Tuesday, February 19, 2008

The Mayor and His Mortgages






Left: 2nd Mortgage Deed of Trust

Right: 1st Mortgage Deed of Trust

(Click on images to enlarge)




Almost everyone in Jackson is aware of the impending foreclosure of the Mayor's home as he is currently in default on his mortgage payment to Omnibank. While Mr. Melton jokes about his foreclosure notices, Jackson Jambalaya made a trip to the courthouse and took a look at the actual Deed of Trust on his home, something the media failed to do. (Note: see earlier post: http://kingfish1935.blogspot.com/2008/02/huh.html)


The mortgage in question is a "Home Equity Line of Credit"(HELOC) for $301,967.00 held by Omnibank. The note was issued on April 5, 2007 and is due IN FULL on April 5, 2009 (This is typically called a balloon mortgage). The mimimum payments are "interest-only" as the Deed of Trust states in bold letters

The minimum payment will not repay the principal that is outstanding on your account. WHEREAS, all sums due and payable under the Agreement shall mature and be due and payable in full on 04/05/2009 (the "Maturity Date"). (Book 6680, page 348).

The interest rate is variable and is a margin (not specified) added to the "U.S. Consensus Prime Rate" as published in The Wall Street Journal on the first of each billing cycle. In plain English that means the rate is determined every month based upon a combination of the prime rate and a pre-set margin. The Prime Rate today is 6.00% and has fluctuated in the last 52 weeks between 6.00% and 8.25% according the the WSJ.

It is important to remember that the Omnibank mortgage is a HELOC, not a standard fixed-rate mortgage. The terms of a HELOC issued to a borrower specify the maximum amount the borrower can use. Mayor Melton can use as much or little of his HELOC as long as it does not exceed $301,967 at any time during the life of the loan.

The Deed of Trust does not state what the other terms of the note are, including the schedule of payments. Omnibank filed a notice in the Chancery Court of Hinds County giving attorney William Little, Jr. full power to pursue all collection efforts against the Mayor and his wife in order to recover any moneys owed to Omnibank.

Mr. Melton is also responsible for any attorney's fees related to collection efforts per the terms of the Deed of Trust. Unless Omnibank pays Mr. Little's fees, Mr. Melton must pay for his services in addition to the amount required by Omnibank to cease foreclosure proceedings.

The questions regarding the Mayor do not end with the second mortgage on his home as the taxes on the home and adjacent lots for 2007 are listed as not paid. Mr. Melton's unpaid property taxes are $228.28, $182.56, $182.56, $182.56, and $9201.27. http://www.co.hinds.ms.us/pgs/apps/real_property_billing_roll_detail.asp?ID=05720190000&IDYear=2007

The first mortgage on Mr. Melton's home was issued by Bancorp South on November 24, 2003. The original loan amount was $250,000 and amortized as a standard 30-year fixed rate mortgage with monthly payments of $2,045.03. Although the payments themselves are amortized as a 30-year fixed-rate mortgage, the mortgage itself is due in full on December 5, 2008 as it is also a balloon note.

Given the foreclosure proceedings that have been initiated against the Mayor, it is not unreasonable to ask how the Mayor is going to pay TWO balloon notes worth potentially (The actual amounts owed on these notes are completely unknown) over $500,000. Apparently balloon notes are the Mayor's preferred mortgage as he has obtained two such mortgages on his house since 2000: a six-month balloon note on April 6, 2000 for $20,025 and a three-year balloon note for $133,640. 29 on Febuary 13, 2002.

One further question must be asked: What exactly is the value of the Mayor's home? The newspaper reported its value as $355,000, using the tax assessment for its source. Apparently the reporters at the Clarion-Ledger have never bought a home and are ignorant when it comes to simple real estate matters since almost everyone knows the tax-assessed value is rarely if ever, the fair market value of a home. Simple math makes it clear that the Mayor enjoys an extremely low assessment on his home as the combined mortgages are worth more than the so-called value of his home as reported by the newspaper. Does anyone think banks are going to lend more than the value of a home? If anything, they will normally lend no more than 85-95% of the value of the home in case they have to foreclose and sell the home.

