Why We SHOULD Pass A Bailout Plan!!

I am a free marketer. I don't believe in theory in bailouts. Having said that, I hope that everyone listening gets the message that we MUST fix this massive problem that has come out as a result of the housing market crash or else.

To get everyone on the same page, from early 2005 to late 2007, there were roughly 14,000,000 mortgages written in the U.S. Of those about 7,000,000 were subprime. As that's occurring oil goes from $60+- a barrell to $140 a barrell, inflation storms in, the economy begins to tank, more and more homes get foreclosed on, lenders go under, investment houses go under and voila....here we are...and here's what is going to happen if we don't pass some type of bailout:

1) Foreclosures are going to skyrocket. (Government takeover would save millions of homes from foreclosure).

2) As foreclosures escalate, fewer people buy refrigerators, carpet, couches, new roofs, etc.

3) Unemployment goes double digit....at least 10-12%.

4) As foreclosures mount, Americans who own homes could lose 30% of the value in their properties. As an example, in Carmel, a fairly affluent area, there are currently 223 foreclosures. If there's no bailout, the preforclosures numbering about 450 would fall into foreclosure and triple the number of those for sale. That would affect every sale and price point in Carmel and frankly every area of our country. Every price point would be driven a long way down and it would take years, perhaps a decade for it to recover.

While you may not be in favor of a government bailout, this is serious stuff. Don't waste your breath blaming on any one political party or individual because it's MUCH MUCH deeper than that. If we do not act, it's going to be a very ugly time in our country's history.

Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)

The housing bill is NO SUCH THING.....

Well it finally makes sense and here's why: This was NEVER a housing bill. It's a banking bill. The legislation signed this week, has hidden costs and in some cases bald faced omisssions that could have helped people. Actually the bill will accomplish what the government has been trying to do for the better part of 2008: Save the banking system by hopefully stemming the tide of foreclosures.

As far as consumers go, the $7500 tax credit for those who buy homes between now and September 2009 is an absolute joke. What hasn't been spoken of is that the credit must be repaid over 15 years which ultimately makes it a loan. Say what? Isn't it this kind of thinking that got people into trouble in the first place, prolonging a penalty when they purchase real estate?

While I'm at it, shame on the National Association of Home Builders and the National Association of Realtors for not telling people about the payback aspect up front in the web site they set up to tout it's virtues. It's garbage like that which wrecks the credibility of Realtors and Builders across the country. Aside from my irritation with the NAHB and the NAR on this, there are still questions about it's affect. Do you have to take the credit? If you don't what will happen when you sell the home and the government wants it's repayment of the credit? Will consumers be responsible for documenting they did NOT accept the credit and if so who's telling them that? As usual a governmnet program has created as many questions as it answers.

The bill also placed a moratorium on risk based financing until September of 2009 as well which was just implemented within the last 30 days. What about those who got a loan in July of '08? Will this be retroactive for them or are they just..ahem..... stuff out of luck?

What about the points of the bill that are attempting to help those in foreclosure? This cornerstone of the housing legislation is intended to ease a shock wave of foreclosures. Many homeowners are in crisis because of rising rates on adjustable-rate loans. They can't meet payments, but can't sell or refinance because of falling home prices, which put them in the position of owing more money than their homes are worth.

Under the rescue plan, to be administered by the Federal Housing Administration, new mortgages must have a fixed rate for a term of at least 30 years and be no more than 90 percent of the home's value. Home equity loans will be prohibited during the first five years. In addition, the borrower will pay an annual fee of 1.5 percent on the remaining loan balance.

The program, which takes effect Oct. 1 and ends Sept. 30, 2011, is expected to help at least 400,000 distressed homeowners, but lenders are not required to participate. Financial institutions won't want to forgive any debt unless they are pretty sure the property is headed for foreclosure, a situation in which they could lose even more. In addition, the mortgage must have been originated on or before Jan. 1, 2008, and be on the borrower's principal residence.

My principle question still is if these home owners are in foreclosure, hasn't their credit been damaged so significantly that no sane voluntary lender would even agree to refinance their current loan?

I suppose this bill will help some but there are still going to be numerous home ownwers who have fallen and will never get up. Like most things that eminate from Washington, they look and sound good in the media but at the end of the day are more for show than actual benefit.

I'm tired of the horse bleep.
No, really, I have lost my patience for those in my business that keep preaching roses and lollipops. The real headline in the Indianapolis real estate market is that it truly is an incredible time to buy a home.

Let me say it again. It truly is an incredible time to purchase a home.

