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Home Ownership & Mortgages

This post is two posts in one.  The first part is a guest piece by regular reader Jim Zavist.  The second part is a press release about a related event at SLU this Friday.


The Mortgage Crisis

A guest editorial by Jim Zavist, AIA

The current mortgage “crisis” has generated a lot of discussion and created a lot of potential “solutions”.  I’m also old enough to remember the previous “crisis”, the Savings and Loan Meltdown of the 1980’s, and I’m seeing one big difference between then and now.  The biggest change now is that there seems to be an assumption that homeowners who can’t pay their mortgages somehow “deserve” to be given a way to stay in “their” homes.  Back in the ’80’s, homes were foreclosed, people were evicted, and because the S&L’s couldn’t deal with the volume of foreclosed properties, the federal Resolution Trust Agency ended up with a lot of properties that were resold at whatever the market said they were worth.  So, while some people lost their homes, just as many people got some great deals and were able to start down their path to the American Dream.

Bottom line, if you’re still able to make either your original or your current mortgage payment, you won’t be living on the street.  Yes, you’ll probably be paying rent instead of a mortgage, but guess what, if you can’t sell your home and you can’t refinance your home, because its value has dropped, maybe substantially, you don’t have any equity!  Whatever money you put down and whatever you invested in improving the property is gone.  It’s the big downside to investing in anything – sometimes things go poorly and you lose some or all of your investment!  Sure, it affects your credit rating negatively if you have to give up your home to foreclosure or a short sale.  It may even seem that it’s not “fair”.  But it’s part of being an adult – it’s time to cut your losses and move on.

As has been noted multiple times in the media over the past few days, 92% of the mortgage holders today are still making their payments on time – only 8% are falling behind.  I’m one of those 92%.  I’ve been making mortgage payments for 25 years; unfortunately, not all on the same property (otherwise it could be close to being paid off).  But, before I bought my first place, I became educated.  I’ve always put at least 10% down and always had a fixed-rate mortgage (including one at 12%!), so I’ve never had to face rates that adjusted upwards, as many ARM’s are apparently prepared to do soon.  I also never bought into refinancing every time the rates dropped half a point or to finance extraneous luxuries (like a car or a cruise) by pulling out the last couple of years’ appreciation.  And I’m not alone – 9 out of 10 people are riding out the current drop/correction in home values, even though it may mean cutting back in other areas.  Real estate shouldn’t be viewed as a piggy bank.  It should be viewed as a long-term investment, one that will, hopefully, eventually be completely paid off.

With the clarity of 20/20 hindsight, we’re relatively fortunate that the St. Louis area didn’t see the huge increases in home values that other parts of the country experienced, since we’re not seeing a huge drop, either.  Sure, we have pockets where too many property owners succumbed to the lure of easy money, but, overall, we don’t seem to being hit nearly as hard as places like, say, Tampa, where property values are down nearly 40%.  Because of that, and even though I agree the government needs to do “something” to “fix” the economy, I’m not all that comfortable with several of the President’s proposals to “help people stay in their homes”.  The fundamental problem is that home values simply became higher than actual buyers were willing to pay.  They will continue to fall until buyers are willing to buy.  And while there are concerns being expressed about the availability of credit, in the world of home buying, if you have good credit and an appropriate down payment and you want to buy a home around here, you can do it!  Realistically, there is no “right” to home ownership.  It’s something that’s earned, and we’re all learning a hard lesson.

Jim Zavist

Local Architect Jim Zavist was born in upstate New York, raised in Louisville KY, spent 30 years in Denver Colorado and relocated to St. Louis in 2005.

Property Ownership and Economic Stability Focus of Symposium
at Saint Louis University School of Law

WHO: Saint Louis University School of Law and Saint Louis University Public Law Review

WHAT: Property  Ownership and Economic Stability: A Necessary Relationship? This symposium brings together a group of leading scholars and practitioners to examine the relationship between property ownership and economic stability.

WHEN: 8:30 a.m. to 4 p.m.; Friday, Feb. 27, 2009

WHERE: Saint Louis University School of Law, William H. Kniep Courtroom, 3700 Lindell Blvd., St. Louis, MO 63108

WHY: The recent instability in America’s housing markets has demonstrated the complex relationship between property ownership and economic stability for lower-income families. Until recently, many experts argued that low-income families could not hope to achieve the “American dream” without owning their own homes. Increasingly, events from the past year are calling the assumptions underlying these assertions into question.

Leading scholars from prestigious law schools across the country join real estate and urban planning experts — including Richard Baron of McCormack Baron Salazar — to discuss an array of pressing property ownership issues, including barriers to creating affordable housing, property rights in the international context and the changing definition of property ownership in the United States.

The symposium offers 6.0 CLE credits in Missouri.

For a detailed schedule of speakers and topics or to register, go to law.slu.edu/news/conferences/property.


Happy Birthday Marti

February 23, 2009 Events/Meetings 4 Comments

Today would have been Marti Frumhoff’s 52nd birthday.  Frumhoff, a good friend to many of us, passed on May 16, 2007 (see post).

Two years ago we celebrated our birthdays together — her 50th and my 40th.  We’re both Pisces.  My birthday is just five days after hers on the 28th.

