Continuing to examine and hold a lively discussion of the Northern Virginia Real Estate market.
Please post your local house search updates, MLS finds, on-topic ideas, and links here.
Fannie, Freddie Decry Bill to Tax Bonuses Proposal Could Put Housing Recovery Programs at Risk if Employees LeaveBy Zachary A. GoldfarbWashington Post Staff WriterFriday, March 20, 2009; A06Legislation to severely tax bonuses at companies receiving government aid may imperil the Obama administration's housing recovery program by igniting an exodus of employees from Fannie Mae and Freddie Mac, employees at the companies said.The firms, which own or back half the nation's home loans, are the major players in the administration's efforts to lower mortgage rates and keep struggling borrowers in their homes by modifying distressed mortgages and preventing foreclosures. @J@ here, anyone believe that the, -choke-, -groan-, hardworking employees of Fraudie and Flakie will bail? Where the F*** will they go?
Wow.. they are really trying to rob us for taxes. At gunpoint...under the idea that they control the market via housing. Fcuk it. Let em go..and get this painful correction over with.@J@ they probally would put there money overseas and then put themselves overseas like all the other rich people are doing. No one wants to be here when shyt hits the fan.....Im loving the blame game being played now. its kinds like hot potato.
Yeah, I'd call their bluff, because with everything falling down, I don't think employees of the financial industry have a place to run to.
They won't leave because I know for a fact that many employees at Fannie Mae take out extra large home loans knowing that if they stay something like 15 years the rest of the loan principle will be forgiven. They were all doing it back when I was a consultant there in 2004-5."Eligible employees at Fannie Mae can also obtain a loan to use toward their down payment and closing costs. As employment continues, a larger share of the loan principal is forgiven, according to company information."link
Oh, and I was a technology consultant - writing software only. I had nothing to do with all the funny money loans. Just wanted to make that clear.
"Former AIG chief executive officer Hank Greenberg said the company under his leadership never had the kind of retention bonus system that has subjected it to withering criticism."When I was there, nobody had a contract with the company, including me," Greenberg said in a nationally broadcast interview Friday. "If you didn't do the job, you didn't deserve to be there. We had a bonus plan based on performance.""This is VERY interesting info if true.http://news.yahoo.com/s/ap/20090320/ap_on_bi_ge/aig
On a completely different topic.I finally looked into the schools in the area. I knew that Kingstowne was a way better alternative to both Huntington and Alexandria, so that's where we're renting and were planning on buying. But yesterday I dug a little more at:schooldigger.comgreatschools.netand the FFX County schools website:FFX County Public SchoolsAnd these tell me that West Springfield, Robinson and Lake Braddock High Schools are all "way" better than Hayfield, Lee or even Edison. And even more concerning, the more immediately relevant thing of elementary schools, only Island Creek does okay in the area I've been looking at.Am I blowing the numbers out of proportion? These ratings are based on test scores. What does less than 90% of students being proficient in Math, Reading History or Science really translate to?Or, is doing anything other than buying as close to George Mason as possible (where it's staff and faculty will effect the local schools) while still being accessible to the VRE irresponsible and foolish? A lot can happen in 6 to 12 years before my theoretical kids start elementary or secondary school, but George Mason's not moving.
Jeremy,That is sick. I had no idea.
Cara - Sure the schools in the western half of the county are, generally speaking, better if you measure "better" based on the quality/demo of the students. I don't think the same can be generalized for the teachers however.Most any school in Fairfax county will be just fine for the students within the school who want to do well. In addition, most any school in Fairfax will have it's share of degenerates (although, some more than others).
