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An Explanation of the Subprime Mess

Blog from Guest Author, Chris Crowe

Unless your head has been stuck in the sand, you've heard national news media outlets cover the subprime mess extensively over the past few months. Most of it has been a lot of hype. However, the reality is there is still a problem. People used subprime mortgages incorrectly or for the wrong reasons. A subprime mortgage was originally created to help those with credit challenges purchase homes. The mortgages provided low downpayment options and reduced income documentation. The result of that was a higher rate for the borrower. However, people who normally wouldn't qualify for a home mortgage could with subprime mortgages.

Most subprime mortgages were ARMs with initial fixed rate periods of 2 years. The 2 year period allowed people to clean up their credit issues and then refinance into a conventional mortgage. This is a good theory, but several problems exist.

1. People didn't clean up their credit. Home values went down. Remember, most subprime mortgages had low downpayment terms. Some people ended up owing more than the house was worth. When it became time to refinance, they couldn't.
2. Subprime loans were used to speculate on fast appreciating property. The low downpayment and reduced documentation appealed to people in search of quick money. Who cares if the rate is high? If you flip the property, it doesn't matter much. Well, what happens when you can't flip and are stuck with the payments?

What does this mean to everyone else? You have to look at the big picture and see what impact the subprime problem has on the market for mortgage-backed securities. Last week on CNBC, they had a gentleman explain this better than anyone I've heard. It's a shame, because it came on during lunch time in the middle of the week. An explanation like this belongs on the nightly news so everyone can hear it. It's slightly technical and uses some industry jargon, but it's pretty easy to follow.

You should always consult with a mortgage professional you trust before making any mortage finance decision. If you have any questions about this, please don't hesitate to contact me.

Thank you, Joe for allowing me to post on your blog. For information like this and more, please visit my blog.

LowCountry Joe and a Lovely Young Lady

Holy Toledo......Is the young Lady I am with simply lovely or what!!!!!  She is also quite well known in literary circles around the world. For those of you that know who she is, please send me an E-Mail. I will put the your name in my hat and have a drawing for correct responses. The winner will receive a very special prize. Have a great day...LCJoe

Joe@LowCountryJoe.com

The Endangered Daufuskie "Fe Foo Darter"

Now I know you have heard of the infamous Tennessee snail darter that stopped development in it tracks.  Well on Daufuskie we have the endangered "Fe Foo Darter". Yup....thats right. This endangered family of darters lives on the North end of Melrose in the woods right next to the pool. Now it's tough to see a "Fe Foo Darter" as they are very elusive. Actually, until today, no-one knew the Fe Foo even existed except for a very choice few, Old LC Joe being one of them.

Now why am I pontificating about the Fe Foo? Actually I have been anxious to let the world's scientific community know they exist for years. Like Pat Conroy's, The Water is Wide, the discovery of the Fe Foo will definately put Daufuskie "on the map". But I knew in my heart that the folks that were tring to control how Melrose developed their property would use it to their advantage"....so I waited until now.

And developing there will be!!!   The included article focuses on the condo units to be built on the site, but believe me, it is much more than that. The exciting news, that I have been paitently waiting for, and telling many of you about, is Beaufort County Council's approval of a whole plethora of zoning changes. These changes will enable, "just to start" Daufuskie Island Resort and Spa to renovate the current Melrose Inn and expand it by a whopping one hundred fifty two (152) rooms. Yowzahhhh!!!! In future correspondence I will brief you on more complete details of development, like the new spa, that are guaranteed to blow your proverbial socks off.

So now I am off, to warn the Fe Foo Family that scientists and folks from around the world will be converging on the pool complex with mason jars in hope of catching one. But these little guys are like fairies and dissapear with the slightest movement. That is, unless you are with old LCJoe after you have drunk a few glasses of Silver Dew Wine. Then they seem to be everywhere........

www.LowCountryJoe.com

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Daufuskie Island developer cleared to build five condo units on beachfront

By GINNY SKALSKI

Published Tuesday, July 24, 2007

A Daufuskie Island developer will be able to build five condominium buildings on the beachfront, just inland from a state required setback, but future Beaufort County developers might not be allowed to build so close to the water.

