There is pending legislation out there that could throw an already crippled real estate industry into cardiac arrest.

Clinton and Obama on the Campaign Trail

We see Hillary Clinton’s and Barack Obama’s smiling faces plastered all over the news while they campaign their hearts out to ensure they receive enough delegates to fight for the Presidency of the United States. However, Democrats need to pay attention to what is going on behind the scenes of these nominees. As Senators, they vote on various bills and even cosponsor bills that can and many times are enacted into the United States law books. Instead of watching these two candidates shaking hands, making promises, and talking about what they would do in order to save the US economy and keep America out of recession, you need to see what is going on behind this façade and learn about the bills they are endorsing or even co-sponsoring.

Clinton and Obama both are cosponsoring a bill that has been introduced that will do damage to the US economy, the real estate market, the housing industry, and future homeowners.

S.2136 The Helping Families Save Their Homes Act, which was introduced by Senator Dick Durbin and cosponsored by both Hillary Clinton and Barack Obama along with the S.2133 Home Owners’ Mortgage and Equity Savings Act introduced by Senator Arlen Specter, will do more damage than good if enacted.

S.2136 would do away with a stipulation in the bankruptcy code that forbids adjustment to the debtor’s primary residence mortgage during Chapter 13 proceedings. Under this bill, Bankruptcy Judges would have the right to change the principal, interest rate, and terms of mortgages. Along with handing these abilities over to Bankruptcy Judges they would also have the power to extend the length of the loan, waive the counseling requirement for those whose homes are already in the foreclosure process, fight the excessive fees, preserve legal claims against greedy lending companies while debtors are in bankruptcy.

S.2133 is almost the same; it would give power to Bankruptcy Judges to amend mortgage loans on a debtor’s primary residence during Chapter 13 proceedings. However, under this bill bankruptcy judges are only permitted to decrease the principal of the mortgage when both the lender and the homeowner agree to the amount. The bill also allows bankruptcy judges to delay, stop, or roll back increases in mortgage interest rates, to relinquish prepayment penalties and to recover interest, fees, and fines when the creditor committed fraud or did not disclose the loan limits. Credit counseling would be postponed until after bankruptcy filing when foreclosure is forthcoming.

With these types of laws on the books, Americans will have a much harder time qualifying for home loans, as lenders will tighten their lending. Qualifying will become a nightmare for middle income Americans as larger down payments and higher FICA scores will be needed. Lending companies are not going to be left holding the bag when individuals end up in bankruptcy court.

This means, the fewer loans will be given due to lending companies being overly cautious which means less home sales, thus interest rates will rise. The higher priced homes will sit longer due to an increase in interest rates, as Americans will not be able to afford their mortgage payments on higher priced homes. The longer these homes are on the market, the lower the price of the home will go. When the housing industry is hurting so does our economy.

Instead of choosing a candidate for the Democratic candidate for Presidency based on what you hear and see on the campaign trail, vote by what the candidates are really doing to aid in helping Americans behind the scene.

Do your due diligence and investigate what types of legislation the candidates have either introduced or cosponsored. It will speak volumes about his/her common sense and appropriate responses to common issues.

~Rhonda McMillan
Broker

Project Lifeline consist of six of the ten major mortgage companies giving a 30 day reprieve on foreclosures to homeowners that are 90 days or more delinquent on their home payments. This 30 day grace period is intended to allow homeowners that are in default to secure refinancing. Obviously the planners of this new program have not attempted to seek financing in today’s market let alone try to shop a bad credit loan in 30 days or less. (more…)

While the wild fires are almost an annual event now do in part to mismanagement of public and private lands as well as urban sprawl, this year was especially devastating with over 1 Million residents evacuating thus far.

Why does a Columbia Missouri real estate Agent pay so much attention to a natural disaster in California you ask? Simple economics for us in Mid-Missouri is the short answer. In my almost 20 years of involvement in the Missouri real estate market I have noted a substantial surge of California property buyers after every major natural disaster and I predict this one will be no different.

Why do California residents choose Missouri? That answer is simple as well. California property owners are some of the savviest home buyers in the nation. They generally do their home work when faced with relocation. Missouri offers more bang for their buck than most competing states and their dollar has considerably more buying power than it did in California. Once a California home owner cashes out they are surprised at just how far their proceeds will go. Funds from the sale or insurance settlement for a modest 2 bedroom ranch style home on 5 acres in southern California can be converted to a ranch consisting of 200-300 acres with a 4+ bedroom modern home with all of the necessary outbuildings. This is an example but I have seen it happen time and time again.

Another major reason that California property owners relocate to Missouri is for the same reason they are in Southern California to begin with. They tend to be lovers of nature. While Missouri does not have the desert landscape and terrain they are accustom to, our hardwoods, forests, pristine rivers and wildlife are enough to please any nature lover.

Southern Californian’s typically are horse lovers. There is an estimated 300,000+ horses in San Diego County alone. Missouri’s hardy pastures and rolling hillsides are well suited to horses, cattle or any other type of livestock.

And as for cattle, Missouri is second only to Texas for cattle production and even leads Texas as the number 1 state in the nation for cattle per acre.

According to one of our biggest referral partners Al Rosson of Cabrillo Mortgage & Realty Services, property owners have begun inquiries in to selling before the fires are even out. Al says that this is not unusual and that even home owners that did not suffer a loss often consider selling due to the fact they are simple tired of all the near misses.

