Joel Wilmoth

Occupying Homes As A Solution?

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Seriously..I am torn.  I just don’t believe this is the right way to deal with a lender when you can’t make your previously AGREED TO payments.

I recently became aware of the website OccupyOurHomes.org.  The site is full of heart tugging stories of people who can’t make their mortgage payments and the issues they have had with the banks in attempting to get a modification or stop an eviction.

I have to start with a basic idea here.  All of these people signed mortgage contracts under lawful circumstances.  If it could be ruled they were not of a right mind, or capable of understanding what they executed, then by now the attorneys would be attempting to void out mortgages based on the incompetence of the borrowers.  Not heard that case being made.

As I wander through this site, I see that the one thread that ties all of these people together is that they can’t make the payments they agreed to make, and getting to live in their homes at a lower cost (or even no cost) is a right extended to them by living in America.  Or under God..or some other deity.   The theme, as we now have heard it from the media so many times, is the 99% will have their voices heard.

The reasons I am torn?  A bunch really.

1. I do feel bad for people who are able to enter agreements (contracts) and really not understand the possible repercussions.  On a different scale..I assume most of these folks purchased cars on credit and signed notes for the cars.  If they can’t make the payments, the car gets repossessed.  No modification programs are being advocated by the government for car buyers.  I have heard talk of them for student loan borrowers.  I suppose cars are next..and I guess OccupyOurCars.org has already been acquired.

2. Admitadely, the banks have not shown a lot of excitement to provide modifications.  They have done it under the strong arm-twisting of the federal government..but the reality is they are complicated beasts with a VERY high rate of failure.  As I have witnessed so many times, the people who are unable to make their house payment also often choose to not spend money on maintenance.  The longer the situation exists, the more the value of the home drops (as do the ones around it).  Modifications, due to the high rate of failure, don’t stop this cycle..only prolong it.

3.  As I review the website, it appears there is a lot of good money being spent on this cause.  It in fact troubles me as to where the funds are coming from.  Yesterday, a press release found on AOL Real Estate brought me to my tipping point on this issue:

NEW YORK – Aug. 22, 2012 – The “Occupy Our Homes” movement is taking its anti-foreclosure message to the airwaves. The protesting group, part of the Occupy Wall Street movement that has a network of participants across the country, announced it has launched a national television ad campaign to speak out against foreclosures and show struggling homeowners how they can fight against evictions.

In recent months, the group has staged “sit-in” protests at properties of homeowners facing foreclosure.

The TV ads direct viewers to the OccupyOurHomes.org (Link: http://occupyourhomes.org) website for a field manual on how to “start an occupation,” which details how homeowners can protest a foreclosure using sit-in strategies.

The ads are set to appear on networks like CNN, FOX and MSNBC.

This is not inexpensive advertising!

The great thing about America and our system is there is plenty of room for groups like this to exist.  We do have laws and at some point those laws will need to be enforced.  There are thousands and thousands of people involved in the housing business who have all kinds of empathy for people who made bad decisions.  Nobody really wants people to be put out on the street.  Don’t worry..they won’t be.  There are so many options for renting and public assistance today.  What I have on my mind is who is funding this anti-capitalism, anti-law, protest movement?  And why?

That is what we all should start to be concerned about.   If you have information on this please comment and share so we can all draw our own conclusions.

Reverse Migration

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It seems like just the other day I lamented about the change in our lives brought on by the return of our two college students.  We have experienced this migration and disruption for several years now.   The expected total change in lifestyle took place through the summer, but with a little more calm.  I guess that is part of the kids being 21 and having jobs and maybe finding they enjoy mornings more?  Not sure…but as the summer has gone on we have had to start to see our lives change even more significantly.  Our two 18 year olds would also be leaving.  One to Purdue.  The other had a decision to make.  He is our hockey goalie and despite my ranting and raving about the world of hockey when kids reach this age…it didn’t change anything.  He wants to play in college and the colleges like the players to spend an extra year in what is called Juniors.  Tryouts ensued and as the summer rolled on it became clear that his selection, and the best choice for his development as a hockey player and young man, was 2300 miles away in a place we have never been..Medford Oregon.

