Chattanooga Real Estate Blog

Lower income households are in for a rude awakening now that interest rates and the number of shady real estate speculators have increased while the unsteadiness of the recent economy has led to decreased property value. These issues have led to subprime loans and other interest-only loans to come under greater scrutiny. Subprime loans are offered to people with questionable credit histories so that they can buy property, albeit at higher interest rates and prepayment penalties. Subprime lenders have recently fallen, economically; the most well-known company to suffer has been New Century Financial, which at the present time is almost bankrupt. These companies have given loans to precarious borrowers, who have been eager to own property such as their own homes.

A few years ago, while real estate was booming and property values were increasing, borrowers, using subprime loans, were able to refinance their mortgages on assets and make a healthy profit. Unfortunately subprime borrowers could not even pay off their mortgages to begin with and fell behind on payments. In this situation, two years ago, borrowers were able to sell their homes to escape with their credit intact but now this is not an option because the price of housing has decreased leaving many people to have their properties foreclosed. Economist David Lereah expressed that of the adjustable-rate mortgages awarded by different investment banks, dating back to 2004, almost 25 percent of them were subprime. Of this 25 percent, 55 percent of these, valued at almost $330 billion, will be foreclosed because borrowers are unable to keep up with their mortgage payments.

Everyone involved with subprime loans are to blame for this crisis. Homeowners took on mortgages that in the long run were too expensive for them to afford; lenders continued to award risky loans; and market regulators did nothing to stop lenders from this flawed practice. Also, while subprime loans were flourishing, lenders and shareholders were making huge amounts of money and borrowers were happy to be able to own property. Unfortunately, at the time, everyone was making intuitive decisions based on he or she’s individual situations.

Even though many are discouraged with the subprime loan situation, there is still hope that subprime loans will not have more negative ramifications. Many believe that the situation is only temporary and it is only a matter of time before property values begin to rise again and then subprime loans will flourish again. Time will tell if the investment banks and homeowners will be able to recover from the present subprime crisis.

The city of Chickamauga has worked a deal to purchase the Gordon Lee Mansion for 1.5 million.  There is a lot of history here that needs to be preserved.  The city can get grants along with federal and state funds to preserve it and promote tourism where the private owner was not able to do so. 

I think this is great!  Now the house will be preserved without fear of it being torn down to make room for a big box store or parking lot. 

For those of you not familiar with the Gordon Lee Manion it was an antebellum plantation house built in 1847 by James Gordon.  It is the only structure left standing that was used during the Battle of Chickamauga during the Civil War.  A short history can be found here.

There have been many different styles of home construction over the years.  Some I like, some I don’t.  I thought I would give you a list of my top 5 styles.  In no particular order:
Victorian

True Victorian homes haven’t been built since the early 1900’s but you can still find design styles from the Victorians today.  Curved towers and spindled porches are a couple of their features we still see today in construction.
Queen Anne

Somewhat similar to the Victorian homes the Queen Anne is a bit more ornamental.  What I love about them is the siding.  It reminds me of a gingerbread house.  This sculpted siding is making a huge comeback today.  The Queen Anne homes have lots of porches, balconies, chimneys and gables.
Craftsman 

The craftsman was popular at the beginning of the 1900’s.  We have tons of them in Chattanooga.  Craftsman homes have overhanging eaves, gable roofs and wide porches with columns.  Little ornamentation.  Very simple in design and function.
French Provincial 

Brick exteriors, steep hip roofs, arched insets for doors and french windows can be found in the more formal French Provincial homes.  We have seen a lot of these built in the Chattanooga area over the last several years.  I think they will always be a popular choice of architecture.
Creole 

Anyone that has ever been to the French Quarter in New Orleans knows a Creole home.  Porches across the front of the home, full length balconies on the second and third floors along with full length windows all the way across each level allow for breezes to cool the homes in the hot, humid, southern summers.  The beautiful wrought iron railings just makes this home "pop" for me.

What do you think?  What style do you like?  The ranch of the Brady Bunch?  Or maybe you prefer a contemporary home?  Colonial, Federal, split level?  I would love to hear your thoughts. 

RealtyTrac has released it’s market report on March foreclosures.  The report shows 149,150 properties nationwide entered some stage of foreclosure during the month, a increase of 6.6 percent from the previous month and an increase of a wopping 46.81 percent from March 2006.  That’s 1 in every 775 households! 

We saw some improvement in Tennessee in March.  Yee Haa!!  We had the 14th highest rate in the nation.  Not good you say?  Well, I agree but it’s a huge improvement over last month and even last year.  1 in 772 households for a decrease over last month of 17% and 6.5% over last March.  At least March was a step in the right direction and hopefully the trend will continue.

The 10 highest were:

10  Illinois
  9  Indiana
  8  Ohio
  7  Florida
  6  Michigan
  5  Arizona
  4  Georgia
  3  California
  2  Colorado
  1  Nevada

Chattanooga was named one of the Top 11 Southern Retirement Towns in the February/March 2007 issue of Retirement Lifestyles, a 10-year-old magazine that highlights locations, communities and lifestyles for prospective retirees across the U.S.  Of course, I have always known this

I’m so disgusted I can’t even comment.  The Chattanoogan has the whole story.

Read the rest of this entry »

Dummy me!  I didn’t realize as long as no one got hurt that committing a federal crime was OK.

Pascal "contends that a sentence of imprisonment is not appropriate under the circumstances of his case"

"Because Mr. Pascal has fulfilled all financial obligations relative to the loans in question, the victim banks have literally profited from the transactions in question."

Pascal "readily acknowledges inflating the selling price of the transactions in question by about 10 percent to cover his down payments, but never in any greater amount."

Now I understand. 

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