Covington, GA

What's the most important thing you'll put your "X" beside when you go to the polls in Covington on November 4^th?

The name of the next President? We hear more about the Presidential race than anything else. In fact, we've been bombarded for months with positives and negatives about each candidate, what they allegedly stand for and what they'll do for us if elected. That's pretty important stuff. But, most important?

The name of your next Senator or Congressman? Heck, if elected, they'll be part of the 535 people who really run this country. That makes their election or rejection pretty important too. But, most important?

Equally important as either of those races is whether you put your "X" beside the "YES" or "NO" on three Georgia Constitutional amendments on the ballot this year. These three amendments will be instrumental in directing the continued intelligent growth and quality of life in our State and local communities for years to come.

The Georgia Association of Realtors Board of Directors has voted to support each of the three. And my inclination, even before that endorsement, was that they would benefit our State and community too. As the amendments are stated on the ballot, however, may cause some not to vote for the initiatives because of the confusing and even misleading way they are presented. So, if there is anyone out there who hasn't investigated what the three amendment questions are all about or hasn't taken advantage of early voting, here's a quick tutorial...

Amendment 1: "Shall the Constitution of Georgia be amended so as to provide that the General Assembly by general law shall encourage the preservation, conservation, and protection of the state's forests through the special assessment and taxation of certain forest lands and assistance grants to local government?"

The primary things this amendment does is to allow property owners with 200 acres or more of forested land to voluntarily enter into a "covenant" with their local governing authority to preserve their land for a period of 15 years, and get a reduction in their property tax on that land by entering the covenant. It costs the general taxpayer nothing, preserves some of the state's natural beauty, is environmentally friendly, and can be bought out of at any time by paying back taxes along with some penalties. It's the same deal that farmers have today with Agricultural Conservation Use Covenants which are about the only thing keeping their property taxes low enough to make farming a viable profession.

Amendment 2: "Shall the Constitution of Georgia be amended so as to authorize community redevelopment and authorize counties, municipalities, and local boards of education to use tax funds for redevelopment purposes and programs?"

At first blush, this sounds like we may be taking school funds to redevelop and cure slums and blighted areas. Not true! If this amendment passes, school systems will not lose any tax dollars, but in the long term will gain. This amendment would authorize the use of school tax funds for the redevelopment and revitalization of blighted areas within "Tax Allocation Districts (TADs)" with out raising our taxes. Once the redevelopment is complete and property taxes within the TAD increase, the increased tax revenue would pay off development bonds. Once the bonds are paid off, the local government and school systems continues to reap the benefits of the higher tax base and associated revenues.

Amendment 3: "Shall the Constitution of Georgia be amended so as to authorize the General Assembly to provide by general law for the creation and comprehensive regulation of infrastructure development districts for the provision of infrastructure as authorized by local government?"

This could be the greatest thing for intelligent, controlled growth within our state and local communities since the hard hat. The establishment of Infrastructure Development Districts (IDDs) within a particular area offer an essential means of financing and building new infrastructure - roads, bridges, sewer, parks, street lights, schools, municipal services, etc. - by taking the burden off the taxpayer and shifting it to the private sector.

Through bond sales by a private board overseeing the IDD, growth is financed and paid off by the renters or purchasers of the new development, resulting in tax growth, greater job opportunities, planned growth, environmental safeguards, and greater quality of life without higher taxes for anyone.

There's no most important on the ballot this year. Everything there is important. But, isn't that the way it always is? Make your voice heard on all the important stuff on November 4^th. Vote!

This is about the state of the real estate market in Covington, Georgia… what caused the state of affairs we find ourselves in today. It’s also a little about politics. It’s also about our main stream media. But mostly it’s about honesty.

I’ve written before that, from my perspective, the root cause of our problems with today’s depressed real estate market – and, indeed, with the current economic condition in our country – is the federal government’s misplaced premise that everyone in the United States should be able to own a home, and our mainstream medias’ crusade to reinforce and perpetuate that position.