How do you move a soon to be 19 year old boy across the country?  We spent the summer on that one.  Fortunately we discovered that he qualified for on- line classes from Indiana University.  We really wanted him to not just sleep and play hockey.  Starting his college classes and having the most flexibility for the future was our goal.  Being the partisan that I am I must brag… Indiana University offered the solution.  So we can officially also now say we have four in college!  Bragging rights is what this game is all about!  Look..we are much more broke than you are!

So, three at Purdue and one going to Indiana University while living in Oregon!  While I am not sure this fully qualifies that I finally got one of my kids to go to my school, at least for a semester,  I can feel a little better about how the college savings flow.  If you know anybody who has saved enough to have four kids in college in the same year they have likely either 1. inherited wealth,  2. won the lottery, or 3. sacrificed for years.   We fall under #3.  Maybe this helps a little more to explain my conservatism?  Not an excuse…but a lifestyle choice.

So, the point today is that 30 minutes ago, our son and my wife hopped in his Chevy Silverado to make the trek across country.   My first observation is thank goodness he is a boy.  He is able to move himself and make decisions I have never seen our girls make.  Travel light.  I carried Jennifer’s suitcase downstairs and realized she would pay the suitcase up-charge if she was flying.  She took up 25% of his cargo space and she flies back in a week!  He was lighthearted about it.  He knows his Mom and had saved plenty of room in the covered truck bed for her (suitcase that is)!  Our 8 year old son said his goodbyes and I know I was about to lose it.   I hugged our hockey player/IU student and told him I am proud of him.    I do not believe I could have ever made the decision he made at his age.  As Mom and I said our goodbyes, her face full of tears, I realized just how hard this was going to be for her.   Not the three day drive, but leaving her baby boy so far from home.   This is not a one hour drive to Purdue!

On Thursday I will have a U Haul truck loaded up to deliver the rest of our girls to Purdue.  When I return it will be the 8 year old and me until Mom comes home.  Then it will be just three of us in a house that is now too large for three, but needs to be able to accommodate seven.  The kids do migrate home.  Then they fly the coop again.  It is a stage of life.  One between needs and support, and total independence.  It is a time of growth and excitement, and a heart tug that can’t be described unless you are a parent experiencing it.    The birds have flown from the nest again.  It is quiet.

For some reason, I am sad.

The Real Estate Sales Model

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Here is some great economic news for you.  If you have always thought that Realtors (licensed real estate agents who are members of the National Association of Realtors) rake in the dough (just look at that Caddy!) then lets talk about what exciting news came out last week.  Realtors can expect to take home a 13 percent higher income in 2012 as compared to 2011!  Well, before you start licking your chops that you aren’t getting that type of pay increase…lets get behind the numbers a little.

The first thing that I found interesting that these stats told me is an assumption is made that no new Realtors join the industry.  Well, Katy bar the door because all most people will read in the headlines is a 13% pay increase!  So right away this projection is screwed.   Then the NAR projections don’t take into account that real estate is a 80/20 (maybe 90/10) business.  In other words, 80 percent of all the business is done by 20 percent of the members.   Here is how this plays out.  The median income for a Realtor (according to a NAR survey) in 2011 was $34,900.  Mind you this is non-guaranteed commission income!   Now, here is the good news for those who have much optimism.  Seventeen percent of all members grossed $100,000 or more.

It takes years and years to join the 17%.  Years of focus.  Acceptance that the average is more likely than the above average.  Yet..that is how life works also.  The interesting news to me is that if people start flocking to real estate as a career, the average income growth may actually decline!   Only so many sales to spread out among the whole.  And the sales that are occurring are not as numerous as they once were.

Chances are when you meet a Realtor they are financially struggling.  The economics of the business are screwy.  There have been many people through the years who have tried to find a better model.   Nothing has stuck because real estate attracts people who all believe they can be in the 17%.  The question I ask myself every time I read one of these studies is how is the public best served?

More in a future post, but let me ask this…do you think the 83% have the resources to provide the kind of support to assist the public with the largest transaction of most of their lives?  Why does the public not latch onto different models involving buying and selling a home?

Statistical source: http://economistsoutlook.blogs.realtor.org/2012/07/02/realtor%C2%AE-income-forecast/

Hot Fun In The Summertime

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OK..I know I am ahead of myself a little bit.  It feels like summer.  Warm air, thunderstorms, baseball and the return of the migrating college student.  It is the return of the college student that annually turns us to anticipation of how much our home life will change over the next few months.   Excuse me if the migration to our home is different than yours.  I have discussed this with enough parents I doubt it.

