a real feeling of Loss

A friend died today. It was expected but it wasn't. He had been fighting Stage 4 lung cancer for about 4 years. He had originally been given 6 months but he was a fighter. Funny (?) thing is he never smoked. He had been a missionary to Hong Kong for about 25 years and I can't help but think that maybe it was all the "second-hand" smoke. (It seems like all Asians like to smoke.) He sang in the church choir with me and he had a wicked sense of humor. I visited with him last Thursday, not knowing it would be the last visit. Although he was in Hospice, I really thought he had several more months left.

Many of you  have expressed concern and sympathy for my secretary who lost her only child in an accident last month. I know she appreciates your experssions of support. There is NEVER a thing you can do to help someone who is deep in grief-except be present at the appropriate times and let the one left behind know how much they are all loved.

It makes you realise how important family and friends are. It also means we all need to live as lives to the fullest. 

What if Banks....

I was watching CNBC business channel today when I heard a great idea. Why not refinance all the people who have been making their payments faithfully without missing any. Under the current bank rules they want you to have 20% equity in your property. The appraisal has to show that you have this equity. However, since the bank is already on the hook for the money, who cares if the borrower is upside down on his loan if he is making his payments in full and on time. So let's reward the good guys. Refinance the good guys, lower their rates and put more money in their pockets. Thay way they will also have more money to spend to help the economy.

Banks don't get it...never did

Bank Seized-again

There was another bank failure in north Georgia recently. On July 23, 2010, Crescent Bank of Jasper was seized by the FDIC and was reopened as Renasant Bank, which is out of Mississippi. Crescent Bank had approximately $1 billion dollars in assets. With the acquisition, Renasant Bank will be operating the 11 branches of Crescent Bank across north Georgia .


Crescent Bank was an active mortgage broker in the north Georgia area. It remains to be seen how the acquisition by Renasant Bank will affect it’s mortgage operations.

copy this

The Georgia legislature finally left office in April. As someone once said, "No one is safe when the legislature is in session." One of the issues they dealt with was the budget shortfall. State revenues have been falling since this recession began. So the legislature thought it would be a good idea to raise the cost of copying court documents.

If you go to the courthouse to get a copy of your deed or plat, it is going to cost you more-much more. The copy charge went from 25 cents ($.25) to 50 cents ($0.50) per page. If a party in a lawsuit wants to appeal a judgment or verdict to a higher court, the cost of copying the transcript to send to the higher court went from a dollar and fifty cents a page ($1.50) to ten dollars ($10.00) a page. A copy of a transcript that would have cost $750 has now gone to $5000.00. This is cost prohibitive.

This is also cutting off your nose to spite your face. What will happen is that people will make less copies. Only those copies that are essential will now be copied. The copy fees can go up but the number of copies can be regulated by the consumer.

As for the transcript costs, the Georgia Supreme Court acted to modify the costs. Now, instead of having to copy an entire transcipt to appeal a judgment or verdict, the parties can get together with the Clerk of the Court and copy only those pages that relate to the part of the verdict or the legal issue that is being appealed.

Maybe the legislature will act again to remedy this situation and maybe, this time, they will use some common sense.

Hot Summer

It is a hot summer and I hate the heat. That's why I live in the mountains-to get away from the heat. If I had my way there would be three seasons-spring, fall and winter.

I had more consultations (counseling sessions) with people today about foreclosures. I'm spending a lot of my time now counseling peoople in dire financial situations. I do what I can to help them but there are a limited number of options. Usually there may be things we can do to "buy time' but I hesitate to reccomend that course of action if, at the end of the time delay, there is no way they will be able to recover and not end up again where they are now.

One sad note is that I learned today that a fellow real estate attorney I know in Atlanta has lost his house and his law practice. He is now working for another law firm wtih long hours and little pay. These times are tough for all of us. Hopefully ..... soon?

