Civil War - Union Success and Failures

In the West - states along the Mississippi - Grant had early successes against the Confederates.  At Shiloh, after nearly being pushed into defeat, he rallied the Union and defeated the army of Albert Sidney Johnston, who died from battle wounds.  As Johnston was considered the best general officer in the South, this was a serious blow to the Confederacy. 

Grant demonstrated at Shiloh, and earlier at Forts Donelson and Henry, that he was effective - a winner that Lincoln would later turn to for leadership.  However, in the East, things went from bad to worse for the Union, and Washington was under threat almost constantly.

General McClellan executed a grand strategy to assault Richmond from the southeast with a huge Union force.  The enormous logistical operation was achieved by summer, 1862, and McClellan began moving toward Richmond.  Union soldiers were so close that they could hear the bells of Richmond's St. John's Church (site of Patrick Henry's "give me liberty or give me death" speech). 

Robert E Lee assumed command of the Confederate forces and launched a series of bold attacks that drove the Union forces back to their fortified James River position in less than a week.  McClellan was outgeneraled and showed that his caution was a serious liability - and Lincoln removed him from command. Lee, on the other hand, surprised Union and Confederate leaders with his skill and audacity.  His manhandling of a much larger Union force was a preview of his illustrious career as a field commander.

 Lee followed up with another whipping of a Union force at Manassas in August (so-called "Second Manassas") and it looked like Lee was unbeatable.  The next move was an invasion of Maryland in September, setting the stage for a crucial turning point of the war.  At Antietam, America experienced the bloodiest day in its history, and in its wake Lincoln would decide to free the slaves.

Property Management

Realtors often handle property management for lenders, relocation companies and asset management companies.  According to an expert in real estate law, there are several cautions that should be addressed.

First, whenever an inspection - the routine monthly exterior inspection, not the GHI - reveals damage or an issue with the property, the realtor faces a disclosure requirement if they are also listing the property. 

Two, is the realtor that does an inspection, or looks at a report, qualified to say the foundation is sound, for example? If the realtor arranges for repairs, are they also indemnifying the repairs?  This is particularly important when handling these tasks for lenders on REO properties.

Third, the E&O policy which relators carry often excludes coverage for anything relating to property management; thus, realtors should be sure they do not need a separate policy to cover property management activities.

Fourth, are the fees that realtors charge competitive with the field service company alternative?  They are often higher, but there may be sufficient compensating factors for the higher cost.

Relocation folks: remember to get a CLUE report before you or your client takes a property into inventory.

National Flood Insurance program needs support!!!

The National Flood Insurance Program is set to expire soon and must be reauthorized by Congress.  Call, write, email your Congressman and insist that this essential program not fall prey to the political wrangling.  The recent threat to FEMA funding makes me more than a little nervous that we'll be without NFIP.

If you aren't already doing so, have a contigency plan to deal with at least a pause.  Recall that we had a bump earlier this year regarding Missouri River coverage.  It was fixed retroacitvely.

Home Values still sluggish gains

For the fourth straight month, home values nationally inched up, this time by 0.8%.  The twelve month downward trend appears to have been reversed, based on new home purchases and refinances in Spring and Summer.  That's good news as we are still 18% below the April 2007 peak, and right now values are at about where they were in March 2004.

A survey of 111 economists and real estate sources predicts a 1.1% average home value gain in each of the next 3 years - not only an average but a general consensus for slow recovery.  Since historically, regional downturns have taken 3-4 years to ascend to prior levels, we are indeed making history in this market.

FHFA published its second quarter report of 308 real estate markets.  Of the top 20 performers in Q2, most were smaller metropolitan areas.  However, Pittsburgh, Buffalo, Honolulu and San Antonio made the top 20 list.  Among the bottom 20 were (still) 13 in AZ, NV and Florida. 

Our financial policy makers must find this report very sobering as refinances won't work if value isn't there to support a new loan.  Unless, of course, the banks are allowed to split the asset into a secured portion (supported by current home value) and an unsecured asset represented by the amount owed that is in excess of the home value. 

Stay tuned....

A Survey of Risk Types

We deal with risk issues all of the time, even if we don't think of them with that label. Here are some worth noting:
- Insurable Risks: property, liability, flood, title
- Property Management: taking care of a vacant home in a northern climate,
- Computers: data security, etc
- Political Risk: relocating to a country with some political instability
- Economic/market/interest rate: outside forces affect your customers, capital and cash
- Loss on Sale: for both the homeowner and the employer post-buyout
- Maritime Risk: the inherent risk of sailing the Seven Seas and briny Oceans
- Credit Risk: Can your invoices be paid in timely fashion?
- Regulatory: especially in the home lending arena, but also taxation issues abound
- Betty Grable Risk: legs, throwing arms, etc (OK, probably not a relocation issue per se)
- Legal: are your contracts, SLAs, addenda documented, tracked and enforcable?

Each requires attention, at the outset and ongoing. Quantify them where you can and apply at least an ounce of prevention and planning to minimize or avoid.
Which have I missed?

Civil War - How Did the Foes Match Up?

So, by August 1861 people sensed the war would not be short, and in would be bloody. There was still hope for a quick solution, but a string of victories for the South emboldened the Confederacy, and firmed up Lincoln's resolve. So how did the sides compare?

From all appearances, the North held a tremendous advantage: more than 3 times the number of available fighting men, 70% of railroads, over 90% of iron & coal production, and three quarters of the nations wealth. The South produced by far the greatest export - cotton - but that was cut off by the Union naval blockade.

Yet, the South had important strengths. They needed only to win a defensive war fighting for their homes. Cotton was crucial to British and French industry; thus, the diplomatic pressure could favor the Confederacy. But most important, in a war of unprecedented scale and complexity, the South had superior military leadership. Stonewall Jackson routinely outfought larger Union forces. And, Robert E Lee would go down in history as one of the great field commanders.

This would be a new kind of war with extensive use of railroads, the telegraph, the machine gun and ironclad warships. And, no one was prepared for the casualties. By war's end there were over 600,000 dead and 2 million wounded. Fully one third of adult southern men died or were wounded from 1861 to 1865. But in that August 150 years ago, no one could foresee such a tragic outcome.

Home Sale Data - A different view

One of the money center banks recently presented an interesting view on home values. They looked at every state and compared home value trends with and without the influence of distressed sales. The result shows that 14 states have experienced appreciation - in one case as high as 8% - with distressed home sales factored out. And the large overhang of 90+ past due and in-process-foreclosures continues to exert gravitational pull on certain key markets.

Our view is that even statewide data is of limited use to folks - realtors, counselors, appraisers - dealing with home value challenges. The various sources of data must be applied to both the property and market complexity issues. We conclude this shows that deeper analysis - perhaps even down to the 10 block zone - can give much better insight to those handling home sales.