The migration patterns of a college student are forced on them by the institutions that take so much of our money to provide training that will enable them to survive in society.  The training only goes so far.  The migrating college student often seems to not realize the differences in the world outside academia.  The strange part is unless forced behavior patterns are introduced they will not recognize that outside their institutions the world does not include sleep until noon, proceeded by many hours of reality TV, and finally mass socialization events starting at 11pm.  For these reasons, the annual summer migration pattern where these cocoons of academia no longer provide protection of this lifestyle, create a level of stress on the homes where the migration occurs.

Starting today, we expect the return of our first college student.  Both of our students already have made their presence felt by convincing their brother to come to school over the weekend and provide use of his truck to bring to our home most personal possessions and furnishings.  Of course, with no thought of where these items would be deposited, the brother and I spent Sunday afternoon carrying things to storage and upstairs to bedrooms in preparation for the migration.  Why do we have to handle the migration and all of its baggage also?  The migration is like taking a business trip, where when you reach your hotel you find your favorite big screen TV, chair, couch and reading materials.  Not to mention a full wardrobe of clothing that most likely has hardly been touched (but was needed just in case)!

For months we have enjoyed a lifestyle that includes sleeping through the night at what most of us consider normal hours.  Beginning tonight, I can almost hear the TV’s blaring through our home at 1am, waking me up to the sound of Jersey Shore reruns.  Not to mention that I am accustomed to getting out of bed and not worrying about the bodies deposited on couches throughout the home.   Did I mention the food consumption and lack of parking?  Or finding myself blocked into our driveway by multiple vehicles when trying to leave to go to the office?

My wife and children consider my attitude about this migration a sign of my senility.  They may be right.  I am increasingly a creature of habit.  Just like nature, the migration affects my habits and it causes conflict.  The good news?  Jobs!  Yes, get the student employed quickly in a job where they work eight hours and are tired by late evening!  This seems to make a huge difference in the adaptation of the student to it’s new environment.  If they can’t find one, create one for them!  You are not running college housing and the migration needs to include a rapid adaptation program to the lifestyle of the remainder of the home.  Unless you also have high school students who will be out of school in a month.   At that point all you can do is plan vacations and disrupt the patterns.

True, we love having our kids back home.  It is the adaptation process that is a true test of our patience and now a part of our recognition of summer.  I think I now understand the real reason people  purchase summer homes!

 

Happy Spring!

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Sunshine on my shoulders makes me happy
Sunshine in my eyes can make me cry
Sunshine on the water looks so lovely
Sunshine almost always makes me high

John Denver

 

Do you feel any different this morning?  The Spring Equinox occurred at 1:14 EDT this morning!  This date means two things.  Daylight and darkness will be approximately an equal 12 hours.  Most importantly, winter is over!!!

I know, most of us have been blessed with a winter that makes us re-think whether we really need to move to warmer climates December through February.  If you are like me, you are worried about the payback.  Does the weather really average itself out over time?

Longer days mean more sunshine.  More sunshine for many of us just means we feel better.  Is it the sunshine or the ability to be outdoors that makes us happy?  Or both?

There is actually some science to back all of these good feelings up.  In a University of Rochester study, 90 percent of subjects got a boost in energy and had their outlook brightened by spending time outdoors around trees, grass, and living creatures.  90%!

So getting outside and breathing fresh air does make you happy!   Walking outside, and not on a treadmill, gives your heart and your mental facilities a charge!  I find the chance to walk and see many different things well worth it for both my heart and mind.

Plus, with the official arrival of Spring, that means each day for the next three months will be longer than the night!  Lets all get happy!

Oh..I have to add this comment because I actually have friends in the Southern Hemisphere of the world.  To those friends…never mind.   Sorry…this does not apply to you.  Can you set it aside and come back to it in September?

Happy Spring!!  (to most of my friends who reside in the Northern Hemisphere!)

Little darling
It’s been a long, cold lonely winter
Little darling
It feels like years since it’s been here
Here comes the sun
Here comes the sun,
and I say
It’s all right   The Beatles