16 Comments - Leave a light on George - Tuesday, Oct 14, 08 @ 9:14 am: Gee do you suppose this is the bank Sneed says Rezko is talking to the feds about? - Ravenswood Right Winger - Tuesday, Oct 14, 08 @ 9:17 am: I can’t wait to read State Rep. Fritchey’s blog entry on this bank….. - Mr. Ed - Tuesday, Oct 14, 08 @ 9:21 am: I didn’t see any mention of the latest twist on the 10th casino license, which has Hawthorne Race Course bidding for the 10th license to be located at their facility in Stickney (not to be confused with Cicero. The Carey family is partnering in their bid with Joe Canfora of Merit Management, an Illinois-based national hotel and casino developer that has worked on two racino projects; and Ed Pilarz of Altium Development, another Illinois-based gaming developer; and the proposed development project is named Champions Resort and Casino. You forgot to link the Daily Racing Form: According to them; Hawthorne has selling points in its bid. According to Mr. Carey, 4.2 million people live within 30 minutes driving time. Midway Airport is four miles to the south, and downtown Chicago is about seven miles away. “The more we talked about slots, the more we thought something needed to happen here over and above racing,” Carey said. “Racing as it exists here is not going to last much longer.” According to DRF, Legislation is already in place that will direct 15 percent of adjusted gross revenues from the 10th casino to the racing industry, regardless of where it operates. Hawthorne they suggest however could be transformed from a moribund Thoroughbred track to a vibrant entertainment destination under the plan. Besides adding a casino at Hawthorne however,the redevelopment plan also calls for razing the current grandstand to make way for a casino hotel, a water park and suites, a subterranean music theater in the infield, movie theaters, and retail space. A horse is a horse, of course, of course, And no one can talk to a horse of course That is, of course, unless the horse is the famous Mr. Ed. Go right to the source and ask the horse He’ll give you the answer that you’ll endorse. He’s always on a steady course. Talk to Mr. Ed. People yakkity yak a streak and waste your time of day But Mister Ed will never speak unless he has something to say. A horse is a horse, of course, of course, And this one’ll talk ’til his voice is hoarse. You never heard of a talking horse? Well listen to this. I am Mister Ed. - wordslinger - Tuesday, Oct 14, 08 @ 9:30 am: What a great story by Novak and Warmbir. Absolutely fascinating for so many reasons. How incestuous between government, developers and financiers. What a Board of Directors for a bank! Can you imagine trying to keep all those close relationships straight and not break any number of federal laws, even by accident? Given the players, the establishment of the bank was virtually a challenge to the U.S. Attorney to “come take a look at what we’re doing over here. There’s a huge paper trail, too!” Hard to believe they did it, really. - Wumpus - Tuesday, Oct 14, 08 @ 9:47 am: LOL @ Fritchey. Is he or is he not a major critic of Blago? - Fun with Numbers - Tuesday, Oct 14, 08 @ 11:11 am: Far too much was left out of this story with regard to Fritchey for anyone to draw any conclusions from it, and yet the insinuation suggests something criminal or unethical on their (Mr. & Mrs. Fritchey’s) part, which could very well not be the case at all. He is correct; that his personal business is indeed personal, and in the absence of credible evidence that suggests wrong doing on the Fritchey’s part, I am not sure why this is even a story in the first place. The story references a 30-year mortgage for $435,000 on the home; and a $300,000 Line of Credit with B of A in addition to the $419,000 ARM with Belmont Bank, and then indicates that: “he now owes more than $1.2 million on the home he bought 11 years ago for $557,000″ First; simple addition illustrates that the reporters premise is inaccurate from the start, when he simply rounded up, on the total amount available under loans collateralized at least in part by the home. In many cases this would not be an issue, but when dealing with finances and outstanding debt that should be specifically noted, and yet it was not, which strains credibility right away. While it is also indeed none of our business, the story does not indicate when that mortgage was secured and recorded, and what the balance of the outstanding B of A 30 year fixed mortgage loan is. If the 30 year fixed rate B of A mortgage was in place when they first bought the home for $577,000 11 years ago then that loan was certainly well within the acceptable loan to value ratios; without even considering any other factors like personal income, net worth, and credit history. If this B of A mortgage referenced represents a refinancing of the home at any point in the last 11 years, then there should also certainly be no issue with respect to a loan to value ratios to be concerned with under the B of A mortgage either. Either way, this article assumes that the full balance of the B of A mortgage is outstanding, which it may not be at all, and the amounts owing under the 30 year fixed mortgage may actually be neglible. The fact that he has established a line of credit for $300,000, also from the Bank of America; does not provide enough supporting detail either. It does not cite any source that there is indeed any actual outstanding balance on this line of credit, and yet this Line of credit was automatically assumed by the writer to be fully outstanding, when in fact there may be no outstanding balance under the Line of Credit at all. Plenty of people took advantage of such lines of credit for access to capital when they were