The current real estate crisis didn’t just spring up from nowhere. It is the direct result of a Clinton administration decision in the late ‘90s to loosen lending rules to make mortgage loans more accessible to America’s poor and minority groups so that everyone could purchase a home. And, to that purpose, Fannie Mae and Freddie Mac were authorized to approve even the riskiest of loans to enhance the American Dream. It was a gravy-train wreck waiting to happen.

Some officials could see the wreck coming. Alan Greenspan (although he, by his own admission, missed some of the signs) warned of it, as did President Bush’s Treasury Secretary, as did his Chairman of the Council of Economic Advisers. They tried repeatedly to tighten the rules on Fannie and Freddie. But the other party blocked every attempt to do so, and continued to loosen them even further.

Congressman Barney Frank (Dem.) and Senator Christopher Dodd (Dem.), denying the existence of any problems at all, led the movement to refuse the Bush administration’s requests to set up a regulatory agency to watch over Fannie and Freddie right up until the sub-prime mortgage market imploded. This is what brought us to the place where the only way to prop up our economy was with a $700 billion bailout.

This is where the “honesty” of our mainstream print and broadcast media comes in….

Shouldn’t our media be telling us the truth about how we got to this point and who put the prosperity of all Americans - and a large part of the world – at risk? Isn’t the job of the media to be the watchdog of truth, to do whatever it takes to discover it and to report it to the American people because the public has the right to know?

That’s what they taught me in the ‘80s when I was getting my journalism degree.

But, when Nancy Pelosi, with Barney Frank and Chris Dodd by her side, recently accused the Bush administration and Republican deregulation of causing the housing and economic crisis, the media criticized Republicans who took offense at her misrepresentation and voted against the bailout.

When Fannie Mae and Freddie Mac were making political contributions to the very members of Congress who were allowing –even urging - them to make irresponsible loans, wasn’t there a story there?

When Fannie Mae CEO Fred Raines was consulted on housing by the Obama campaign after he was fired from his $90 million job for incompetence, wasn’t there a story there?

What happened to responsible, honest journalism after “All The President’s Men”? Honest people… honest media is free from deception. They are upright in their character. They diligently discover and insist on reporting the truth in spite of the probable consequences or effect on their preferred candidate. That’s how they earn our trust.

We’re now in a crisis begun during the Clinton administration and perpetuated by a Democratic Congress. Yet the mainstream media continues to act like the PR agency for the Democratic Party, trying to convince us that the evil President Bush caused all our problems. Unfortunately, with a lot of people, they’re doing a pretty good job at it. But, I don’t trust them!

As Realtors in Georgia, we are extremely fortunate to have the insight, expertise and guidance of a very wise man, Seth Weissman. Weissman is a senior partner in the law firm of Weissman, Nowack, Curry & Wilco, P.C., and serves as general counsel of our Georgia Association of Realtors. In that capacity, Weissman is not only an advocate for Georgia Realtors, but equally for every home buyer and seller throughout the State.

Mr. Weissman recently co-authored and article with Dan Forsman, president and CEO of Prudential Georgia Realty entitled "Sorting Out Atlanta's Housing Market." I just came across the article, but wish I had found it earlier.

The article provides a very astute insight into our current real estate marketplace, where it's going, and when.

Weissman begins the article by saying, "While the sky may be falling in other housing markets, it is certainly not falling in Atlanta's. However, the old saying that all real estate markets are local has certainly gotten lost in the shuffle of the bad news coming out of our national press." This statement is why I believe the article should be recommended reading... not only for Atlanta area Realtors and home buyers and sellers, but also for Realtors in markets all across the country.

Most real estate markets across the U.S. are much more similar to Atlanta's than to the "bubble" markets in some parts of Florida, California and Nevada. "Atlanta's real estate market never had the kind of run-up prices seen in bubble markets," Wiessman says.

He goes on to say that "Residential real estate markets have always been cyclical." "Housing prices will recover and in a few years, due to the health of our economy, will likely be much higher than prices at the peak of the previous cycle." As a Realtor and a homeowner, I love that kind of talk!

For some great insight, read the article "Sorting Out Atlanta's Housing Market." I think it might make you feel a bit better about the state of real estate today. It certainly did me!

