Friday, October 13, 2006 - FHA - Form Revised - "Get a Home Inspection"

TO: ALL APPROVED MORTGAGEES
SUBJECT: Revision to form HUD-92564-CN, For Your Protection:  Get a Home Inspection

The Federal Housing Administration (FHA) has revised form HUD-92564-CN  for Your Protection:  Get a Home Inspection.  The purpose of this revision was to create a more conspicuous, easy-to-understand document that informs homebuyers of the availability and importance of getting an independent home inspection.  The form also provides clarification of the differences between an appraisal and a home inspection and stresses the importance of radon testing...

To read this mortgagee letter in its entirety, please visit: http://www.hud.gov/offices/hsg/mltrmenu.cfm select 2006 letters and click on the letter of your choice.

To dowload a copy of the new form, CLICK HERE

Thursday, October 12, 2006 - Could Homeowners Insurance Be on the Rise; Study Says Yes

According to Aon Re’s “2006 Homeowners Return on Equity Outlook,” the projected return on equity for the homeowners insurance is 5.7 percent. A similar analysis in 2005 revealed a 9.3 percent return on equity in 2005. Many insurers seek a return of 14 percent or more.

"Homeowners insurers are in a challenging position. Rating agencies are taking an even-closer look at catastrophe risk as they assess insurers' capital adequacy, meteorologists and risk-modeling firms expect more and stronger hurricanes at least in the near term, and the increases in homeowners insurance rates that we've seen thus far aren't enough to provide insurers the opportunity to earn back their cost of capital," said Bryon Ehrhart, president and chief executive officer of Aon Re Services Inc. "Homeowners insurers must keep more capital on hand to meet industry standards than was necessary only a year ago. As a result, we at Aon Re are helping our clients to understand the new capital requirements and needed rate actions."

Aon Re's prospective return on equity is 3.5 percent for hurricane for affected states viewed as a group, 8.1 percent for the non-hurricane affected states. To reach a prospective return on equity of 14 percent, an estimated average rate increase of 43.3 percent would be required for the hurricane affected states and 11.1 percent for the non-hurricane-affected states.

Wednesday, October 11, 2006 - Today's Tech Tips

FOLDER MARKER

How many folders do you have on your computer? Scores of them? Hundreds? Thousands? Are all of them are alike: yellow folder, yellow folder, yellow folder, yellow folder... It's so easy to be confused with such a routine!

Folder Marker is your small assistant, an ardent fighter for your convenience and comfort in any kind of computer work. Use Folder Marker to mark your folders. One mouse-click and it becomes clear at once, which documents have a high priority, and which of them have normal or low priority. Which operations are finished completely, which are half-done and which haven't started yet.

Do you fear that someone might unintentionally delete information necessary to you? Mark a folder, and other users will notice at once that that folder contains important information for you.

Changing folder icons, Folder Marker will help you to cope with the standard yellowness. Folder Marker adds an item "Mark Folder" in the folder popup menu. Changing a folder icon is now a piece of cake.

Folder Marker is for anyone who wants to make his work with a computer more convenient. Folder Marker is for you.

Tuesday, October 10, 2006 - HUD's U.S. Housing Market Conditions: Three Texas Markets!

Tuesday, October 10, 2006 - Prepaying Your Mortgage Is Not ALWAYS the Best Option

Sep. 24--The old question about whether you should spend extra money on paying off the mortgage early has a new twist.

Tuesday, October 10, 2006 - Ameriquest to Disperse $325M Settlement

Tuesday, October 10, 2006 - Landlords Needed in Beaumont, TX

From the RECON Newsletter...

HELP WANTED: LANDLORDS

BEAUMONT (The Beaumont Enterprise) – To keep the federal government from trimming its $9 million annual commitment to the Section 8 housing program in Southeast Texas , the Beaumont Housing Authority (BHA) is in a rush to find landlords willing to join the program.

