Last week I said I would present a solution to the foreclosure mess in today’s post. However, I was sidetracked by two pieces I read in a friend’s newsletter. Since they are about the recently passed housing bill, I think they are important. After you read them, you too may decide they are important.

The newsletter is: International Council of Online Professionals and is published by jl scott (sic). She is the Director of i-cop located at http://www.i-cop.org. The pieces were in the August 11, 2008 edition.

She gave me permission to reprint the two items as long as I left them intact with the proper attributions. Please pay attention to the ramifications of this thing called a housing bill.

As you read them you will notice several things, one of which is neither author is actively involved in real estate or real estate matters. These are two citizens who took the time to read the damned bill and discovered business as usual is the name of the game under the guise of helping people who are in a terrible life changing situation.

Housing Bill” Affects E-commerce Merchants
by Tom Mahoney

Last week, President Bush signed the Housing and Economic Recovery Act of 2008 into law. Sure, another law will fix it. Hidden in the 700-page bill are a couple of totally unrelated provisions.
One relates to hurricane recovery and gives tax breaks to a Canadian rail car manufacturer in Alabama. Of course, in true government style, this has nothing to do with housing relief but after all, someone had their hand out and got their hand-out.

There are also some provisions in the bill for home buyer credit; provided that you’re a first-time home buyer between April 8, 2008, and July 1, 2009, and make under $150,000 ($75,000 if you’re single.)
And there’s an additional $1,000 standard deduction against property taxes ($500 if you’re single.)
You wouldn’t think any of this has anything to do with E-commerce merchants that accept credit cards, but you’d be wrong. You’d be wrong because there’s also something in the law for us lucky merchants.
Starting in 2011, banks or other companies that process credit cards must report the amount of the payments a merchant receives on card transactions to the IRS. The law will not apply to merchants doing less than 200 transactions totaling less than $20,000.

We can all thank PayPal (thank you PayPal) that the exemption amount isn’t $600. Yep - they tried to make it $600, a whopping $50 per month, but PayPal successfully lobbied to raise it to the current level.
So, starting in 2011, even some smaller e-Bay sellers will have their income reported to the IRS.
Just thought you should know.
————
Tom Mahoney, Founder and Director of Merchant911.org
http://www.merchant911.org
————

More on the “Housing Bill”
by jl scott

I thought you should know, too. I’ve been watching this for a long time. But, as little as about two months ago, I read that Congress was rejecting it. Wouldn’t you know, they’d slide it through by hiding it in the “Housing Bill!”

And, you should know this will include third party processors such as 2CheckOut and PayPal (who Tom already mentioned).

Some self-righteous people will say, “So, what’s the problem? We all have to pay our taxes, anyway.”

True - But There are SEVERAL Problems …
Not the least of which is that government will now have access to information not just of the sellers but of the BUYERS.

Unless it is stipulated differently - which I would seriously doubt - everything you buy online will now be accessible by the U.S. Government - and it will not matter what country you live in.
It may not be on the original report, but it WILL have to be available to back up the data. And, if it’s available, they’ll take it any time they please.

Talk about lack of privacy!

Second, will be the additional paperwork for your tax preparer - which YOU will pay for. These reports to the IRS will ONLY state how much money you received. It will NOT show refunds or any charge-backs, etc. All that will have to be calculated.

Third - the merchant account companies are sure to increase fees. You can bet THEY aren’t going to pay for the extra help and hours to prepare these reports - YOU will.

Fourth - in the past, if the IRS wanted to get information from banks and merchant accounts, it required going to a judge and getting a subpoena. Now, the IRS can step in and audit at any time - with a little or no notice. (emphasis added by Tom Koziol)

I’ve been told by a CPA, who is also a registered agent for the IRS, this law MAY be repealed. SOMETHING definitely needs to be done about the loss of privacy for buyers. And subjecting innocent customers from around the world to surveillance by the U.S. Government, is truly unacceptable!

Don’t panic - but, don’t ignore this, either. Pay attention to whatever is coming next!

This was a rather long post but I thought if you didn’t know the government has pulled another end around your Constitutionally protected rights, you should. The bastards actually used a scammed up housing bill to put greater monitoring and reporting controls on us.

To anyone who says this isn’t germane, I say you probably don’t buy anything over the web or don’t have a web based – even if part time – business. If you use any of the online based foreclosure sites to locate properties, you could be a subject of this bill. If you use the web to make, or apply for, loans, you could be a subject of this bill.

The list goes on and on but I will stop there. I thank jl scott for having the foresight to print this material even though her site has nothing to do with housing or foreclosures.

As it turns out, my proposed solution will put an end to this kind of preying on the people by the politicians. Maybe the above information appeared at just the right time.