Contact any of "Your Traditional Neighborhood Specialists," Licensed Realtors in Georgia at 770.787.7777 (Ext. 456) to list your property for sale or to purchase a property in Covington, Conyers, Oxford or anywhere in Newton, Rockdale, Walton, Henry, Gwinnett or east DeKalb Counties in Georgia. We are accepting referrals!

You deserve more from your Realtor than just another refrigerator magnet! Visit our profile to learn more about the services you deserve. Call us today at 770.787.7777, Ext. 456, or contact us by email by clicking on "email me" on the right side of this page under our profile.

To see all Covington, Conyers and Oxford homes for sale, click here and then click on "Search MLS Listings." We know Newton, Rockdale, Walton, Henry, Gwinnett and DeKalb Counties and can get your home sold or help you buy your Covington or Conyers home.

"Your Traditional Neighborhood Specialists" fees are the same as for a single Realtor. But you get...

• Five times the Market Knowledge
• Five times the Marketing Expertise
• Five times the Negotiating / Sales Ability
• Five times the Accessibility
• All for a single-Realtor fee!

We think you deserve it!

Copyright 2008 by Your Traditional Neighborhood Specialists. All Rights Reserved. All information provided in Covington Living Blog is subject to change without notice, and represents the ideas and opinions of the author(s). The author(s) are not responsible in any way for the accuracy of the information provided, and offer no warranties of any kind, either express or implied.

I was just going through my online news, when I discovered a report that new home construction was up by 8.2% according to new figures released by the government. I was just wondering whether this is true in your neighborhoods. Here in my area (Covington GA Real estate market), there's virtually no new construction going on. I drove around the other day trying to locate any new houses under construction, but was surprised to find that many of the Covington GA new homes built more than a year ago are still on the market. There's virtually no new construction activity in these subdivions. The home builders are trying to sell their current inventory an they have drastically reduced the prices on these houses. We scout around and pu together a list of discounte homes in the area.

CLICK HERE FOR OUR FREE LIST OF DISCOUNTED HOMES.

There are also many Covington GA foreclosures currently on the market that are having a hard time finding qualified buyers. Many HUD homes are also looking for buyers with a lot of difficulties. HUD is now requiring only $100 down to move into one of their homes. They will even pay some closing costs for you. The national main stream media may be reporting that Construction activity is up, but I don't see that here in Covington. Both Residential and Commercial property construction is definitely down.

At the risk of loosing about 51% of my readers, I have to say right up front that... No, girls! This is not about the 1983 movie, "Risky Business," that propelled Tom Cruise to fame. Sorry!

This is the third in a series of articles on mortgage lending in the Covington Georgia real estate market. And that, too, in today's market, can be a "risky business."

In mortgage transactions, the lender takes the risk that you and I, as borrowers, may default on the loan and not repay the debt. Therefore, they assess their risk on every type of mortgage loan to determine whether the loan should be approved or declined. There are four major risk factors lenders consider today when underwriting a mortgage loan in the Covington real estate market and several lesser ones. In this part of the series, we'll look at the first two major factors, LTV and DTI. In Part 4, we'll look at the other two major risk factors and the lesser ones.

Loan To Value (LTV)

One of the first risk indicators lenders look at is called the Loan To Value (LTV) ratio. Loan To Value is a mathematical calculation in which the amount of the loan you're applying for is divided by the lower of either the purchase price or the appraised value of the home you are buying.

Example:

• Purchase Price of $200,000
• Appraised Value of $203,000
• Down Payment of $20,000
• Loan Amount of $180,000

$180,000 divided by $200,000 = 90% LTV

The normal maximum LTV expected by the lender for a "conforming" mortgage loan for a primary residence or second home is 95%. That is to say that the borrower pays 5% down, leaving a mortgage loan of 95% of the sales price of the home being purchased.

Normal maximum LTV for a conforming mortgage loan on investment property is 90% (10% down payment).

Loan options are also available for LTVs between 95% and 100% even though they represent a higher risk to the lender. They are available on some special conforming programs and on government guaranteed programs through the FHA and VA.

