PRESIDENT'S MESSAGE

Did you see the article in last month's PERSPECTIVE on Sub-prime Loans? If not, then, did you see the article in the October 6, 2007 Sacramento Bee's Metro Section, just opposite the Editorial page? Well, since then, it's occurred to me that there may be another solution besides the use of taxpayer monies for a bailout of lenders and borrowers that have been caught in this mortgage squeeze. Besides the article's suggested changes, like requiring accurate disclosures at the time of lending and consumer education, I think that mortgage companies, which made loans to borrowers with very high loan to income ratios, should be penalized. Traditionally, the loan to income ratio for qualifying for a loan was something like 37% or 38%, with an occasional "bump" to 40% for a borrower with excellent credit. But, just a few years ago, those ratios were well above the traditional limits, in some cases-like the case of the loan on my "new" house, about 60%. Well, that can mean disaster, in cases where incomes are fixed, or other sources of income are not available. Lending companies are not doing that now, and there ought to be some kind of penalties for lenders who made these kinds of loans. What do YOU think?

This coming year, the League wants to pursue the Mello-Roos bond oversight issue. Property taxes, together with bonds and community service district charges, now add insult to the injury imposed by sub-prime and negatively amortizing loans. However, a few years hence, we, who are now complaining, will NOT be complaining about the appreciation that we've realized.

If any of you readers have "pet" subjects or taxation "beefs" you would like to write about, please send your article, or a proposal for an article, to our Executive Director at his e-mail address: bob@sactax.org.

Please join us, and our new Board Members, at our next meeting October 18, 2007, at noon at Zigatos Restaurant. Thank you for your continued support.

Ken