Time flies- - - - - - -

I can't belive it has been so long since my last posting on my blog. Life can get very busy and time can get away from you so easily. Since I last posted a lot has happened and I will try to slowly bring the blog up to date.

We are dealing with more and more foreclosure situations and problems. Most of the foreclosure issues have to do with deficiencies-there has been a foreclosure and the bank is coming after the former owner/borrower for the difference between the loan balance and the value of the property. We have had a number of these issues. But this month, we filed our first lawsuit to set aside a bank action for "wrongful foreclosure". I don't believe in filing lawsuits to just "buy time". I don't think it does any good to file a lawsuit only to have it thrown out two or three months later. If there is to be a valid lawsuit filed, you must be thinking of making a permanent change in the situation.

In the wrongful foreclosure actoin I mentioned above, the mortgage company had approved a modification of the loan agreement subject only to the borrower's signature and notarization. The borrower signed the agreement, had it notarized and sent it back. The mortgage company rejected the signature because the notary had not printed her name in the proper loaction on the form, even though the notary, otherwise, was fully and legally, effective. So we have filed suit to have the lender bound by the agreement.

I'll let you know how it turns out.

I hope the rest of your day is good!

Roller Coaster Ride

I don’t know if we are at the bottom of the roller coaster looking up or at the top of the roller coaster looking down! On May 6, 2010 we had the largest one day drop on the DOW ever in history. The Dow fell over 900 points before recovering and finishing at -347.


I had been feeling pretty good lately. We have seen an “up-tick” in business. It seems as if more businesses are opening around town, and there is less office space sitting vacant. Until last week, the Dow had been slowly rising. The direction we were headed appeared to be “up”.

“PIGS” is a new acronym that I have learned to dislike. It stands for Portugal, Italy (sometime Ireland), Greece and Spain. Just before the DOW dropped so badly and diverted my attention, I had been following the riots in Greece as the EuroBank was imposing limits on the Greek economy. Greece is bankrupt, but apparently lots of people were not happy about the austerity measures.

And now the UK government (United Kingdom-England) is having its own problems. No one party won a majority in the recent election so the parties all have to get together and bargain to try to form an amalgamation of parties that will somehow equal a majority of seats in the Parliament…or to be precise, a majority in the House of Commons. Commentators say that it may take a month or so for a leader to form a government. Sounds like the USA Presidential Election 2000, doesn’t’ it?

So after all the excitement with the Dow, the Labor Department reported that we gained 280,00 jobs last month. It was also noted that the gains were “across the board”, i.e., in many different parts of the economy.

So what’s next? I don’t know, but I do like what Benjamin Franklin said at the time of the signing of the Declaration of Independence… “We must all hang together or we’ll surely all hang separately.” We’re in this together…whatever this is.

Monday, May 10th, the DOW was up over 400 points. Did I mention the roller coaster?

Hoping to see you at a closing real soon -

Borrowers in Shock?

The “Final Rule” mandated by Dept of Housing and Urban Development changing the standard closing statement (also called a “HUD”) has been in effect for almost four months now. It was not an issue in the first month, since all loans that had originated prior to January 1, 2010 could be closed on the “old” HUD. However, we are now required to utilize the new HUD on nearly all loans.

What reactions have I seen to the new HUD? To begin with, not all lenders and attorneys really know how to prepare the new HUD. Mistakes are not unusual. I recently had a lender and investor disagree about the figures on the HUD. For two days we watched and read emails being sent back and forth between the lender and the investor before they finally found agreement with the figures on the HUD. Borrowers also are perplexed by the new paperwork. I see faces that appear confused and dazed as I explain the figures on the HUD.

As a closing attorney, I have always tried to explain the HUD in some detail. I firmly believe that every borrower needs to understand the numbers and the terms of the loan. But I find myself now having to judge exactly how much information is too much information. I don’t want to scare a new buyer/borrower with tons of information, but I also want them to be free to ask questions about things they don’t understand.

