The Insider Blog

 The current loan situation became up close and personal for me when I read a response from Karol. She wrote about about her current sub-prime loan: ”had no idea what my broker, title company did, nor appraiser, I’m no cheat and knew less than I thought about what I was doing, and sometimes you trust people. who would think that these people would do this to you?”  While Karol knows that this program may not help her who would be helped?

What could the FHA relief bill mean for struggling homeowners?  This bill provides FHA guarantees to lenders.  The lender’s in turn make up to 90% loans to the present value. 

“For a homeowner to get a new FHA-backed loan, the holder of the current mortgage would have to accept a loss and take a payment totaling no more than 85 percent of the home’s value.

The government would also get a share of profits if the homeowner sold the house in the future and would have to pay the lenders only if homeowners defaulted on FHA-backed mortgages. The Financial Services committee estimates that 1 to 2 percent of the new loans would default, costing the government between $3 billion and $6 billion.” 

 Karol says her family will be OK and they will repay their debt-what should borrowers do to make sure they are getting the best loan for their situation? 

Though still a long way from becoming the law of the land, the House of Representatives moved an FHA relief bill out of committee.  The bill in its current form would guarantee $300 Billion with a B in new mortgages by Government Sponsored Enterprise approved private lenders.   The house Financial Services Committee passed the bill with the full House voting this week.  This may be a relief and alternative to homeowners who are about to lose their homes to foreclosure. As committee chairman Rep. Barney Frank said, “There are people who made loans that should not have been made; there are some people that were wrong to take the loans out, some wrong to make the loans.  If nothing happens the economy suffers.”

What could this mean for struggling homeowners?  This bill provides FHA guarantees to lenders.  The lender’s in turn make up to 90% loans to the present value. Perhaps this will become an option for troubled loans.

Our central Virginia market is not overwhelmed with foreclosure but as Percy Montague,IV said in his POST, A Tale of Two Markets, if you are the homeowner suffering-then one bad loan is one too many.

Where are we with our spring real estate market?  March thru May is often a busy time for both home buyers and home sellers in Central Virginia.  In 2007 38 % of Charlottesville and Albemarle sales took place during that time frame.  Who is on the move in the spring?  Medical residents get their appointments and begin the housing search.  Business relocation and faculty appointments fill the ranks of the movers.  Don’t forget that our area attracts many retirees. What factors are important to our local sellers?  Is my prospective buyer qualified to buy now?  Do they have a house to sell in this area or in another area?  How soon must they move?  Does their time frame line up with mine? Yes, Spring is a busy time for buyers, sellers and for their agents.

 If it is May 1st, which it is, you can bet that there will be a celebration at the Free Union Country School in Free Union, Virginia.  The students, pre-school-5th grade, faculty , family and friends are still practicing the old tradition of dancing around the maypole. 

As you will see when you visit the Free Union Country School website:

“On May 1st each year, the school celebrates May Day, a festival that marks the arrival of spring. The day is filled with music and flowers and at the center of the celebration is an enormous maypole around which the children dance. Families enjoy picnic lunches on the playground after the dancing.”

It is always fun to see the youngest group; for them it is all about waving to the folks or weaving the ribbons as quickly as you can, possibly running down the person in front of you.  Isn’t this a great place to live.

Free Union country School is a private independent school to read what The Cavalier Daily says about the school read on.

It may be the renovation of our building here at Westfield Road or it may just be the sign of the times but many of us are working from home offices.  With high speed DSL available (even in Free Union where I live) or cable Internet or even satellite Internet access we have our own window on the world from our home office.  I found some tips from Microsoft (naturally) about how to be productive.  Read More- Tips to Stay Focused.   Truthfully I just don’t feel as business like in my bathrobe-so one hint might be to make your work schedule at home more formal and on a time table. We should be OK until “view phones” are standard home office equipment. One of the real benefits of working at home is dropping any pretense of focus and just going for a walk on a pretty day. In fact, I feel a walk coming on now. Enjoy.

Well, it just so happens you could be one and not know it.  Scuppies are Socially Conscious Upwardly Mobile Persons.  As mentioned in a USA Today article, you will likely find Scuppies congregated in the parking lot of Whole Foods and buying their coffee at Starbucks.  It seems we are all on the band wagon to think green, to think organic, to invest with a conscience.  One of the segments on the Today show gave advice on how to spend our, “organic dollars” at the produce counter.  They recommend always buying organic celery, apples and strawberries .  Another segment explained how Mutual Funds have established holdings that allow “green investing”  and investing in stocks of “companies with a conscience”.  What will the real estate market hold out for Scuppies?  We have seen builders using “green” design.  it will be interesting to see how our industry changes to meet and greet Scuppies.

I love parades in general and love the annual Dogwood Festival Parade in particular.  Every year I worry that the dogwoods won’t be in bloom in time for the parade and most years, like this one, I am rewarded with beautiful weather and trees in full bloom.  Growing up in Charlottesville means you have probably been in the parade; with the cub scouts, girl scouts, community groups of all sorts; or in a band.  My debut parade with the Albemarle High Band was unremarkable, I dropped my lyre holding the music in the first block and never played a note! Now you know why they have parents trailing behind the bands.  No doubt this year’s band members have memorized the music but I’ll bet they are just as excited as  I was.  If I had my pick of parade entries now, I would have to say I would want to be with the “Girl’s just Want to Have Fun” troupe.  They seem to be my contemporaries and seem to be kindred spirits.  Everyone has their favorite spot to see the parade but you will find me -every year- on the steps of the library with my sister, Joan  and anyone I can talk into joining me. See you at the Parade on Saturday April 26th- 11:00 kickoff.

According to a posting on the Inman News Blog-a Blog which calls itslef the “First word in Real Estate,” an April 10th Reuters Zogby poll  53.8% of those surveyed felt it is a good time to buy. What about the 41.6% who say now is not a good time and those who are “undecided”?  When will the time be right?  When do stock investors buy stock?  Do people prefer to buy when prices are over heated or when there is a Buyers’ Market? Is it possible to find the bottom of any market?  From where I sit, now is a great time to buy because of the number of properties available and because the loan rates are very attractive. 

Launching a new Blog is exhilarating and daunting.  We want to get it right.  We want to bring the best information to you, share ideas, and have a dialogue.  Our authors will comment on relocation, life in  Central Virginia, the local real estate market and much more. Are there topics which interest you?  Let us hear from you.

As Percy Montague IV stated in our previous post …Despite headlines touting collapsing prices, the facts paint a different picture. House prices in Virginia per the Office of Federal Housing Enterprise Oversight show a 2% average annual appreciation during the 1990’s, a 12% increase annually duing 2000-2006 and a 3% annual appreciation in 2007. I personally would describe the real estate bubble in Central Virginia as “partially deflated” rather than “burst”.

What about opportunities in today’s market? The inventory of new and resale homes available for sale is at the highest level in many years. Market conditions have encouraged serious sellers to price their properties very competitively. All of these factors combine to make this the most attractive market for home buyers in the last decade. It is a particularly attractive market for first time home buyers or patient investors. For those with a home to sell, they will be both buying and selling in a more moderate market than the fast moving, overheated market of a few years ago. Conventional wisdom may suggest to “buy low and sell high”, but in reality most people buy and sell in the same market cycle, unless they are relocating from a hot market into a depressed area. The only strategy that I would discourage is a seller who chooses to sell and then wait on the sidelines. My concern is that they may end up reinvesting in an inflating market. Now Is A Great Time to Buy.

Percy Montague IV, Chairman, CEO, Montague, Miller & Co.