Real Estate News

The Mortgage Professor: The fixed-rate, adjustable-rate decision. Here is a great discussion by the Mortgage Professor over adjustable and fixed rates.

10-7-2014: Great discussion an explanation between Adjustable Rate Mortgages and Fixed Rate Mortgages

8-1-2014: Almost 20% of the home purchase loans were ARMs in 1Q14.

Just had a client close a Jumbo ARM loan – 5/1 ARM @ 3.25%

6-5-2014: Lenders are back pushing longer term fixed periods of adjustable rate mortgages to people with better risks and qualify under tighter lending standards than before. This time they’re offering one fixed initial interest rate up to 10-15 years after which can adjust up to 5-6% higher interest rate in the year or adjustment. Interesting to note that the average homeowner who sold their home in 2013 owned the property for 9 years. Source: WSJ, May 24-25, 2014, page B8.

3-20-2014: Apparently, about 37% of all mortgage held by banks on their own books were ARMs (my thought: makes sense since the banks sell FHA and Conventional Loans all day long but ARMs are harder to move). ARMs are very popular for homes above $1 million – makes the first year of mortgage payments low enough for most to qualify…Source: WSJ, 3-17-2014.

1-28-2014: Just heard that banks are offering Jumbo 5/5’s – 5 year arms lasting 5 years fixed at one time followed by a rate adjustment that lasts for another 5 years and not an annual rate adjustment period.

Most everyone has heard of them, and they usually start with a low rate, can jump 1-2% per year and have a lifetime cap of 4-6% above where it started.

They’re back and being pumped…but why?

Well, my personal opinion is that since the Federal Reserve is going to start pulling back soon on their $85 Billion per month purchase of Treasuries & Mortgage Securities, interest rates are going to start climbing – and that means they may climb faster on an adjustable rate mortgage than the fixed rate mortgage.

I have to agree with the WSJ article’s offer – don’t stretch yourself too much to squeeze into an expensive home with a terrific starting interest rate.

Source: WSJ, 11-11-2013, R9

12-16-2014: Sewer overflow of 140 gallons caused by grease on Dec. 5 on Wild Oats Court in Marietta into Noses Creek tributary.

11-4-2014: (Oh, how appropriate to report this on election day!) 340 Gallons of wastewater overflowed into the Chattahoochee River at 7131 Discovery Blvd in Mableton, GA on 10-29-2014 – just in time for the ghosts and goblins and halloween trick-or-treaters.)

10-13-2014: Two reported overflows: (1) 160 gallons of sewage into Sope Creek at 172 Kings Row and (2) 170 gallons of sewage into Winter Lake at 546 Stoneywood Trace in Mableton.

9-17-2014: Two sewer overflows: (1) Marietta – about 240 gallons into Sope Creek off Fairfield Drive and (2) Mableton – about 750 gallons into Buttermilk Creek off White Blvd.

8-15-2014: 100 gallons of wastewater flowed into Lake Acworth Monday Augsut 11th.

8-9-2014: Two overflows in Austell. One sewer overflow of 130 gallons discharged into man made lake near 2000 East-West Connector on 8-7-2014. Another 170 gallon discharge into Chattahoochee River tributary near Six Flags Parkway on 8-5-14.

8-2-2014: Over 600 gallon of sewer wastewater spewed out into Sope Creek on Old Fuller Mill Road on Thursday 7-31-14.

What is with all these recent sewer overflows in Cobb County?

Nothing like this has happened in years and yet three overflows of raw sewage have occurred in the past few weeks…Austell, Powder Springs, East Cobb…maybe many other locations.

The Cobb County Water Department have been positioned at the manhole cover across the street from me every week for about 3 weeks trying to dislodge a clogged line…

Do we have citizens or immigrants who don’t understand sewage systems, stupid tenants, home owners who are flushing oils and greases down in the sewers now which tend to clog the lines, etc,?

All I can say is – people are more ignroant now than ever before after all we spent on the US educational system!

Ignorance is plentiful!

Check your local County authority for proper disposal of paint and paint cans. But it’s a shame we just mix paint with kitty litter and toss it in the dump to get rid of old paint and paint cans.

Authorities in Plano, Texas were mixing all their water based paint together in a facility and the result was alot of gray paint…which they gave away for free in 5 gallon containers as “Plano Gray Paint”. I’m not sure if they still do that, but it’s alot more responsible and the free paint for fences, primer, etc., is a great idea.

According to the Georgia EPA guidelines, use of kitty litter or oil dry (as opposed to shredded newspaper) as an absorbent works very well.

Here is discussion on proper disposal of paints in Cobb County. Example in this discussion: For water-based paints, leave the cover off the can until the paint is dry, or put kitty litter into a box and pour the paint into the kitty litter so that it will absorb and dry up the paint. Once the paint is dry, throw the can or box out in the trash.

If you are really opposed to the solidification/disposal option and want to have your Household Hazardous Waste handled by a licensed hazardous waste company for a small fee, please send an e-mail to recycle@dca.ga.gov for the contact information of a company that could pick it up.

Or you can take the more responsible path and call Atlanta Paint Disposal (404-333-8763) to schedule a pick-up of your used paint cans for proper disposal.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

In many counties across the US, there are property tax exemptions from local school taxes to those citizens who’ve reached 62 years or older, depending on the local laws.

Arguments normally arise by younger taxpayers that this is unfair. Older taxpayers believe that since they no longer have children of school age K-12, they are not directly benefiting from such taxes

Shortage of revenue and stringent budgets for the local schools normally intensify the debate.

Is this exemption in jeopardy across the US? Maybe, but it is going away in Hampton, VA – Source: http://articles.dailypress.com/2014-05-29/news/dp-nws-hampton-tax-exemption-20140529_1_real-estate-tax-changes-property-taxes-exemptions.

