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August 2009

Aug. 29, 2009 - Fannie and Freddie Mac Programs Help Struggling Homeowners

In March of this year, the Obama Administration authorized a new federal program to help stabilize the housing industry. The feds poured a mere $75 billion into the Making Home Affordable (MHA) mortgage program intended to avert further foreclosures, assist responsible home owners in retaining their homes and stabilize the nation's communities.

Home Affordable Refinancing Program (HARP) and Home Affordable Modification Program (HAMP) are the two initiatives under the umbrella of the MHA that are being used to distribute the funding for the program. The programs fall under the U.S. Department of Housing and Urban Development (HUD) secondary mortgage market lenders, Fannie Mae and Freddie Mac. Through the MHA programs, certain homeowners are provided assistance whose loans are either owned or guaranteed by Fannie Mae and Freddie Mac.

Over the following three years, the program is on target to assist three to four million homeowners. Currently, over 230,000 trial modifications have been started; although, over 500,000 is the goal to have in process by November 1, 2009. What's interesting is that more than 85 percent of mortgage loans out there today are covered by participating service providers.

HARP assists homeowners who are current on their mortgage payments, but are not able to refinance their loans due to a decrease in their home's market value. Homeowners may be afforded the opportunity to refinance their mortgage to a lower interest rate and to a lower-risk loan solution, both of which are part of the program.

General requirements to be eligible for HARP are as follows:

* Must be the owner of a one- to four-unit home
* Mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac
* Must be current on mortgage payments throughout the previous 12 months, which means that you've not been more than 30 days late on any mortgage payment within the previous year
* Amount due on your first mortgage is not more than 125 percent of the current market value of your home

HAMP offers options for homeowners that may potentially reduce their monthly mortgage payments, or provide other alternatives that can assist them in keeping their homes. The program helps homeowners who are in the following situations with their mortgage:

* Current, but have experienced recent significant hardship, including hardship that will inhibit their ability to pay mortgage payments going forward
* Delinquent on their mortgage payments
* Currently in the foreclosure process

For full details regarding the MHA, visit the MHA website.

Both sites offer a self-service lookup tool that tells you whether your home loan is owned by either. To find out more about the Fannie Mae or Freddie Mac MHA programs, or to see if your home loan is owned by either, see the information below:

* Fannie Mae
* Phone - (800) 7FANNIE (Hours - 8am to 8pm EST)
* Freddie Mac
* Phone - (800) FREDDIE (Hours - 8am to 8pm EST)

Ki's website includes a searchable map of homes in the Austin MLS. His site is focused on helping Austin real estate buyers. In addition to information on the Austin market, his site also provides a mortgage widget that shows current interest rates.
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Aug. 29, 2009 - The Truth Behind the Housing Numbers

The recent headlines have trumpeted a rebound in the American housing market. According to the Associated Press, July's 7.2 percent increase in home sales was the biggest month-to-month jump in the last ten years. But before breathing a sigh of relief and checking Zillow for increased home values, it might be a good idea to look at the story behind the new and improved numbers.

A big chunk of the recent increase is first-time home buyers taking advantage of the tax credit. One third of recent home sales are due to the $8000 incentive for first-time home buyers, which will end in November. Another third of the recent sales across the nation are actually foreclosures. According to a recent report on NBC news, home prices overall are down 23 percent in the last year, largely due to the number of foreclosures across the country.

NBC news broke down the numbers even further, showing that the biggest surge in home sales are for homes under $100,000. While sales of homes in this price range rose an impressive 39 percent in the last month, sales for homes over $250,000 are actually down. In fact, the higher the price tag the fewer homes are selling.

Better numbers in several sectors of the economy, including housing, have led Federal Reserve Chairman Ben Bernanke to announce that the U.S. economy is on the verge of recovery. He said at a Federal Reserve conference in Wyoming that "the prospects for a return to growth in the near term appear good." Not a resounding endorsement of the world economy, but certainly keeping to the more positive tone he has taken lately.

According the Associated Press, Bernanke continues to stress the importance of freeing up consumer credit, stating this is the key to any kind of long term economic recovery. However, banks continue to be careful with lending to consumers. Mortgage defaults remain at an all time high--which brings us back to the housing numbers. While foreclosures continue to less of a factor in Austin as they are in other parts of the country, they are taking a toll on the economy as a whole.

