It sickens me when I hear that people such as Lloyd Wright have a mortgage that exceeds the value of their home. Is this just a byproduct of the economy? Or just misfortune? I dont think so. Here is what Beaumont wrote into its Bond language to address the risk associated for potential Bond buyers.
"...in the language of Bonds....Here is how you can tell who reads the fine print...**************************************** "......The failure of the District (Beaumont Community Finance District) to comply with its reporting obligations is not, initially, a default under District Indenture."
AND sorry Lloyd and others this language
".........In the opinion of some economists, the significant increase in home prices in this time period has been driven, in part, by the ability of home purchasers to access adjustable rates and non-conventional loans. If interest rates on new loans increase and if the interest rates on existing adjustable rate loans are reset (and payments are increased) there could be a decrease in home sales due to the inability of purchasers to qualify with higher interest rates. Such a decrease in home sales could, eventually, result in a decrease of home prices. Such a reduction in home prices could result in recent home buyers having loan balances that exceed the value of their homes, given their low down payments and the small amount of equity in their homes.."
http://emma.msrb.org/MS256076-MS231384-MD451085.pdf
THE CITY KNEW THIS WAS GOING TO HAPPEN!
I will bet dollars to donuts that these words never crossed the lips of any real estate agent in your purchase process. But Beaumont wrote it into the risk assessment part of the Bond Sale, knowing full well this would be the result. As long as someone..anyone is on the hook for fees to repay these outrageous Bond schemes the City could care less.
