I just spent the last few hours of December 30th 2006 fixing my computer because for some strange reason Internet Explorer 6.0 would not work, nor would 7.0.  I did this so that I might be able to do my job.  Maybe continue to support my family and be a decent person.  Now, I see that my life is about to change incredibly, all with a simple e-mail from a lender.

You see, I have spent the past fourteen years of my life working to help people own homes.  Helping people to buy investment properties and achieve the American Dream.  In the process of this I meet all types of different people, from the family struggling to make it looking for a modest $50,000 home that really only meets the basic needs to the person looking to buy the multi-million dollar home with far more bells and whistles than even I could imagine.  People who work in factories and hospitals, restuarants and garages, bars and coal mines, strip clubs and churches.  People from all walks of life.  Some of these people have been in a position where I've just told them to go down to their local bank, they don't need to pay me.  Others, well I have had to work extremely hard to find lenders that would accept them because they have poor credit or are self-employed or just changed jobs.  But each and everyone of them has had one thing in common, the desire to have a better life and part of the American Dream.  Tonight I have to tell many of them that dream is gone. 

But here is the strange part, it is gone not for the people with bad credit, but rather those with good credit.  Those who have worked incredibly hard to build up businesses that they own and operate, doing the things that they love.  These people are all about to lose their homes.  They are all about to lose the things that they have worked their entire lives for simply because they can not prove how much they make.  For this, I must give you a short lesson in the mortgage industry.

There are really two types of borrowers in my business, those that we call full doc and those we call stated/reduced/no doc.  The difference between these borrower's is dramatic yet small. 

A full doc borrower is one who works for a company, collects a regular paycheck with taxes withheld and so on.  They give us their last 2 years worth of w-2's and last 30 days worth of paystubs, from their we calculate their income and qualify them based upon their bills on the credit bureau and how much they make each month. 

The stated/reduced/no doc borrower is different.  These borrower's usually have excellent credit ratings and are either self-employed or own multiple investment properties.  They work extremely hard at everything they do and one day hope that it will all pay off.  These people unfortunately due to the way taxes are done and a lack of paystubs or w-2's from any company find it impossible to prove their income through conventional means.  Therefore they are given other options to complete this, such as providing up to 24 months worth of bank statements, a letter from a CPA stating they are self-employed and that CPA does their taxes, or a business license showing they have been self-employed over 2 years.  These borrower's are heavily scrutinized and forced to jump through many hoops to finally achieve the things they want.  In turn, because their income is more difficult to prove they also pay a slightly higher interest rate than the conventional borrower might pay.  This rate is usually 1 percent higher. 

Well, the problem is, these people can no longer do this.  Thanks to the state of Ohio Senate Bill 185, they must now provide a consumer financial statement showing all income and expenses for the past two years.  Now, you might say what is the big deal, seems simple enough, right.  Wrong, because you see the financial statement that is acceptable is pretty much a federal tax return.  Now, it's not like using a normal workers tax return showing the top line as income, no, these borrower's have to use the bottom line to show their income.  That is the line after all the deductions and write-offs have been made.  A good example of this is also a very good friend of mine. 

She works 5 jobs starting her day at 4:30 everyday, 7 days a week.  She delivers a couple of hundred newspapers.  She then returns to her house to care for approximately 20 animals that compile her cat and dog breedery business.  From their she drives approximately 25 miles each way as a home health aide to care for a handicapped women.  She also has to field issues with tenants because she has five buildings.  Now, you are thinking that is great, she must be making a killing with all of that.  No, she's not.  On her tax returns she makes less than a 15 year old kid working at McDonald's part-time.  She covers the mortgages on all five properties, makes all the repairs herself and does a ton of horseswapping to keep her head above water.  In addition, she takes care of foster children with major problems.  She finally gets to bed around 11:00 each night. 

She does this without complaining or causing any issues for anyone.  She sees it as her responsibilities and that maybe 20 years from now she just might be able to retire and begin to relax.  In a few hours here I have to sit down with her and explain to her that somehow her life has to change.  That she no longer qualifies for a mortgage based upon her situation.  That unless we can come up with a plan that will work, a completely new plan that we have never even considered before, she is going to lose everything she has worked so hard for. 

You see, like so many people in her situation, she has mortgages that are fixed for a few years and then they go variable.  One goes variable on Monday, two more will go variable in April of this year.  The other two will go variable in Janary and October of 2008.  When this happens more than likely the interest rate on each of her properties will jump by 2%.  With this will come the issue that she will not be able to refinance them unless we find another solution right now and the rents on her buildings will not cover her payments.  The small amount of profit she is making, less than $1,000 per month, from these buildings will be gone.  From there it won't take long for the rest to collapse on her.  You see, she really doesn't make alot. 

The animals are already losing money, but she does it because she loves them and enjoys it.  Her job as a home health aide doesn't even cover her own bills, let alone help out with mortgages on other properties.  So now, one of the most beautiful and wonderful people I have ever had the opportunity of knowing is screwed.  The woman who has helped others have Christmas and made sure noone ever went hungry or cold is about to do just that.  She is now being fucked by the very banks that loaned her money and the very government that she pays taxes to.

She is about to become like thousands of others like her, who took out mortgages to achieve that dream we all truly want and have it ripped away from them.  I now sit here at 3:42am and am trying to think of a solution that will help her.  A solution that will not cost her everything she has fucking worked her whole life for. 

I wish that I had the answer at this hour, but I don't.  I have been searching my list of lenders online looking for that one piece of information that will allow me to say it's not true, but I can't find it.  Not yet at least.  I have read all of Ohio Senate Bill 185 and found the part that applies to her.  In a law covering mortgage brokers, natural gas suppliers, title companies, appraisal companies and many other things, their is just one sentence.  One small sentence that is changing her life along with thousands of others.  One small sentence is about to send thousands of good hardworking honest people into bankruptcy and foreclosure.  One small sentence is about to destroy thousands of retirements and children's college educations.  One small sentence is about to put not only thousands of homeowners on the street, but their tenants and employees as well.

To the politicians of Ohio I ask you this.  Have you not fucked the good people of this state enough yet.  Have you not caused enough damage and heartache upon those you are meant to serve.  I have no problem with you playing with rules governing how I treat customers and how I charge them, but how can you take away their abilitiy to own a home and enter into a business contract based upon your own ignorance to this industry?  An industry that with all of your fancy degrees you really don't know a god damn thing about?  How could you intentionally fuck so many people who have supported you and write your paychecks?  You say that you did this to stop the high rate of foreclosures, well you just multiplied it by a hundred.  Now, when homeowners and tenants alike are on the streets, good homes are boarded up and owned by banks but not selling, renters not being able to afford the rent on the few homes remaining, what the fuck are you going to do?  By then it will be to late.  You see, all the people who provide this low cost housing will not be able to buy anything.  Rents will skyrocket and housing values will plummet.  Congratulations. 

With all that you are doing, as these homes move into foreclosure and inundate the market, the trickle down theory will come into play.  The huge surplus of homes on the market is going to force the values of all properties in the state down, which in turn will almost immediately affect even the normal full doc homeowner.  You see, if banks have to sell these houses dirt cheap to get them off the market, then average Joe may not be able to even sell his for enough to cover his mortgage.  This in turn will lead to even more foreclosures as people get pissed and just quit paying.  With plummeting values will also come the inability of people to borrow against their homes for things like new roofs, siding, furnaces, credit cards,  vacations, college educations for children.  Congratulations, because you have now fucked an entire state with one small sentence.  You have sentenced all of your constituents to a life of poverty and ineviteable foreclosures and bankruptcies.  I hope all of you are proud.