As the latest housing numbers have indicated, foreclosures are great for bargain hunters but bad for the housing sector and the overall economy. It only takes one foreclosure in a neighborhood to skew the assessment of overall home values in that area. Mortgage defaults that lead to foreclosures cost banks a significant amount of money. The banks in turn raise rates on credit cards and fees to recoup some of these losses, along with making fewer loans overall.

The real estate industry is lobbying Congress to get an extension on the first-time buyers' tax credit, because many industry analysts are predicting a plunge in the housing numbers after November. "I would not be at all surprised to see a dip at the end of the year once the tax credit expires," Robert Dye, senior economist with PNC Financial Services Group, told the AP.

Austin continues to weather this long recession better than the rest of the country, but let's hope the story behind the national numbers gets better.


Ki moved to Austin for school. After graduation, he started working in the Austin real estate market. He has a website where future owners can search the Austin MLS. His website also has a blog with updates in Austin Texas real estate.
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Aug. 29, 2009 - The Small Town of Del Valle

During the Texas Revolution, around the year 1812, Santiago Del Valle made his way to central Texas and settled with his family on a large piece of land granted to him by the Mexican government in the area now known as Del Valle. Del Valle is 7 miles southeast of Austin and the community is currently unincorporated.

The community is near the Austin Bergstrom International Airport, and is situated near the intersection of U.S. Highway 183 and Highway 71, on which Del Valle is actually located. Del Valle is also very near the communities of Lockhart to the south and Bastrop to the east, and the terrain is gently rolling farmland with plenty of shade trees as well as rivers and creeks.

Del Valle has its own school district, the Del Valle Independent School District, a small post office, and a few other businesses, including restaurants and hotels and motels, which are numerous due to the town's proximity to the new airport as well as nearby state parks and other tourist attractions.

Del Valle also boasts many sports related activities and events, and there is a local golf course as well as a baseball complex, among other facilities. With its rural atmosphere, many local residents enjoy the outdoors, for sporting events or even eating outside and picnicking in the many local parks and greenbelts.

Del Valle is considered a growing community, and there are many inexpensive homes available, most with plenty of acreage to raise a family, livestock or pets, or even grow your own fruits and vegetables, since the town is on the southeastern side of Travis County which has good soil and lots of water.

Currently, there are many available homes in the $100,000 range in the community, and most have all the modern amenities, as well as access to U.S. 183 and 71, which makes travel to Austin, San Antonio, and even south Texas very convenient and speedy. There are also many mobile homes parks and empty lots with green grass as far as you can see on which one can build a home and eventually settle into the sunset years.

Some of the local eateries around Del Valle include a Thai restaurant called Little Thailand, a barbecue spot called Elroy Sausage Company, and an old-timey saloon called Water Hole Saloon. All offer above average food and refreshing beverages, according to visitors to the Del Valle area.

A local church that hosts many events is the Methodist Church, called Haynie Chapel United Methodist Church, and the church promotes the spiritual life as well as actively promoting social events and get-togethers for residents and their guests, with regular prayer meetings, worship services, and study groups.

Del Valle is the location of the Travis County Correctional Complex, which is a large, local employer of correctional officers, social workers, medical staff, and many other professionals, as well as the home of a youth program, a military-style boot camp, and many other facilities intended to teach and encourage healthy living and life skills for the young, old, and in between.

Del Valle is a promising location for those who want to see the stars at night without the distraction of city lights, and hear the birds chirp and the roosters crow. The lifestyle is laid-back and the cost of living is inexpensive, so consider the Del Valle area when visiting the southeastern part of Travis County, and you'll be glad you did!


Ki lives in the Austin area. He created a website for future homeowners owners to search for Austin homes. He has worked in the Austin Texas real estate market for almost 10 years. His site also has a blog with updated statistics on Austin real estate.
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Aug. 29, 2009 - Mortgage Rates Hold Steady

For the most part mortgage rates held steady this week after dropping sharply last week. The 30 year rate rose slightly from 5.12 to 5.14 after dropping from 5.29 the week before. The 15 year rate rose from 4.56 to 4.58. The 1 year arm held steady at 4.69 and the 5 year rate (the only mortgage product that saw much movement) rose from 4.57 to 4.67.

