Get a load of this!  If you want to know why your water rates are going through the roof, it’s not just because the city financed a majority of the bonds to purchase the water company with adjustable rate loans that have gone through the roof, but there’s evidence that when the people who used to run this place paid more than $500 million for the water company a few years ago, they overpaid by $200 million.  I need a drink, and it won’t be just water.

The following is a guest column by Indianapolis attorney Mike Norris.

More consumers are losing their homes than ever before, and more lenders are foreclosing their mortgages than ever before. Both sides are losing faith in the American mortgage lending system, even though one wants payments; the other is willing to pay. One wants the house; the other doesn’t want the house.

There are five variables with which we can tinker: term, interest rate, payment, starting balance, and ending balance. The important issue to most consumers is: “the payment is too high”. For that reason, extending the loan term, or lowering the interest rate, or adjusting the loan balance become powerful tools in a loan workout.

In an example, Harry Homeowner has bought a home for $200,000, with a loan of $190,000 at 7% requiring a payment of $1,264.07 per month. After 24 months of payments, Harry Homeowner loses his job as a mortgage broker. Harry Homeowner realizes he still owes $186,000.40 of the original balance. In the middle of his job search, no mortgage payments are made for two years. With 7% interest, after two years of payments and two years of no payments, Harry’s loan balance is now $213,864.38.

Adjust Term & Rate:

• A possible adjustment can be made if the loan balance is considered (after two years of nonpayment) to have grown at only 5% interest per year, with a current balance due of $205,519.53. Assuming the lender is willing to accept this sum over 40 years at the original 7% interest (even though $16,000 more is owed than the original balance), Harry Homeowner has a new house payment of $1,277.16, just $13 more than he was paying originally.

Keep the Original Terms

• In another example, what if both homeowner and lender were hoodwinked? If the home value has gone down, and now the home is worth only $160,000, what if the owner is “upside down”, with a loan balance of $186,000? Is there any need to call the loan due, because of the negative equity? Absolutely not. As long as the homeowner can make the payments, he should be encouraged to do so.

“Back End” Payment Shortfalls

• With an adjustable rate mortgage on a home with lots of equity, what if the mortgage rate goes up? Perhaps some part of interest can go unpaid, added to the “back end” of the loan. This is the theory of the FHA “reverse mortgages” given to those over 65: they actually pay no payments at all!

What if Loss on Transaction is Too Great?

• If indeed the federal government intends to be a “backstop against losses” for lenders who hold “toxic assets” among $4.5 trillion of mortgages, are we not wise to make those assets less toxic? Any deal to keep homeowners paying and living in the home is good for us as taxpayers. Make the homeowner pay to stay, on whatever level is possible. Be flexible with that homeowner and the eviction process. Every penny of rent/mortgage payment tendered goes straight to the bottom line and paying expenses.

Knowledge is power. The math allows very flexible solutions to end the mortgage crisis immediately, if we work together. Due to the depth of the current crisis, the time to act, in strict accordance with the math, is now. As every executive knows, the ineffective bring problems to the table; winners bring solutions to the table. Let’s get ‘er done.

For more information contact: Michael J. Norris Attorney at Law, mike@mikenorrislaw.com, (317) 266-8888.

The movement toward government reform moved slowly today as the Indiana State Senate approved an amendment to a township government consolidation bill that would give county councils oversight over township budgets and eliminate their advisory boards.

Marion County was excluded, but the bill also calls for full disclosure of township expenses, such as renting space from your own home and billing it back to the taxpayers.

Throw another name into the ring of potential Democratic contenders for Mayor of Indianapolis.  The latest addition I hear wanting to run against incumbent Greg Ballard in 2011 is lobbyist and former Democratic State Party Chairman Kip Tew.    Tew was also a senior advisor for Barack Obama’s Presidential campaign in Indiana and was aide to former Mayor Bart Peterson.  

So far, the list of Democrats possibly running for Mayor include former Deputy Mayor Melina Kennedy, Sheriff Frank Anderson, former 7th District congressional candidate Dr. Woody Meyers and former Indiana Secretary of State Joe Hogsett.

The conventional wisdom is that Democrats think Ballard will be easy to beat because of the County’s political tilt, however they privately begrudge the fact that the Mayor’s approval ratings are in the 60-70 percent range.

While en route to Washington D.C. this morning, Governor Mitch Daniels’ plane had to be diverted to Columbus, OH.  Press Secretary Jane Jankowski said the plane had to land in Columbus after cracks had developed in the windsheild of the aircraft.

The Governor is making his scheduled appearance on Face the Nation to talk about the economic stimulus’ impact on Indiana, but his Fox News interview with Chirs Wallace at noon has been cancelled.

The Governor is expected to take a commercial flight this afternoon and resume his normal schedule at the National Governors Association.

Here’s some reaction from yesterday’s State of the City address…

Democratic City-Councilor Mary Moriarty Adams

Marion County GOP Chairman Tom John

Marion County Democratic Party Executive Director Adam Kirsch

Enjoy.

One way I tend to gauge how well elected officials are doing is by listening to their critics.  If their critics have nothing good to say about them, then that probably means they’re doing ok.  Such is it with Greg Ballard and his critics.

Now before we go any further, let me say this so some of you don’t have to.  “Abdul, you and the Mayor are friends and you will never write anything critical of him anyway so why should we read what you have to say?”  Two things, first you don’t have to read anything I write so you can stop here and go back to YouTube.  Second, you may disagree, which is fine, but unlike a lot of other people who scribble on the Internet, I have the distinction of actually being in the room when these things usually happen and talking to people before and afterwards.  So with that all out of the way, let’s talk about the State of City.

