belly laughs it's hard to beat a Boston Globe editorial!

 In yesterday's editorial on the SEC case against Goldman Sachs (04/24/2010)  the Globe rails against Goldman's "financial folly" and, since the Globe's editors sit at the right hand of the Father (or on Olympus) and are spoken to by the deities, declare that "The transaction in question wasn’t an investment; it was a form of gambling."  Well ... thank you, I'm glad you clarified that for us "regular folk".  But, sometimes, even those of us that aren't as enlightened as Boston Globe editors have a few questions ... and sometimes they're good questions.  Better yet, sometimes we are actually presumptuous  enough that we'd like to have them answered.

I'd like to start with those first statements.   How is the Globe defining investment, gambling and folly.  Any person who thinks they can open a restaurant and pours their own (and frequently borrowed) money is, in fact, gambling.  Since most new restaurants (not chains or parts of larger restaurant groups) fail with astonishing regularity (about 90% in 5 years), is opening a restaurant and investment, gambling or "financial folly"?  In fact it can be all, folly for those that fail, and an investment or a "successful bet" for the successful.

I'm not trying to split hairs or "count the angels on the head of a pin", or even determine how you define the word  "is",  just to point out that ALL investment involves the risk of failure.  The very reason there is a potential for reward is BECAUSE of the risk.  If all the sides of 2 dice had only one spot, the number that would come up when rolled would always be 2 and betting 2 you would always be a winner, but there would be no reward because of the lack of risk!

The Globe's editorial board also skew the particular Goldman/Paulson transaction by failing to place it into context.  Yes, investor John Paulson, etal did ask Goldman to assemble the Abacus financial instrument but Goldman (and other investment banks) were assembling and had assembled hundreds .. perhaps thousands of similar mortgage based securities involving Collateralized Debt Obligations (CDO), credit default swaps (CDS) and other investments.  Abacus was hardly unique.

Investors that thought any particular investment would fail could avoid them, those that thought they would be a successful investment (or bet) bought them, and those who bought them could buy a form of insurance against losses in the form of the CDS's.  So the Abacus investment was just like many others with just one difference, Paulson, etal were so sure the real estate market was going to tank that they didn't care about anything but the low cost CDS's who's value would skyrocket if the mortgages backing the securities failed.   (For an analogy to help explain Credit Default Swaps see the addendum below)

But again, failing to place the Abacus investment in context, this was not the first purchase of CDS's for Paulson.  After they became convinced the market would tank and foreclosures would rise, they set out to buy low cost CDS's from others and did.  But that means that those that held these CDS's were of the opinion that defaults would not rise, the value of the CDS's would not rise,  so they sold them to Paulson for a low price.   Paulson, etal were already betting against the real estate market BEFORE Abacus but, they were so confident everyone else was wrong, they asked for specific deals they could specifically bet against, by investing in the swaps.  So, Boston Globe, to me it appears that those who held, but sold, the swaps to Paulson were wrong.  You might argue that they committed "financial folly" ... but who is it that decides, especially looking forward?

Further, the Globe (as it frequently does) leaves out information that might undermine it's arguments.  The Globe leaves out that, to avoid any conflicts, Goldman brought in a company that specialized in assembling mortgage backed securities, ACA Financial Guaranty Corp., a New York firm that helped Goldman assemble the investment and then bet that it would gain value. (Italics mine)  So confident was Goldman of ACA's ability to put together successful MBS's that persons  in Goldman repeatedly told Paulson, etal that they were wrong and that Goldman was confident with their models.  So confident that the instrument would be a success, Goldman put some of their own money in the investment!!

Yes, Goldman earned $15 million for assembling Abacus for Paulson but they also LOST $90 million of their own money when the loans went bad.  If Goldman Sachs committed fraud, then they must also be guilty of having defrauded themselves out of $90 million!!!!!  Is that why the Globe left this information out of the editorial?