I'm a little torn on the "Retention Bonus" issue. If you've ever worked at a company that loses a sizable portion of its workforce you know how disruptive it can be. From 2002-2004 I worked for such a company that had some serious financial issues, so much so that the company was late paying its employees on multiple occasions. As a result, many employees left and with them went the institutional knowledge, both good and bad, needed to right the company. As a result of the exodus it was extremely hard for the remaining employees to sort out the mess and get the company back on the right track. Based on this experience, I think there is some legitimacy to retaining workers in order to ensure that the baseline investment made by an outside investor/lender is protected. I, however, would be more in favor of paying the bonuses on a delayed fashion based on the eventual profitability of the company, perhaps post reimbursement of the bailout funds to the government. On a related note and more on topic for this blog, I have a friend who works at Freddie Mac and he received word recently that he would be receiving a bonus this year. When he took his job at Freddie Mac his compensation package was largely predicated on a bonus structure. Unfortunately, his compensation didn't also come with the ability to make all the decisions. His beef with voiding out the bonuses is that a lot of people who work at these companies, who were just following orders and doing their job, are the ones getting penalized. He feels there has to be a better way to determine who among management was responsible and holding them responsible. He doesn't feel that he was responsible for this economic catastrophe any more than you or I are and he was only tasked to do a job and a good job he did.Also, what sort of precedent setting are we as citizens willing to accept if the government can all of a sudden retroactively single out a specific group and pass legislation against those groups? We can blame the President, Congress, or anybody we want today, however, last time I checked this is a government that allows active participation. Every citizen in this country has the same access to the laws that the Congress votes on and the President signs. In theory, we all hold a little responsibility for not speaking up earlier. You really can't trust your government to do the right thing anymore than you should trust your mortgage lender, real estate agent, broker or other party we entrust to watch out for our best interests.
My previous post is a little off topic, so feel free to ignore it. I don't want/mean to hijack this thread with tangible discussions that aren't really about the housing market.
@J@Who are you going to get to serve as CEO of Freddie? The old boss got fired, the next one clearly read the tea leaves and left three weeks ago, now who that's qualified will take a job that pays 250,000/yr? Managing an institution of that size to very conflicting requirements (Save housing!, but don't loose too much more money either) isn't a fun nor easy job, at any pay rate. You're not going to be able to find anyone to do the job if they get the pay a low level VP would get at a bank.
Since I do not know anything about the financial industry, I can only comment as a citizen with a B.A. in political science and theory:There is a shocking lack of leadership in our country right now.
Charles Krauthammer today makes a good point:"Now, in the scheme of things, $165 million is . . . less than one-tenth of 1 percent of the bailout money given to AIG alone. If Bill Gates were to pay these AIG bonuses every year for the next 100 years, he'd still be left with more than half his personal fortune. For this we are going to poison the well for any further financial rescues, face the prospect of letting AIG go under (which would make the Lehman Brothers collapse look trivial) and risk a run on the entire world financial system?"
Tabitha,I had a lot more fun getting my PSCI B.A. than the other degree... and to an extent I agree. This is a bad spot for the country, but I disagree on the reasoning. It's not a lack of leadership. We have plenty of people who are leading us. Too many, even, perhaps. Something of a chefs in the kitchen kind of deal. They're leading us in all kinds of different directions trying to achieve the same ends through opposite, and sometimes mutually exclusive means. None of that is a bad thing.The bad thing is coming from the followers. Pogo's "We have met the Enemey; and It is Us." is more true today than it was then. I don't know precisely when or why individuals stopped making decisions based on long-term rationality, but we did as a group. And no amount of leadership will pull our collective wallowing selves out of the pit when it's where we want to be. I have some theories on it, but they're way off topic.So I'll return to topic. The housing bubble was a particularly poignant example of the folly of the crowds. We've said it here before:Everyone* KNEW housing prices could only continue to rise**. So they were right in a self-fulfilling prophecy until they weren't right anymore. Rationally it shouldn't have happened. But it's happened before (tulips, South Seas) so maybe man isn't as rational as he thinks?*A statistically significant percentage effectively equivalent to everyone. Obviously some of us here, and others elsewhere are not included, but we're the outliers, and at the end of the day, what is the semantic difference between, "for you and the many" and "for you and for all"?**Based on the obvious truisims of population increase, limited land availability, high desirability of THIS area, favorable tax shelters, baby boomers retiring, and Halley's comet coming around again.
