The Arizona Republic has just caught on to the fact that there’s a lot of mortgage fraud going on in Phoenix: A wave of mortgage fraud is rippling through pockets of the Valley, inflating home values through scams called cash-back deals. Left unchecked, cash-back deals cost homeowners and lenders millions of dollars and could erode confidence and values in Arizona’s real estate market. The fraud involves obtaining a mortgage for more than a home is worth and pocketing the extra money in cash. Neighbors may then discover home values in the area are exaggerated. Homeowners stuck with overpriced mortgages may never recover the difference. And lenders end up with bad loans that, in the long run, could hurt the Arizona real estate market, the largest segment of the state economy. While the extent of the fraud is unclear, an Arizona Republic investigation into these cash-back deals found organized groups of speculators have bought multiple homes this way, leaving whole neighborhoods with inflated values. Add to these the individual deals done by amateurs who hear others talk about the easy money they made from cash-back sales. State investigators and real estate industry leaders want more enforcement and greater public awareness to stop the spread of cash-back deals before the damage mounts. “Mortgage fraud in the Valley has become so prevalent people think it’s a normal business practice,” said Amy Swaney, a mortgage banker with Premier Financial Services and past president of the Arizona Mortgage Lenders Association. Under federal law it is illegal to misrepresent the value of a home to a lender. Everyone who is a party to the deal is subject to prosecution. Felecia Rotellini is a Notre Dame law school graduate and former assistant attorney general who is now superintendent of the Arizona Department of Financial Institutions. Her agency regulates mortgage lenders, state banks and credit unions in the state. Alarmed by what she was hearing from lenders and real estate agents, she has just pulled together state and federal regulators to form an Arizona mortgage fraud task force. “People need to understand these cash-back deals are illegal and stop,” she said. “We are going after mortgage fraud." I think this is likely to be too little, too late. When I was actively suing telemarketers using illegal prerecorded calls to residences in 2003, the worst offenders were mortgage brokers. In the process of going after some of them, I found signs that some of them were engaged in other illegal activities as well, such as defrauding other lenders, defrauding their customers, defrauding the IRS and Arizona Department of Revenue, and transferring assets between entities prior to filing bankruptcy to evade creditors. I found the Arizona State Department of Banking (now known as the Arizona State Department of Financial Institutions), which regulates mortgage brokers, to be completely uninterested in investigating–though they did send some warning letters after I won judgments against brokers, which prompted some of them to pay their judgments. They said that they did not have resources to investigate my claims of violations, even though I offered up specific areas of the law that they are supposed to enforce (they don’t enforce the Telephone Consumer Protection Act or FCC regulations). There’s more on this subject at Ben Jones’ Housing Bubble Blog. UPDATE (January 22, 2007): Arizona Senator Jay Tibshraeny has introduced a bill making mortgage fraud a felony. But it’s already criminal activity covered under current laws–adding more laws against it doesn’t do anything to cause those laws to be enforced.

My letter to the editor in response to David Paszkiewicz’s letter in the Observer was too late for the print edition, but was published on the newspaper’s blog. Here’s the letter with a couple typos corrected (“nor” for “not” and an extraneous possessive): David Paszkiewicz quotes from Thomas Jefferson’s April 21, 1803 letter to Benjamin Rush in support of his argument that the Founding Fathers would have agreed with his bringing his religious views into the public school classroom. The original letter, in Jefferson’s handwriting, can be found on the Internet at the Library of Congress: http://www.loc.gov/exhibits/religion/rel06-2.html What Jefferson actually wrote in this letter was “To the corruptions of Christianity I am indeed opposed; but not to the genuine precepts of Jesus himself. I am a Christian in the only sense in which he wished any one to be; sincerely attached to his doctrines, in preference to all others; ascribing to himself every human excellence; & believing he never claimed any other.” In other words, Jefferson rejected the divinity and miracles attributed to Jesus. His “Life and Morals of Jesus of Nazareth” (also known as the “Jefferson Bible”) was composed by removing miracles and claims of godhood from the gospels. Paszkiewicz’s quote comes from a letter from Jefferson to Charles Thomson on January 9, 1816, regarding his “Life and Morals of Jesus of Nazareth,” stating that he is “a disciple of the doctrines of Jesus” in that work. This letter may be found online here: http://etext.virginia.edu/etcbin/toccer-new2?id=JefLett.sgm&images=images/modeng&data=/texts/english/modeng/parsed&tag=public∂=2 37&division=div1 Paszkiewicz also misquotes George Washington’s May 12, 1789 address to the Delaware Indians–what Washington said was “You do well to wish to learn our arts and ways of life, and above all, the religion of Jesus Christ. These will make you a greater and happier people than you are. Congress will do every thing they can to assist you in this wise intention.” He said nothing about teaching this in schools nor that he believed it; he was giving the Indians advice for cultural assimilation. Paszkiewicz argues that because the words “separation of church and state” are not in the Constitution (a document that contains no reference to God), the concept is not there, either. But neither are the words “checks and balances,” and the New Testament contains no use of the word “trinity,” for that matter–the concepts are expressed using other words. The arguments over the wording of the First Amendment make it clear that the Founding Fathers were very concerned about religious control of government resulting in persecution of those with different beliefs, as had already occurred with established religions in the colonies, such as persecutions by the Puritans in Massachusetts. Jim Lippard Phoenix, Arizona