First, did Greg Ballard use an oratory style worthy of King or Obama?    No, of course not.  He was a bit monotone and somber, but it was a delivery more in line with the serious challenges facing this city.  The latest two major challenges, need I remind you, are a direct result of actions taken by the people who used to run this place; the Lucas Oil Stadium operational deficit and Indianapolis Waterworks bond fiasco which is leading to increased rates.

Second, did the Mayor spend time pointing towards the “small stuff”?  Yup, he sure did, because you know what, it’s the small stuff that makes a city livable.  Can they always do a better job?  Yes.  But I think they’ve done okay over the past year and you will see things stepped up in Year Two.

Third, the vision thing.  The biggest criticism, and I would argue only, Democrats have of the Mayor is that he has no “vision” and he failed to spell one out in his address.  No offense to my Democratic friends, but for some of them, their idea of “vision” is building something somewhere that you have no idea how you’re going to pay for it so you leave it for someone else to fix or you announce some grand scheme that gets a lot of media attention in the short run and falls by the wayside once the lights and cameras go away.   I think this city has enough of that “vision” for a while and for these times Indianapolis is better off with someone who will work to make the trains run on time.

Overall, I gave the Mayor a “B” on his speech.  I liked the content, but the delivery could have been better.  It’s not a bad way to start out your sophomore year, but like I tell my students, it’s not how you start the class that matters, it’s how you finish.

In his second State of the City address, Indianapolis Mayor Greg Ballard today said the city was strong, but not immune to the challenges and crisises hitting the rest of the nation. He reiterated his themes of a safe, livable city, that has a healthy economic climate, good schools, is environmentally sound and has efficient services.  The Mayor also touched on some newer themes.  Here they are…

Lucas Oil Stadium

• The city is working with the Governor and the Legislature to find a solution to close the $43 million operating deficit that directly involves the users of the facility and the parties who benefit from them.

Crime

• The city has made progress, but needs to do more.  He plans to hire more police and 36 public assistance officers this year who will deal with administrative duties, such as taking reports, freeing up police to be out on the beat.

Infrastructure

• The city has requested more than $160 million in economic stimulus dollars for infrastructure.  And is spending more than $18 million on new street equipment and snow removal vehicles.   The Mayor is also creating an Infrastructure Advisory group headed by IUPUI’s Bill Bloomquist.  The Group will look at making city purchasing more efficient, increasing revenues from parking meters, city garages and upgrading city parks by looking for non-taxpayer funded sources.

The Mayor also touted the successes in the city’s charter schools and acknowledged former Mayor Bart Peterson’s work in them.   He talked about producing a mass transit plan in six months that incorporated a more regional approach to addressing the issue. He called for the elimination of township government and told the audience that he wants to solve Indianapolis’ issues for the long term (i.e. 30, 40, 50 years) as opposed to short-term solutions to problems.

In case any of you ever wondered what happened to the idea of a debate between Amos Brown and me over government consolidation and it’s impact on the African-American community, here’s the e-mail response my friend Amos recently gave tax activist Melyssa Donaghy…

I’m in receipt of your e-mails concerning a recent op-ed in the Indianapolis Recorder where WRTV/Channel 6 commentator Abdul Hakim-Shabazz hoped for an opportunity to have a debate with me on the issue of government consolidation.

As you may know, historically, the issue of government consolidation in Indianapolis/Marion County has had a very negative connotation in the African-American community. The UniGov debate in 1969-1970 evoked very strong negative reactions among African-Americans. By and large the community then did not support it. And as you may know the citizens of Indianapolis weren’t given an opportunity to vote then on consolidation.

Unlike the original UniGov, the government consolidation plans this time will take the right to vote for government officials and the government of their choice away from individuals. This is far more radical than the original UniGov 1969-70 proposals.

I agree with my friend Mr. Shabazz that this issue is worthy of public debate.

>Any “debate” should be about bringing to the African-American community, the community I serve, the actual decision makers who are pushing this scheme that will take the right to vote away from the community I serve; that will deny the community I serve their right to have the government of their choosing; that will make it harder for the community I serve, in the worst economy since World War II, to get emergency assistance within the 72 hours required under Indiana law.

I appreciate your efforts and passion at organizing a “debate” between myself and Mr. Shabazz. Even though Mr. Shabazz’s op-ed was in the Recorder, you’ve written me in my capacity as an employee of WTLC Radio.
>As a full time employee of the radio station, there are policies and procedures that I must adhere to as their employee. Those policies preclude me from appearing at a public forum, outside of the radio station’s programming, that would have me as an advocate on behalf of a particular issue of public importance, including an issue that may appear on a public ballot, which the issue of the consolidation of local government will.

I thank you for your passion on behalf of the people of Indianapolis and Indiana.

Although, I still think we could have worked something out, a debate would have been fun, informative and a great way to raise money for charity.

I’ve got some work to do today, so I’ll make this quick.  I’ll give you some topics to chat about.  Feel free to discuss…

• Should Indiana follow the lead of some other states and NOT take the economic stimulus money?
• Should the Indiana House pass a one-year budget or go back to a two-year?
• Is government reform really dead?
• Is a ticket tax the best way to close the operational shortfall for Lucas Oil and Conseco Fieldhouse?
• What shouuld the Mayor stress in his State of the City speech tomorrow?
• Should employers pay more as a way to solve Indiana’s unemployment fund crisis?
• Do you agree with Indianapolis Water’s decisions to raise rates an average of 17% to cover bad bonds?