Jeremy,I think your point about fannie/freddie is not accurate. The loans they get are not that large, like 20-30k max, and they are forgiven after 5 years of service or something. And if you look at the legislation about taxation on bonuses in congress, you will see that it hits mostly high earners, who were not eligible for these loans.
Cara - I have a very close relationship with several former members on the Fairfax County School Board. I spoke often with these people when looking into housing, specifically around the Lorton area (feeding into Hayfield). They told me definitely do NOT advise buying if it fed into Hayfield. This was their opinion, but I take their opinion with very high regard.I currently reside in Robinson's district and that school is regarded very highly. I also know Lake Braddock has the same high regards. So yes, I do agree that both are "way" better than Hayfield for a large number of reasons. But don't forget elementary schools too. Lorton Station and others lag dramatically behind.My realtor was very excited when I told her the schooling tree my house feeds into, as the Bonnie Brae/Robinson tree is regarded very highly.During my housing search, I did not focus on schools initially. It was a big mistake. After a few months, I really narrowed down my areas I was looking at solely due to schools. It really is very important.
T,Thanks! I really am wary of the only 80% proficiency in Algebra at Hayfield. That's pretty troubling to me... In the Burke area, to grab the intersection of walkable to the VRE while in a good elementary district I'm thinking, Bonnie Brae, White Oaks, Terra Centre and Laurel Ridge while avoiding Cardinal Forest.Given the long time line there's no way to know exactly where the boundaries will lie, which is why I like the idea of being happy with either high school my kids might get sent to.Any comments? (including things like can one walk through Pohlick Stream Valley Park to reach the rolling road station while living in White Oaks?) The idea of the VRE instead of the metro and the 10(15?) minute longer commute each way is taking some adjustment... Gives one half a mind to rent for 5 more years for convenience and not move until we need the schools...
Cara - FCPS has a lot of data on its web site regarding the various schools. As to the other resources, GreatSchools is better than Schooldigger (at least I've seen situations where the raw data that Schooldigger uses is just plain wrong).As to the schools that you're mentioning, Robinson, Lake Braddock and West Springfield are all schools that students in the area try to attend (there are more students assigned to other school districts that transfer to those schools than vice versa), whereas the opposite is the case at Lee and Hayfield. Hayfield has been jerked around by the School Board for years. More kids assigned to other schools transfer into Edison than out of that school, but the largest number of transfers to Edison are from Hayfield.
Thanks for those details Mozart. I'll play with the FFX website some more.School digger's mostly useful for being able to map all the schools visually so that I can tell proximity to VRE and metro stations.
I know White Oaks is a very good school. It is a GT center, so it takes in kids from other schools and thus its scores may be higher. If a child lives in its border, and is not GT, that child still attends school there but is in different classes.I don't know much about the walk to the VRE from there. I can answer a lot of other questions you may have about the area. Burke is a great place to live. Terra Centre is down the street but I don't know as much about it as I do Bonnie Brae and White Oaks. One thing I like about the general location of my TH (and any other near the burke vre) is you've got Walmart and Target within about 1 mile away, I can literally walk to Safeway, tons of restaurants and other stores. It is easy to get to 123, FFX Cty PKY, Braddock and Old Keene Mill. Those are the main avenues to 66, 495 and 95/395. It is definitely farther than Arlington/Alex, but I commute into DC every day. You just have to time things right and get into a pattern. I am actually moving slightly further away (West) because I know I can handle another 10 mins each day up the FFX Pky on my way home from 395 S.
t,Do you know of any TH complexes that we should specifically avoid in the area (outside of the cardinal forest district)? I.e. ones that you feel are way more run-down than others, or that have been hit really badly with foreclosures? We plan on starting the driving around and checking out neighborhoods this weekend. (too bad we don't need 4 bedrooms...and can't close until July anyway, and...)
I'll get back to you on that one tomorrow...
t,Thanks. I mean we will figure this out ourselves eventually, but we've spent a lot of time walking in the neighborhoods here, and have now decided not to buy here. Not that this wasn't good exercise.
