Say WHAT?
"Mayor Frank Melton is in danger of having his house on Carter's Grove in Jackson foreclosed on if he doesn't make payments owed to OmniBank by March 11.
OmniBank, the present holder of the deed for the Jackson property, appointed a substitute trustee - Jackson attorney William J. Little Jr. - to handle the situation between the bank and Melton, according to a document filed with the Hinds County Chancery Clerk on Feb. 13.Little, who would not state how much money Melton owes on his house, said a public notice will appear in the newspaper on Monday and run for four weeks announcing the date for a foreclosure sale on the house."
http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20080215/NEWS/80215046
OK. Very strange. First he gives up JPD to Mac. Then the house is going into foreclosure. Strange behavior. Or maybe not so strange if for some reason you think these things are no longer important. Maybe some of the rumors floating around since Langston pleaded guilty are true after all.
Update: CL published a story today with more details.
"Melton said he had not heard about the situation until a reporter from The Clarion-Ledger contacted him Friday.
"I'll be up in (Little's) office Monday to resolve this," he said.
Little, who would not state how far behind Melton is with his mortgage, said a public notice will appear in the newspaper on Monday and run for almost four weeks, announcing the March 11 foreclosure sale.
If Melton does not resolve the issue within the next few weeks, bidding will start on the home at whatever Melton owes the bank.
Melton said he pays a quarterly note on the house, which has an assessed value of almost $353,000. He said he made a payment in October, at the beginning of the last quarter.
Melton said he has not received any notices from OmniBank but admitted he is running about two or three months behind in receiving his mail."
http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20080216/NEWS/802160349/1001/news
There are several serious questions raised by this story and Melton's comments:
1. The issue of the quarterly note. It is very rare in the mortgage business for a borrower to obtain a note that is paid quarterly as they are almost always required to make monthly payments. Such a practice is so rare that this is the first time I, along with other seasoned mortgage professionals have ever seen such a loan, even for a bank that can in-house (Bank services the loan itself instead of selling it to Fannie Mae or a servicer such as Citi or Chase, thus allowing the bank to make its own terms) a loan. However, the saying that he who pays gets to play applies here and if Omnibank makes a loan that stays on its books, it can set the terms for the Mayor, including making the payments quarterly. However, one would assume that in today's market, a second mortgage that is repaid in quarterly installments is considered to be riskier than most mortgages (The second mortgage market has largely dried up in the last year as lenders have been torched (not burned) by second mortgages.)
2. The issue of the second mortgage. Why is the mayor getting a second mortgage on his home when he is supposedly a millionaire?
3. A sale has been announced for March 11. This means the note is more than three months late. The lender will also make several attempts to contact the borrower in order to resolve the problem, especially on a second mortgage as they are in an inferior position (The first lien is paid usually, then the second). Foreclosuring on a home is not cheap for banks (when is a lawyer cheap?) and there is a reason why there are lawyers whose practices handle only foreclosure cases. For that reason, a note that is three months late is usually not placed into foreclosure although some procedures are initiated. However, if this is truly a note that is paid quarterly, one would have to look at the terms of the note to see what the schedule is for foreclosure proceedings to start as the normal rules would not apply is such was the case.
4. Melton says he has not received any notices from Omnibank. That is a lie as lenders will always send out notices in an attempt to the borrower stating he is behind in his payments. Most lenders will even call the borrower in an effort to resolve the situation. I will bet that the records from Omnibank show several notices were sent out and that repeated efforts were made to contact Mr. Melton regarding his delinquency. His excuse about not getting his mail doesn't hold water either as he has not been at WLBT for two years. Does anyone really buy the excuse that a supposed millionaire such as the Mayor runs 2-3 months behind on getting his mail? One would expect the Mayor to remember even without the assistance of the U.S. Postal Service that he has a house payment to make. Some things you just don't forget: phone bill, light bill, and the house note. Did something in the Mayor's brain not tell him "hey buddy, we haven't paid the house note in 5 months. We should go pay it."?
There is more to this story and we haven't heard the last of Mayor Melton's foreclosure, unless he pays his house notes in full.......soon.
3 comments:
"He said he made a payment in October, at the beginning of the last quarter."
Well, what he says and what the facts are, are two usually very different things. I'm going to go out on a limb and, without any evidence except what Melton says, side with Omnibank. Actually, I think that is pretty good evidence.
I used to be a Realtor, and I've never heard of a quarterly mortgage payment. I called a friend, who is also in the business, and she has never heard of a quarterly.
Second question, is that if he pays it 4 times a year, my question is this: Is he 3 months behind? Or 3 PAYMENTS behind. Big difference. And he last paid in October. Of 2007? Or 2006? I would venture a bet that it was 2006.
I have similar questions myself.
Keep in mind that a bank can structure a loan however it wants to. I've never heard of this in terms of a mortgage but then again, its the banks call if they keep it on their books. Something doesn't add up though.
By the way, there was something that the reporter did not do she should have done. As I'm going to do it Sunday or Monday, I'm not going to say. I will let you guys figure out what it was.
Wouldn't the notices be on file too?
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