Tuesday, December 20, 2011

Charlottesville City Manager Maurice Jones Would Be A Candidate For Short Sale or Strategic Default - If He Were a "Private Citizen"

The DP is reporting the ongoing housing downturn is preventing a local government official from fulfilling the terms of his contract.  Home values in this area continue to drop, and   1 in 7 Virginia homeowners owes more than the house is worth;  and effective negative equity is preventing sales and inhibiting "move up buyers."  These problems have thrown a wrench into the moving plans of the new City Manager, Maurice Jones, who had one year to become a resident, but has been unable to sell his current home.  The deadline for the move was a year from hire: December 6, 2011; it has now been extended 9 months.  
Jones currently lives on Templeton Road in Earlysville.  He paid $393k for a 3 bedroom, 2.5 bath house at the peak of the housing bubble in 2006; the house is currently assessed for $317k.  Assessments don't equal market value; market value is usually lower.   The most recent home sales data: November's 2011 prices were -12.26% lower than in 2010.  And  November's single family home sales in Albemarle County were 37% lower than in 2010.

The house is not currently listed for sale on the CAAR website / Trulia / Zillow.

If Maurice Jones were a "private citizen" -- not one whose own personal housing crisis will be tracked by the local media -- he'd be contacting his mortgage lender to arrange a HARP loan modification, a short sale (bank agrees to take less than what is currently owed on mortgage), or he'd be strategically defaulting ("walking away").  Instead, he is burdened with taking a no-interest loan of up to $90k for a downpayment on a residence in the City.  And he must avail himself of a no-interest loan to pay off the remainder of his mortgage after he sells the house for less than what he paid.  There's no cap on the amount of the pay-off loan.  While Jones has an annual salary of $170k plus use of a car, health insurance, retirement contribution, and Masters education paid for, he is debt  burdened: Even at zero percent interest, the man is looking at approximately an additional $200k in debt, besides his new mortgage, for the sake of living in the City.

Read the article at The DP. 

Image from Albemarle County gisweb.

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