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Arizona want to buy back their capitol building - 1/12/2012 9:29:10 PM   
erieangel


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Status: offline 		http://motherjones.com/mojo/2012/01/arizona-wants-buy-back-state-capitol-it-inexplicably-sold?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Motherjones%2Fmojoblog+%28MotherJones.com+|+MoJoBlog%29

Arizona's decision to sell off its state capitol to a private real estate company was perhaps the greatest drunken eBay transaction of all time, except in this case there was no booze involved, and the whole arrangement was justified on the grounds of austerity and small government.
The longer the state continues making payments on the property, the more the whole embarrassing episode will have cost taxpayers. That's what made the plan such a terrible idea to begin with (well, that and the fact that it involved selling off the state capitol)
_____

This entire plan would be like me selling my house (which is bought and paid for) and then paying the buyer rent so that I can continue to live there.  I might end up with a tidy sum of cash in the short term but in the long term, it benefits nobody but the buyer. 

And how does the selling of government-owned buildings which the government then has to rent equate to smaller government?






< Message edited by erieangel -- 1/12/2012 9:30:06 PM >
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RE: http://motherjones.com/mojo/2012/01/arizona-wants-b... - 1/12/2012 9:32:06 PM   
Hippiekinkster


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Status: offline 		You have identified the fatal flaw in "privatization"; it invariably ends up costing the taxpayers more. It's just a sneaky way of transferring wealth (through taxation) to the 1%.

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RE: Arizona want to buy back their capitol building - 1/12/2012 10:49:23 PM   
DarkSteven


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quote:

ORIGINAL: erieangel

This entire plan would be like me selling my house (which is bought and paid for) and then paying the buyer rent so that I can continue to live there.



That's called a reverse mortgage.  It's appropriate when the homeowner is nearing end of life.  In some ways it resembles a home equity loan (HEL).

The Arizona transaction could be a good deal, depending on the terms.


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RE: Arizona want to buy back their capitol building - 1/13/2012 1:26:51 AM   
erieangel


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Status: offline 		Reverse mortgages are a gimmick that steals the inheritance of the off spring.

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RE: Arizona want to buy back their capitol building - 1/13/2012 1:31:05 AM   
joether


Posts: 5195
Joined: 7/24/2005
Status: offline 		Holy Cow that's priceless! Are the folks in that state happy with Jan Brewer (the person they elected to office) now? And all the other Republicans they elected to their state goverment? Selling the state capital and now paying rent to the people that bought it? Would be amusing if the new owner said "The hell with it, let's just bulldoze it down and put up cheap apartments here..."

...WOW....that's conservative's 'smaller goverment' in action alright.

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RE: Arizona want to buy back their capitol building - 1/13/2012 1:43:09 AM   
MrRodgers


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quote:

ORIGINAL: DarkSteven

quote:

ORIGINAL: erieangel

This entire plan would be like me selling my house (which is bought and paid for) and then paying the buyer rent so that I can continue to live there.



That's called a reverse mortgage.  It's appropriate when the homeowner is nearing end of life.  In some ways it resembles a home equity loan (HEL).

The Arizona transaction could be a good deal, depending on the terms.


Well not to nit pick but it's actually called a sale and lease back (it always requires a defined lease or usually no financing) which is not only very popular but the corporate policy for example of Safeway stores. A reverse mortgage is a check from the lender each month amortized usually against 80% LTV. (loan to value) One does realize the tax benefit of the interest deduction but most don't make enough. If they did, they likely wouldn't need a reverse mortgage to begin with.

I am considering just such an offer now on the house as opposed to a new mortgage. But it doesn't do me much good unless a lump sum in the form of line-of-credit. My mortgage will offer a deduction yet my lease could be less, so it as always a numbers game.

Sale means capital gains tax and if I as planned, put the proceeds in the market, I had better do better there than all of expenses and the lack of a deduction if I lease.

It is a bit of a risk except that these houses are coming back and at full speed...10% a year.


< Message edited by MrRodgers -- 1/13/2012 2:06:38 AM >

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RE: Arizona want to buy back their capitol building - 1/13/2012 2:04:46 AM   
MrRodgers


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quote:

ORIGINAL: erieangel

Reverse mortgages are a gimmick that steals the inheritance of the off spring.


Actually no gimmickry involved just the typical American financial rip off. It is that ripoff that does any stealing. As usual, the in fact, very risk averse American investor also needs to know...he can't lose. So he gets laws passed to have the country, society...the taxpayer...insure his loan. What a deal hey ?

You're so poor and can't even handle your end of medical expenses and support yourself, that you need to what, take your only wealth left...your home equity. Lottsa points up front some added to the ticket. (higher interest) Then a higher rate is justified because it is presumed the borrower will sell or die before equity runs out. (hopefully)

I still haven't figured that one out. How is it that any reverse mortgage would need any insurance beyond the value of the house which is presumably the only criteria there is. It isn't income or credit number...there is none of either, hence the need for the mortgage in the first place.

Then it becomes just another REO but at prevailing prices, presumably higher...or essentially a pre-planned sale or foreclosure when either occurs.

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RE: Arizona want to buy back their capitol building - 1/13/2012 4:34:08 AM   
farglebargle


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Status: offline 		Won't SOMEONE think of the politically connected friends who profited from this scheme! They have mortgages on vacation houses and ski vacations to Vail to pay for, and that first class airfare ain't cheap!


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RE: Arizona want to buy back their capitol building - 1/13/2012 5:17:12 AM   
Hillwilliam


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quote:

ORIGINAL: erieangel

Reverse mortgages are a gimmick that steals the inheritance of the off spring.


I have no children so when the time comes...........

Also, My parents looked into one but they checked with me first and I indicated I had no issues. It's their money, not mine. I didn't earn it, they did and they can spend it the way they damn well please.

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RE: Arizona want to buy back their capitol building - 1/13/2012 6:37:45 AM   
MrRodgers


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quote:

ORIGINAL: farglebargle

Won't SOMEONE think of the politically connected friends who profited from this scheme! They have mortgages on vacation houses and ski vacations to Vail to pay for, and that first class airfare ain't cheap!


True enough but everybody with the money can do the same. Sometimes yes, the connected get better deals but then so do the rich who most often don't really even need a mortgage.

A reverse mortgage is not so much a scheme or financially cheating in any way. It is simply cashing out equity in your home...one month at a time. Lenders will attempt to extort every point in fees and interest rate they can and it is usually a very expensive loan...much more so than the typical govt. insured purchase loan, conventional mortgage.

Oh and the home must be 'owner-occupied.' That means the mortgagee must live there almost all of each year, maintain the value of the property and have it established as their primary address.

I am not sure entirely but just to cover it, obviously one cannot get a reverse mortgage on a vacation or investment home.

Seems with the value of real estate down, threaten to take the govt. out of the capitol building as a tenant and then have the govt., then Arizona buy it back with little or no gains to the seller. I mean is anybody going to lease the building in the marketplace ? I doubt it.

< Message edited by MrRodgers -- 1/13/2012 6:45:30 AM >

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RE: Arizona want to buy back their capitol building - 1/13/2012 5:16:17 PM   
erieangel


Posts: 2237
Joined: 6/19/2011
Status: offline 		My original question still stands:  How did selling the state house equate to a smaller government in AZ to begin with?

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RE: Arizona want to buy back their capitol building - 1/13/2012 5:45:52 PM   
mnottertail


Posts: 60698
Joined: 11/3/2004
Status: offline 		I don't know, but since most of the price of it was federal government money, they gotta get us back first.  Then they can worry about their second mortgage on the little shitbox.

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