Fuck Fannie!

This is going to be a little rant about the state of the housing market and Fannie Mae. Since a bunch of you guys are lawyers I would love to hear your thoughts as well as whether or not you want to be famous. This is the way I see and understand things and since it's me, I guess it's at least 10% correct. OK, here goes.

Fannie Mae is a monopoly and is breaking antitrust laws in the US.

I want to find out if I can sue them or start a class action suit against them. What am I talking about? Have you heard about the 4-loan rule that Fannie Mae has put in place? Well here's the problem in a nutshell. Fannie Mae owns the secondary mortgage market and has decided that anyone who has 4 outstanding loans cannot even APPLY for another loan. So this means they are killing every investor-run real estate business out there.

Let's say you want to invest in real-estate since, you know, there are hundreds of thousands of empty, deteriorating, rodent infested, roach filled, windows broken, copper stolen, eye sore, bank owned homes on the market these days. So you want to go out and buy something on the cheap because you heard the banks are pretty much giving away empty properties.

But you own a home (with a mortgage) and you already took out a home equity loan to finance some improvements or pay off your car loan. And you have that lot on the lake that you hope to build on one day and that's partially mortgaged too. And you have a rental property that you bought and financed, have a great tenant in, who pays the rent on time and never wants to leave. So you're in pretty good shape to grow your real-estate business, but you WILL NOT BE ABLE TO GET ANOTHER LOAN. Because Fannie Mae, a company who has lost BILLIONS of dollars mismanaging it's business and then got pumped full of your tax-paying money because the federal government wanted to save it for some reason, decided that nobody with four loans to their name can get more loans.

Let's count the loans:
1. Primary residence home mortgage.
2. Home equity loan on primary residence.
3. Mortgage on lake lot.
4. Mortgage on rental property.

You're done! You're finished! You CAN NOT get another loan. You can sell one of your properties and get a new loan if you wanted but that is just ridiculous. It doesn't matter that you have a 730 credit score. It doesn't matter that your wife and kids are all working and you have 4 jobs. It doesn't matter that you have a net worth in the millions. You will not get another loan.

Now you say to yourself "self, let's go to a small local bank, they will be happy to help a small business like mine." But you would be wrong. Because everyone who gives you a mortgage has to use Fannie Mae software that will tell them what Fannie will buy from them in the future. That software will normally show what rate to offer based on your net worth, credit rating, how much equity you will have in the property and so on. Because Fannie Mae is the only company that will buy these loans and sell them to someone else. Because they are a monopoly.

See, this is how the whole problem started in the first place. Little banks and shady mortgage brokers would sell risky loans because they didn't care what happened to them later. Fannie Mae would package up all that craptastic debt and sell it to the big banks who would then bundle it up in all sorts of mortgage backed securities or some other financial instrument that nobody understands. Broker gets a commission, bank gets a commission, Fannie takes a cut and then big banks eventually go belly-up.

So what's the right move? Let's not give out any more loans. Makes perfect sense.

But who will buy these hundreds of thousands of empty, foreclosed, bank-owned homes? Will someone just walk up off the street and buy these houses? When they can walk up to a brand new house a few blocks away, that the builder is desperately trying to get rid off so that he can pay his builder loan and not lose the rest of his empty development?

No. The only people who will buy these places are investors. But Fannie Mae has locked them out with this 4-loan rule. So we are basically in a deadlock. And the result will be catastrophic. Let me try to pain you a picture that is easy to understand and is not so far fetched:

Two people in your neighborhood have lost their jobs. They were struggling to pay their mortgage payments anyway since they got some sort of ARM (adjustable rate mortgage) where they only had to pay 1% per year for the first 3 years, but now the real rate kicks in and they have to come up with 7%. So their payment just ballooned and their paycheck has evaporated. Since they actually have no equity in the home anyway, because the loan they got was for 100% of the home value, plus money to cover their credit cards, plus money to cover their car loans (which brings the total loan value to 130% of the home value - sound business logic there to being with), they can just easily default on their loan and let the bank try to sell the house in a down market.

So now there are two foreclosed homes in the neighborhood and since the bank is usually not a very good homeowner, is not interested in home ownership and doesn't want to spend a single dollar making sure the place is ready to sell, the house starts to slowly crumble. Some hoodlums break a couple of windows and spray graffiti on the outside and inside, a stray dog wonders in a craps all over the carpets, the gutters fall off and water leaks into the house. You get the not-so-pretty picture.

So now you have two eye-sores in your neighborhood that you thought was quaint and charming when you moved in a few years ago because it was in a great school district and had wonderful amenities and neighbors. And those eyesores are selling for less and less every month because even though the bank paid 130% of the value of the homes, they need to get them off their books and they keep slashing the prices in hopes of just taking that loss.

So now your house is worth less and less every month. And you live next to an abandoned, rotting, excrement-filled shack. This is exactly what you promised your wife and kids, right?

And it's all Fannie Mae's fault.

