The Mysterious House on North Washington

[XLFD]

Information from a FOIA request was recently looked at by a variety of Torch members concerning a local house on North Washington-- what could only be called a house of mystery.  This article is a compilation of their observations and a couple of my own.

BRIEF HISTORY

Back in the 1997, a house on N Washington was sold via a land contract from the Olmstead family to a couple 1997 Sale of 201NW  This couple had made capital improvements of about $72,000 on the house during their stay 2000 Building Permit  and had taken a mortgage out in 2003 on this house from a local bank. In early 2010, a default on this mortgage was recorded by the mortgagor, and the house was effectively foreclosed on. A foreclosure sale was initiated for Feb. 11, 2010, moved up to Feb. 18 by this notice on Feb. 9. 2010 Ab Notice This Foreclosure sale was advertised in the Daily News on four dates, one week apart 2010 LDN Notice of Sale for the 11th. The attorneys overlooking this sale for the bank were from the firm Trott & Trott.

MYSTERY 1: DIFFERENT DATE, SAME FIRM

But the records do not show that the LDN advertised the new sales date, nor did it advertise the date when a sheriff's sale actually did sell the property to the Federal Home Loan Mortgage Company (FHLMC, or Freddie Mac) which did not happen on the revised date, Feb. 18th, but on May 27th and they came in possession on June 26th 2010 Transfer to Freddie. The records do not exist that show why this sale was again pushed back over three months and why there was no public notice of it.
Interestingly, however, we find that the seller (PNC Mortgage) and the buyer (FHLMC) are represented by the same law firm, Trott & Trott, whose representatives handled the details of the transaction. With this potential conflict of interest and Freddie Mac's recent scandals, such a transaction could be deemed suspicious. However, FHLMC did pay a fairly steep price ($223,116) for the house in regard to fair market value when it seems to have had an upper hand in bidding, perhaps exclusive bidding, but why? And why is this the only house in the City of Ludington that is/was held by FHLMC? 

MYSTERY 2: BUY HIGH, SELL LOW

I have read up on Fannie Mae and Freddie Mac and find them to be hard to understand. Their motives seem to be to allow more people to afford a house, but they seem to go beyond the realm of prudent in arranging low-interest loans and mortgages to the risky homebuyer. Be that as it may, it does not seem it would be within their practice to buy a house one month, and then sell it at nearly a 50 percent loss less than two months later.
But this is what they did for this N Washington house. The Community Development Director of Ludington, a person whose primary job is to apply for federal and state grants as well as work with state and federal housing agencies on a regular basis, wrangled such a deal from Freddie Mac, purchasing the house for $127,582. 2010 Freddie sells at a big loss There are good real estate deals out there, but this is... mysteriously nice.

MYSTERY 3: INEXPENSIVE FENCE AND A SIGNAGE PROBLEM

Within days of purchasing this house, the new owners sought a zoning compliance permit (ZCP) for putting in a 6' high privacy fence and a 4' high wrought iron fence by themselves:

ZCP p1

ZCP p2

ZCP Diagram

The estimated cost of this project was stated to be $200. If you price privacy fence on the net, you will find that a 6 x 6 section of the cheapest privacy fence costs over $100, but that figures in the prohibitive cost of getting it to you. If you look at the local lumberyards you can get such a section and a post for around $80. Just the south section of privacy fence would have to use about 20 such sections, or roughly $1600 worth. The north section is roughly the same amount if the drawing is to scale. That project is thus over $3000 just for the privacy fence. This poor estimate has no effect on the ZCP's price, but is surprising since both owners must estimate costs of projects as a public employee overseeing such projects and as a sign contractor, respectively.
Speaking of signs and mysteries, both forms for the ZCP were incomplete, the first was not signed by either permittee, the second was not signed by the zoning administrator. Just a formality among co-workers? Perhaps, but by not signing the first the permittees are not necessarily held to the rules in the fine print and by not signing the second Zoning Administrator Foote has not shown whether the ZCP was approved. Which it shouldn't have-- but that's the fourth mystery.

MYSTERY 4: A ZONING PROBLEM

Look again at the picture of the fences. One could say the picture lacked rigor in scale and the usual formality of measurements one might expect from a ZCP applicant, irregardless of their occupations. But notice how the 6' privacy fence extends away from the line of the house and extends so that it is near the sidewalk on the south side. In the ZCP, the lady of the house certifies that the application will comply and conform to the requirements of the Ludington Zoning Ordinance No. 23-00 with her signature. But this same ordinance says that such fences cannot lie beyond the line of the house on a street-abutted border, as illustrated by this on page 49 (the house in question is on a corner, and thus any fence beyond the line of the house abutting a street needs to be 3' or less for a solid fence):  ZONING_ORD_081010.pdf and detailed within 23-00.  Approval also needs to be given by the Building Inspector (p. 47).  They should have kept the hedges.
Very mysterious that two women so familiar with the Ludington Zoning Code should overlook this, but this is a house of mystery.

As this goes to print, I have notified the proper city authorities of this blatant violation of the zoning law, so that we can correct this public nuisance that has been created.


