Rusty Law

Bank History in Brief

The first Bank of the United States failed in 20 years.  Opened in 1791 it was gone by 1811.  The second one lasted only sixteen years.  After that followed a time known as the Wildcat period in banking until 1864 when Congress passed the National Bank Act, solidifying regulations and stamping “In God We Trust” on the two-cent piece.  National banking took off since then.  

The roots of modern banking began in Venice, Italy in 1587, where the housing market has been underwater for quite some time.  Banking made a significant development in the 1600’s when goldsmiths in England began issuing notes for money deposited in their strong vaults.  These notes came to be accepted as money.  

The Greeks coined money in the 700’s B.C.  The US Bar Cent of 1785 with a “USA” insignia was probably coined in England, where banking had been around since 1694.  If the one dollar bill has George Washington on it, why isn’t Abraham Lincoln on the sixteen dollar bill?  Most people don’t realize the US mint is still printing the two-dollar bill.  It’s the three dollar bill that’s out of circulation.  

Mortgage lending became popular after the Great Depression, when Roosevelt instituted a means by which homeowners could pay over time for their American dream.  This system of mortgage lending has enjoyed mixed results lately, but has outlasted the first Bank of the United States.  

We may be in for a Revised New Deal, but the nation lives on, as does its banking.  

Economic Heights in Haiku

K-2, G-20—

Letters have their own summits.

What heights will this fill? 

The leaders of the Group 20 nations and economies recently met and aspired to new economic heights in Pittsburg.  Meanwhile, the folks at foreclosure ground zero call every day and still can’t get through to Countrywide/Bank of America. 

Angele Ellis wrote her frustration in a haiku and stuck it on a marquee visible for the leaders of the world’s biggest economies.  She sums up what’s wrong in just 17 syllables.  Forget the MTV generation, haiku has been catering to short attention spans for 300 years.  It’s a form of Japanese poetry that challenges the author to write inside the lines:  five syllables, then seven syllables, then five in this three-line single stanza.  

The finance ministers and central bank governors of the Group Twenty meeting were not limited to seventeen syllables in their speeches.  These 20 represent 12 letters of the alphabet in country names, and 85% of the global gross national product.  They have bank regulations to consider: 

1. More capital on hand

2. Incentives to reduce risk

3. Save more, spend less 

The common sense of these regulations resembles the basis of the National Bank Act of 1863, the Federal Reserve Act of 1913, and the Banking Act of 1933.  In the ever-increasing global nature of economy, the future is not the past and hindsight doesn’t necessarily apply… 

However, those who

Cannot learn from history are

Doomed to regret it. 

Happy Anniversaries

One year ago I was admitted to the Florida bar, and my law practice has grown rapidly since.  My background in real estate title motivated me to attend law school.  I am proud to provide service in areas where legal and land issues often overlap.  

My family has been in the title business for thirty years.  We’ve enjoyed the ups and downs of the housing market.  When we opened the doors in 1979, the first month we only had two orders.  Even in the recent downturn of real estate, we’ve done better than that.  To celebrate our thirty years, we open the doors and say:  “We’re still in business!”  

A lot of title companies have closed in that time, and a lot of homes have gone into foreclosure.  These are not the best of circumstances, but I’m proud to say I have the real estate experience and the legal qualifications to serve those in need.  I’m willing to do the work and accomplish difficult tasks—happy anniversary to my family’s business and to me.  

Land Title of America and Rusty Law work together in the same building on South US 1 in St. Augustine, and we’re glad to be of service to our community.  

Therapeutic Divorce

Divorce is a blood sport, but it doesn’t have to be.  Therapeutic divorce offers an alternative to the traditional sense of “till death do us part.”  It does not mean you keep getting divorced until you feel better.  

Once the love is gone, it’s just business—therapeutic divorce upholds that statement.  The idea behind it is to work out the details while allowing both sides to continue to be good parents, good employees or employers, good at whatever it is that they are.  Therapeutic divorce is not a new concept, and there’s been a push for it in Florida.  

One of the caveats of therapeutic divorce is that if the negotiations break down, none of the attorneys can continue to be used by the clients.  This eliminates any attorney incentive to keep the couple fighting for more money.  It keeps the focus on the business of how best to deal with the details, and also does not make public those details.  Because the process goes through mediation and not through the court, the dirty laundry is hampered from public view, another amenity to therapeutic divorce.  

Divorce in some cases is necessary.  As with any legal matter, examine your options and determine what’s best for you.  

Foreclosure Sales - Deals in the Silver Lining

My father, Stan Collins, had the best comment when asked about foreclosure:  “I don’t want one.”  That’s the way most people feel about them, but they do create a healthy buyers’ market.  If you’re headed down to the courthouse steps to pick up a deal on a piece of real estate, here’s a few notes to take with your hat and coat.  

Don’t forget your wallet.  Have your cash handy to produce 5% of your bid amount upon sale; you have to pay the rest of it within two hours.  My father recommends that you save your money and take a whole bunch of it with you.  

Purchase of a foreclosure property is not without risk; however, you can minimize that risk by doing some homework.  Have a reputable realtor assess the value of the property.  This will underscore exactly how much of a deal you’re getting and help you set your bid price.  AND do a title search.  Make sure everyone’s on the note who has an interest in the property.  You don’t want to buy a bargain beachfront only to realize it’s a SECOND mortgage and your view is blocked by $400,000 of the first mortgage.  

