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“Emergency Economic Stabilization Act Of 2008" Summary

by The Hat Team

The 'Emergency Economic Stabilization Act' failed to pass congress yesterday. the result being a 777 point drop in the stock market. Most of us are aware of the affect, but don't understand what the Act included. Below is a summary from John Herzog, Alabama's first Certified Mortgage Banker.

I.  Stabilizing the Economy

The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit, which is vital to a strong and stable economy.  EESA also establishes a program that would allow companies to insure their troubled assets.

II. Homeownership Preservation

EESA requires the Treasury to modify troubled loans – many the result of predatory lending practices – wherever possible to help American families keep their homes.  It also directs other federal agencies to modify loans that they own or control.  Finally, it improves the HOPE for Homeowners program by expanding eligibility and increasing the tools available to the Department of Housing and Urban Development to help more families keep their homes.

III. Taxpayer Protection

Taxpayers should not be expected to pay for Wall Street’s mistakes.  The legislation requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may experience as a result of participation in this program.  The legislation also requires the President to submit legislation that would cover any losses to taxpayers resulting from this program by charging a small, broad-based fee on all financial institutions. 

IV. No Windfalls for Executives

Executives who made bad decisions should not be allowed to dump their bad assets on the government, and then walk away with millions of dollars in bonuses.  In order to participate in this program, companies will lose certain tax benefits and, in some cases, must limit executive pay.  In addition, the bill limits “golden parachutes” and requires that unearned bonuses be returned. 

V.  Strong Oversight

Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250 billion immediately, then requires the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional disapproval). The Treasury must report on the use of the funds and the progress in addressing the crisis.  EESA also establishes an Oversight Board so that the Treasury cannot act in an arbitrary manner.  It also establishes a special inspector general to protect against waste, fraud and abuse.

John Herzog CMB
Vice President/Regional Manager
New South Federal Savings Bank
[email protected]

Montgomery Real Estate & Homes For sale

by The Hat Team
Montgomery Real Estate: Homes For Sale:
3137 Milan Dr.
Montgomery, AL 36109

Move in Ready Home in Forest Hills!
Pristine condition and move-in ready! If you are a perfectionist, this precious cottage style Forest Hills home in Montgomery is just for you. Great room has vaulted beamed ceiling, built-in bookcases and cozy fireplace. Large kitchen with glass-front cabinets, and 2 greenhouse windows for those plant lovers! Out back you'll find a large custom deck and professional landscaping to include some pretty spectacular sego palms! "Smooth Move" pre inspection means this one is problem free!
For more information on 3137 Milan Drive, visit or give us a call, 800-428-5239.

Midtown Montgomery Real Estate Sales Statistics - August 2008

by The Hat Team
Midtown Montgomery Real Estate Market Report
The level of home sales is expected to show little movement in the months ahead, according to the latest projections by the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, fell 3.2 percent to 86.5 from an upwardly revised reading of 89.4 in June, which had risen 5.8 percent from May. The July index remains 6.8 percent below July 2007 when it stood at 92.8.

Lawrence Yun, NAR chief economist, said home sales continue to edge up and down. “Pending home sales are oscillating month-to-month, with the long-term trend essentially flat,” he said. “Overly stringent lending criteria imposed by Fannie Mae and Freddie Mac in the past month no doubt held back contract signings.”

Let’s take a look at the Midtown Montgomery sales statistics for August 2008 to see how the Montgomery AL real estate market looks:

In Midtown Montgomery, pending sales decreased 24% in August 2008, compared against August 2007.  Likewise, the number of sold listings dropped 22%.  The average sales price decreased 11% to $162,606, and homes remained on the market for an average of 14 days longer this August.

Market Times
Sales Price
August 2008
August 2007

For the latest Montgomery AL real estate market conditions in your area, please call me at 800-HAT-LADY or visit


nformation is provided by the Montgomery Area Association of Realtors and is deemed accurate but not guaranteed.  