Marti had a big impact on my life in the last 18 months of hers.  She was among the people that convinced me to pursue a Masters degree in Urban Planning at Saint Louis University. We had a course together in the Fall of 2006.  In April 2007 Marti was at my house and she forced me into her car — she was going to take me to meet Christopher Thiemet who had recently opened Circa Properties.  Circa, she told me, is where I needed to be selling real estate.  She was right.  She died three weeks later.

I made the move to Circa and I’ll finsh my Masters in December.  I will always have Marti to thank for still being an important part of my life.

Her legacy lives on in organizations and events she started such as the Rehabber’s Club and the Big BIG Tour.  This year is the 10th year of the Big BIG Tour:

Big BIG Tour, St Louis’ only FREE City-wide tour of for-sale properties will kick off its Tenth Annual Tour on Sunday, March 29 from 10am to 3pm. The starting point is Mullanphy ILC Elementary School, located at 4221 Shaw Boulevard near Missouri Botanical Garden. Mullanphy School is a great central location, allowing attendees to easily explore the Big BIG Tour properties listed throughout the City.

Go out and do something positive for the city today in honor of Marti.


Missourians Against Red Light Cameras

This just in from local singer and anti-red light camera activist Jesse Irwin:

The bill that would ban red light cameras in Missouri, SB211, is being ambushed. It was granted a premature, unexpected hearing by the Senate Transportation Committee scheduled for this Wednesday, February 18th at 8am at the capitol in Senate Conference Room 1. We have to keep them from killing the bill before it gets to the senate floor. I need people to do one of three things.

1. Call or email one or all of the senators on the committee. You can find them here:


Let them know you don’t like the cameras and you support the passage of SB211

2. Give me a written statement saying they do not like these cameras, etc. You can fax it to 968-5981 or send it to irwinjes@webster.edu. I  will take it to the capitol for you and enter it into the record

3. Ride to jeff city with me on Wednesday morning to sit in on the hearing.

There is a lot of big money trying to stop us, so we are going to have to be loud and persistent.

I am organizing a group of people who will be driving down to attend the hearing. If anyone is interested in going and would like a ride, they can send me an email at irwinjes@webster.edu or call me at 314-775-5760.

Thanks again,

Jesse Irwin


Now that I’m driving a car again I’m concerned about the cameras.  Not that I might get caught doing something I shouldn’t — that a camera might falsley cite me.


Join Me at the Royale to Discuss the Upcoming City Primary Election

Monday evening (2/16/09) I’m hosting the first of two City Primary Discussions at The Royale.

From the invite:

In our fair city we have many elections, and a very important election is coming up in early March. It is the primary, the key election for most offices in Saint Louis city. In this election half of all of the wards will be up for election along with the executive branch, our city’s Mayor.

Here at the Royale we discuss the future of our city. For the next two Mondays(16th and 23rd) starting at 8:30 to close we will have an open discussion about all of the city election races. These discussions will be hosted by Steve Patterson of the urbanreviewstl.com blog. All are welcome and encouraged to attend to learn more about the candidates.

The start time is 8:30pm on the 16th & 23rd.  The Royale is located at 3132 S. Kingshighway (map).  So come out, get a beverage from the bar, and sit down with me to discuss the various races throughout the city.


St. Louis to Replace ‘Fuctionally Obsolete’ Arch with New Monument/Parking Garage

It’s just too short,” says St. Louis Mayor Francis Slay, “It’s holding back our skyline.“. Slay cited monuments in other cities that a considerably taller such as Paris’ much older Eifel Tower, Seattle’s Space Needle and Toronto’s CN Tower. Not as tall but able to accommodate more people is the London Eye.

One concept floated in the cigar filled backrooms of city hall is to recreate a 19th century riverfront, complete with a walkable compact street grid and cast iron storefront buildings. “It would be so retro,” exclaims Barbara Geisman, Slay’s Deputy Director of Development, making reference to the 40 city block of warehouses the city tossed aside in the 1940’s.

Geisman continued, “We have simply run out of historic structures to demolish. The Arch was next on our list.”

Alderman Phyllis Young is not to keen on the walkable grid idea, “I drive a hybrid Prius so why would I walk anywhere. What the area needs is more drive-thrus like a Starbuck’s and a Walgreen’s.” The St Louis Development Corporation has already awarded the project to Steve Stogel. When SLDC director Rodney Crim was asked if an RFP (Request for Proposals) had been issued he simply responded with, “Oops, we forgot. Too late now.”

Stogel’s concept is for the world’s tallest parking garage with a McDonalds on the top level. “Take away one Arch,” Stogel said, “and replace it with two arches and parking for 2,000 cars. Imagine driving right into the monument and enjoying Chicken McNuggets while watching East St Louis flood!”
Obviously I’m having a bit of satirical fun, the Arch isn’t going anywhere. However the second of two public meetings on the future of the Arch Grounds will be held Tuesday July 1st, starting at 3pm at the Old Courthouse.

From the Post-Dispatch:

The National Park Service will hold the second of two open houses Tuesday to gather input on proposed improvements to the Arch grounds.

The open house will run from 3 to 6:30 p.m. at the Old Courthouse, 11 North Fourth Street. Ideas range from better connections to the surrounding city to a major new museum.