Saturday, February 23, 2008

Foreigners are Buying Property in America!

Internet chatters and local and national pundits are discovering that foreigners are purchasing homes in America and they are expressing surprise and outrage. They are not happy.

It has never been a requirement that one had to be an American citizen to own property in America; one does not even have to be a resident of America. If residency is not even a requirement for owning property, then why are people so concerned about the residency status of those who are purchasing homes?

Ever since we have been a nation, foreigners have owned property in this country. Foreigners own stock in corporations that own timberland, manufacturing plants, shopping centers and office buildings. Some of those corporations have majority foreign investors, or the American corporation may be owned by a foreign corporation.

Chrysler has changed hands again, but for a while it was owned by a German firm and Chrysler was renamed DaimlerChrysler. A few years ago a Japanese company, the Mitsubishi Group, purchased the entire 22 acres Rockefeller Center complex in midtown Manhattan, the home of Radio City Music Hall, Rockefeller Plaza, and NBC.

Nissan has an auto plant in Smyrna Tennessee, a town in the county next door to Nashville. Tennessee sought the plant and Nissan's investment has been and economic boon to the region.

Wealthy foreigners own condos in New York City, Miami Beach, Vail Colorado and elsewhere throughout America. The less wealthy foreigners may own vacation time-shares in Gatlinburg or Gulf Shores.

Not only do foreigners own property in American but Americans also own property in other countries throughout the world. Many wealthy Americans have condos on the French Riviera or vacation homes in the Caribbean. Over one million Americans own property in Mexico. As the baby boomers reach retirement age, many are discovering their retirement income goes a lot further in Mexico and they can enjoy a better lifestyle south of the border. They are moving there in droves.

American companies own or have ownership interest in vineyards, banana plantations, manufacturing plants, utility companies, and land holdings throughout the world. Prior to it being nationalized, Americans owned a large chuck of the real estate in Cuba. American Telephone and Telegraph at one time had large holding in many countries of the world. Many developing countries seek and welcome this foreign investment. If you have an IRA invested in a Mutual Fund, you may have an ownership interest in a foreign corporations with real estate holdings.

Do the same people who object to foreign ownership of American properties object to American ownership in foreign countries?

I am not at all concerned that foreigners can own American property and I am glad Americans can own real estate in other countries. To my way of thinking, this is a good thing. A more integrated world is a less dangerous world. Ask yourself, “Do you think the Japanese would have been as likely to have bombed Hawaii, if they would have had the same level of investment in Hawaii prior to Pearl Harbor as they have now?”

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Friday, February 22, 2008

Illegal Immigrants are a Good Mortgage Risk

In a recent Tennessean article, columnist Phil Valentine speculated that the reason we are experiencing a mortgage crisis is because illegal immigrants are getting home mortgages. His basis for this was that several of the nation's leading mortgage companies that are participating in Project Lifeline make mortgages to illegal immigrants. Project Lifeline is a program that will allow people facing a mortgage foreclosure and an additional 30 days to try to work out a plan to avoid foreclosure.

Mr. Valentine’s speculation is contrary to fact. In actuality illegal immigrants are a good mortgage risk. The type of mortgages that illegal immigrant get is called an ITIN mortgage. To qualify, the applicant must have a form of identification known as a matrĂ­cula consular, which is an Id card issued by the local Mexican Consulate. (You may want to think of this as their “Illegal Alien” id card.) They must also have a W-7, which is also know as an individual tax identification number (ITIN), insured by the IRS. The ITIN allows the illegal immigrant to pay federal income taxes.

They must have two years income tax returns, two years work history, and a bank account. Their income must be verifiable and stable. They must also have two year history of non-traditional credit which must include two years rent history and three other sources of credit which may be bills they have paid on time such as utility bills or cable TV, or some others monthly bill. This is more documentation and a more stringent standard than is required on lots of other alternative type mortgage products.

According to a recent article in the Wall Street Journal, ITIN mortgages have a delinquency rate of about 0.5%. That compares with 1% for prime mortgages and 9.3% for subprime mortgages extended to those with spotty credit histories.

Before we jump to conclusion and blame society’s woes on illegal immigrants we should get our facts correct. Mr. Valentine will not let facts get in the way of a good opinion.

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Thursday, February 21, 2008

Peace Sign Turns 50

The Peace sign turns 50 today, but don't expect me to celebrate. If some deranged Vietnam vet beats the hell out of someone who is celebrating the peace sign turning 50, I might celebrate. Actually that is a little harsh. I'm actually a peace-loving guy myself and don't celebrate violence. However, if some deranged Viet vet did beat up some peace-sign-wearing dude, I would see a certain poetic justice in the act. But really, I don't want to see neo-Nazi or peaceniks get beat up, not one more than the other. In a free country both have the right to express themselves.

I know not everyone who wears a peace sign is an evil person, many just think it is "cool". To many it is just generally associated with the fun of getting stoned and creative music and 'going to San Francisco and wearing a flower in your hair.' Flower Power! Groovy! Peace! Far out! Cool! Many people have no concept of the context of the Peace sign, and it is just a fashion statement. To some, it has no more meaning than the 60's era smiley face. To some it is just a nostalgic relic of the past.

To me however, it is a symbol of those who won the Vietnam war on behalf of the Viet Cong. It represents those who gave aid and comfort and encouragement to our enemy. It is the banner that prolonged the war and caused more death and destruction. When I see the Peace sign I think of those who marched and chanted "Ho, Ho, Ho Chi Minh" and burned American flags and spit on returning vets. It is the symbol of those who hated America and allied with our enemies. It represents the worst of my generation.

The Vietnam war was not won by the Communist in the jungles of Vietnam but was won by the "Peace" activist on the college campuses and the streets of America and the peace sign was the banner under which they marched. Those who marched under that banner can take credit for millions of deaths at the hands of the Communist, for many millions more who were enslaved and for prolonging the cold war for an extra thirty years. The Peace sign represents to me those in the Communist fifth column who stabbed us in the back. If you want to offend me, the Nazi swastika, the Communist hammer and sickle, "KKK", and the Peace sign are all symbols that will do the trick.

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Tuesday, February 19, 2008

Are Illegal Immigrants Causing the Mortgage Crisis?

In the Middle Ages, people used to blame plagues and crop failures on witches; now, many Americans blame everything from crime to unemployment on illegal aliens. Nashville’s own Rush-Limbaugh-Want-a-Be, Phil Valentine, makes the absurd assertion that the subprime mortgage crisis is a result of mortgage companies making mortgage loans to Illegal immigrants. (See: Stop Bank's catering to ….. ) He makes this leap in logic because the participating lenders in Project Lifeline make loans to illegal immigrants.

Project Lifeline is a program that will allow people facing a mortgage foreclosure an additional 30 days to try to work out a plan to avoid foreclosure. While it is true that several of the mortgage companies involved in Project Lifeline do make loans to illegal immigrants, these are the largest mortgage companies in the nation and they make loans to everyone. Only a very small fraction of their loans are made to illegal immigrants. There is absolutely no evidence to suggest the sub prime crisis is a result of loans made to illegals. Mr. Valentine offers no evidence to support his conclusion.

One has to be cautious in making leaps in logic like the one that Mr. Valentine made. These same mortgage companies also make loans to red headed people and people with the last name of “Valentine.” Valentine not only does not offer proof, he does not even show a correlation.

People who carry cigarette lighter have a higher incident of lung cancer. That is a correlation, but even that does not show cause and effect.

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