Montgomery Real Estate: 2042 Madison Avenue For Sale

by The Hat Team
Montgomery Real Estate For Sale
2042 Madison Avenue, Montgomery, AL 36107

Fully Renovated Capital Heights Home
Classic Capitol Heights home in Montgomery, AL with cool contemporary edge! From the front, you'd suspect a traditional cottage layout. Once inside you'll be amazed at the open feel of this from the studs out renovation! The LR/DR areas have 12 ft ceilings. DR opens to breakfast area and large kitchen with tile countertops. Master bedroom has walk in closet, home office/study room, and french door to private deck out back. Spacious master bath has make-up/dressing area, pedestal sink, antique claw foot tub, and lots of light! Start packing now, and call the movers...this is the ONE!
For more information on 2042 Madison Avenue or other Montgomery real estate, visit or give us a call, 800-428-5239.

Government Bailout In Layman's Terms

by The Hat Team
John Herzog, Alabama's first Certified Mortgage Banker, is a finance wizard, world class trainer and friend of many years. He has always had the ability to take the most complex concept and restate it in terms that I and others can easily understand. 
And once again he's done it: an intelligible explanation for the current state of affairs in the world of high finance. Thanks, John!
"Trying to guess which way interest rates will go in circumstances unprecedented since the great depression is impossible so let's see if we can describe what is going on in laymen's terms to allow each of you to decide for yourself if the government is taking the right course of action.
Banks and investment banks have a lot of delinquent (and potentially delinquent) loans on their balance sheets. These financial institutions are required to hold money (capital) in reserve against the potential of the future losses of the bad loans to be considered solvent. The money held off the market then is lost to the market as capital for future lending. The higher the delinquencies the more capital held out of the market until finally there is no new money for new loans (lack of liquidity). That is about where we are as no new capital is flowing into the mortgage markets. 
Potential solution: Issue each of these institutions a Waste Away Bin with two wheels to roll it to the Wall Street curb. Allow them to put all their bad debt in the bin and put it on the curb for the government to come pick it up for some small percentage of its value. The money the government pays these institutions for their bad debt when they drive the garbage truck down Wall Street will be just enough to keep the institution afloat. The real value however will be to free all that capital being held in reserve against future losses to inject into the credit markets (all be it under much tighter credit guidelines and regulation).
Next the Federal Government takes all the garbage back to the dump and tries to make compost out of it so they can sell it later for more than they paid for it so the tax payer does not lose money. It remains to be seen if this step could be accomplished, but it is believed the losses will not be as great as the market currently expects and consequently later the value of these bad assets will rise.


Sounds like a good solution, but there are a lot of variables that will determine if in fact it will work:

1. Will the cost of buying the bad assets drive the dollar down, cause inflation to go up, and make rates rise?
2. Will lenders find enough "qualified" borrowers for their new money under the tighter regulations to stimulate the housing market back into prosperity and avoid recession?


3. Will the government be able to work with the troubled assets (loans) it buys enough to resell them at a profit, or will this "bail out" cost the taxpayer a bundle and be a drag on the economy for decades? 
To use Barak Obama's phrase, the answers to these questions are above my pay grade and I am glad some of the best financial minds in America are focused on the problem. For me, I am betting they'll work it out."

John Herzog CMB
Vice President/Regional Manager
New South Federal Savings Bank

Mortgage Market in Review
Week of September 22, 2008                                       Volume 15, Issue 39

Market Comment
Mortgage bond prices rose last week applying a slight downward pressure on mortgage rates. Trading in the financial markets remained in disarray. The Dow Jones index moved more than 400 points, both up and down, several times during the week. Rates fell sharply early in the week as traders fled stocks for the safety of bonds. This money flow reversed Thursday afternoon after rumors of a massive government intervention into the financial markets surfaced.
For the week, interest rates on government and conventional loans fell by about 1/8 of a discount point.
Durable goods orders and new home sales data will be the most important events this week. The mortgage interest rate market remains volatile as US Government officials strive to bring liquidity to the financial markets.
Looking Ahead
Date and Time
Existing Home Sales
Wednesday, Sept. 24,
10:00 am, et
Down 1.4%
Low importance. An indication of mortgage credit demand. A significant decrease may lead to lower rates.
Durable Goods Orders
Thursday, Sept. 25,
8:30 am, et
Down 1.3%
Important. An indication of the demand for “big ticket” items. A larger than expected decrease may lead to lower rates.
New Home Sales
Thursday, Sept. 25,
10:00 am, et
Up 0.5%
Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
Q2 GDP final revision
Friday, Sept. 26,
8:30 am, et
Up 3.4%
Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment
Friday, Sept. 26,
10:00 am, et
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Durable Goods Orders