At Slate, Jack Shafer argues for the abolition of the FCC, drawing heavily from Peter Huber’s book, Law and Disorder in Cyberspace. For a critique of Huber, see Tom W. Bell’s “The Common Law in Cyberspace” from the Michigan Law Review (1999, vol. 97, pp. 1746ff). (Hat tip to Jesse Walker at the Reason blog.)

Those of you who read this previous blog entry about Gapminder may be interested to see that Google has collaborated with Gapminder to produce this tool. (Hat tip to Radley Balko.)

From the Pensacola News Journal: Pensacola evangelist Kent Hovind was sentenced Friday afternoon to 10 years in prison on charges of tax fraud. After a lengthy sentencing hearing that last 5 1/2 hours, U.S. District Judge Casey Rodgers ordered Hovind also: – Pay $640,000 in restitution to the Internal Revenue Service. – Pay the prosecution’s court costs of $7,078. – Serve three years parole once he is released from prison. Hovind’s wife, Jo Hovind, also was scheduled to be sentenced. Rodgers postponed her sentencing until March 1 to allow her defense attorney an opportunity to argue possible discrepancies in sentencing guidelines. I’ve added a label for Kent Hovind. UPDATE (January 21, 2007): Ed Brayton points out that Hovind, at his sentencing, suddenly adopted a newly-found meekness: Before his sentencing, a tearful Kent Hovind compared his situation to that of the lion and the mouse in Aesop’s Fables. “I feel like the mouse,” Hovind told U.S. District Judge Casey Rodgers. “I stand here in great fear of the power of this court. Your decision can destroy my life, my ministry and my grandchildren." ...

I got back this morning from a few days in Buenos Aires, Argentina, on a business trip. It was a beautiful country, with great summer weather. The people were very friendly (and patient with my attempts to use a few Spanish words and phrases, as I’m just a beginner at the language), and the food was excellent. I hope to return for a longer time in the future, and hopefully to get some Spanish tutoring while I’m there. Buenos Aires is a huge modern city (population around 15 million) undergoing a lot of construction, especially in the Puerto Madero neighborhood, where this picture was taken. This was an old port that ceased being used in the 1960s, but is now the location of many restaurants, hotels, and businesses. Although a website about Argentina business warned me that subjects not to discuss were the Perons and the Falkland Islands, both subjects were brought up by Argentinians I conversed with, and it wasn’t a problem. This was one of those rare trips where I returned home to Phoenix to find the weather much colder and wetter than it had been in the place I was visiting. UPDATE (January 26, 2007): CNN Money recommends travel to Buenos Aires, and specifically offers this dining suggestion: Tip: Cabana las Lilas in the Puerto Madero section of Buenos Aires is often cited as the best spot for grilled beef. But Robin Goldstein, a writer for Fodor’s travel guides, says you’ll find a more authentic dining experience at half the cost just next door at La Caballeriza (address: Alicia Moreau de Justo 580).I didn’t visit Cabana las Lilas, but did eat at La Caballeriza with a large group of locals, and it was excellent (even the blood sausage wasn’t bad).

Guy Kawasaki interviews Jon Winokur, whose books of curmudgeonly quotations are prized possessions of mine. It was Winokur’s The Portable Curmudgeon which inspired me to track down and read the very entertaining autobiography of Oscar Levant. Here’s a short excerpt, chosen because it makes a point that is part of Paul Krassner’s standup act: Question: What are you working on now? Answer: The Big Curmudgeon, an omnibus edition of previous curmudgeon books plus new material, and The Big Book of Irony, a small-format hardcover in which I try to share my delight in the many facets of irony and clear up some misconceptions, because irony is widely misunderstood. It drives me crazy when people say “ironic” when they mean “coincidental.” The classic example is Morissettian Irony, which I define in the book as “irony based on a misapprehension of irony, i.e., no irony at all.” It’s named for the pop singer Alanis Morissette, whose hit single, “Ironic” mislabels coincidence and inconvenience as irony. In the song, situations purporting to be ironic are merely sad, random, or annoying (“It's a traffic jam when you're already late/It's a no-smoking sign on your cigarette break”). In other words, “Ironic” is an un-ironic song about irony. Which, of course, is ironic in itself. But wait, there’s more, a “bonus irony” if you will: “Ironic” has been cited as an example of how Americans don’t get irony, despite the fact that Alanis Morissette is Canadian! By the way, here's a rewrite of lines from Morissette's song to actually make them ironic. Historical Comments Ed Brayton (2007-01-16): Ah, I am also one who treasures Winokur's books, which I've been collecting for a long time. Great stuff. ...