I want to sue them. But the problem is, I don't want to pay to sue them. Because suing the government is too expensive. And even if this becomes a class action suit, the kinds of lawyers who take on this stuff usually get paid out of the settlement. But in this case I doubt there is going to be a settlement because there is no real monetary damage unless you count loss of wages, which is a long shot.

So the only one who will take this on is a lawyer or law firm who wants the fame, prestige and the ego boost to be able to say "I/We crushed Fannie Mae! I/We saved our country's economy! I/We turned around the worst housing market in history!"

Anyone out there want to step up and take a swing?

And, oh yes - FUCK FANNIE MAE!

No Way!

This might be a real oldie by now, with the Superbowl next week and most fantasy leagues finished. But I just saw it today and thought some of you will get a kick out of it. So enjoy:

Homegame Winah!

Went to BK's to play a belated monthly homegame. First game 13 players, two tables, merged at 10. I didn't make a single mis-step. Obviously got AK vs KQ to never hold up. Down to four and everyone is all "let's chop" (3 paid). Even chop, blah, blah, blah. I said no. Even though I was short stack. I didn't come to chop. I like bubble play. I like short handed. I like first place.

So I knocked out BrainMc in 4th. Sorry bubble boy. Now I am the chip leader and I say I will take first and they can chop however they like. But they are all mad. Mad, I tell you. So no chop. We're heads-up. Let's chop? Sure, let's see chip counts. I have double Tim's chips, so I take first place money and he takes second. So I basically won. And got 3 bounties. Score!

Second game, 12 people, 2 tables, was annoying cause half the people were hammered from drinking Sweet Water something or other. Really strong beer. I had tweo in the first game and felt it. They were pounding them down from the basement tap. Yeah, BK has the best basement. With a bar and tap. Awesome.

So the game is real slow and people are just playing awful and it is getting on my nerves. Obviously, I get AK vs KQ to never hold up again and get down to 700 chips with the blinds at 600/300. And I am in the SB. So I triple up and basically see everyone slowly bust out. We're down to four and Chris is unintelligible. He and his tiny bladder stagger off to the bathroom and I say, I've had enough of this, let's chop, I'll take 3rd place money and you 3 chop the rest. We let two people rebuy so there's an extra $40 in the prize pool anyway. They agree and we wait for Chris who is taking his sweet time.

He eventually comes out and starts apologizing for knocking over some 'formula' and breaking it. And it's all over the place and he's so sorry and he didn't do it on purpose and he's sorry and he's really sorry and sorry. What kind of formula? Well it was some sort of bathroom perfume and the whole thing stinks to high heaven. So yeah he wants to chop or whatever cause he's really sorry and sorry and really.

So, I double my buy-in and keep my bounty. I made it to 4th and didn't knock anyone out. Weird. Let's see: $20 buy-in x 2 games and 2 x $5 bounties paid to play. 1st and 4th and 3 bounties (in the first game) = $140 + $20 + $40 + $5 = $205 = $155 profit means 310% ROI. Nice!

Homegame Winah!

CNN / Netflix Ad FAIL!

2008 Blog Stats Review

Well, really who the hell cares, right? I do! Damnit!

I won't bore you with too many details. But it was surprising to me that although I pretty much stopped playing online poker on a regular basis in '08 the blog got more readers for some reason than the previous year:

9,874 Visits
Previous: 8,157 (+21.05%)

6,719 Absolute Unique Visitors
Previous: 4,878 (+37.74%)

66.64% New Visits
Previous: 59.62% (+11.78%)

A whole lot of new visitors. Where did they all come from? Well there was an increase of over 600% for visitors who came from images.google.com - but Google Analytics will not tell me exactly what image they were looking for, so I don't know how to duplicate this success. So looking at what was the top content I can tell you that people love FAIL. This was the most viewed page other than the homepage:

http://www.kajagugupoker.com/2008/05/more-fail.html

But the strange thing is that only the bottom image is actually one that I uploaded, the other one and the video are links. Why would images.google direct that traffic to me?

I have to give a shout out to some other peeps who sent traffic my way:

1) Hoy - Still my top referrer for some unknown reason even though he claims I am a hater. Thanks buddy. Way to kill those UB sniper games lately.

2) Riggs - Thanks buddy. Always brings up memories of Lethal Weapon (was it 2 or 3) where the fat fuck from South Africa told Mel Gibson: "Officer Riggs, you can't even give me a parking ticket. So who's the dickhead now, eh?"

3) Loretta - Yes, he's a dude with a chick name.

Top 3 is enough, right?

People from 95 countries came to visit. I think that's pretty cool. Lat two on the list are two places I would like to visit: Faroe Islands and French Polynesia. Send tickets next time you visit. Pretty please...

People searched for 1,292 keywords this year which led them to this blog. But that is way too boring and this post is getting too long anyway.

Have a terrific 2009 everyone! Thanks for coming to visit and y'all come back, okay?