The general consensus is still that rates are going to eventual move up rapidly when the economy recovers. As long as the economy stay in the doldrums there is a decent chance rates will stay below 5.5. To put today's rates in historical context the all time low for the 30 year rate is 4.81 (reached in April 2009). So the 30 year rate is still very close to its all time low. Below are mortgage rates for the major mortgage products for the last few weeks and from January 22 (6 months ago).

Aug 27, 2009
30-yr 5.14 15-yr 4.58 5-yr ARM 4.67 1-yr ARM 4.69

Aug 20, 2009
30-yr 5.12 15-yr 4.56 5-yr ARM 4.57 1-yr ARM 4.69

Aug 13, 2009
30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jan 22, 2009
30-yr 5.04 15-yr 5.12 5-yr ARM 4.80 1-yr ARM 5.24

For the most part mortgage rates have stayed low in spite of some encouraging signs with the economy. In addition to rates we can also look at mortgage payments. We took today's rates and translated them into a mortgage payment for a 200k loan. We also translated rates from August 13th (2 weeks ago) and January 22 (6 months ago) into a mortgage for a 200k loan.

Aug 27
30-yr $1090.82
15-yr $1538.17
5-yr ARM $1033.67
1-yr ARM $1036.07

Aug 13
30-yr $1109.36
15-yr $1548.44
5-yr ARM $1043.29
1-yr ARM $1039.68

Jan 22
30-yr $1078.53
15-yr $1594.11
5-yr ARM $1049.33
1-yr ARM $1103.16

As we saw with mortgage rates the mortgage payments are relatively stable from 2 weeks ago.

So what do we expect over the next few months? As long as the economy stays down barring other developments in the financial sector mortgage rates should stay low. When the economy starts to rebound though mortgage rates are generally expected to start rising.

What is our advice to people considering getting a loan? Basically it's the same as it has been for the last few months. I would avoid getting a 5 or 1 year arm if at all possible. Since rates should be higher in the future it makes sense to lock into long term rates while they are low. It's also a good idea to start the loan process before starting your home search. We are still in one of the strictest lending environments we have seen in decades. Minor credit issues that were ignored before are stopping loans from going through today. Starting the loan process early on can give a potential borrower time to clear up any issues on their credit report.


Ki has a comprehensive website focusing on Austin Tx real estate. Buyers can use it to search the Austin MLS. It also provides a graph showing updated mortgage interest rates.
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Aug. 24, 2009 - What U.S. Cities Are Doing to Promote New Construction

With real estate vacancies on the rise and new construction having taken a sharp downturn, many cities across the nation are coming up with some clever and creative methods to entice new building construction into their respective areas.

Although home sale numbers may be resurrecting in some cities, this is not the case for most. Not only are home sales down, but new home construction has hit rock bottom in many major cities.

Commercial vacancies are also steadily climbing, which have caused the lending industry to raise the bar in obtaining new construction loans. Builders are now struggling more than ever with a variety of costs, and are much more hesitant in a down economy to begin new projects.

Insightful U.S. cities are noticing the significantly diminished number of new building permits, and are responding. In order to kick start the slumping industry, many cities are cutting various impact fees typically charged to builders. Generally, impact fees are one-time fees charged on new construction to pay for infrastructure for the new development, like roads, sewer systems, curbing, lighting, schools, parks and other community needs.

The hope is that the savings will entice developers to complete or build-out existing construction and encourage new residential and commercial development.

Earlier this year, the City of Harrisburg, Oregon, cut in half what are called the city's Systems Development Charges. These are the fees the city bills home builders pay per house. City officials stated that the reduction in fees saved new home builders nearly $5,000 per house, a savings that is supposed to be passed along to the buyer. The city's program ended August 1.

Following suit with numerous other local California governments, Riverside County reduced their impact fees to builders just this month. The California Building Industry Association says it's a growing trend that's paying off. Riverside officials voted to cut development fees by 50 percent for one year effective August 15. That adds up to a savings of about $2,100 per single-family dwelling. In addition, the Western Riverside Council of Governments will consider a reduction in the Traffic Uniform Mitigation Fee (TUMF) that currently cost builders $10,000 per home.