There is a 95% maximum LTV on home refinancing to obtain a better interest rate, and 90% maximum LTV on refinancing for home equity loans, called "cash out refinances."

When a borrower is obtaining two mortgage loans to finance a home (such as an 80/20 loan - 80% first mortgage, 20% second mortgage), the mortgage lender considers a calculation called the CLTV or Combined LTV.

Example:

• Purchase Price of $200,000
• Appraised Value of $203,000
• Down Payment of $20,000
• 1^st Lien Loan Amount of $160,000
• 2^nd Lien Loan Amount of $20,000

$160,000 divided by $200,000 = 80% LTV

$160,000 + $20,000 = $180,000 divided by $200,000 = 90% CLTV

Debt To Income Ratio (DTI)

The second major risk factor lenders consider is your Debt To Income Ratio (DTI). Making up your DTI are two ratios: 1. Housing Ratio, and 2. Total Debt Ratio.

The Housing Ratio is the monthly estimated house payment (including PITI: principal, interest, property tax and homeowner's insurance) divided by the borrower's and co-borrower's monthly gross income (before tax).

Example:

• PITI of $1,420.50
• Gross Monthly Income of $6,000

$1,420.50 divided by $6,000.00 = 23.7% Housing Ratio

[TIP] A good rule of thumb to use when you're crunching numbers before deciding about applying for a mortgage loan is to make sure your Housing Ratio is no higher than 30%. In reverse, that means that you should be able to comfortably afford a house payment (PITI) amounting to about 30% of your gross income.

The Total Debt Ratio is the estimated monthly house payment (PITI) plus other monthly payments such as car loans, credit cards, personal loans, etc., divided by the borrower's and co-borrower's monthly gross income.

Example:

• PITI of $1,420.50
• Other Debt

• • Auto Loan Payment $460.00
  • Credit Card Payments Totaling $300.00

• Gross Monthly Income of $6,000

$1,420.50 + $460.00 + $300.00 = $2,180.50

$2,180.50 divided by $6,000 = 36.3% Total Debt Ratio

[TIP] A good rule of thumb to use for a maximum Total Debt Ratio is no higher than 40%.

[TIP] Your car loan payment is not normally considered when figuring your Total Debt Ratio if you have less than 10 months left to pay on the loan!

Most loans today are underwritten through automated (computerized) underwriting. When lenders use automated underwriting, actual maximum ratios allowed may be different since the computer can easily consider all risk factors of the loan at once. The ratios can go higher than 30% Housing Ratio and 40% Total Debt Ration. However, when you're crunching numbers yourself, as I mentioned above, it's best to use 30% Housing Ration and 40% Total Debt Ratio as guidelines.

Contact any of "Your Traditional Neighborhood Specialists," Licensed Realtors in Georgia at 770.787.7777 (Ext. 456) to list your property for sale or to purchase a property in Covington, Conyers, Oxford or anywhere in Newton, Rockdale, Walton, Henry, Gwinnett or east DeKalb Counties in Georgia. We are accepting referrals!

You deserve more from your Realtor than just another refrigerator magnet! Visit our profile to learn more about the services you deserve. Call us today at 770.787.7777, Ext. 456, or contact us by email by clicking on "email me" on the right side of this page under our profile.

To see all Covington, Conyers and Oxford homes for sale, click here and then click on "Search MLS Listings." We know Newton, Rockdale, Walton, Henry, Gwinnett and DeKalb Counties and can get your home sold or help you buy your Covington or Conyers home.

"Your Traditional Neighborhood Specialists" fees are the same as for a single Realtor. But you get...

• Five times the Market Knowledge
• Five times the Marketing Expertise
• Five times the Negotiating / Sales Ability
• Five times the Accessibility
• All for a single-Realtor fee!

We think you deserve it!

Copyright 2008 by Your Traditional Neighborhood Specialists. All Rights Reserved. All information provided in Covington Living Blog is subject to change without notice, and represents the ideas and opinions of the author(s). The author(s) are not responsible in any way for the accuracy of the information provided, and offer no warranties of any kind, either express or implied.