Hayfield has always had a higher percentage of lower income students(even when I went there) than Robinson and Lake Braddock and that probably accounts for the lower test scores. Hayfield did have some discipline issues when the school was overcrowded in the early part of this decade, but I understand that it has improved since South County opened. Dr. Orhlein, the Hayfield head principal, was the VA middle school principal of the year a couple of years ago.
thanks HayfieldGrad.(we have such a rich source of lurkers on here)
Guys and gals,Is it me, or is the pace of REO listings picking up considerably. This could be part of the inventory dump we've been anticipating.
kevin,I've not seen it (anecdotally). I have seen more activity in prepping homes for listing though. I actually got to witness a trashout followed by a steam cleaning the next day.
Also, what sort of precedent setting are we as citizens willing to accept if the government can all of a sudden retroactively single out a specific group and pass legislation against those groups?Oh, you mean like banning gay marriage? Banning gays in the military? Banning stem cell research? Cutting middle-class social security benefits in order to pay for the tax cuts for the richest 1% of Americans, like McCain promised to do? Firing air traffic controllers to bust their union? Opening the national parks to mining/logging interests?Yes, we would NEVER let anything like THAT happen would we--that would be BAD. Especially bad if the people who were disadvantaged by the new law were already RICH BEYOND IMAGINATION. VERY bad. After all, THEIR lives/votes are more important than the lives/votes of the LITTLE people...right?
There is a shocking lack of leadership in our country right now.There is a shocking abundance of LAZINESS.There is a shocking abundance of CHEATING.There is a shocking lack of consumer savvy and skepticism.There is a shocking lack of financial prudence and austerity.There is a shocking lack of COMMON SENSE, critical thinking, or respect for capable intellect.There is a shocking abundance of attitudes of effortless entitlement--the "American Dream" is considered a right, rather than a reward.
There's a lot of chatter now in the MSM and elsewhere about it being a "Bill of Attainder".In the simplest terms, that article prohibits legislation punishing or penalizing a specific person or group without trial. In the Federalist Papers #44, James Madison wrote in 1788, "Bills of attainder, ex-post-facto laws, and laws impairing the obligation of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation."
Scott,Do you think making over 250K makes you "rich beyond imagination?" Because that's the criteria the House just used when passing this bill.Think of this scenario mentioned here at Bloomberg:You're a bank teller or a loan officer at a Wells Fargo branch and you're married to a lawyer/doctor/builder/IT Manager who makes $200,000 this year. Maybe you made $50,000. You get a $10,000 bonus for your good work during 2008. The federal government takes 90%. Fair to the little people?
Also, if you're married and filing singly, you'll have to surrender any bonus if your income is over $125,000.
@Harriett,Whiskey Tango Foxtrot . . ."Bill of Attainder" . . . Constitutional??? my goodness we've gone so far we aren't ever coming back. Show me where the bailout of AIG, GM, Citi, and the whole rest of the bunch is constitutional. If they'd ever bother to read the Constitution we wouldn't even have the Fed, or fiat currency (no emitting of bills of credit-1780s speech for fiat-the founders were WELL acquainted with paper money-Continentals anyone).I'm not for this 90% tax, but then I'm not for bailing any of these corrupt organizations either.Sorry folks, the game has changed. The only rule now is that there are no rules . . . except the ones made by those in power by the lobbyists to plunder and loot as much as possible.The Constitution . . . it's dead, put a fork in it, only the framework of the house remains. The inside of the walls, the flooring, the wood, the furniture, the pipes all rotten and rusted to the core. It was a great work of art, but it will take a massive restructuring and a lot of pain to root out the plague; unfortunately I don't believe we have the backbone to do so.
Scott, you're a dyed in the wool leftist. We don't need partisan hackery here. And, though I disagreed with it, there wasn't a ban on stem cell research. They just wouldn't fund it with federal tax dollars. Get your facts right before you spew your party's talking points.
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