Larry Riggs

This past Thursday we just had our monthly luncheon for the Frederick County Association of Realtors. Our featured speaker was a representative from a local bank/mortgage lender. He had some interesting statistics to share.

First: Did you know it's been 37 years since interest rates were this low?

Second: Were you also aware that the percentage of monthly income spent for a mortgage hasn't been this low since 1973?

Third: I certainly hope, by now that you all know there is a $7,500 first time buyer tax credit available which doesn't expire until June '09.

Fourth: Are you familiar with the fact that USDA has a 100% loan program with no MI? There is a funding fee but that can be paid by the seller.

I know were are inundated with REO's and short sales but I also believe there is an end in sight. I'm not trying to get preachy here but "Where there is no vision, the people perish" Every top trainer I've every studied teaches that there must first be hope to start moving ahead.

So why are we still hearing the doom and gloom from the media? Here's a theory. The incoming administration wants a stimulus package passed (For all your rich people that means a redistribution of wealth) by congress. I could be totally wrong but I have a feeling this is a set up to re-engineer the financial system in America. By the way, does anyone remember the attack by the left on the Bush administration about the deficit? Hmmm, has anyone been listening to the president elect? If you have then you know that deficit spending is suddenly back in style.

One thing I've learned in my real estate career is, it's not wise to be overtly partisan. Believe it or not, I'm trying not to be but let's be fair. What's bad for the Republicans to do is also bad for the Democrats. The financial situation in our country will only be corrected by level headed individuals from all parties coming together and doing things that actually make sense. Just yesterday I heard someone on the radio talking about investing money in the economy where we can expect a return. She then went on to name some of her suggestions. They were a string of entitlement programs that would lots of love (votes) but no money. Every day I pray that people will wake up and work to solve problems rather than please people. And, in order for that to happen our media has to stop trying to engineer society and start reporting the news. I hope you'll be praying that prayer with me.

I try to stay up on local and national news as it pertains to real estate. This morning I was looking at our local paper on line and couldn't believe my eyes. I really don't watch much TV so maybe more of you have heard this before. In one of the stories on refinancing, one of our local lenders commented on how helpful proposed new "no appraisal" loans would be for the industry. HAVE WE LEARNED NOTHING!!!

Let's think about this. We have sellers upside down in their homes. I have an idea! Let's give them loans that have nothing to do with the value of the home. One person commented that, now that democrats are in we can solve this issue with such programs. Now I do my best to stay away from partisan politics but let's be honest. This path to ruin started with the community reinvestment act. Hmmm, which republican what that? Oops, that was Jimmy Carter. Don't get me wrong. Jimmy Carter is a kind, benevolent man who puts feet to his faith. Unfortunately, he doesn't seem to understand basic economics. Forcing lenders to give high risk loans for the privilege of doing business is bad business. I can still hear lenders coming into my office complaining about that program. At least the ones with any economic vision.

Fast forward...The Bush administration warned the Fannie Mae and Freddie Mac were headed for trouble. Which republicans shot that down? Oops again...It was Congressman Barney Frank and Senator Chris Dodd that said "hands off." Frankly, (no pun intended) I'd prefer to forget party affiliation and say, let's get our heads together and work on a solution that will actually solve the problem, not prolong it. In my experience, prolonged problems only get worse. It just takes a little more time.

As a real estate agent I am obviously in favor of home ownership. However, if those happy homeowners are being set up for a fall, what have we gained? I'm not an extremist. I don't believe we have to go back to 20% down loans. In my younger days I had countless buyers using FHA or VA loans without default. Truth is, they're still good loans. FOR THOSE WHO ACTUALLY QUALIFY! There is no easy or immediate fix for the present situation. It will take time. But please, let's not compound the error with more reactionary "solutions".

I keep hearing about a credit freeze on the news. I watch several different financial shows on cable and I often hear that no one can get credit. I'm not a real complicated guy so I asked some of the lenders I deal with. They looked at me like I'm crazy. I look at our office's sale board and sales just keep happening. I've been pretty brutally criticized in the past for "spinning" the news to make the Realtors look good. Well I have a few problems with some of my critics. Here they are.

Rates are great!

Jobs are coming into the Frederick area.

Inventory is high so it's a buyer's market.

FHA loan limits are way up from where they were.

New businesses are moving into Frederick County.

Recently I saw a great article in one of our local papers. The article was titled "Real Estate Market Myths" In it, the writer told how she had just purchased a home with an FHA loan. She detailed how the process went and it all sounded fairly painless. Of course, a couple of things have changed. You have to have a job! You have to have good credit! Perhaps I'm showing my age but I remember when those things were normal. For me, and others who have been around this business for a while, things are back to the standards we learned on.

So how dare I be so positive when there are so many foreclosures and short sales? It is truly unfortunate that people are suffering because of our economy. In my defense, all my positive comments have been about he Frederick County real estate market. None of the big three auto manufacturers are located here. No major industries that are failing here. We have our issues but all in all Frederick is a great place to live and it's a great time to buy in our community.