http://www.seattleweekly.com/2008-07-23/news/mckenna-distressed-over-one-of-his-bills

This article from Kenneth Harney explains it pretty well.

http://seattletimes.nwsource.com/html/realestate/2008086783_harney03.html

Marcie Maxwell is running for the vacancy as State representative in district 41 (mine…NE Renton, Mercer Island, Newcastle). She has been on the Renton School board since 2001, and has been a Realtor for 19 years.

At least she should understand issues related to the field of housing and education. Couldn’t do a whole lot worse than Weinstein did.

TV and the internet have gone a long way towards the building of “desire” of what our society expects towards more and more material things. She and many others took the bait of the 100% financing because she wanted what she was taught that she should & could have. And her mortgage company very clearly told her “you can have this house, sign here”.

During those years, how could the unsophisticated know they couldn’t be part of boom times too?

How many popular TV shows are there that focus on wealth and real estate? Far too many.

I agree fully on this. I’m going to track legislation much closer, but in the case of the distressed property law I don’t think that would have been enough, due to the last minute changes.

Oh, and BTW, if nominated, I will not run, if elected, I will not serve.

RCW 19.144.050
Negative amortization — Limitation.

A financial institution may not make or facilitate a residential mortgage loan that includes any provisions that impose negative amortization and which are subject to the interagency guidance on nontraditional mortgage product risks and the statement on subprime mortgage lending.

“Interagency guidance on nontraditional mortgage prodict risks” and “statement on subprime mortgage lending” are defined terms:

(11) “The interagency guidance on nontraditional mortgage product risks” means the guidance document issued in September 2006 by the office of the comptroller of the currency, the board of governors of the federal reserve system, the federal deposit insurance corporation, the office of thrift supervision, and the national credit union administration, and the guidance on nontraditional mortgage product risks released in November 2006 by the conference of state bank supervisors and the American association of residential mortgage regulators.

(12) “The statement on subprime mortgage lending” means the guidance document issued in June 2007 by the office of the comptroller of the currency, the board of governors of the federal reserve system, the federal deposit insurance corporation, the office of thrift supervision, and the national credit union administration, and the statement on subprime mortgage lending released in July 2007 by the conference of state bank supervisors, the American association of residential mortgage regulators, and the national association of consumer credit administrators.

So basically you’d need to read both those things to determine whether a reverse mortgage was illegal. I haven’t read either, but I’d suspect that you could probably come to different interpretations of the legality if you did. The cautious and safe approach would be to simply quit doing them.

BTW, the legislature could have avoided this issue entirely by having this definition include reverse mortgages and then defining reverse mortgage:

(10) “Residential mortgage loan” means an extension of credit secured by residential real property located in this state upon which is constructed or intended to be constructed, a single-family dwelling or multiple-family dwelling of four or less units. It does not include a reverse mortgage or a borrower credit transaction that is secured by rental property. It does not include a bridge loan. It does not include loans to individuals making or acquiring a residential mortgage loan solely with his or her own funds for his or her own investment. For purposes of this subsection, a “bridge loan” is any temporary loan, having a maturity of one year or less, for the purpose of acquisition or construction of a dwelling intended to become the borrower’s principal dwelling.

But seriously, this year has made me realize that I must pay much more attention to the legislative process, and devote time and dollars to the politcal process, or suffer the consequences.