The Beaufort County Council voted 7-4 Monday to approve a package of zoning changes submitted by developer Daufuskie Island Properties, with opposing members taking issue with one area of the developer's master plan.

Opponents didn't like a portion of the plan that calls for building 12 condominium buildings along the island's front beach. Five of the buildings are located just inside a 50-foot setback required by the South Carolina Office Ocean and Coastal Resource Management. The other seven will go just behind them.

"I'm going to vote against this if only as a gesture (to say): 'Just because it's legal doesn't mean it's wise,'" said councilman Rick Caporale, who represents the north end of Hilton Head Island.

Several Daufuskie residents who oppose the 55-unit project have cited concerns about

erosion. The buildings will replace The Beach Club & Fitness Center, which will be demolished to make way for the development.

The developers say the island is not eroding as quickly as opponents claim, and they're committed to future beach renourishment. Council members confirmed Monday that any future renourishments would not be funded by county taxes.

Councilman Weston Newton, whose district includes Daufuskie, voted against the proposal. He suggested the county and local municipalities consider adopting setbacks that are more strict than state standards.

Newton plans to bring up the idea during today's meeting of the Southern Beaufort County Regional Plan Implementation Committee. The plan was adopted last year by the council and is supposed to serve as a guide to area growth.

The plan says barrier islands like Daufuskie are "continually being modified by waves, currents and winds" and suggests efforts be made to balance the natural environment with man-made structures.

House for Sale....Needs Work Quick

                OWNER WILL CONSIDER ALL OFFERS

E-MAIL LOWCOUNTRY JOE AT Joe@LowCountryJoe.com  TODAY!!!!!!!

Real Estate Smells

Read with interest the other day an article linking the sense of smell with alzheimers disease. It seems that if an  individual cannot smell Cinnamon it means there is a good chance the disease is in its first stages. Now is that interesting or what. So just for the heck of it I went to the local bakery and got me a big fat cinnamon roll and put it right under my nose. The baker thought I was a bit goofy but when I told him about the study it was amazing how fast he got his own roll from under the counter. Well contrary to common belief, I am not loosing my mind and the middle aged baker and I both smelled cinnamon and are just fine, thank you.

And it just so happens I read on the "net" the other day about how significant smell is in our daily lives. The author commented about how he could still remember the smell of his high school girlfriend's perfume. Ahhh...it made me remember too, and that was many moons ago. But this is supposed to be a blog on real estate so lets talk about real estate smells.

The first thing I do when I show my customers a house is walk into every room and put my "sniffer" to work. If I smell fresh canned scents that might have been sprayed intentionally, I am outta there. That's because those canned scents are probably there to cover something up.

So what might the seller be trying to hide. The first thing I can think of is cat or dog pee. There is nothing worse. I have walked into houses where the smell was so intense my eyes started to water. The second biggest thing is cigarette smoke. The nicotine from smoke literally permeates every inch and cranny of a residence. Its not unusual to paint the interior of a home multiple times before the tar is covered. Even then, it is not unnormal to see that ugly brown stuff creep through small cracks a few weeks later. I have seen non-smokers "turn on their heel" at first whiff and never make it into the entry foyer. And then there is the 'M" word. That's right "MOLD". Now we are talkin' serious stuff and due to our high humidity in the Lowcountry it is very prevalent. Recently I heard about a couple that decided to turn their air conditioner way down to conserve energy while they were away for the Summer. Now that was definitely a classic proverbial "brain fart". When they returned the walls were covered with the stuff. Not a very pretty sight and very, very expensive to eradicate.

Now lets talk a bit about what you should do if you are tring to sell your house. First, do yourself a favor and don't make sauerkraut the night before the showing. Now I love sauerkraut but that smell lingers on. If you are a smoker, a compete interior paint job might be in order, along with having the rugs, curtains and furniture professionally cleaned. Now I don't have a clue what you do with "Dog Face" or "Cat Face" because I know you love them... but you might want to consider weekly trips to the groomer for a bath. Now I know "Dog Face" will love it but washing "Cat Face" will prove interesting. Definitely don't spray the place with disinfectant. That's like walking into a hotel room and smelling the "gunk" the maids use (I can smell it now). But you might want to consider baking a pie. A friend of mine, and a very classy Lady, Gloria Henley, was the classic pie maker/home seller. She would build one house at a time strictly for resale. These homes were always "simply fantastic" with incredibly entry statements and furnishings. But even with this professional approach she never forgot about the sense of smell and its importance. I showed her homes many times and will always remember that hot apple pie smell waifing from the kitchen as I entered the front door.

