It's all a Gray Area

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It has been said by many experts in the real estate field that we will never see this gravy train again with property owners yielding unbelievable profits that they enjoyed during the boom. They bought houses not only to provide a roof over their heads but also to reap rewards beyond imagination. Some bought just to flip and sell quickly to make small fortunes. For about a four year period, others took advantage of the unrealistic values in property going north and became wealthy through refinancing.

"Over the four-year period 2003-2006, annual construction spending rose to a level $150 billion above and then fell back to its long-run trend. Thus by the start of 2007, the United States was overbuilt: about $300 billion had been spent constructing buildings in excess of the long-run trend." Source: Pig Philosophy. The bubble burst and a lot of people got caught holding the bag.

We in the grassroots who fought hard for Amendment 4 could not fight the developer and special interest money. Our State was overbuilt but they still wanted to build more--still do. We changed our State leadership and Rick Scott gutted the DCA and other oversight. Now it will be up to the local municipalities to control bad development. Here in Lake Worth, that means 3 people sitting on the dais.

Bubbles always burst and when the housing bubble finally did, everyone was sitting with property they could not sell without taking big losses and property they could no longer afford. Banks created a big mess.

The Realtors Association has endorsed Triolo and Amoroso. The Realtors Association has one agenda--vote in candidates that will be the best for their members to make sales thus commissions. It is all politics and who they feel will be the best for their special interests.

But what the financial institutions also created was a refinancing mechanism for people to use during the boom times--refinancing and drawing thousands and sometimes hundreds of thousands of dollars out of a property that was artificially inflated. This equity also was used for people that were going through difficult financial times. No question about it; because of refinancing, more people became part of the foreclosure crisis unable to make their payments when the bubble burst and property values took a death spiral. Others lucked out as they had already extracted the equity and walked away.

During the first candidate forum by Tropical Ridge Neighborhood Association held at Compass, we had to listen to Dustin Zacks berate and humiliate Rachel Waterman and her financial problems. He implied that she was the biggest deadbeat in the history of mortgage scams. She got into financial difficulties as so many millions of people did during those boom years. As an attorney specializing in foreclosures who has proved that the banks were the fault, he blamed it on the person, the candidate, Waterman. Zacks is still a mystery of this campaign.

All of the candidates sat silently by as Zacks took personal attacks at Waterman for a default on her mortgage and other loans. Ms. Triolo also told us that she was the only candidate who owned a house. She was lucky during the boom. As property values kept going up at an unheard of percentage, she took advantage of cash value by drawing the money out of her property at 2417 N. Federal Highway, Lake Worth through re-financing mechanisms, starting with a mortgage of $229,600 and ending up at $417,000. She admits to having her own personal financial and health issues during this time.

The difference in the two candidates is one was a victim of circumstances and used the system but lost everything, the other was able to capitalize from the same system by taking advantage of an opportunity and make money. Perhaps this is just smart business. Although certainly legal, it is curious why a candidate who also experienced difficult financial times and therefore understands it and what Waterman might have been going through at the time, would sit silently during the Zack attack on Waterman.

Housing is still in the doldrums especially in Florida as we here have a good part of the distressed housing inventory in our State. We will eventually recover but it will take us a lot longer than other parts of the country. Pam Triolo says, the only victim is the City of Lake Worth and she is, after all, meeting her financial obligations.