THE CHALKBOARD – Issue 1

NEWS AND NOTES FROM CHALKER & CHALKER, P.C.

PREMIER ISSUE

Welcome to the premier issue of “The Chalkboard.” The last few years have been challenging ones for those of us in the real estate business. 2010 should provide a new set of challenges and opportunities. The purpose of this newsletter is to provide useful information to real estate professionals as well as highlight the services our firm provides. The premier issue is being sent to approximately 250 real estate professionals. I would ask that you forward this issue to several of your colleagues so that they may benefit from the information that will regularly be appearing here.

This issue is meant to serve as an introduction to “The Chalkboard” and to briefly cover a few topics that will be of increasing importance in the months to come and which will be covered in greater detail in future editions. I would also like to wish all recipients a healthy, happy and prosperous new year.

A SAD NOTE

Kenneth L. Chalker, Sr. the founding member of our firm passed away on September 10, 2009 following a courageous battle with cancer. For the obituary please see below. Dad started his law practice in 1966 and probably closed over 25,000 real estate transactions in his career. Our thoughts and prayers go out to all who have lost loved ones this year.

Kenneth Lamar Chalker, Sr. passed away on September 10, 2009 after a courageous battle with cancer. Mr. Chalker was a prominent attorney who practiced law for over 40 years in Smyrna and Marietta. His uncle was L.C. Chalker, the former mayor of Kennesaw, and the namesake of Chalker Elementary. He was born on May 30, 1936 in Atlanta. He was a graduate of Northside High School and he graduated from East Carolina University with a BA degree where he met his wife, Peggy, of 51 years. He graduated from John Marshall Law School and passed the bar exam in 1966. He served for a short period as the Recorders Court Judge in Smyrna in the early 70s. He was active as a coach and booster for the Smyrna Athletic Association, served as President of the Smyrna Lions Club, and was active in the Smyrna Jaycees. He began his legal career as an Associate with Cochran, Camp, and Snipes in Smyrna. He soon opened his own firm and established a general law practice with an emphasis on residential real estate closings. During his career he probably closed over 25,000 real estate transactions. Perhaps his most interesting case involved Osborne High School in the early 80s. Osborne lost a game that would have placed them in the playoffs if they had won. Late in the game the officials applied an erroneous interpretation of a rule that cost Osborne the game. Mr. Chalker filed for an injunction and a Cobb County Superior Court judge agreed with his argument and ordered that the game be replayed from the point where the error occurred. The GSHA appealed to the Supreme Court of Georgia and the court ruled that they were not going to involve the courts in a high school football game. The case received quite a bit of statewide press. Mr. Chalker was a member of Marietta Country Club for over 40 years and was a faithful member of the “1:00 group.” He was a man of the highest integrity whose word was his bond. He liked to say that, “there is no gray area – only right or wrong.” He was preceded in death by his beloved grandmother Lottie Pruitt and his parents Irene and Andrew Chalker. He is survived by his wife of 51 years Peggy Batchelor Chalker, his son and law partner Kenneth L. Chalker, Jr. and his son Charles William Chalker, his two daughter-in-laws Tammy Luther Chalker and Kimberly Morris Chalker, longtime legal assistants Cindy Middleton and Jennifer Edwards, and five grandchildren. Visitation will be Saturday afternoon 2-5 and the funeral will be 4:00 Sunday at Mayes, Ward-Dobbin funeral home. Pastor Robert Ledbetter officiating.

NEW GOOD FAITH ESTIMATE AND HUD-1 FORM

As most of you are aware, HUD has mandated that lenders and closing attorneys begin using new forms and disclosures for all loans closed after January
1, 2010. All our lender partners have been participating in training to be ready. Unfortunately, I am not sure that anyone is really prepared. It is my understanding that many of the software programs associated with the new forms contain bugs that are still being worked out. In addition, the proposed good faith form does not even disclose a bottom line amount to the borrower. It is my hope that implantation may be delayed to assist everyone in resolving the existing problems.

The main thing for realtors to be concerned with is the fact that certain fees must be accurately disclosed at the time of application by the loan officer. Any changes that negatively affect the borrower will result in the need for a new disclosure and a mandatory waiting period. The new HUD-1 only allows closing attorney’s two places to disclose their fees. This will probably be a positive change as it will make it easier for the borrower to compare fees among closing firms. Our fee will be $495.00 plus title insurance. These fees offer significant discounts over those charged by other firms. For a link to our complete fee sheet please visit our web site.

It will be extremely important for the lenders to present accurate fees at the time of application. To assist them in doing so we will be happy to provide a preliminary HUD-1 with all of our fees listed whenever requested. In most instances we will be able to provide this within a matter of moments. Just call or e-mail the request in. If needed after hours you can call Ken at 678-575-3806 and I can probably provide you a HUD-1 through my home computer. Feel free to call that number if any after hour’s issues arrive that you need assistance with.

OTHER CHANGES FOR 2010

Beginning in 2010 all lenders will be required to provide borrowers with a new “HUD Settlement Cost Booklet” which runs about 50 pages. This booklet presents borrowers with a good deal of information about the home buying and borrowing process. One point that the book emphasizes is the need to shop around for professional services associated with the loan. Of course, we fully support the borrower shopping around for settlement services since our fees are generally $200.00 – $500.00 lower than many of our competitors. If you would like a copy of this publication please click here for the link.
Interest rates have spiked in the last couple of weeks of this year. The yield on the 10 year Treasury bill hit 3.19 the Monday after Thanksgiving. On the Monday after Christmas it was 3.84. Higher yields on the 10 year treasury notes generally translate to higher interest rates. Rates which were running in the 4.625% to 4.75% range after Thanksgiving are now approaching 5.25%. Anyone associated with the real estate industry should log on to Bloomberg.com a couple of times a day and check the current yields on the 10 year treasuries and read some of the articles attached to this section. There is a treasure of trove of financial information disclosed on Bloomberg.com.

One of the greatest challenges facing our industry in 2010 is the fact that the Treasury Department is scheduled to cease purchasing mortgage backed securities at the end of March. The government purchasing of these securities has kept rates artificially low during the past year or so. Rates are almost certain to rise – the question is by how much. The days of 4.75%, or even 5.0% rates could be a thing of the past.