When I asked Al about the future of real estate in San Diego he replied “With the natural beauty of San Diego and weather that is remarkably similar to the Canary Islands San Diego County will continue to have some of the most sought after property in the nation. While many residents will relocated soon after this fire, there are many more that are waiting to move in. We will recover and be stronger than ever. We always do”.

So while our hearts go out to all of the home owners in Southern California that have suffered a loss I can assure them there is a brighter road ahead….the road to Missouri.

~Rhonda McMillan

We will undoubtedly feel the affect of the sub-prime fiasco through 2008. However, the figures of mortgages in default are minute when you look at the number of sub-prime loans and even smaller when you look at the total housing market. The figures simply do NOT justify the “Chicken Little” “the sky is falling” mentality of the liberal press.

The larger problem is the lack of confidence by consumers all of this negative press has brought about. Perception is the key and the perception of the crisis is far worse than the crisis itself.

Even for home owners that find themselves owing more on their home than it is worth can simply sit it out and wait for the market to rebound. And unlike finding yourself with stocks that have been devaluated your home is a usable and necessary asset that provides utility while you await a market correction.

In addition to pending legislation to assist distressed homeowners the suggestion by the Bush Administration that lenders work with troubled borrowers appears to have resonated. If you are in a situation where your ARM (Adjustable Rate Mortgage) has raised to a level that is no longer sustainable simply contact your lender. You will in all likelihood discover they will work with you. This will enable you to keep your home and credit rating which is far more desirable than the alternative.

Just remember that history teaches us that the real estate market will rebound. It always has. And you will once again find yourself with equity in your home. Stop listening to the doomsayers and research the REAL figures for yourself.

While I follow real estate markets nationwide I of course pay special attention to Columbia real estate trends. Just like the rest of the nation, new home starts in Columbia MO are down. This will reduce inventory and cause housing prices to stabilize. Sales of existing and new homes are down slightly but by no means dead. The only viable explanation for the recent downward trend in home sales is the negative press the housing industry is receiving nationally. Once excess inventory is absorbed the local market will get back on track.

With fewer housing starts in recent months in combination with stronger consumer confidence the panic selling should subside and the market stabilize.

But the worst is only over if we ignore an extremely biased main stream media and research the facts for ourselves.

~Rhonda McMillan
Broker

With the drop in both interest rates and the median home price nationally it may be time to purchase as the cost of housing is more affordable now than in recent years.

While the sub-prime lending fiasco made great headlines for the liberal press the reality is that it affected a very small segment of the housing market. Even a smaller portion of the market was affected here in Missouri as the sub-prime loans were never truly embraced by local lenders. Missouri banks and mortgage companies based in Missouri primarily stayed with conventional loans requiring income verification and down payments of 10-20%.

The indirect affect on the local housing market was the shaken confidence of home buyers with all the media attention given to the credit crunch created by sub-prime loans going into default even though it was a national, not a local phenomenon.

While the Dow quickly soared back to over 14000 shortly after the Federal Reserve dropped interest rates by a half of a point, today Wall Street fell 140 points at the time of this article after Citigroup’s dismal earnings numbers and news of a potential $100 billion emergency fund to help out three of the largest U.S. banks hit by the chaos created by sub-prime mortgages.

So is the worst behind us? That depends entirely on consumer confidence really and unfortunately the media can all too easily sway and shaken this confidence. The press has begun irresponsibly throwing about the “recession” word of late. Keep in mind that a recession is defined by two consecutive quarters of negative GDP (Gross Domestic Product) and we have yet to log the first. Is this once again an attempt of the media to create rather than report the news? Given the deep hatred of President Bush by the liberal press it is a distinct possibility.

Before you decide not to buy another home or continue to put off a purchase you should do the research for yourself. This is far too important of a decision to leave up to a clearly biased media. And while researching check out how much new housing starts have declined in the past few months. This will lead to a much lower inventory in months to come and could begin a substantial increase in new home costs. Especially if the Federal Reserve again cuts interest rates soon as has been predicted by many.

~Rhonda McMillan

The office painting is going well. Mack has the DSL up and running and Doug is almost finished with the Network.

Brandon should have the phone system installed soon and the movers are scheduled to be in and out on the 11th with the office furniture and equipment.

Mack is having a bit of a problem getting the IDX Feed from the Boards vendor but hopes that he can get that soon so that he and Doug can install the UltimateIDX™ Columbia MLS on our website.

On July 14th we will officially be open to the general public and hope to service Columbian’s with their real estate needs.

~Rhonda McMillan
Broker

Thus far my experience with the local board has been very pleasant. I will keep you posted.

~Rhonda McMillan
Broker

In all honesty real estate has not been nearly as much fun since Rita’s retirement in 2003. And regardless of how busy or tired she was she always took the time to advise our younger Agents and yes…. even me. While we visit Rita regularly it is not the same as it was when we worked shoulder to shoulder every day. I know she deserved a break and retirement but we all miss her deeply.

Moving to Columbia has revitalized both me and the Agents that are coming with me. Even still… I miss you “Ma”.

~Rhonda McMillan
Broker

While all Brokers and Agents have expressed an interest in relocating to the new office in Columbia we are considering having only Vice President Brandon Parker accompany me initially.

Sharon Sevedge (Broker/Officer) will remain in Salem to oversee Salem and Rolla operations. Sharon will join us in Columbia once she has trained her replacement.

Columbia was chosen as the new corporate headquarters due to many considerations such as sales volume, proximity to the Capital, telecommunications and most importantly the progressive nature of the community itself.

We look forward to servicing the fine folks of Columbia and Boone County with the same level of service that has earned us our unparalleled reputation of service excellence.

~Rhonda McMillan
Broker