Mr. Michael Phillips, Journalist for the Wall Street Journal;
I have some questions about this article (included below in full) you wrote in the Wall Street Journal:
(Note: To see photos and slideshow click on link)
Link: http://online.wsj.com/article/SB123454070638883495.html
First, how much, in total, did Mr. Thompson have into this home with principal, interests, fees and costs?
Second, did you attempt to find out if the mortgage holder attempted to offer Mr. Thompson and/or Ms. Rogers the home on the terms that it was sold to the banker, Mr. Jackson, for?
It seems to me you have a perfect example of the problems confronting people in terms of foreclosures here and you didn’t follow through with all the facts and draw the proper conclusions.
Would Mr. Thompson and Ms. Rogers have been able to hold on to their home if they would have been extended the same terms under which Mr. Jackson purchased this home?
I find it rather bizarre, for lack of a more appropriate word, that this mortgage holder would be willing to kick someone out of a home they have quite an investment in and then turn around and sell the same home for $40,000.00 less than what Mr. Thompson/Ms. Jackson paid for it.
How much did Mr. Thompson initially put down on this house?
What are the terms of Mr. Jackson’s mortgage?
How much did Mr. Jackson put up as a down payment on this house?
How much is the interest rate Mr. Jackson is paying?
What are Mr. Jackson’s monthly payments? (I assume his payments are substantially less than Mr. Thompson’s/Ms. Roger’s payments were?)
I am very confused here why you would provide some specifics concerning the history of this house and not follow through to the conclusion. By providing the American people with greater insight as to exactly what is going on people could better understand what kind of solutions are required.
Also, would Barack Obama’s “foreclosure” legislation have saved Mr. Thompson and Ms. Rogers their home, given their circumstances?
Again, we have a perfect example here in how you begin this story but it is like you leave us without a proper conclusion given the economic mess we are in--- of which the housing market is one of the primary problems… not the primary cause of this economic crisis; but, certainly, one of the most important aspects of this economic crisis.
I am curious about another aspect of this problem that might be related in a way to the “bailouts.”
Could you tell me if the mortgage company holding the deed to this house at the time it was foreclosed on was insured by AIG--- or one of its subsidiaries--- or a similar institution to protect itself from losses associated with foreclosures?
Thanking you in advance for your attention to my concerns and questions,
Alan L. Maki
DILLON, S.C. -- Travis Jackson walks through his modest ranch house, admiring the kitchen's built-in spice rack and the red-oak floors. He draws back the curtains, and sunlight illuminates the pride on his face.
The young banker just bought Federal Reserve Chairman Ben Bernanke's childhood home at a foreclosure sale.
"This is where it all happened," marvels Mr. Jackson, a 27-year-old loan officer at First Citizens Bancorp, which is down the street from the old Bernanke place. "Kind of a surreal feeling, isn't it?"
Mr. Bernanke's family sold the property more than a decade ago. It ended up on the block late last year after its former owners fell behind on their mortgage payments.
The small town that gave the Fed its chairman is suffering more than most from the financial and economic crisis he's struggling to fix. Already hit by the long decline of the local tobacco and textile industries, Dillon County is facing a fresh assault of plant closings and layoffs that have pushed its unemployment rate to 14.2% -- almost double the national average. A foreclosure wave that began in mobile-home parks is spreading to more-established neighborhoods.
Mohawk Industries has shuttered a plant that made yarn for carpeting and employed 137 people. Wix Manufacturing, a unit of Affinia Group Inc., has cut hours and a few jobs at its automotive-filter factory. Smurfit-Stone Container Corp., which makes corrugated-cardboard packaging in nearby Latta, filed for bankruptcy protection last month.
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In an interview, Mr. Bernanke declined to speak publicly about the fate of his hometown or boyhood home, which is set amid tall, scraggly pines on East Jefferson St. "We believe that getting the credit markets going, getting banks lending again, increasing the demand for all products -- including those made in Dillon -- are part of economic recovery," he said. "That's what the Fed's trying to do."