MYSTERY 5: A NICE ASSESSMENT

You would expect a house that was brought twice (once for $223,000) the previous year to increase in value in its yearly assessment, as most such homes do. Guess again. This house, even with the "$200" fence improvements went down in its State Equalized Value (SEV) from $143,700 down to $128,300. A 12% decrease.  Compare other sold houses in Ludington last year at the City's assessing department site, and contemplate the dilemma of this drop.

 Lud assessing link

Mysteriously, the Assessor of this property just so happened to be the person who accepted the incomplete, noncompliant ZCP from the owners for the fences.  Will this assessor who overlooks zoning violations, stands in for the Building Inspector, overlooks unbelievably low valuations for improvements, and knocks a bit off the SEV of this house of mystery do the same for your house? 

Are these mysteries so mysterious? Perhaps not, when we look at how the DDA has been run the last few years. Administrative fees tripling from $10,000 to $30,000 with no rationale, contracts awarded to other DDA members before any competitive bids, unfairly structured competitive bids, events with plenty of costs to the public but unaccounted for revenue, is just a start of that grand mystery that no public official wants to explain to the public.  Why the mystery?

[Edie Lindsey]

The "public nuisance that has been created" refers to a fence in your article, but also applies to the DDA and our see-no-evil, hear-no-evil, allow-any-evil City Manager. 

Don't expect answers to your mysteries from the Mystery Machine that runs City Hall.  John "Shaggy" Shay is Scooby Don't.

Good job, one and all, who helped X with this.

[XLFD]

Our contributors did a great job; but they are advised that the City is a bit touchy on such subjects, so if they want to keep their jobs and not have recent traffic violations along with baseless innuendos splashed out in the Ludington Daily News with their names attached, they might want to just remain in the background.

[Willy]

Nice research. You'll probably be banned from Fiday Night Live for this one and Fourth of July fireworks.

[AQUAMAN]

Well, since you laid all this out so nicely and correctly, you'd expect a rebuttal of same from the mews/muse in the audience that is spying and vigorously asserting denial over at another local back-door forum, or would we? Job well done indeed, and with this much smoke, now, at long last, can anyone deny that this is one "mysterious house", in fact, I'd be willing to add, "incredible firehouse". Just the fencing deal alone was like smelling dead fish of long ago, add the other mixtures, and abracadabra, the magic potion of credibility simply isn't there, it's not even close, but then, who's supposed to be looking and notice? Esp. when a LOT is already served, someone can't get close enough to ask the owners, nor take pics. of the fence, or are they?

[XLFD]

Anyone who drives by the house on Washington can see the "$200" privacy fence boldly violating the city zoning ordinance.  So as to respect the mysteriously timid sensibilities of the house's owners, I have took no pictures of the existing fence.  The existing hedges I have been told, are also well above the 4' height.  Check it out, and post a picture, if you don't care about a LOT or worse from the owners.

[Angela]

oh I"ll take some pictures............. they can place a no trespass but u can still walk on the public side walk!! I find it funny that when this house sold last year - the SEV or taxable value or anything else didn't increase - it went down by over $10,000!!! More often then not, when a house sells - it gives the city the right to increase its value to get more tax $$$$ out of them.  it doesnt matter what kind of housing market we r in right now, when a house sells - the value always increases EVEN if it is a forclosure!! and yes the hedges that were there before were over 4 ft

[XLFD]

RJE, I've banned myself from FNL until as such time they justify the expenses/revenues problems I pointed out in my Development of Authority thread on that topic.  They might try to keep me from the Freedom Festival and Fireworks, but those events are what makes Ludington special, and I won't miss them until the progressive mercenaries at City Hall take them over and totally ruin the events.

[Dave]

I could never say that I am a real estate expert by any means but I do have enough business sense to know that buying high and selling so low is not how anything stays in business. If Freddie Mac does all its business in such a way, it would explain why they needed a bailout.. it would also show that its pretty much a criminal way of doing business, making it inevitable that another bail out would happen.

There is enough information here to ask questions about the deal as there do appear to be several red flags.

[XLFD]

Another mystery is that the SEV is supposed to be half of what the actual cash worth of the property, meaning this property's worth was considered to be twice its previous SEV or $287,400 when Freddie Mac brought it at a foreclosure sale at what could look to be the bargain price of $223,116. 

To then sell it at $127,582-- at $160,000 below its actual worth-- to the DDA Duo gives a mighty good reason why they may feel threatened and intimidated by having anybody investigate this.  And, contrary to the City Assessor's entry in the City records, the sale to the affianced couple was not a foreclosure sale.

[AQUAMAN]

The County's last tax roll show this house as previously assessed at $223K with property taxes of summer 2010: $5433 and winter 2010: $260. I can't wait to see the new taxes for 2011: my forecast? summer $2100, winter $90, big difference between $5700 and $2100 per year imho. I also see the PRE? is set at 0% now, homestead exemption? When that changes to 100% these forecasted rates could be close, or maybe worse.

[Angela]

what is PRE? and what does 0% or 100% mean with that?

[Sweater Cows!]

I am not sure wha the letters stand for but it is the exemption a person gets for the property.

 

Like if PRE is 100% and class 401 that means it is a primary residence and that you live there full time. If you owned a vacation home you would not get a certain exemption or discount and it would be a different class like 403 and 0%.  That is a statewide classification system, not just our county.