Nobody wants a foreclosure… unless you’re on the buying side.  

Fed Up

The Federal Reserve Chairperson has got to be the ultimate anthropologist.  He or she has to observe human behavior over a myriad of events—acts of God, terrorism, natural disaster, and neutral distastes—and predict behavior into an increasingly global economy.  The past two living chairmen and current chairman have held significant roles regardless of the discrepancy in number of years at the position.  

The Federal Reserve has the reputation as the Fourth Branch of Government in the United States with a divine flare of mystery.  Ben Bernanke’s only served a few years but everybody knows he’s as American as road rage.  He came on board just as the housing bubble burst and has preached transparency every since.  Paul Volker served only eight years into the late Eighties and he’s got a position today as chairman of the President’s Economic Recovery Advisory Board, advocating banks’ retreat from risk, the risk that’s lead to the Uncle Sam’s Club of mortgage lending.  

Then there’s Alan Greenspan who lead quite the green span over four presidents, some with double terms.  While his adventures in the new world of global economy are uninhibited in reaching for sweeping hypotheses according to him, the fall of the Berlin Wall and the dissolution of the Soviet Union surprised him.  Then came the 9/11 Attack and he was astonished at how quickly ramifications were absorbed into the world economy.  Perhaps over 19 years he was lulled into complacency as the housing market blistered, then left everybody wondering if Bernanke is over-reaching or under-checking.  

That’s the height of the Fed.  

At the other end, you’ve got Lee Farkas of Taylor Bean Whitaker, a man who publically bawled out colleagues so often he became his own verb:  to be “Farkassed.”  Bet there was a lot of Farkassing just before the Federal raid in August.  He’s got global headquarters empty in Ocala—a lovely building featuring a stained-glass ceiling with a bull and bear depiction, plus an in-house chef serving roast ostrich to senior executives.  Thus Taylor Bean was fed up pretty good and now prosperous as the dodo.  

Driving Down Income

The gap is closing between the rich and the middle class, correlating with a narrowing gap between federally backed and privately funded loans.  It’s not the middle class going up, but the wealthy coming down.  

Just as the “Cash For Clunkers” program closes, Rolls Royce rolls out its economy model, the Ghost of the Phantom.  At two-thirds the flagship cost, you can have the iconic grill and the hand-crafted bull-calf interior, but downsized to a steel shell instead of aluminum, and boasting BMW electronics.  

Middle income Americans are still driving the same cars they were 30 years ago, though the more fuel efficient models.  But for those in the top 1% of wealth in 2007 (representing 23.5% of personal wealth in the US), the long-reaching ramifications of the mortgage crisis have affected their ability to inflate their income.  This year’s income is a ghost of what they once made.  

Loot

Sir Leonard Woolley got married in the midst of his archaeological excavations at Ur.  The dig was significant, Ur being the Mesopotamian birthplace of Biblical progenitor, Abraham.  Unlike the Egyptian pyramids, the royal tomb of Queen Puabi yielded vast treasures of gold, silver and lapis lazuli.  By the law of economics, you can’t help but wonder if Katharine Woolley didn’t marry Sir Leonard for the loot, kind of like how Wall Street got involved with the housing market. 

 

Supply and demand, demand and supply—the economy was getting fat in early 2000 A.D. with an increasing appetite, so much so that even subprime mortgages looked good.  Demand for risk began to rise.  There was a huge, untapped market share and lenders like Countrywide and Taylor Bean went into competition with each other to swallow up as much as they could to resell to Wall Street investors.  But these were not golden headdresses or bracelets and earrings weighted with silver and lapis lazuli.  The lack of value in these securitized packages toppled the integrity of the lenders. 

 

Katharine Woolley drove everybody nuts at Ur.  She was overbearing and the workers feared her.  Her attitude vacillated between queen and priestess.  Unwittingly, however, she managed to do a good turn when she ordered her husband’s assistant to escort a visitor.  The visitor was Agatha Christie, who fell in love with the archaeology and with the assistant.  They were married and she accompanied him on many future digs. 

 

The treasures of the mortgage crisis may not be as grand as Queen Puabi’s tomb, but perhaps there is some good that can come of this, at least as a warning to future Wall Street greed and banking judgment. 

Summonsing Time

Physicist John Wheeler of Jacksonville, Florida said that “Time is nature’s way to keep everything from happening at once.”  Foreclosure defense is like that.  Once you receive a lis pendens, you only have twenty days to respond.  Twenty days is not a lot of time, but it’s enough to launch a foreclosure defense. 

Attorneys have not accomplished time travel yet, but we can slow down events in a foreclosure proceeding, and allow you a broader opportunity to fully examine your options and set sustainable goals.  A foreclosure defense puts you in control.  

2016 - Where Will You Be?

Anything could happen in the next seven years.  The question is, where will you be?  

Chicago has put in its bid to host the 2016 Olympics, with some question as to whether America’s third largest city can afford it.  With a poor economy strickening the city’s ability to fund the necessary infrastructure, all eyes are on the President to make the case for his hometown and our nation.  China showcased its carbon footprint in its fireworks display.  What will the Windy City do to blow away doubts? 

Foreclosure defense isn’t as glamorous as competing for a gold medal, but in both cases, it’s goal-setting time.  A foreclosure suit may be a record-breaking goal-setting opportunity in your life.  It is a summons to examine your current situation, find out what your options are, and figure out where you want to be, both now, and in 2016.