Durable goods orders are generally believed to be a precursor of activity in the manufacturing sector because manufacturing must have an order before considering an increase in production. Conversely, a decrease in orders eventually causes production to be scaled back; otherwise the manufacturer accumulates inventories, which must be financed.
Unfortunately, durable goods orders data has many drawbacks. The first problem with the orders data is that they are extremely volatile. The volatility of the data usually is attributed to the civilian aircraft and defense components of the figure. For example, if Boeing has a big order for one of its jumbo jets, the civilian aircraft category can change by $3-4 billion. The same scenario is evident when an aircraft carrier is ordered, surges in the defense category result. Keep this in mind with the current economic environment. Many sectors of the economy continue to struggle, but defense spending remains robust.
The second problem with the data is that orders are continuously being revised. There are many times in the past when the advance report on durables showed an increase while a revision a week later showed a decrease. The revised data is found in the report on manufacturing orders, shipments, and inventories. 
Since the data is very volatile and difficult to forecast, there is quite often a huge disparity between the actual release and the initial projections.   If the durable goods report is much stronger than expected, look for mortgage interest rates to push higher. If favorable, the data may help interest rates remain steady or even push lower.

Montgomery Real Estate Podcast - Sept 2008

by The Hat Team
The Montgomery Real Estate Podcast

This month's edition covers Montgomery real estate market activity and then we will examine the Housing and Economic Recovery Act of 2008 recently passed by Congress.

Features special guest Terri Murphy of US Learning.

Program length: approximately 7 1/2 minutes

Montgomery Real Estate For Sale: 120 N Capital Pkwy

by The Hat Team
Montgomery real estate for sale
120 N. Capital Pkwy Montgomery AL 36107
MLS 257860

Classic Capitol Heights Bungalow
Looking for the charm of a lovely historic neighborhood but wary of old house issues? Well, we've got you covered with this classic Capitol Heights bungalow in Montgomery. This cozy home has new EVERYTHING from the wiring and plumbing to the fixtures and roof. You'll love the brand new kitchen and bath with custom touches everywhere. Refinished hardwood floors throughout, graceful arches, and antique mantle are other extras that will cause you to fall in love with this gem.
For more information on this 120 N Capital Pkwy or other Montgomery real estate, visit or give us a call, 800-428-5239.

Montgomery real Estate For Sale: 3124 Woodley Terrace

by The Hat Team
Montgomery real estate for sale:
3124 Woodley Terrace, Montgomery AL 36106
MLS 255546

3124 woodley

Fixer Upper in Woodley Terrace
Bring your hammer and get ready to whip this property in shape. Sold strictly "as is" Click on photo for Smooth Move inspection. This should give you a good idea of the work that needs to be done. Upgraded electrical, fairly new heat pump (06), water heater (07).
For more information on this property or other Montgomery real estate, visit or give us a call, 800-428-5238.

Montgomery Real Estate: Prices Too Good To Be True

by The Hat Team
If you are currently looking to buy Montgomery real estate, you probably have a good idea of the general range you can expect to spend on a home. So you might be surprised when a great-looking home shows up on the MLS with what seems like a shockingly low price tag attached. The extra-low price seems too good to be true and – most of the time – it is. 
foreclosureIn many cases, the price you are seeing does not represent the actual asking price of the property. Rather, it is likely a property that is in “pre-foreclosure” and the amount listed actually represents the balance of the defaulted loan, or the amount the current owner is in arrears. Below is an excerpt from an article I found at Inman News that does a great job explaining how these properties end up on MLS search engines, and what you can do to spot them:
Real estate agents, investors and sophisticated buyers will know that it's impossible to buy a house in Hermosa Beach for $4,712. But first-time home buyers may miss the fine print on sites like Yahoo and Trulia that explains that this is not the home's listing price -- and that the property may not even be for sale.

The practice of mixing pre-foreclosure properties with listings of for-sale properties by major listings sites like Yahoo Real Estate and Trulia is misleading to consumers and damages the credibility of the sites that allow it, according to a company that's in the business of supplying similar information itself.

