Jackson Jambalaya

Joe Kalahar of WLBT reported on the requests by Mississippi cities for their share of funds awarded to the states in the federal stimulus package that just passed Congress. The money quote from the story is here:
"Jackson, Meridian, Biloxi and Hattiesburg make up the bulk of the state's listed requests. But according to stimulus watch dot org, Natchez made the largest total request at nearly seven hundred million dollars and the largest single request for a project called the Forks of the Road Heritage Trail.
"I've checked with the mayor and city council, all the city officials, nobody has made a request like that for Natchez," said Rep. Robert Johnson, (D) Natchez.
But requests that are legitimate include four olympic size pools and seven splash parks for the city of Jackson...."

How many problems are there in this passage? Since Representative Johnson said no one made such a request for Natchez (the request at issue was for $600 million for ONE project), shouldn't Mr. Kalahar have asked the mayor and city council members WHO made the request? One would think that's a part of Journalism 101 but Mr. Kalahar just let that denial fly right by his pretty little head without checking it out with other officials. My favorite part of this story is where Kalahar calls FOUR OLYMPIC-SIZED POOLS and SEVEN SPLASH PARKS LEGITIMATE REQUESTS!!! Pools and splash parks are legitimate needs.

Maybe he hides in his little cubicle when he's not on assignment, but in case he hasn't noticed, there are MANY more pressing needs than seven damned splash parks for Jackson. Jackson has a water/sewer system in desperate need of an overhaul, roads falling apart, creeks that need dredging, and schools in need of repair. However, calling swimming pools and splash parks "legitimate" needs makes one wonder if he's even thinking about what he is reporting. I suspect he doesn't think critically, as I remember this story he did on Jim Hood and foreclosures a few weeks ago.

Jim Hood bragged about how he and other Attorneys General sought to have the bankruptcy laws changed so judges could alter mortgage contracts as he thought such modifications would keep homeowners from losing their homes. Kalahar gleefully (and yes, gleefully, I saw him report the story) reported:

"Hood says a simple change to the federal bankruptcy code could give judges the discretion to order a loan modification and keep families in their homes.
"Not let people get away with a free home or anything; just adjust their payment schedule and try and knock off some of these excess charges," said Hood....
If it passes, the code change could be a win-win for both the homeowner and the lender. (Kalahar's words, not Hood's, and he said it in a very cheerful manner as if he'd found some really good news for the audience)
"They want to agree because they want people to continue to live in those homes. They want people to continue to pay the debt," said Hood..." Story

Really? How do you know its a win-win for the lender? Because Hood told you so? Did it cross your mind that you might want to actually go ask......... a mortgage expert or an officer of the Mortgage Bankers Association whether this was true? Since I've worked in the mortgage business for over ten years, I think I know a little bit more than you or Mr. Hood about this matter and I can say on some authority this is not a "win-win" as you put it for everyone. What such a change will do is raise interest rates and require larger down payments from homebuyers at a time when the economy is weak.

When lenders set their rates, they use a pricing model that factors in the costs of the mortgage itself, the risk, the size of the down payment, and the ability to foreclose on the property in case of default. That is why the loan is considered to be secured. I realize you only learned to write stories in journalism classes but this is remedial finance stuff that millions of frat boys learn every day after sorority swap night while hung over. When you reduce the ability of the lender to recover on the security, the loan is now riskier. Because the lender doesn't want to get burned, he's going to require more money from the homebuyer for a down payment and probably increase the interest rates as his collateral now is less secure. Such a scenario is actually what is driving this housing crisis: lenders are failing because h0mes are worth less than what is owed to them when they are forced to foreclose. Before a lender will take such a position because of a change in the bankruptcy law, he is going to cover his ass before giving a seller a check for $300,000.

This is not sloppy reporting but rather an inability to think critically, ask basic questions, and do basic research. Before anyone thinks I'm being too harsh on this reporter, here is a story by Monica Hernandez in the same broadcast on a similar subject. Notice how she talks to a realtor, an owner of a mortgage company, a landlord, and a tenant thus covering all sides of the story. Story on renting. Contrast her reporting with the story by the other reporter who got a tingle down his leg while he told us gleefully how something harming homebuyers is a "win-win" for everyone and seven splash parks are a "legitimate" need.