Thursday, July 24, 2008
Nanny state lunacy
San Diego's city attorney said on Wednesday he filed a lawsuit against Bank of America Corp and its Countrywide unit to prevent the mortgage lenders from foreclosing on homes in the city, which he aims to make a "foreclosure sanctuary."Are these people on crack? Why on earth would any financial institution loan their money to someone in a "foreclosure sanctuary"? And what do you suppose will happen to the local housing market if no one is willing to make loans there?
City Attorney Michael Aguirre plans to file similar lawsuits against Washington Mutual Inc, Wells Fargo & Co, and Wachovia Corp, in an effort to make the lenders negotiate with mortgage borrowers facing foreclosure.
"We would like to see San Diego become a foreclosure sanctuary," Aguirre said.
(CWCID: Calculated Risk)
12 Comments:
By 
, at
Thu Jul 24, 09:56:00 AM:
Interesting man this Mr. Aguirre. Apparently he is an activist with a law degree, a wound up mouth and a growing list of of antagonists. He should be so proud, he has carefully cultivated each and every one of them.
Just coincidentally he is up for re-election this year, and he probably won't have the endorsement of the local paper.
http://media.www.thenuherald.com/media/storage/paper1239/news/2008/03/11/OffCampus/City-Attorney.Mike.Aguirre.Calls.UT.evil-3251044.shtml
Should his latest publicity gag go much further, I doubt he'll have much support anywhere.
By , at
Thu Jul 24, 10:34:00 AM:
I hope someone does an analysis of what has happened here. We have lenders making bad loans to unqualified borrowers. The lenders turn around and sell those loans to [who?] Mac & Mae who declare the loans to be fine and then sell them to financial institutions, pension funds and China. The lords of Mac & Mae take huge bonuses for their accomplishments.
The "foreclosure sanctuary" may not drive all lenders out, but those who will lend will only consider borrowers who put down big chunks of cash, maybe 25 to 50%.
By , at
Thu Jul 24, 12:05:00 PM:
Anon let me finish that for you:
Thus driving DOWN house value.
And we all know that when you drive down house value, it lowers property tax revenues, unless the township/city increases the tax rate, and possibly uses the "pre-fall" assessment.
Again win/win situation for the city's administration.
lower property values, and increased taxes.
BRILLIANT.
That's change you can believe in!!!!
By , at
Thu Jul 24, 01:14:00 PM:
"unless the township/city increases the tax rate, and possibly uses the "pre-fall" assessment"
Because of a law called "Proposition 13", it's generally not possible to increase property taxes in California (it's against the law). I say generally because it's theoretically possible there's a taxing entity that is still below the cap, but I doubt it. The assessment method might work, but prop 13 also limits assessment increases to 2%/year regardless of what the market value of the house does, so most houses in San Diego have an assessed value that is a fraction of their actual value, even after this crash. Because the assessed value is readjusted to market when a home is sold, homes recently sold are bringing in the highest amount of taxes. Mr Aguirre's thinking probably is that homes in danger of foreclosure are those that sold recently for inflated prices and thus bring in the highest amount of unit revenue, so blocking their foreclosure will keep that revenue stream alive. Of course, if the owners really can't afford them, eventually they'll sell anyway, probably at a greatly reduced price, resulting in a lower assessment. Meanwhile, nobody in their right mind will finance a home in a "foreclosure sanctuary", so home values in the area will collapse.
One of the problems with the legal profession is that it is one of the few (maybe the only) where people can be utterly ignorant of science, mathematics, and economics, and still attain great power, and frequently do.
By 
Georg Felis, at
Thu Jul 24, 01:23:00 PM:
Ah, another Politician Whos Party Shall Not Be Mentioned (anybody want to guess?). If this winds up before a sane judge, he/she will boot it as a frivolous suit. (Then again, "sane" is relative in CA)
By , at
Thu Jul 24, 03:13:00 PM:
To answer your question more directly, Tigerhawk...
Yes, they are on crack.
It is the only reasonable explanation.
By , at
Thu Jul 24, 03:55:00 PM:
Our City Attorney is a little erratic at times. He has riden into office as a populist and this is just another one of his antics in that vein. Yes, he is just as crazy as this item makes him sound. Sadly he very well may win the run off this fall - being part of the "downtown business establishment" seems to be the kiss of death around here in an election. Given our recent history in San Diego local government I (sadly) can't say that opinion is all wrong.
By Prariepundit, at
Thu Jul 24, 03:57:00 PM:
Apparently this guy did not read Article One of the Constitution which among other things prohibits states from making laws which impair the obligations of contracts.
By , at
Thu Jul 24, 08:11:00 PM:
foreclosure sanctuary == mortgage desert
By , at
Thu Jul 24, 10:47:00 PM:
I live in San Diego. Mike Aguirre is a bona fide nutjob. We recently had a landslide and he was johnny-on-the-spot in less that 24 hours to suggest that maybe the city was liable. Who needs a city atty like that. Aguirre has a very long track record of failed lawsuits, but it gains him vote with a population segment who will support anyone "fighting the man" no matter how rediculous. He recently accused the mayor of corruption, and then refused to cooperate with the AG office when they offered to investigate. He is a huge windbag. He gets press but no one really takes him seriously anymore when he files suit. Think a white Al Sharpton and you get the drift.
By , at
Thu Jul 24, 10:52:00 PM:
You can't brand Aguirre by party affiliation. He is a self proclaimed "mavrick" and an equal opportunity panderer. He has gotten to the point that no party wants to claim him as there own.
By , at
Fri Jul 25, 02:40:00 PM:
An interesting update. It turns out that Mr. Aguirre was subject to foreclosure twice by Countrywide because he wasn't paying his mortgage. Both times he brought his loan current. I wonder if the city attorney may have a conflict of interest on this one?