Judge Jones’ ruling in the Kitzmiller v. Dover case found the Dover Area School District’s policy on intelligent design a violation of the First Amendment’s establishment clause on two grounds. First, on the ground that it had a specifically religious purpose, and second, that intelligent design is not science but religion, and so the policy was an endorsement of religion. These are two of the three prongs of the “Lemon Test” for whether a state action violates the establishment clause. The Discovery Institute has argued that Jones’ ruling should only have used the “purpose” test and not the “endorsement” test. Ed Brayton points out that this position is contrary to the position that creationists and intelligent design advocates have argued for the last three decades–that the “purpose” prong of the Lemon Test for violations of the First Amendment’s establishment clause is unfair and should be abandoned. Ed observes that at least four DI personnel–Casey Luskin, Frank Beckwith, Mark Ryland, and David DeWolf–have all argued this way in the past. His post also responds in some detail to the specific arguments made by Philip Italiano, a law student at Rutgers Law School, who is the latest to argue that Jones should only have used the “purpose” test.

Jack Whittaker, the trouble-plagued winner of what was then the largest Powerball jackpot, $315 million (a $113 million lump sum after taxes), now says that it’s all gone. UPDATE (January 15, 2007): Apparently Whittaker claims that thieves cashed checks at multiple branches of City National Bank to steal his money–and this is why he can’t pay a settlement to a woman who sued him for assaulting her at the Tri-City Racetrack and Gaming Center near Charleston, WV. But the bank just says that they are investigating “small discrepancies” in his accounts–which doesn’t sound like it’s all gone.

At long last, Kearny, NJ U.S. History teacher and Baptist youth minister David Paszkiewicz has spoken out publicly about his teaching (in a letter to his local newspaper), and has publicly displayed his incompetence on early U.S. history in the process. Paszkiewicz’s letter shows that his knowledge of the Founding Fathers and the First Amendment comes from crackpot pseudo-historian David Barton. He misrepresents the views of Jefferson, Washington, and Franklin using out-of-context and fabricated quotations, makes the bogus argument that because the words “separation of church and state” aren’t in the U.S. Constitution that the concept isn’t there either, and generally shows that he doesn’t understand the subject matter he teaches. Kennesaw State University history professor David Parker shows that Paszkiewicz’s alleged Jefferson quotation from an April 21, 1803 letter to Benjamin Rush is not found in that letter. (There’s something somewhat similar, but Paszkiewicz’s version changes the meaning by dishonestly adding and removing words from what Jefferson actually wrote.) Paszkiewicz misrepresents Jefferson’s religious views, failing to recognize that Jefferson did not believe in the divinity or miracles of Jesus, and edited the gospels into “Life and Morals of Jesus of Nazareth” (sometimes known as the “Jefferson Bible”) by removing all of the miracles. Ed Brayton at Dispatches from the Culture Wars addresses Paszkiewicz’s claims in more detail, showing that he doesn’t understand the role of the U.S. judicial system. Mr. Paszkiewicz, already considered a fool, has spoken and removed all doubt. (Hat tip to Pharyngula.) UPDATE (January 15, 2007): I’ve removed the statement that Ed Brayton has shown that Paszkiewicz used a fabricated Washington quotation, though it appears Washington didn’t mean what Paszkiewicz thought he did, and Paszkiewicz didn’t quote it correctly. The correct quotation, part of Washington’s advice for assimilation, is “You do well to wish to learn our arts and ways of life, and above all, the religion of Jesus Christ. These will make you a greater and happier people than you are. Congress will do every thing they can to assist you in this wise intention.” He didn’t say he believed it, he said to learn it. An interesting and lengthy examination of the history of the First Amendment’s Establishment Clause can be found in Noah Feldman’s “The Intellectual Origins of the Establishment Clause” (PDF) from the May 2002 New York University Law Review (vol. 77, pp. 346-428). ...