Left: 2nd Mortgage Deed of Trust
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 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***
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:
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?
Great work King!
I'd bet in some parts of Jackson that assessed is damn close to market.
http://www.reason.com/news/show/123117.html
What an insult to those of us in Jackson that actually pay taxes...
Keep up great work, fish!
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?
Watched all three channels tonight. No mention of any of this stuff at all.
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.
They've all seen it. My traffic counter tells me so. They all saw it last night. Several times.
I wonder why he does not get the money from his wife.
Compared to your work King the Jackson Free Press article published today is a complete POS.
Which story is that?
This Jackson Free Press POS.
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.
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.
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.”
That is what I told you. Jackson Free Press garbage.
This is great coverage, 'Fish. Good stuff.
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