If you haven’t noticed already, your air conditioning system(s) take the humidity inside your house and puts it outside…

On several visits to homes over the years, I see the condensed water pour out of openings/tubes on sides of the home where the HVAC A/C condensers are located. I’ve seen the water usually running into the ground and in my opinion, wasted and very often drains right under the foundation support of the HVAC condensers or back to the foundation and causing them to sink or tip.

What I have done over the years is to run the drain hose out under the basement doorway into a 5 gallon container.

Since we have 2 HVAC systems, there’s up to 15 gallons/day of “clean” water that is perfectly fine to water plants and vegetables.

These zones are being defined throughout Cobb County, but let me focus on Canton Road area.

Commissioner JoAnn Birrell is proposing, to the Cobb Commissioners, to expand the Canton Road Enterprise Zone to give businesses a non-school property tax exemption (they will till pay the taxes for schools which reflect about 2/3 of the total property taxes) for a number of years…5 with full exemption, another two years at 80% exemption, then 4 straight years reducing each year by 20% until the exemption is gone…and so is business?

How much money does this mean? And who will get the exemption – any sized business or a certain # of full time or total employees? And existing businesses never got an exemption but if they add enough employees, they get one? That seems a bit unfair, especially if there’s a competitor who moves in and local government gives tax favors to them over a one who’s been there for years. Is local government playing favorites again?

And is this incentive necessary? If Canton Road was of any interest to businesses in the past, they would have moved there by now.

There’s a reported 38 sites eligible for these zones, but 13 of those sites were along Canton Road.

Bottom line: Local government should continue to stay out of creating artificial incentives for businesses to locate in these areas because the business’ profitability without them should determine location decision.
Source: MDJ, 6-24-2014, B6

A recent local Atlanta news story about a government building in Atlanta that had been water damaged over time and obvious mold issues arose finally got the attention of the government employer to move employees out of area and repair – remediate the mold.

Testing for mold is not expensive (warning: many “do-it-yourself” test kits don’t result in clear findings and professional testing inspectors require the approval from the employer to perform the testing) but mold remediation can get expensive and most employers really don’t want to take either action because of cost and potential liability to employee’s health.

I don’t know how many employers actually test for mold and ensure their employees work in a clean environment…but my guess is less than 5% of them ever do.

Will your employer (private or government) allow testing for mold inside your office space? –Probably not.

Will they fire you for asking? — Probably will.

Then what are your options? — Shut up and get sick over toxic mold until plenty of individual or class action lawsuits force all employers to think about mold testing, remediation, or best of all mold prevention.

Workers sue company for toxic mold exposure: Does court allow lawsuit?

Source of information about lawsuits regarding mold.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Remember that recent financial system bump in the road we just had a few years ago? It had something to do with monetizing bad/risky mortgages in an increasingly rising real estate pricing market that suddenly dropped?

Update 10-29-2014: US regulators (including FHFA, FDIC and others) have agreed to relax US mortgage restrictions to become effective in the fall of 2015 by eliminating the need for 20% down payment. They also loosened the requirement of lenders to hold back 5% of the loan as long as they verify the borrower has the ability to repay the loan and their debt to income ratio doesn’t exceed 43%. Another agreement between FHFA and lenders is the type of circumstances that will require loans to be repurchased or levy large penalties on lenders years down the road if mortgages default.

Update 10-15-2014: By the way, reports that regulators will relax mortgage restrictions abound.

By the way, here’s the US Office of Inspector General’s semi-annual report on the impact of the bad mortgage loans http://www.hudoig.gov/sites/default/files/documents/SAR71.pdf

Well, recent news just revealed Washington DC “Policy Makers” (whoever they are – maybe the SEC-Congress-Lobbyists-CFPB – and all the above) are contemplating relaxing the 20% down payment requirement of borrowers and 5% holdback by lenders/banks on mortgages…when defining the qualified residential mortgage (QRM) rules. Source: WSJ, 6-11-14, Page C2.

This post will be updated from time to time to reflect some issues about Cobb County Schools. I welcome any thought you might have to share…

6-2-2014: It was reported that the Cobb School Board authorized eleven (11) more school resource (i.e., police) officers for a total of $575,000 (including benefits) which amounts to about $52,250 per officer…

Cobb School System also authorized $402,000 for six (6) additional groundskeepers (including benefits) which amounts to about $67,000 per groundskeeper.

Define the role of a groundskeeper in the Cobb County Public School system and justify why they have to be school employees and not just hire some independent landscapers when the grass needs cutting and the bushes need trimming.

Now, is there something wrong here or would a resource officer be better off to quit and get rehired as a groundskeeper?

Source: MDJ, 5-15-2014, 5B

This Federal CDBG program has been administered by the U.S.Department of Housing and Development. It has taken federal income tax revenue and “redistributed it” to state and local government offices to help with “special projects”.

Update 5-30-2015: The City of Paterson, NJ’s HOME Investment Partnerships Program Controls Did Not Ensure Compliance With Regulations.

The MDj article (4-28-14, Page 7A) mentioned that this program’s funds (i.e., Federal tax $) have “financed several significant quality of life improvements.”

The 2014 bill passed by US Congress includes, compared to final FY 2013 levels, a 2 percent cut to the Community Development Block Grant program (CDBG).

For fiscal year 2012, Congress appropriated about $3.4 billion for the Community Development Block Grant (CDBG) program and $1 billion for the HOME Investment
Partnerships (HOME) program

My humble opinion: The CDBG Program is a side show by US Congress to how they are throwing peanuts of our tax revenue back to states for “fluff” projects that should be decided on and financed by local communities. Why not eliminate these Federal grants and allow state and local governments to determine whether these “improvements” need to be made and how to finance them?