Brad Geisen, founder and CEO of, singled out Yahoo Real Estate and Trulia -- which have partnerships with's rival, RealtyTrac -- as sites that are presenting pre-foreclosure data to consumers in a potentially confusing way.

Property searches conducted by Inman News show both sites provide information that could help consumers understand that the pre-foreclosure properties are not "listings," and that the dollar figures displayed with each are not asking prices. But there does appear to be potential for confusion.

Checking "foreclosures" under "listing type" and entering a maximum value of $100,000 in the "price" field, a Yahoo Real Estate search for properties in Hermosa Beach, Calif., turned up seven properties, accompanied by dollar figures ranging from $4,712 to $100,000. According to Yahoo, the median asking price for 34 homes on the market in Hermosa Beach is $1.29 million.

But click on any of the properties for more details, and you are given a "property description" that reveals -- for the first time -- that the dollar figures associated with each property in the search results is not the asking price. Although "price" was specified in the query, the numbers may represent "estimated loan balance" or another figure related to the borrower's indebtedness.

The moral of the story here is two-fold; first, be sure to always read the fine print and don’t trust everything you see on the Internet and, second, always consult with an experienced Realtor who can help you determine the legitimate value of a property and assist you in finding the home of your dreams.

If you are ready to learn more about Montgomery real estate, please call me at 732-775-2774 or visit

How To Sell Your Montgomery Home NOW!

by The Hat Team
As most owners of Montgomery real estate have realized by now, this is not the ideal time to try to sell a house. With a struggling economy and negative media surrounding the housing market, more and more homes are staying on the market for longer and longer as fewer buyers are out making offers. So what should you do if you are in a situation where you need to sell your home now? The Wall Street Journal offers the following tips that I hope you’ll find helpful:
Even in the better housing areas, it's taking a long time to sell houses; so, don't try to sit out the market. That's what hundreds of other timid sellers are doing, each of them hoping -- somehow, some way -- that hanging on the sidelines will improve prices and, ultimately improve the chances of a successful sale. It won't. If you want your place sold, the best way to make sure that happens is to put it up for sale.
Buyers are taking your house out on a date. It has to make a good impression.
You don’t have to (and shouldn’t!) spend a lot of money, but ensure everything is in good working order.  As you get closer to the date that the house is actually on the market, start moving out by decluttering – buyers don’t want to see a house filled to the rafters with other people's things.
Don't fight the market by trying to price your house at bubble-era levels or by factoring in all those improvements you made. In today’s market, your best bet is to set a realistic, salable price on day one. Don't let the house hang around on the market as you gradually lower the price. Forget what you think the house should be worth or what it was worth three years ago. That's not what it's worth today.
Get the best listing agent you can find. When everything was selling before it even hit the market, of course, you didn't need the best.  Sellers of higher-end properties may be able to negotiate a lower commission percentage, but this is no time to quibble over a couple of percentage points. Also, offer the agent a big bonus if he or she sells the house in 30 days or at your asking price. Offer other agents bonuses if they bring in the ultimate buyer.
The agent should pay the usual marketing costs, but you should be prepared to pony up for extras, especially if you insist on more expensive or untraditional promotions.
Make sure your house is on the leading real-estate Web sites; Trulia, Zillow, Cyberhomes, Eppraisal and are some of the top ones.
Beyond that, get really creative. Advertise in corporate newsletters and intranet listings. Check in with local relocation firms that help transferring corporate executives find new homes. List the house on eBay. Put it on Craigslist. Put it in your church bulletin.
As bad as things are, there's one big factor in your favor: the tight credit market. If you have no mortgage you have to pay off, your strongest selling point might be your ability to finance all or a substantial part of a buyer's purchase.
You're a lot more flexible than a bank that has the Federal Reserve looking over its shoulders, so you might even be able to charge a higher interest rate than a commercial lender as well as command a higher sale price.
If any qualified buyer comes in with a reasonable offer, be prepared to accept it.
Negotiate, of course, but recognize that the buyer has a lot more clout than you do. Your house, as wonderful as you think it is, is worth only as much as someone is willing to pay for it.
If you are considering selling your Montgomery real estate, let my experience work for you! Please call me at 800-428-5239, visit, or request a complimentary market valuation of your home.

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