Mr. Bernanke's grandfather Jonas, a pharmacist, opened Jay Bee Drug Co. on Main St. in 1941. His father, Philip, and uncle, Mortimer, eventually bought the drug store and became admired figures in the community, famous for their personal touch with customers.
Ben Bernanke, now 55 years old, was known around town as brainy and diligent. He played saxophone in the Dillon High School marching band and graduated at the top of his class in 1971. Before heading off to Harvard University, he worked construction on a new hospital going up in town. He spent summers waiting tables at the Sombrero Room at South of the Border, a Mexican-themed collection of souvenir stores, rides and restaurants just outside of town.
Ben Bernanke's old house in Dillon, S.C., recently sold for $83,000.
Richard Schafer, head of the family that owns the roadside attraction, says revenue at the theme park today is off more than 10% from pre-recession rates, the roughest patch since the 1973 oil crisis. "People are losing their home and jobs, and they're not traveling as much," says Mr. Schafer, 59, who attended synagogue with the Bernankes before converting to Presbyterianism. He wishes he'd kept a photo of young Mr. Bernanke in the yellow, green and red poncho-like serape that waiters wore in the old days. "I'd probably get some economic-bailout money if I did," says Mr. Schafer.
During the presidential campaign, then-candidate Barack Obama twice visited Dillon to highlight the desperate state of its schools. Once he went to Mr. Bernanke's junior high, a century-old building whose auditorium has been condemned as unsafe. Another time Mr. Obama went to Dillon High School, Mr. Bernanke's alma mater, where some 40% of those who start ninth grade drop out before graduating.
Every morning, Lynda Cottingham, Dillon's 60-year-old high-school principal, and her husband, David, pray together for Mr. Bernanke and President Obama. "Lord grant them wisdom to make good decisions," Mrs. Cottingham recalls praying recently.
Mr. Cottingham, 62, runs a business brokerage out of a building that was the final home of Jay Bee pharmacy before the Bernanke brothers sold it. "Ben Bernanke used to walk right in that door," Mr. Cottingham says with satisfaction.
These days Mr. Cottingham gets a regular flow of middle-aged executives who have been laid off and want to purchase a business because they can't find a job. Financing is tight, even when buyers and sellers are willing. "I just can't imagine the kind of pressure he's under," Mr. Cottingham says of Mr. Bernanke. "It's not just the U.S.; he's got the burden of the entire world on his shoulders."
Mr. Bernanke's 80-year-old uncle, Mort, the only Bernanke still living in Dillon, continues to run his small company selling oxygen tanks, hospital beds and other medical equipment. He figures his personal investments have lost 35% of their value. "At my age for that to happen is a terrible thing," he says.
That's not a criticism of his nephew, however. "He can stand on his head, but he can't do any wrong in this town," Mort Bernanke says.
On Sept. 1, 2006, seven months after Mr. Bernanke became chairman of the Fed -- previously he was a member of the Fed Board of Governors -- Dillon celebrated their favorite son on Ben Bernanke Day. Two dozen residents ate breakfast with Mr. Bernanke at the Kintyre House, a pub-restaurant located in the building that housed the original Jay Bee store. (The restaurant still displays a photo of the Fed chairman going through the buffet line, choosing from among the hash, sausage, eggs and canned fruit.)
Later in the day, some 700 people, almost 10% of Dillon's population, gathered in front of the county courthouse. South Carolina Gov. Mark Sanford presented Mr. Bernanke with the Order of the Palmetto, the state's highest honor, and Mr. Bernanke reminisced about the lessons of a Dillon childhood.
"I remember the fellow construction worker who wanted to become foreman someday and a waitress who was saving to go to college," Mr. Bernanke told the crowd. "I was impressed by these experiences. And I think they were an important reason I went into economics, which a great economist once called the study of people in the ordinary business of life."
Among those breakfasting with the guest of honor was Charlie Vance, senior vice president of First Bank on Main St. His Troy, N.C.-based bank, a three-state institution with roughly $3 billion in assets, received $65 million from the government's Troubled Asset Relief Program. In Dillon, however, more capital hasn't led to more lending, says Mr. Vance, 61, who says he used to be the senior Bernankes' banker.