made available; and yet many people never drew on them at all, and others that did for whatever reason simply repaid the loans according to the terms under the Line of Credit. Depending on the actual amounts owed under the B of A 30 year fixed mortgage and the Line of Credit, the $419,000 ARM from Belmont Bank may not be out of line at all in terms of loan to value either, even when considering slumping home values; especially when you consider that the home may not be the only asset which collateralizes the ARM loan as well. The article would like to suggest a relationship between the campaign deposits and the ARM loan, but I am reasonably confident that Belmont Bank cannot consider the campaign fund deposits as collateral under their loan underwriting, since the deposits are of a restricted nature, and the depositor and the borrower under the ARM are not the same. There could be plenty of plausible explanations for this situation, but right now based on this article the Fritchey’s owe us none whatsoever, and the reporting on this in relationship to the Fritchey’s is at best sloppy, and at worst wholly inaccurate. In the best case scenario some substantiation of relevance should be offered by the Fun-Times, and perhaps a clarification, correction or even a published apology for factual errors reported. - BannedForLife - Tuesday, Oct 14, 08 @ 11:28 am: “he now owes more than $1.2 million on the home” I agree this is sloppy in that it does not comprehend current outstanding balance. “There could be plenty of plausible explanations for this situation, but … the Fritchey’s owe us none whatsoever … ” ok, unless he were interested in addressing the appearance of impropriety campaign cash in, personal loan out ” … that loan was certainly well within the acceptable loan to value ratios; without even considering any other factors like personal income … ” interesting point you make, one not elaborated on by the authors: beau coup income could make all this borrowing make more sense perhaps the Sen. could explain - Rep. John Fritchey - Tuesday, Oct 14, 08 @ 12:04 pm: Okay, Let me make a quick effort at addressing some fair questions. The article ‘alleges’ a few things: 1. That I “put $275,000 from my campaign funds into CDs at Belmont Bank & Trust”. (This is correct. I moved CDs that had matured at BofA to Belmont Bank. Belmont Bank was offering a higher rate than was BofA, and the rate that I received was the exact rate that was being advertised and offered to the general public. The only way that this would be an issue is if the CDs were used to collateralize a loan. See the next point.) 2. ‘Fritchey did say there was no connection between the mortgage he got and the campaign cash he deposited in the bank.’ (Not only did I say it, but it is 100% absolutely correct and underscores the pointlessness of including me in the article.) The fact is that I received a MORTGAGE from Belmont Bank, collateralized by my HOME, and well within a loan to value ratio that any lending institution would find acceptable. In fact, the current LTV for the mortgages against our home’s present value is about 65%. The CDs at the bank had ZERO bearing on the mortgage. 3. The article concludes by saying that “I shopped around where to invest my campaign funds,” he said. “And if I’m going to take on any personal obligation, I’m going to shop that around as well.” (Right again. I fully stand by that statement, and am confident that it would apply to virtually everybody investing money with, or borrowing money from, a bank.) That is the totality of the article as it pertains to me. While I guess that I shouldn’t say this, I think that including me in the article was baseless, shoddy, and sensationalistic ‘journalism’. I hope that this answers questions that people may have. - Fun with Numbers - Tuesday, Oct 14, 08 @ 1:26 pm: Mr. Fritchey; while agree on very little with you ideologically, I have always respected you a great deal just the same because of the way that you conduct yourself in the legislature. The fact that you bothered to provide answers to questions you were not obligated in any way to address; especially here, provides more evidence as to your character. There are a whole host of reasons why people borrow against the combined equity and market value of their home; which can each fluctuate somewhat significantly over the term of any loan. Often times people do so with good reason, in order to limit their risk and diversify and invest their money elsewhere, where there could be a much better opportunity of return for them in the short term. Even if invested on a longer term basis; the returns can be exponentially greater, like taking advantage of higher real estate values to fund future college education; the price of which never goes down, and the long term value of which always goes up. Your explanation seems to validate my earlier assessment that this is yellow journalism with respect to you; in an effort to hype a story through inuendo, that does not otherwise exist. Unfortunately this comes with the territory of being in public life from time to time as you already know, but hopefully this or the cumulative effect of it won’t diminish your interest in continuing to serve. The chances of someone from your area sharing my ideology getting elected are remote at best, but at least you represent your constituents with good conscience and an almost unparalleled degree of transparency. The prospects of someone else getting elected from your area that might do far more harm than good on a wide range of issues I care about have already been on display for quite some time, and I like to hope that it is in the Kool-Aid, rather than the water up there, but stick to Lake Michigan on-tap just