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Tags: Economy, George Bush, Housing and Economic Recovery Act of 2008, housing bill, housing law, politics

A friend of mine sent me to this website: National Priorities Project

The headline on the page reads:

National Priorities Project analyzes and clarifies federal data so that people can understand and influence how their tax dollars are spent.

There is a link titled Affordable Housing Units on the page that tells you how many affordable housing units your city, county or state could have built had the money not been diverted to the war.

Since I live in a state where the foreclosure rate has been, and is still hovering around, 1 in 43 households, I wondered to myself if those dollars could have been used towards helping people keep their homes never mind building more. Or perhaps, those dollars could have been better used to maintain the infrastructure (bridges, roads, etc.) or better used in the education arena or better used well, just about anywhere else.< !–more–>

I am not endorsing the above website nor am I saying they are 100% on the mark. What I am saying is if this website is even 50% correct, do you suppose a percentage of our problem lies in the way our politicians throw away our dollars.

As it turns out, my eye wandered around on their home page and once again landed on their title line. Right there in plain view I saw a most glaring error. The website owners actually believe the PEOPLE not only can understand but influence how their tax dollars are spent. Obviously the website creators aren’t from Nevada…

The first and last time the people thought they could influence the way the government spent tax dollars, George Washington was president and he had to use soldiers to quell the rebellion. That’s right, the father of our country used armed force to crush the people’s spending wishes.

It appears the politicos have only changed modus operandi between then and now. Instead of using soldiers, they use foreclosure, bankruptcy, outsourcing, bailouts and other financial tools and ploys to quell the rebellion.

What rebellion you may be asking.

The rebellion symbolized by our children being displaced in the work force by people who have to sneak into the country under the cover of darkness rather than walk in during the day. The rebellion symbolized by gutless weasels like Mike Nifong and Jeremiah Wright.

I could go on with examples but I will spare both of us. All we have to do is open our eyes and there they are right in front of us.

I believe we instinctively know the only thing that keeps us from becoming a Zimbabwe or Beirut is trust. We trusted our representatives to do the right thing and they didn’t. Rather than keep the scoundrels from recreating another Savings & Loan crisis, they actively participated in giving birth to S&L revisited.

Unless you are completely devoid of feelings or thought, you know I’m correct. Trust is really all we have. We have to trust those we put in charge of the national treasury. We have to trust those we let make important, life changing decisions. And, we have to trust in each other.

Otherwise we will have 1 in 43 households not only in Nevada but in Texas, Florida, New York and every other state that starts with a letter of the alphabet.

P.S. Next week I will present a solution to the mess we are in that I think is absolutely on the money (no pun intended).

Tags: Economy, Foreclosures, Housing, money, politics, public policy, real estate, recession, S&L

Real investing is, and has always been, a topic that has generated a lot of interest. Some people are actually accomplished investors while others are dabblers with the remainder being “wannabes”. That’s the American way and nothing wrong with that unless you fall victim to a real estate hustler.

What’s a real estate hustler? If you have ever heard of a fellow named John T. Reed, you will know. A West Point graduate and former Army officer, Reed isn’t exactly your run of the mill dummy. However, he does carry an acerbic pen.

To give you an idea, he has a full page devoted to those folks who sell how to invest in real estate courses. He gives you in no uncertain terms who he thinks is a hustler and who he thinks isn’t.

As one would imagine, he has both critics and supporters. Personally I like the idea he created his guru rating. It at least gives a broader read on the former late night real estate hawkers.

There is an ominous overtone in his pages as well. If you go to his headline page, you will see this in the headline box:

USAA canceled my homeowners insurance and refused to sell me umbrella liability insurance because of this page

I hate to admit this but USAA is my insurance company as well. I have been with them since 1972.

From the letters he reprints it appears USAA has decided to censor Reed for his outspoken political views. Mind you, in my opinion and from I’ve been taught, your political views are not grounds for censorship by ANY insurance company.

I also happen to be a co-owner of an insurance agency. None of the companies we represent list “political views” as a ground for cancellation.

This has me a bit upset. His political views and his real estate guru views are his and his alone and not subject to any sort of admonishment by any entity unless clearly declared illegal by law or done in a slanderous or libelous way.

What upsets me the most is the arbitrary nature of USAA’s expressed objection. If they can cancel Reed for his political views and statements, they can then cancel me because I invest in foreclosures. It amounts to the same sort of sin if one reads their reasoning.

The signal might be that only certain investments are politically correct. The signal might be Big Brother has many ways to keep you in line. I could go on but you get the idea.

I am neither a proponent nor a detractor of Reed’s. What I am is concerned that the censorship line is getting wider and wider. I used Reed’s case only because he is well known in the real estate investment community.

Tags: gugu ratings, john t reed, politics, real estate, real estate guru, real estate ratings