"The scary thing is nothing seems to be working," he says.
Hoping for the best, Dillon County has secured rights to 2,400 acres to locate new manufacturers who might appear in the future. "Dillon is still a great place to live," says Mayor Todd Davis, 44, an insurance agent and financial adviser who says he counted Mr. Bernanke's parents among his clients. "It's a great place to raise a family."
In 1945, Mr. Bernanke's grandparents, Jonas and Pauline -- the latter a University of Vienna-trained physician -- bought the land on East Jefferson Street for $750. Four years later, they built a single-story brick house on the property. The couple then sold the place to Mr. Bernanke's father, Philip, in 1960 for $22,000. Ben and his two siblings were raised there.
In 1976, Philip deeded the property for $1 to his wife, Edna, "for and in consideration of the love and affection" he felt for her, according to county records.
Two decades later, the Bernankes sold the house to a couple from Texas for $72,500 and moved to North Carolina. In September, 2006, the Texans put the house on the market. It caught the eye of Spec. Dwayne Thompson, a soldier in the South Carolina Army National Guard, and Sharon Rogers, his former wife with whom he had reconciled, but not remarried.
Spec. Thompson, who grew up in Dillon, remembers as a kid buying peppermints for himself and hair-care products for his mother at the Bernankes' store. Unaware that the house had a Bernanke connection, however, the couple saw it simply as a chance to "upgrade and get something better, the American dream," says Spec. Thompson, 47. The 2,383-square foot home has four bedrooms and three bathrooms, with a large car port. "It was big, spacious, downtown," says Ms. Rogers, 42, now an assistant manager at a Wal-Mart store.
Landmark Mortgage, a Dillon finance company, gave the couple a 10.1%, 30-year fixed-rate mortgage, well above the rate for a prime loan. Their payments on the $123,000 mortgage came to $1,088 a month, including principal and interest. Landmark transferred the couple's loan to Option One Mortgage Corp., then a unit of H&R Block Inc., which packaged it with other mortgages into an $818 million security.
Back then, Landmark's owner, Kelly Hayes, had six employees and plenty of work to keep them busy. These days Mr. Hayes, 40, works alone and struggles to find creditworthy borrowers. "I have to go through 10 or 12 applications before I can find one qualified to buy a $70,000 house," says Mr. Hayes, who keeps an autographed copy of the Ben Bernanke Day program behind his desk along with his own family photos.
A few months after the sale closed in early 2007, Ms. Rogers lost her job managing a shoe store. The factory where Spec. Thompson worked when not on National Guard duty cut back his hours. The couple fell behind on their payments, and, under financial strain, broke up again last June. Twenty-one months after they bought the house, the bank that served as trustee for the mortgage-backed security began foreclosure proceedings.
"I kept trying to pay," says Spec. Thompson. "I've never been under that kind of stress, living paycheck to paycheck, and it still wasn't enough." As he was losing his house, he volunteered to go on active duty with the Army because it paid more than his factory job. Last month, Mr. Thompson filed for personal bankruptcy.
He sympathizes with Ben Bernanke. "I know things gotta be pretty rough for him right now," he says.
In December, Mr. Jackson, the young banker, and his girlfriend, Beth Webster, a 25-year-old high school teacher, bought the Bernanke house from the bank for $83,000. Mr. Jackson grew up a block away; he can see his parents' home from his new master-bedroom window. Both he and Ms. Webster are devout Christians. They don't plan to live together in the house until they marry, an as yet unscheduled event.
Mr. Jackson, who started his career at the teller's window, jumped at the chance to own a piece of economic history. Aside from some minor redecorating, he wants to keep the house much as it was when Ben Bernanke lived there. Someday he'd like to put up a plaque noting its significance.
"It's just a great sense of pride to know that one of the greatest leaders we have in our time period walked the same floors I walk," says Mr. Jackson. "It's just sheer excitement."
Write to Michael M. Phillips at michael.phillips@wsj.com
Printed in The Wall Street Journal, page A1
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