Where I have issue with my brethren in the real estate industry is that we should stop entirely with the 'well, it's getting better' horse bleep. It is not getting better right now. It will get better eventually. It may bottom out later this year. It will begin to slowly crawl off the carpet next year. We are not in a market that suffers like Southern California, Florida, Phoenix-Scottsdale, Las Vegas and others that are losing 50% or more of their value in the last 18 months. We are in market that has lost value and units sold and STILL has huge property tax issues....most specifically Marion County.

Sit down for this one....Marion County in many places has gotten worse with the new reassessment of the new reassessment of residential property taxes. Case in point...three bedroom, one bath home in Arden on Indy's north side will be paying $4400 year this year plus the additional tax bill of about $1600 that's a 'make good' from 2007. The same home in Carmel will pay $1560 this year based on square footage. The Arden home will come down to $3100 in 2009 and $2250 in 2010 but that will do nothing to help home values for at least the next two years. The collateral damage is that the perception of tax problems will plague ALL homes in Washington Township for some time to come.

Here are the most recent numbers for April 2007 to April 2008:

Homes pended in central Indiana April 2007: 2735
Homes pended in central Indiana April 2008: 2076
Differential -23.85%

Washington Twp. Marion County Closed sales April 2007: 208
Washington Twp. Marion County Closed sales April 2008: 147
Differential: -29.4%
Average S.P. Washington Twp. Marion County 4/2007: $224,649
Average S.P. Washington Twp. Marion County 4/2008: $181,866
Differential: -$42,743

The numbers go on and on like this with only Boone and Hamilton Counties actually seeing price increases but with units sold in decline.

Be it Indianapolis real estate values, Hamilton County real estate or any of the contiguous counties, it is an incredible time to buy real estate. It will be one that we may not see again for many years on the buyer's side. It will be one that many will look back on as being one of the best investment times of their lives. That doesn't mean there isn't pain. It simply means for those who must sell, reality is a very large pill to swallow and will require difficult decisions. Failure to do so will mean a 'for sale'sign could still be in the future of those who can't make the tough decisions. It could mean that in May of 2009, that 'for sale' sign is still in front of their property. Or for some, it could and will mean worse.
Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)

Creating Legacies.....The Village of Byron

There are those rare opportunities in my business of real estate where I get to be a part of something truly special. The Village of Byron is one of those unique opportunities in my daily work that digresses from the normal challenges of excessive oversupply, sub prime mortgage messes, diminishing equity and the constant drip of bad news about housing from the national media.

Byron is a concept that is long overdue. It's a concept that combines incredibly affordable investment, quality family time to rejunivate relationships and the chance to be a part of a true legacy. In the early days of lakes Wawasee, Sweetwater and others in Indiana, few realized what they would become today. An enjoyable place to spend weekend time with those closest to us yet still not quite a complete concept in their own right. What thoughtful people are looking for today is a place for people to invest in their families, themselves and the future value of a concept that would yield incalcuable memories and long term benefits. The Village of Byron is becoming that type of location.
Byron is located about an hour west of Indianapolis on Lake Waveland in very close proximity to Turkey Run State Park. It's nestled on a beautiful stretch of rolling hills along a pristine waterfront. Byron's setting provides picturesque views that would no doubt have inspired James Whitcomb Riley's awe at the beauty of his home state.

When the likes of Wawasee and Sweetwater were created, there was little thought given to how the community would develop around them, how certain homes and lifestyles would blend with others and how each of these would affect the overall quality of life and value of property there. The Village of Byron successfully combines all of these elements into what will no doubt become a landmark Indiana community. Byron not only has the forethought of design to allow family and friends to interact and enjoy each other along and on the water, but also to create a community rich in design and quality craftsmanship.

From the soaring ceilings and abundant sunlight that streams in through the Sycamores to the quiet quality of construction that's found in every room, few other locations in the country let alone our state are offering what's found here. In every residence you may see gleaming wide plank hardwood floors, slate, tile and granite as well as wood work reminding one of the days when master craftsmen treated new homes as their personal work of art.

Wide interior expanses for group gatherings, wrap around porches to enjoy sunsets on the water and bunk houses and lofts that will help the next generation to begin building their frienships for years to come are all here.

As the Spring and Summer prepare to descend on Indiana, it would be well worth your time to take a casual drive to a place where we all can find endless warm days and magnificent workmanship and design. The Midwest's next great waterfront community is coming to life in Indiana and it truly is The Village of Byron. A printable map will help you find your way or you can just call or email me for directions at the contact points below. Here's to a great summer on a great stretch of property that's literally in our own backyards.

Greg@GregCooper.com or by phone at 317.848.GREG (4734)