Hooray for Governor Patrick

Three cheers for Governor Patrick for standing firm against the wrong for Massachusetts Gambling bill the legislature sent him.

BOSTON – Saturday, July 31, 2010 – The following is a statement from Governor Deval Patrick.
“The decision we make to expand gaming in Massachusetts will impact our state for decades. We have to get it right. Destination resort casinos will bring thousands of new jobs and increased economic development. Slots parlors will not. That is why I proposed licensing up to 3 destination resort casinos, and chose not to include slots parlors in my original bill.

“I believe that the bill before the Legislature provides for more licenses than the market can bear, and will therefore not produce the job creation and economic benefits that destination resort casinos would provide. In addition, the inclusion of two slots facilities for the tracks brings social costs without the benefits, and amounts to a “no-bid” contract for the track owners. I have been clear from the beginning that is not something I can accept.

“I have proposed a compromise that provides for one slots facility in addition to destination resorts, so long as that competition for that license is open and transparent. The Legislature has so far rejected that compromise.

“If the Legislature insists on sending me their gaming bill in its current form without addressing these concerns, I will send it back for amendment. The amendment will largely be the full text of the destination resort casino bill passed by the Senate last month, which is similar to and based on the legislation I filed in 2008.

“This amendment keeps faith with my convictions about the best long-term interests of the Commonwealth and with our shared interest in job creation. I hope the Legislature will see their way to enact the amendment. However, if the House and Senate choose to send back a bill with two slots facilities and without a truly open and competitive licensing process, I will veto that measure.

“Whether we ultimately agree on a gaming bill or not, it is imperative to the people of the Commonwealth that we see final action on the other pending measures that will expand job opportunities and on which there is support in both houses. Bills are ready for final action to promote further economic growth, to gain access to credit and lower health insurance premiums for small businesses, to reform our broken CORI system and enable former offenders to get back into the job market, and to lower energy costs by enabling more wind power. They all deserve favorable action before the Legislature adjourns tonight.”

Popular ‘Zero Down’ Mortgage Program Makes Comeback

The Wall Street Journal
Erick Moore used a no-money-down USDA-backed loan to buy his four-bedroom house outside Raleigh, N.C.

One of the nation’s last sources of no money down financing for home loans appears to be making a comeback: Legislation that restores a Department of Agriculture home-buying program is headed to President Barack Obama’s desk for signature.

The legislation makes the USDA’s Single-Family Housing Guaranteed Loan Program self-sufficient, the National Association of Realtors reports. Borrowers will have to pay a higher “guarantee fee” of 3.5%–essentially upfront mortgage insurance–but the fee can be folded into the mortgage.

Buyers won’t mind paying a bit more in fees, says Sue Botelho, a senior mortgage advisor with Waterstone Mortgage Corp. in Ft. Walton Beach, Fla. “It’s great news,” she said. “It’s a huge part of my business. I am thrilled.”

Also happy is LGI Homes, a Texas builder that caters to USDA buyers. Chief Executive Eric Lipar estimates he’s lost 100 sales in the last few months.

“Once funding’s officially in place, we’ve got customers waiting,” he said.

The USDA wasn’t immediately available for comment.

As we’ve reported, the program offering no-money-down loans in certain parts of the country for low- and middle-income borrowers, exhausted its $13.1 billion funding earlier this year, leaving some would-be buyers fearful their financing would fall through. USDA loans were particularly popular this year as first-time buyers tapped the government’s federal home buyer tax credit. They have until Sept. 30 to close.

Despite the last-minute save for USDA borrowers, industry watchers haven’t stopped criticizing zero-down deals-given the role they played in the housing crash. The USDA program is considered safer because up to 90% of the purchase amount is guaranteed, meaning the agency will pay should the borrower default.

The USDA has previously said that last fiscal year’s foreclosure rate was 1.72%, well below the Federal Housing Administration’s 3.32%. Borrowers also can’t make more than 115% of a county’s median income, preventing McMansion-sized loans: The average USDA loan is $112,000.

The strong guidelines weed out potentially troublesome borrowers, Ms. Botelho said. “When they approve a loan, it’s a very, very good loan,” she said.