And last, the Globe fails to point out the type of investors that lost millions and whom were allegedly defrauded.  These investors weren't retirees or young people investing for their future, the banks at the heart of the Abacus episode are major investment banks.  These are banks with thousands of employees and layers of risk analysis to determine whether or not any particular investment (or gamble to the Globe) is worth the risk. I think everyone agrees that the rating agencies blew it but,  regarding these investment banks (German banks IKB and Deutsche Bank), they did (or certainly SHOULD have done) their own risk analysis of their Abacus  investment, and decided it looked good.  So, is it the role of the SEC to  protect these banks from their own mistakes and from risk and potential losses??? I hope not because that would imply that the SEC's job is also to protect them from risk and potential gains!

And what if Paulson was wrong, as most of Wall Street thought he was?  He would have lost millions on Abacus, Goldman would have made millions and we wouldn't be having this conversation now.

Ironically, while the Globe berates Goldman Sachs and Paulson, etal, it continues to go soft on those institutions that also "gambled" and lost and clearly exercised "financial folly", but with whom the Boston Globe editorial board agrees.  The failure of FNMA and FHLMC have cost the taxpayers more than $125 billion so far and they are hemorrhaging more money every month.   Even worse, since the government has nationalized the two, the taxpayers are now on the hook for guaranteeing about $1.5 trillion (that's right, with a "T") of loan guarantees issued by them!!!   Fannie and Freddie also used the same sort of MBS's, CDO's and credit default swaps used by Goldman, Paulson and others and lost in a scale not yet seen on Wall Street! When will we see the SEC bring fraud charges against Fannie and Freddie?

Yet, one of the Globe's favorite congressman Barney Frank, pushed Fannie and Freddie to gamble with the American housing market and the world's bond investments.  Where was the Globe criticism when Congressman Frank prodded Fannie and Freddie  into more risky mortgages?  When Mr Frank stated in 2003 that, " These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis.  The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''  Has the Globe tarnished him for being astonishingly wrong??  And did the Globe ever condemn him for gambling on the housing markets when he famously claimed that, " I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation ..."?  Where has been the criticism of Mr Frank when he looked for LESS "safety and soundness" at Fannie and Freddie than what is applied to other banks and lenders?  That's not "financial folly" ??   And  "roll the dice" (his words), doesn't the Globe think that sounds like, oh ... I don't know .... gambling?

And last, where is the criticism of do-gooders like MAHA, NACA, ACORN, and others who, at the top of the real estate market, were encouraging low-moderate income (largely minority) buyers to buy expensive homes with mortgage programs that were referred to as "affordable".  These "activists" were betting that the Dorchester and Roxbury real estate markets would stay expensive (if they thought at all), but they were betting, not with their own money, nor with the money of large investment banks, but with the money and finances of persons who have, by definition low and moderate incomes.  They're NOT RICH!!!

My favorite is the three decker that an Hispanic family purchased on forgettable East Street in Dorchester for $605,000 on 06/17/2005 with an "affordable soft second" mortgage product.  The next most expensive three family home sold on East Street since sold for only $370,000.  If what Goldman/Paulson did was fraud, what the do-gooders did to low-moderate income (largely minority) home buyers should be a capital offense.  But we hear NOTHING from the Globe.

I started off stating that Boston Globe editorials were frequently funny.  The carelessness they exhibit SHOULD be comical.  But when you consider how many people have gotten hurt, and the Globe STILL doesn't get it ...... it's just sad.

(A quick analogy about Credit Default Swaps.  In Florida during hurricane season insurance companies WILL NOT allow you to close on a house purchase if there is hurricane or tropical storm within a certain number of miles of the state.  The reason is that, with a storm that close, the potential for loss is so much greater that, at any price, the insurance company is still taking too large a risk.  If a MBS is thought to be well constructed the risk of loss is low and the cost of the CDS's are low, but if the mortgages start going bad the value of the CDS's rise and THAT was what Paulson, etal were counting on.

I would ask the Globe, are the home insurance rules in Florida a form of gambling or a method for managing the risk of an investment?)