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Archive for tag Glenn hannon

Are Local Governments immune to the Tea Party?

For purposes of anonymity, a client of mine, let’s call him John, was surprised by his tax assessment of over $400,000. He contacted me and asked for an evaluation of his property. I had the misfortune of telling him that his probable selling price was closer to the upper $200’s or very low $300’s. John does not intend to move, but he did want the city of Oconomowoc to properly assess his property. He gathered all the facts, looked at past sales and paid for an independent appraisal. The facts indicate that John’s property was really worth about $300,000. The past sales for identical properties indicated that this was the market value for his home. Feeling confident, John took his case to the city only to be denied! What was the reasoning you might ask? There was none. Denied!! The assessor had never been through his property nor had he evaluated any of the comparable sales. He was basing his decision only on the computer model that generates a tax assessment. To be fair to the assessor, it would be almost impossible, with our current system, for his office to personally walk through all the homes under his authority. Having said that to simply refuse to look at the applicable data that contradicts his computer model will raise objections from a reasonable citizenry. The problem in Washington and the rise of the tea party is due in part to the refusal to listen to the electorate. The mayor and alderman of local municipalities would be wise to watch what is happening nationally. It could happen locally, too. Listen to what John had to say about the city: “Having been a political conservative all of my life, I’m finding the Tea Party rallying point of high taxing out-of-control government as too tame. Let’s hope for some dramatic election results”. The national, state and local governments need to pay attention to the winds of change. They are blowing and soon they may be howling.

Posted by:  Glenn Hanon

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FHA in Trouble?

In July of 2007 the news media was abuzz with the news that one of the largest mortgage lenders in the United States was set to go down in flames. That was then this is now. The Federal Housing Administration, FHA, began touting no down payment options when the private sector realized the nightmare that was on their doorstep. I remember commenting to my colleagues that the “No Down Payment” schemes were terrible but that the government’s insistence to continue this practice was not a good thing for our market. Some argued that this was a necessary program that offered an alternative to the potential pool of buyers who wanted to own a home but just needed that extra help. Today in the Wall Street Journal it was noted that 24% of the loans issued in 2007 are going bad and an additional 20% of the 2008 loans will go bad as well. Responsible lending must be the key to a recovery and not the quick fixes that we so often run to. The government pilloried the private banks for their shameful practices, but then did the same thing as the market was disintegrating with their own agency—the FHA.

FHA Digging Out

Posted by:Glenn Hanon

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