Interesting questions for some interesting dealings.

*** Must credit http://www.jacksonjambalaya.com/ unless otherwise authorized***

17 comments:

Anonymous said...

I would bet money that he does not have as much money as people think he has. There is just no other way to view this.

Why would you take out an equity loan, assuming that you had a bunch of money? Further, why on Earth would you make it a balloon? And it's an ARM? Wow.

I assume since Melton told reporters it would be taken care of yesterday, and everything was closed yesterday, we could assume it was taken care of today??? Right??? Bueller? Bueller?

Anonymous said...

Great work King!

I'd bet in some parts of Jackson that assessed is damn close to market.

Anonymous said...

http://www.reason.com/news/show/123117.html

Anonymous said...

What an insult to those of us in Jackson that actually pay taxes...

Keep up great work, fish!

Anonymous said...

Who is the livingston road property owners? Why is Melton's name listed on there? If you click his name following the link you posted to the tax roll, it pulls it up.

Also, on his property in 1999, it says "redeemed." Doesn't that mean it was foreclosed and he got it back?

Kingfish said...

Watched all three channels tonight. No mention of any of this stuff at all.

Zombino! said...

will be interesting to see what local news directors will do with this info, now that someone has actually done the work for them.... well done k-f.

Kingfish said...

They've all seen it. My traffic counter tells me so. They all saw it last night. Several times.

Anonymous said...

I wonder why he does not get the money from his wife.

Anonymous said...

Compared to your work King the Jackson Free Press article published today is a complete POS.

Kingfish said...

Which story is that?

Anonymous said...

This Jackson Free Press POS.

Kingfish said...

Either sloppy or didn't have time as he also covered the legislature, which is understandable. However, I've noticed he does not do his homework any time the legal system is involved (See the Prudential story).

Took me one hour at the courthouse and 90 minutes if that long, to write and rewrite a couple of times.

Anonymous said...

Sorry King. If the Jackson Free Press is going to crow about their journo-quality then they need to deliver it on everything they do. If Ladd doesn't have the ponies then she needs to do less well.

This Melton mortgage story isn't the first average job they've done.

Kingfish said...

Just read the story. Garbage. Didn't bother to figure out what the real value of the home is. Didn't bother to point out it was a second mortgage and the specifics of it.

Lynch also screws up by not distinguishing between the two notes because Melton HAS been making payments on his first mortgage.




Mayor’s Home on the Block?
by Adam Lynch
Photo by William Patrick Butler
February 20, 2008

Jackson Mayor Frank Melton is in danger of losing his $353,000 home at 2 Carter’s Grove in North Jackson to foreclosure. Melton told The Clarion-Ledger that he was making arrangements with his mortgage lender, OmniBank, to save his northeast Jackson home, which he has not made a payment on since last October.


In an embarrassing twist, the lender published a public notice of sale of Melton’s lavish north Jackson house in Monday’s Clarion-Ledger, complete with a March sale date.

Melton told the paper he blames the late mortgage payment on a mix-up in the mail, explaining that the October mortgage bill might have gone to his old mailbox at WLBT Channel 3, even though Melton’s connection to the station allegedly ended in March 2006, with the sale of the station to Raycom Media.

“As of Feb. 1, Frank (Melton) has absolutely zero affiliation with WLBT,” WLBT Vice President and General Manager Dan Modisett told the Jackson Free Press in 2006.

“Frank bought some stock in the company, which anybody can do, and he was probably given a certain amount of stock for being on the board ... but beyond that, Melton is no longer connected.”

Anonymous said...

That is what I told you. Jackson Free Press garbage.

Tom Head said...

This is great coverage, 'Fish. Good stuff.

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Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


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Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

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