It is easy to read the numbers in the borrower’s column. With the new HUD, the numbers represent the total of fees in the body of the HUD. These numbers are such that they can be seen, totaled and explained very easily. However, the information given in the left hand section (outside the borrower’s column) of the second page of the new HUD is confusing. I don’t believe many borrowers can understand them. As experienced as we real estate professionals are, this new HUD has taken countless hours and ‘trial and error’ efforts for many of us to understand it. It may be difficult for a buyer/borrower to grasp in one closing.

The bottom line: unfortunately, I think that the new HUD may have the opposite effect from that intended by the federal regulators. Instead of a clearer understanding of the breakdown of fees, we are having more misunderstandings; instead of clarification, we are having more confusion. We will be waiting to see how this all ends up. Clear?

spring has sprung.....

I saw some financial reports lately that are encouraging. In March new car sales were way up from Febraury and from the same time last year. Also (and maybe most important) the eceonomy actually created jobs in March. This is the first time in many, many months (years) that more jobs were created than were lost. Maybe things are starting to move in the right direction. The only drag on the reports was the housing market; still not doing very well. I am happy to report that in my office, at least, there appears to be a small "up-tick" in contracts and activity.

Onward and upward-

April Fools Day

I've had several conversations with people asking about April Fools pranks. I have to tell them that in our family we don't do April Fools Day. Most folks know that my associate attorney who works with me, Kristina Eno, is also my daughter. What you don't know is that her birthday is April 1st. When she was little she was always mortified that the other kids were playing jokes on each other. It also diverted attention from any attempt at school to recognize her birthday.

It's also given me an appreciation and understanding, and sympathy, for others whose birthdays fall on holidays. I also had some of that from my childhood as my sister was born on December 31st, right between Christmas and New Years on New Years Eve.

banks fail...life goes on

Well, it has been several days now since the two banks in Blue Ridge and Ellijay have failed. We have had a chance to catch our breaths and to know that the sky is not falling. Depositors are protected and business is going on as usual as always.

One hiccup in one of my closings though. It was a sale of a foreclosed property owned by Bank of Blue Ridge. Scheduled to close this Friday, one week after the FDIC take over, we were informed that the property was now owned by the FDIC and they would be contacting us about what procedures we would have to follow for this sale under the new circumstances.

The buyer had also arranged for financing through the Bank of Blue Ridge. Now, the bank is unable, under the new ownership, to offer the same terms on the loan. The buyer has to shop for new financing that had been previously in place.

Life goes on……….

Two north Georgia Banks acquired by FDIC

Appalachian Community Bank (also operating as Gilmer County Bank) and Bank of Hiawassee (also operating as Bank of Blue Ridge and Bank of Blairsville) were acquired by the FDIC, Friday, March 19, 2010.

(Please note that the Bank of Ellijay was NOT part of the financial institutions involved with this action.)

Appalachian Bancshares, Inc., Ellijay, GA wholly owns Appalachian Community Bank F.S.B., McCaysville, GA, which has branch offices located in Murphy, NC and Ducktown, TN. were not subject to this transaction and will continue to operate as usual.

All deposit accounts for Appalachian Community Bank and Gilmer County Bank have been transferred to Community & Southern Bank of Carrollton, GA. For more information on Community & Southern Bank, you can visit their web site at http://www.thecsbank.com/. They will open for business as usual Monday morning.

Bank of Hiawassee (Bank of Blue Ridge and Bank of Blairsville) was sold by the FDIC to Citizens South Bank of Gastonia NC. It too will open Monday morning under its new ownership. More information of Citizens South Bank can be found at www.citizenssouth.com

If you have questions about your deposits, you can call an FDIC representative at 1-800-508-8289. Lots more information about the consequences of a bank failure can be found at http://www.fdic.gov/bank/individual/failed/borrowers/index.html

Ratajczak looks into the Future.....