And this "smelly" pontification can also extend to outside your home. We are blessed with clean crisp salt air in the Lowcountry so don't mess it up with spreading lawn fertilizer the day before. And you might want to consider cleaning up the garage or golf cart barn and leaving the door open. These places are notorious for smelly mildew buildup.

Now lets get to the included "Pic" of my favorite manure spreader ever. This beauty sits proudly in front of a very nice dockside seafood restaurant in Charlottetown, Prince Edward Island, Canada. It reminds me of the days when I grew up working on my Uncle's farm in Pennsylvania. Now I spread a lot of manure with a spreader just like this one.  The smell can travel across the countryside, and that brings up one of the funniest smelly real estate stories I have ever heard.

As we all know, housing is rapidly sprawling away from the cities and into the country. A developer in the Mid West decided to purchase property surrounded by farms and build some tract homes. But to do that, he had to put a "disclaimer" on the house sale about the possibility of smelling manure. "Now this a true story folks, so bear with me"......So what did he do....he hired a company to develop a manure "scratch and sniff" smell test. Each potential owner was required to do the test so they would know what to expect when Spring came around and their farmer neighbor cleaned out his barn. Go figure!!!

So that brings me to the end of my smelliest blog ever. So I will leave you with my favorite quote from Robert Duvall in Apocolypse Now...."I love the smell of napalm in the morning". Well put Robert, but "I love the smell of Lowcountry marsh pluff mud in the morning"...Imagine That....

Shark Fishin'

Now is this a happy young man or not.....This fine lad just landed a small shark off the beach at Bloody Point.....  one of many he caught this particular Summer afternoon. He also caught the unhappy sting ray turned upside down (not a happy camper). Folks dont realize it,  but the waters off of Hilton Head and Daufuskie are loaded with sharks off all sizes and persuasions. I have been told from excellant sources that Port Royal Sound is one of the largest shark hatcheries on the East Coast. Not to worry, however, I have never hear of anyone being bitten and notorious white sharks are not common to these waters.

Now if you want to get real serious about "shark fishin" or any other type of "fishin" for that matter, give me a holler. Over the years I have befriended some fine boat Captains that know the local waters like the back of their proverbial fishing rod.

Have a great day and as local professional fisherman Fuzzy Davis says when he signs off on his fishing program..."TIght Lines To You".

Jammin' at the Gazebo

It's Summer and time for some Jammin' at the Driftwood Beach Gazebo. Thanks to the fine gentlemen Mitch and David......it was a guy inspired party......locals of all sizes, shapes and persuasions got together for a bit of music and mingling. The weather looked precarious at first but I saw David down at the beach doing some sort of incantations....just a shakin' his finger in the air and mumbling some kind of foreign language and the sky cleared and the orange moon rose. I wouldn't expect anything less from a fellow that has a wife that walks on fire.

And then there was Terry and Jordan of Terry and Jordan fame kickin' it up a notch with guitar and vocals. Their music wafed from the gazebo and floated like some spiritual ocean mist over the assembled mass. Like in an African tribal dance, bodies showed signs of slow movement at first and then full fledged gyrations contorted normally politically correct frames. The image was so spiritual I fully expected to see few Yemmasee Indians sneaking through the Oak Ridge lolly-pines to join the entourage.

But like all things, the party must end. The procession starts as golf carts weave their way though unlit streets and under moss covered oaks.  The sounds of a whippoorwill's lonely call and ocean waves replace "Help me Rhonda...Help me Rhonda. The special community called Driftwood Beach returns to its unique "feel" and the beacon from Tybee Light reflects in Vicki's bedroom window.