Letters to the Editor
lalucas
Published Letters: 52
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Hypothetically -- but who knows...
[Read the article: The "Rezko" game]
[Read more letters about this article: Here]RE: 1. Was this really a partnership? Was there a decision made by Obama and Rezko to jointly purchase the 2 parcels? Who contacted whom about the whole deal in the first place?
Is there a partnership agreement? The last question is significant -- if there is an agreement, there need be no speculation about the nature of the deal -- it would be spelled out in black and white.
How EXACTLY did the $300,000 price reduction for the Obamas come about?
This one is easy. By 2005, many homes were placed on the market at inflated prices -- usually, speculating that the seller could get a windfall. For desirable properties that did not require an appraisal due to a cash sale, the seller often could obtain an inflated price.
Most times, buyers are more savvy than to pay more than market value, however. The question should be: What was the market value of the property at the time? Even if the property was sold for less than TOP market value, no wrong-doing can be implied from this. A seller has the right to sell a home for any price that can be obtained in an arm's length transaction with any buyer.
It is NORMAL BUSINESS PRACTICE, even in a "hot market" to negotiate the sales price of a home. It is documented that there was an offer, and two counter-offers. Evidently, the seller was happy with the last offer and accepted it.
Since the seller wanted the two parcels to be sold together, again, it would not be unusual for two buyers to get together to make a purchase. There may have been a hand-shake agreement for the Obamas to buy the lot at a later time, after more income became available to them. Or, is there a partnership agreement spelling this out?
2. What kind of investment is this vacant lot? Can anything actually be built on it? If so, what? And what about now that Rezko has sold a piece of the land to Obama -- how did that affect what can be built on what's left?
In view of the unpredictable stock market and other factors, vacant land speculation was considered a great investment until about the fall of 2005. Vacant land was at its peak mid-2005, but no one could have been 100% certain of that at the time. In 2005, the Rezko's may have chosen to make an investment in a vacant land parcel, especially if they knew the neighbors, as a SOLID investment. Thousands of land speculation transactions happened every day in 2005 -- again, normal business practice at the time.
Why split up the parcel? That is an interesting question: Did the Obama's need land for an addition? Did they want to begin to take an ownership position in the vacant lot? Or, the part that requires the investigation -- did they know the Rezcos were going down, the lot would go back to the bank, and then likely they would be able to purchase it at a reduced price?
3. Has anything actually been built on the lot? Why not? We've just been through one of the hottest residential real estate markets in history. Why didn't Rezko take advantage of it?
The market began to show signs of slowing by the fall of 2005. There would not have been time to get drawings and permits together, more less build anything. Also, the timing wasn't right to develop the property. There may never have been an intention to build anything on the property, however.
On the surface, the transaction was entered into via NORMAL BUSINESS practice -- getting a loan with a cash down payment. A 20% down payment on a lot is usually enough incentive for the purchaser to make their payments. At that time, there was an expectation that the lot would increase in value. The Rezcos may have intended to sell it to the Obamas in a "flip" situation, making a percentage profit on their cash down payment. This is normal speculative vacant land investment practice and at the time was common place.
The lot is most likely worth MUCH less now due to a declining market. Would the Rezcos have known this them? Probably not. I do not propose to get inside the Obama's mind on this deal. As a Realtor, I know deals like this happen all the time. It can only be an issue if there was some plan to commit mortgage fraud or fraud in general.
The only aspect that is at all unusual is the selling off of a portion of the lot. There could be many legitimate reasons to have done that as noted previously. To my mind, it would be simple to find out why the Obamas bought a piece of the parcel -- ask them?
I think this is likely much ado about nothing, but should be fairly easy to sort out should anyone decide to do so. Much like John Edwards hair, there are often very practical reasons behind what appears "unusual" on the surface...Where are the investigative journalists? A partnership agreement should be public record. Make your case, or stop the smear.
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Hit a Nerve
[Read the article: The religion of balance and centrism]
[Read more letters about this article: Here]Take the criticism as a compliment. If the trend in critique is to push for centrism and balance (which is a goal for our reality, not for political expose'), you have written with power about one of the extremes. Can't wait to read your book!