Since Hurricane Rita, many landlords have raised their rents above the HUD-determined fair market level to recoup costs for damages that their insurance companies did not cover, BHA Executive Director Robert Reyna said. In its 2006 survey of area rental markets, HUD concluded there was no need to adjust the fair market rental rates to make up for post-storm rent increases.

BHA serves about 1,600 families through Section 8 and currently has a waiting list of more than 1,700 families.

Tuesday, October 10, 2006 - Texas Economy Still Strong!

COLLEGE STATION (Real Estate Center) – The Texas economy continues to surpass the nation in employment growth rate and job creation, according to the Center’s latest “Monthly Review of the Texas Economy.”

Research Economist Ali Anari reports that Texas ’ total nonfarm employment rose 2.3 percent from August 2005 to August 2006 compared with 1.3 percent for the United States . Laredo ranked first in the state in annual employment growth rate during the period, followed by McAllen-Edinburg-Mission, Midland and Brownsville-Harlingen.

Texas’ construction industry ranked first in job creation followed by the natural resources and mining industry, professional and business services industry, and the financial activities industry. Construction recorded 40,900 new jobs, 12,700 in construction of buildings, 3,400 in heavy and civil engineering construction and 24,800 in specialty trade contractors.

Despite falling oil prices, the state’s natural resources and mining industry gained 10,000 jobs during the period. Active rotary rigs went from 624.4 in Sept. 2005 to 779 in Sept. 2006, according to Hughes Tool Co.

Texas’ seasonally adjusted unemployment rate fell to 5.1 percent in August 2006, remaining slightly higher than the 4.7 percent U.S. rate.

“ Texas ’ unemployment rate reflects high employment in the border areas,” says Anari, “but it’s important to note that overall unemployment has been decreasing over the past two years.”

Midland had the lowest unemployment rate in the state, followed by Amarillo , Austin–Round Rock and College Station–Bryan.

For more information, see the full report at http://recenter.tamu.edu/econ/.

Tuesday, October 10, 2006 - Texas Apartment Market Sees 2006 Gains

Tuesday, October 10, 2006 - Inverted Yield Curve Could Spell Trouble for 'Soft Landing'

The Texas housing market, however, continues to fly high. The state’s population has soared by two million so far this decade. Home inventory remains low, and prices continue to appreciate.

Some speculative money has made its way to Texas , much less than in Florida , Nevada and California , says Real Estate Center Chief Economist Mark Dotzour.

Despite the smooth flight Texans currently enjoy, Dotzour sees two blips on the radar screen that might spell trouble ahead. 

“At this time, the most significant risk to the Texas housing markets is the possibility of large-volume builders attempting to make up for lost volume in East and West Coast markets by increasing volume in Texas cities,” said Dotzour. But he added, “I’m confident that will not happen.”

The second is one the entire U.S. housing market faces — a recession in 2007. 

Dotzour is concerned because the United States has had a flat or inverted yield curve for nine months. This artificial situation occurs when short-term interest rates are higher than long-term rates.

“It almost always causes a recession within 12 to 18 months,” said Dotzour.

The Center’s chief economist says the declining ten-year treasury rate and home mortgages indicate that bond investors are convinced the 5.25 percent Fed funds rate is high enough to slow things down considerably.

“I don’t expect any movement on interest rates between now and the end of the year,” he said. “The Fed doesn’t like to take action before elections. But I think it’s highly likely that every day the yield curve stays inverted as it is now, is another day closer to a national recession.”

PREPARING FOR RECESSION

COLLEGE STATION (Real Estate Center) – In Tuesday’s RECON, Real Estate Center Chief Economist Mark Dotzour raised the possibility of a national recession in the next 12 to 18 months.

That elicited this question from a RECON reader: How does one go about recession proofing a real estate business and personal portfolio?

Dotzour’s reply: “There is good news. Although the United States could have a recession, it’s highly possible that Texas won’t participate in it. Our economy is not overheated in the housing market, and we don’t have a lot of ailing auto plants in our state.

“When an economic cycle is near the top, the best plan for businesses is to not take on a lot of new debt. If revenues start to flatten, the people who can continue to meet their debt obligations will be around for the next cycle.”