Good morning, and Happy Easter. This is Gary Edelbrock, and I've been talking with my friend, Dan Shaw. He tells us that Adjustable Rate Mortgages are beginning to make a comeback. And he thinks that interest rates are creeping up. He also discusses how the same-sex marriage issue might affect real estate affairs, and offers his opinion on an approach.
Editor's note: While the eNewsAZ staff may or may not agree with Mr. Shaw's perspective, we are not afraid of a vigorous (although courteous) debate. So, read through, and leave your comments below. As always, the comments will be monitored carefully and may be removed if they are deemed inappropriate in any way.
Adustable Rate Mortgages
Happy weekend! I hope your week is going well. Sales of homes in Arizona are still on the rise but following close behind are rates. I suspect we will move toward the 4% and stay there for the remainder of the year. Interestingly enough we are already beginning to see numerous Adjustable Rate(ARMS) Mortgages being reintroduced to the market. This may very well be an indication of things to come. For those of you who remember the 80's and President Carter, when we hung in the 17% interest rate range. The 80's saw the introduction of Adjustable Rates which lowered your mortgage payment for the first few years….then you could worry about it later! I remember buying homes back in those days and my thought process was that I was on the ladder moving up and my pay would increase to where I could afford those higher payments. It allowed people to buy more home.
But truthfully those days are gone. Not many young people are on an upward climb financially as they were in the 80's and 90's. The job market is shaky at best. I financed a young man from California in his 20's who had bought and sold 5 properties in California. All financed with adjustable interest only loans, and all sold at a profit. That was how he had made his living. That would be somewhat difficult to repeat in 2013 due to lending laws. Which brings to mind, remember the guy who made millions doing seminars and selling books and videos on how to move to San Francisco or any City and buy a home with no money and no credit? And the other who boasted seminars on how to make millions in real estate with no money invested? Why did the Dodd Frank bill not go after those people?
About Same Sex Marriage
Yesterday in the twitter world the use of "unfollow" jumped 10X its normal frequency. "Following" is similar to "friending" on Facebook, with the exception that on Facebook a person has to accept the "friend request". In the twitter universe anyone can follow someone else. It is suggested that yesterdays "unfollow" jump was brought about by people's views on same sex marriage. This is a huge topic in front of the Supreme Court this week. And recently we have added the GLBT family to a protected class status in the real estate world.
I would like to make two points here. The first is that as a society we have evolved to a point where we no longer want to hear, see, or read both sides of a discussion. We seem to only want to be exposed to the people with whom we already agree. That unfortunately is fact. We run into people like this every day. I find that I learn more by listening to educated opinions and thoughts from opposing viewpoints. I am fortunate enough to know some gay/lesbian couples whom I consider close friends. I don't think of them as gay or lesbian, I just see them as people and couples. And they are great couples very much in love who enjoy each others company. What more is there, that is more important in life than having a friend and companion to share adventures with?
Open debate seems to be a lost art in this country. The idea of expressing your thoughts and hearing others ideas is what has made this country great. Can you imagine the debates that took place on writing the constitution? The lack of debate is gridlocking our government. I have some real insight on this that I will save for a later writing.
My second point is the marriage issue which the Supreme Court is hearing this week. I find it ironic that the government is having to decide once again, on a problem which the government created. For my more liberal thinking friends I like to remind them that it was in fact President Clinton who signed into law the Defense of Marriage Act, not a Republican or Libertarian. More importantly than just the vows of same sex marriage are the benefits involved with wed couples.
That is truly the heart of the issue being debated. In one case before the Supreme Court, a Woman who was married to her partner was forced to pay taxes on inheritance which would not have been paid had she been married to a man. At question was an amount of about $400,000. Now stop and think about this before you click "unfollow"….the government provides special benefits to married couples. In the 1950's I would understand? But we have since had a women's liberation movement. These government regulations were primarily passed to protect widows of war veterans. But again, government benefits remain the soul of the debate. With sequestration the government could easily make a case for taking away spousal government benefits which would treat all people and couples equally. Would that not be much simpler? No special benefits and no special regulations? Now as far as insurance or other benefits such as that, you are now discussing the free market. And we all know the free market will adjust to sell product to anyone with money. So without a government benefit to married couples, free market companies would begin offering products that cover and pay to everyone.
My point is that there may be a much simpler solution to the issue. The benefits were the beginning of the discussion. The GLBT family has been trying to get their discussion "heard" for many years and unfortunately it has taken this long to get an audience. All because we tend to listen to only those we agree with. But instead of simply listening and having an open debate we have become divided. Huddling into our group of friends where we feel safe in hearing only the things we agree with.
Government regulation has wrapped its fingers through our daily quests, choking off the paths less followed. They have, through regulations, divided a country of caring and benevolent people. This country needs less government interference in our lives.
Dan Shaw " a distinguishable difference in service"
Licensed Mortgage Banker BKBR-0116708 NMLS 181393