I recently had the privilege to attend a seminar where economist Dr. Donald Ratajczak spoke on his insights into our economic future. Dr. Ratajczak is a noted economist, the former head of the Georgia State University economic forecasting center and a noted worldwide lecturer. His opinions are in demand by the media and he is often sought after by major television networks for his thoughts on the economy.

Below is a summary of what Dr. Ratajczak sees for our economy in the near future:


Banks are reeling from the bad loans that were made over the past few years. Many lenders are surprised to find out how bad their portfolios really are. The banks feel that federal regulators are looking over their shoulders. How do the banks keep the regulators at bay? How do they improve their loan portfolios? They need lend…to good qualified borrowers. Then the banks will have more good loans in their portfolios.

Are we in an economic recovery? Yes, but it is not the traditional recovery that is usually led by the housing sector. Housing, in this recession, is a laggard. We have a two to three year inventory of unoccupied residential houses. However, by 2013, the inventory should be back to “normal.”

The recovery is slow because the banks won’t lend. New loans are DOWN eight per cent (8%) from this time a year ago. However, deposits are UP eight per cent (8%) from last year. When lending is down and deposits are up, the banks have money. They have plenty of money to lend if they would do so.

The banks need to change their manner of lending in order to get better loans into their portfolios. With a required credit score of 700, only one-third of the population can qualify for a loan. If the criteria were lowered to 675, then forty-five per cent (45%) of the population could qualify for a loan.

The Jobs Report for February showed a loss of thirty thousand jobs. However, sixty-four thousand of those job losses were in construction and government. State governments are letting people go to save money; state governments are experiencing large deficits and the fastest and easiest way for government to save money is to cut jobs. If the construction industry and government jobs are removed from the report, we actually had an increase of thirty thousand jobs last month. This trend should continue into the future.

Temporary jobs have also been increasing for the last five months. This will lead to job growth as temps are hired and made permanent workers. We should see continued job growth in March, April, and May –JBW 3/5/10

Sign of the Times

Factoid: (sign of the Times)

One measure of real estate activity is the Real Estate Book. This is a national franchised publication to advertise real estate for agents and other real estate professionals. Each book is tailored to local areas.

Here in the Mountains of north Georgia, the last four issues of the Real Estate Book, (issues 21 #10; 21 #11, 21 #12 and 22 #1) contained 48 pages of ads, 40 pages, 32 pages and finally 24 pages respectively. We are now, sadly, referring to it as the Real Estate Pamphlet. Times are still hard.

Short Sale Fraud

We have had a lot of questions about "short sales" recently. I came across this article about problems you might encounter in a short sale where there is a second mortgage holder who has to agree to the sale even though there is no money going to that lender. The article is a bit long but I think it is worth it-Byron


Big Banks Accused of Short Sale Fraud
By Diana Olick
CNBC Business Reporter

Just as regulators, lawmakers and all forms of financial oversight boards are talking about new regulations to guard against mortgage fraud and another mortgage meltdown, there appears to be yet a new mortgage fraud out there today, allegedly perpetuated by agents of, yes, the big banks.
I was first alerted to this by Jeremy Brandt, the CEO of several companies that bring short sale agents, investors and sellers together.
His companies include 1800CashOffer, HomeFlux.com and FastHomeOffer.com. Brandt has a huge network of short sale real estate agents, and over the past several months he's been receiving all kinds of questions and complaints about trouble with second lien holders.
As we all know, during the housing boom, millions of Americans pulled cash out of their homes in the form of home equity loans and lines of credit. They also used "piggy back" loans in order to get even lower interest rates on their primary mortgages. Now, many of the borrowers in trouble, and many who are so far underwater on their loans that they don't qualify for any refi or modification, are choosing short sales as a way out. (Short sales are when the lender allows the home to be sold for less than the value of the loan). About 12 percent of all home sales by the end of 2009 were short sales, according to the National Association of Realtors.
In order for a short sale with two loans to happen, the second lien holder has to drop the lien. If they don't, and there's no short sale, the home goes to foreclosure and the first lien holder gets the house because second liens are subordinated debt to the primary loan.
In short, the second lien holder gets nothing. In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn't have to agree, but more and more are doing so.
That's all legal.
But here's what's not legal and what's apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say "on the side," I mean in cash, off the HUD settlement statements, so the first lien holder doesn't see it.

