Thursday, May 27, 2010

Another deceptive mailer sent to Democratic voters

The flyer that was mailed to my house sure looks like it came from the Democratic Party; it says in large capital letters, "VOTER INFORMATION GUIDE FOR DEMOCRATS." It contains color photos of Jerry Brown and Barbara Boxer.

But Democrats don't support Proposition 16. So why does this deceptive flyer urge me to vote to help energy companies?

I think the flyer was paid for by friends of Pacific Gas & Electric, which is hoping to prevent municipalities from providing energy to citizens. After the energy companies caused the horrible California financial crisis of 2000-2001, they should allow citizens to defend themselves from unscrupulous corporations who are happy to plunge an entire state into crisis in order to increase profits.*

This kind of deception is why voters need good reading and thinking skills, and this deception may also explain why those in power allow (or perhaps encourage?) our failing education system to continue shortchanging children. It's shocking to me that the biggest changes have merely led to privatization of education, not real change. We now have a bunch of failing charter schools in addition to failing public schools. The success rate hasn't changed significantly, and I don't think it will until we change how teachers are evaluated.
*From Wikipedia:

The California electricity crisis, also known as the Western U.S. Energy Crisis, of 2000 and 2001 was a situation where California had an artificial shortage of electricity. The state suffered from multiple large-scale black-outs, one of the state's largest energy companies collapsed, and the economic fall-out greatly harmed Governor Gray Davis's standing.

Artificial supply shortage was created by gratuitously taking power plants offline for (unnecessary) "maintenance" on hot summer days of peak demand. Rolling blackouts adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced a large number of retail consumers. This demand supply gap was further exploited by energy companies, mainly Enron. Enron traders were thus able to sell power at premium prices, sometimes up to a factor of 20x its normal peak value. State cap on retail electricity charges squeezed the industry's revenue margins, causing the bankruptcy of Pacific Gas and Electric Company (PG&E) and near bankruptcy of Southern California Edison in early 2001.

The financial crisis was possible because of deregulation legislation instituted in 1996 by Governor Pete Wilson (Republican). Enron took advantage of this deregulation and was involved in economic withholding and inflated price bidding in California's spot markets. The crisis cost $40bn to $45bn...

Tuesday, May 25, 2010

Would Lorie Zapf bring "strategic fraud" to City Council?

Would Lorie Zapf bring "strategic fraud" to City Council?
by Pat Flannery
Blog of San Diego
May 24, 2010

Lorie Zapf, a candidate for City Council District 6, is attempting to turn a bust into a boon. Last week Dave Maass of CityBeat broke a story busting her for being in default on her family home in Clairemont. Responding to CityBeat Ms. Zapf tried to paint herself as the champion of all families who are attempting to negotiate a modification of their mortgage with their lender.

Maass asked me for my (real estate) opinion on the veracity of Zapf's claim, that "strategic defaults" are now commonplace. I told him it was "B.S." Lenders do not modify loans for borrowers who have the means to make their payments. Modification is for families who have genuine hardship, not slick real estate professionals like Zapf's husband.

Before responding to CityBeat I pulled the relevant Deed of Trust and the Notice of Default from the County Recorder. The loan on which the Zapfs are in default is an interest-only Home Equity Line of Credit (HELOC). A quick look confirmed that Zapf's "explanation" to CityBeat was indeed B.S. HELOC rates are already the lowest rates available.

Reporter Maass was now caught between two opinions on "strategic defaults". Mark Goldman, a real estate lecturer at SDSU, was telling him "In order to just have the bank consider your request, they pretty much force you into going into default. There’s a lot of people in that situation.” A classic example of "Those who know, do. Those who profess to know, teach". But the journo handbook requires that reporters call know-all professors.

Then CityBeat asked me to research another Zapf Notice of Default, this time in Las Vegas. Was this too a "strategic default"? So I dug out all the Zapf documents on their property at 2446 Craigie Castle St., Henderson, NV. It is a 4 bedroom, 2 bathroom single-family house built in 2004. The Zapfs bought it from the builder, Dell Web of Arizona, on September 10, 2004 for $511,875 as a second home.

It was a "second home" because they used "second home" financing. They got a $417,950 first loan and a $52,277 second, both from Countrywide. Wife Lorie would have to be intimately involved. A husband can't get "second home" financing without a wife's full cooperation. Their combined 1st and 2nd loans, $470,277, was 92% financing. That kind of loan-to-value ratio is not available for investment properties. If Eric rented out this property as an "investment", he defrauded his lender and Lorie was equally responsible. Yet that is exactly what Lorie told Channel 10 they did. She said it was an investment property, owned by her husband...

Friday, May 21, 2010

Ethics Official Says Nancy Graham's Actions Had 'Appearance of Corruption'

Perhaps Gil Cabrera wasn't the right person to head the San Diego Ethics Commission. He has made a career defending those accused of white-collar wrongdoing. Now that he's gone, the Commission is at last going after real corruption rather than small mistakes in reporting campaign finances.

* San Diego news, analysis and conversation.
* Government

Ethics Official Says Graham's Actions Had 'Appearance of Corruption'
May 20, 2010
Voice of San Diego

Sitting a few feet from Nancy Graham, one of her former bosses testified Thursday of how hard the former Centre City Development Corp. president worked in San Diego. Came in early, CCDC chairman Fred Maas said. Stayed late.

When first raised questions in 2008 about Graham's undisclosed financial ties to developers doing business downtown, Maas gave Graham the benefit of the doubt, he told the San Diego Ethics Commission at a daylong Thursday hearing. She was the agency's president, he said, and he held a "kinship" with her.

Maas recalled asking Graham directly about the financial relationship: Did she know where her past business venture's income came from?

"I was told absolutely not," Maas said. So he stood up for her.

Then VOSD reported that Graham earned more than $3 million from a Florida development deal. Lennar Corp., which paid her from that deal, owned land in downtown San Diego, the site of a proposed hotel that Graham was negotiating about.

Graham never reported receiving those millions on her annual conflict disclosure forms here. If she did, she would've had to recuse herself from negotiations designed to clear the way for a hotel on the land adjacent to Petco Park. If the hotel had been built, Lennar and another developer would've made about $100 million...