The best news about the $160 million business bonuses is the chance we have to see our government in action. You would have thought that somebody got into Fort Knox and seized the keys to the vaults the way Representatives, Senators and the President of these United States are acting. If you look really closely, you can see the blankets and sheets being readied to "pull the wool over our eyes"! What was the whole thing about? It was the public outcry that shook the government officials to their quick. Why? Because as per usual, the government gave away billions of dollars without any conditions, including the granting of these bonuses. So what do our elected officials do? Attack the company and get the public eye off the ball! Mission accomplished!

The reason I even bring this up is because it appears that the government messes up everything they get involved in. And they always have. This includes my industry, the mortgage and real estate industry, where they apparently cannot figure out a simple solution to a problem that has rocked the nation: how to dispense mortgages to qualified borrowers across the nation. The government's problem: defining "qualified" and through some fuzzy thinking, creating a "red lining" policy within and among states. It didn't have to happen.

In the past, I have talked about three similar cities within one state, California, having three different conforming loan limits under the expanding conforming jumbo program. The three are Beverly Hills, La Jolla and Santa Barbara.

Realistically, why the difference?

I have mentioned the self employed problem, which was exacerbated on December 15, 2008 when the government's companies, Fannie Mae and Freddie Mac, would no longer accept their own findings from their automated underwriting system. Prior to that date, if you had a low loan to value, a high credit score and good liquid assets, you needed only to prove that you were self employed for two years and you would get the loan. No more!

I stated previously that many lenders are forcing appraisers to change the actual comp sales (price of a house when it sold) that took place and put a declining factor on the price to reflect the property is in a declining market. This of course, to the naked eye, will insure that the declining market will continue to decline until houses reach a price of zero. Continued...