They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale," says Brandt. "So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal."

I told RESPA specialist Brian Sullivan over at HUD about all this and he replied, "That's a red flag!"
Clearly illegal.
Most agents wouldn't go on the record with me, for fear of retribution by the banks with whom they have to work every day. But one agent, Kayte Gentry, of Keller Williams Integrity First Realty, was brave enough to blow the whistle.
"I think it's wrong, and I think somebody needs to hold them accountable, and every time I lose a house in foreclosure because of this, it hurts my client," says Gentry matter-of-factly. "Aside from being illegal and a violation of RESPA, it's immoral and truly it's just sad for the client that it's hurting."
Gentry says she has had the requests made three times and claims she lost one sale because of it.
"The big banks that have recently made this request, specifically payments outside of the closing statement have been Citi Mortgage and JP Morgan Chase."
JP Morgan Chase simply answered, "No Comment," when I relayed the charge to their media representative.

When we confront the lenders and tell them that this request is illegal and a violation of RESPA, they tell us it's been cleared through legal and they don't care. Do it anyway," charges Gentry.


I contacted the Treasury Department, HUD, FINCEN (Financial Crimes Enforcement Network) and the Federal Trade Commission, and none of their representatives could tell me of any active investigation into this. The folks at HUD said they'd be very interested to see my story.
© 2010 CNBC, Inc. All Rights Reserved

A Tradition Ends?

Is it Over?

For the last sixty years, on the birthday of American write Edgar Allen Poe, January 19, a mysterious stranger has always appeared during the night to leave three roses and a half-bottle of cognac on his grave. This year, 2010, the Associated Press is reporting that the mysterious stranger did not appear.

This event has become a “must see” for die-hard Poe fans. Many fans had travelled from all over the country to stand outside the cemetery to await the appearance of the mysterious stranger.

More than three dozen disappointed Poe fans huddled in the cold on the night of January 19th, when the stranger failed to appear. Last year marked the 200th anniversary of Poe’s birth, so many speculate that the stranger probably thought it was a good time to end the tradition.

“Edgar Allan Poe (January 19, 1809 – October 7, 1849) was an American writer, poet, editor and literary critic, considered part of the American Romantic Movement. Best known for his tales of mystery and the macabre, Poe was one of the earliest American practitioners of the short story and is considered the inventor of the detective-fiction genre. He is further credited with contributing to the emerging genre of science fiction.[1] He was the first well-known American writer to try to earn a living through writing alone, resulting in a financially difficult life and career.” -Wikipedia

Let it snow! Let it snow! Let it snow!

Snow Snow Snow It snowed a little over one inch –that’s right 1.0 inch- last Thursday. We were stuck for days. Actually we were stuck until Monday. On Monday and Tuesday, I couldn’t get out of the driveway and my neighbor loaned me her car. Our drive is located on an “upslope” so once the snow froze, we couldn’t get up that hill. Finally, yesterday, Wednesday, we were able to get out on our own. It was a bit “dicey” and we had to be careful but we make it. Temperature is getting warmer each day.

One added bit on excitement in cabin fever living-Tuesday night we lost our water. We had nothing. So no shower Wednesday morning, among other, unnamed, inconveniences. We are on a shared well with 8 other houses. After an investigation and search, we discovered that one of the houses day the was, whose owners are only here on weekend, had a burst pipe, Their garage was flooded. All the water rushed from the pipe and effectively emptied our well. Once the water was cut off to that pipe, the water came back. I love living in the mountains!