in case. That’s the sad thing about journalism - BannedForLife - Tuesday, Oct 14, 08 @ 1:48 pm: Thanks for your post. Can I ask a question? When you were shopping around and settled on Banks’ bank for your campaign deposit and home mortgage needs, what were you thinking? Were you thinking no one would ever connect the events? Were you confident that if confronted you could explain everything? Did you just consider the legality/illegality dimension, or did you ever consider how this might look, perhaps to someone unsympathetic, like a potential political opponent or someone trying to sell newspapers? - Fun with Numbers - Tuesday, Oct 14, 08 @ 1:52 pm: Banned for Life, I don’t even see the appearance of impropriety. Have you ever borrowed money from a bank in which you also had a depository account? Which bank would be more likely to process a loan for you expeditiously; on a competitive basis, one at which you have made deposits, or one at which you have no other relationship? The deposits themselves can not collateralize the loan in this case, so there is obviously no quid pro quo. They had to make a determination to lend; or not lend based on the value of the underlying collateral, the net worth, and the cumulative debt and credit history of the borrower. Practically speaking, do you think it would be more difficult to balance two or more banking relationships when you could simplify your life administratively by consolidating your business and personal accounts with as few banks as possible? What has your customer service experience been lately at the big money center banks? How about those integrating complex acquisitions, consolidating operations, laying off people and closing branch locations? Do you have any concerns over how well capitalized they might be? How does that compare with the customer service of a community bank that has invested in the community where your business is located? This is just that situation except not only is it operated by someone they know; but the principals are someone they are related to through marriage. This may just be sloppy reporting; and if it is so be it, we all have bad days at work. If this is part of a greater pattern of yellow journalism that unnecessarily breeds more contempt and cynicism of government, then there is a cost to be paid beyond just that of the attempt to blemish the reputation of the Fritchey’s, and we all pay that price. Even if this was something done intentionally with malice and motive don’t fall into that trap yourself, because as that hole gets deeper you feel like you may never be able to climb out of it. Instead you think that you can at least entertain yourself by reading inflamatory journalism that stokes the cynical fire that now burns within. Some journalists count on a large percentage of people to be vulnerable to this kind of smear. The only way this will ever change is if fewer and fewer people forego critical thinking and continue prove them right. - BannedForLife - Tuesday, Oct 14, 08 @ 2:07 pm: “Have you ever borrowed money from a bank in which you also had a depository account?” No, I have never taken a personal loan from a bank which also held the deposits of my political committees. I’d like to hear from Rep. Fritchey on his decision-making process. - Rep. John Fritchey - Tuesday, Oct 14, 08 @ 2:13 pm: Banned - fair question. I guess my short answer is that I had zero thought that there were any events to even connect. Keep in mind that I previously had CDs and a mortgage at BofA. This, in my mind and in reality, was no different. The CDs were deposited well before I had even considered any other financing needs. And yes, I was, and am, confident that I could explain EVERYTHING. Banking is the most regulated industry there is, and I knew that I received no special treatment whatsoever. I guess my mistake was assuming that everybody in the media would deal with the issue in an honest and fair manner, and actually do their job. Won’t happen again, especially with this ‘reporter’. Fun w/ #s - thank you for the kind words, I sincerely appreciate them, especially on a day like today. Furthermore, you fully understand the fundamentals of our credit system, something that Novak either doesn’t get, or was too lazy to spend the time to understand. - Phineas J. Whoopee - Tuesday, Oct 14, 08 @ 2:59 pm: I’d love to see who’s on the board of the collection agency that recoups this banks bad loans. I bet their having no trouble with foreclosures - wordslinger - Tuesday, Oct 14, 08 @ 7:40 pm: –Banking is the most regulated industry there is…– That blows hot and cold, as recent events will attest, but in general that true. That’s why I find this bank and its activities so fascinating. A bad fiction writer couldn’t have come up with the scenario. Paper, paper, everywhere. Signatures, the mail, telephones — its mind-boggling, in the era of The Big Heat. Public discourse is best served with a degree of civility. But that doesn’t mean you have to pretend to be a fool. - Arthur Andersen - Tuesday, Oct 14, 08 @ 9:37 pm: word, I totally agree. My family’s long time attorney once gave me this gem of legal advice: “Never do something illegal while you’re doing something illegal.” I can’t believe this group ever got a charter, so it must be a State bank. Having said that, “blowing the loans to self limit” is right after “don’t pay your self out of vault cash” in Banking 101. What were they thinking? “something that Novak either doesn’t get, or was too lazy to spend the time to understand.” In my experience with Novak, education and energy have never been issues once he’s on the trail. Those may be regretful words from a usually classy and articulate guy. Sorry, comments for this post are now closed.