Naples, Florida, made history in cities that are considering the reduction of impact fees. Known to charge the highest impact fees in the state, the city was one of the first to consider lowering impact fees in January of this year. The county's commissioners voted to suspend certain impact fees for two years. Benefactors of the suspended fees will primarily be existing commercial property owners who change the use of commercial space listed on the building permit.

Arizona state government initially rejected, and then subsequently approved, a budget that included a two-year suspension for impact fees assessed by city governments relative to construction sales and building codes, along with reduced assessments for commercial property tax. The National Association of Office and Industrial Properties (NAIOP) and Home Builders Association of Central Arizona (HBACA) had been petitioning for a three-year moratorium on impact fees.

In attempts to bolster commercial development, Meridian, Ohio has also jumped into the fray. Officials have waived impact fees for fire and police for all commercial building permits through September 30, 2009.

Boise, Idaho Mayor Dave Bieter has deferred fees for building permits and inspections for new construction. The fees are not due until the occupancy permit is issued by the city. In addition, impact fees for fire, police and parks are being deferred.

The trend seems to be catching fire throughout the nation; although it is unclear as to what extent these deferred, reduced or eliminated impact fees will benefit the community in the long-run.

Ki has been interested in Austin real estate since graduating from the University of Texas. His website has a graphical search for Austin homes for sale. His website has statistics and information on Austin real estate and commercial real estate.
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Aug. 24, 2009 - Federal Stimulus Funds to Buy and Fix Up Foreclosed Properties

State and local governments across the nation are gearing up to spend federal stimulus funds. The U.S. Department of Housing and Urban Development (HUD) birthed the Neighborhood Stabilization Program (NSP) that provides federal stimulus dollars to assist neighborhoods hardest hit by the home foreclosure crisis. The NSP falls under the umbrella of the American Recovery and Reinvestment Act (ARRA).

HUD's intent for the NSP is to provide assistance to more than 500 communities, cities and counties across America in the form of rent relief, for homeless prevention and to assist low-income families to buy homes. Organizations that are eligible for NSP funding are cities, non-profit agencies and housing authorities.

St. Lucie and Martin Counties in Florida hope to receive some $7.5 million in stimulus dollars. The counties recently applied for the funds through the state's Department of Community Affairs. Both counties intend on buying foreclosed homes, renovating them and selling them to low-income homebuyers. The other initiative for the funding will be to weatherize neighborhood homes.

Fresno County, along with the City of Fresno, has received a total of $18 million in NSP funding to address the abundance of local area foreclosed homes. Officials have already interviewed several developers that will be hired to buy, renovate and sell or rent the homes to low-income families.

Blighted areas will benefit the most from the funds. A byproduct of the dollars will be construction jobs associated with renovating the properties.

Massachusetts may see some activity soon in many of their local cities and neighborhoods, since the state applied for funds in the total of $54 million. Boston Community Capital, alone, applied for $50 million in NSP funds in order to broaden the organization's ability to assist the state's residents who are facing foreclosure on their homes. The group has already committed $4 million in assistance to purchase abandoned property, loan funds to small developers renovating vacant properties and assist struggling homeowners in keeping or buying back their homes.

Connecticut has thrown their hat into the ring for $45 million in NSP dollars, which will target the state's four most hard hit cities. The Connecticut Consortium falls under the state's Department of Economic and Community Development (DECD), and will be responsible for allocating the funds to local communities. Low- to middle-income families will be the primary beneficiaries of the program.

Chicago received $5.4 million in stimulus funds earlier this year. The city's goal is to reinvest profits made from selling renovated properties back into other foreclosure properties.

Ohio was allocated $45 million NSP dollars to jump start the housing market in blighted neighborhoods. The intent is to allocate the stimulus money quickly, so that communities will be enabled to attack the growing numbers of abandoned and boarded up homes.

Kentucky was awarded $44 million, Evanston, Illinois applied for $39.4 million and Virginia received $45 million. Brad Pitt even entered the fray with his Make It Right Foundation. If funding is approved, it will benefit New Orleans and a project the group will launch in Newark, NJ. His organization, as part of a consortium of non-profits, is asking for $65 million.

Ki works to help buyers searching for Austin Texas real estate. He has worked in real estate for almost a decade. He maintains a searchable Austin MLS directory on his website. His site has current information on mortgage rate trends.
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Aug. 24, 2009 - Mortgage Rates and the Economy

Mortgage rates fell this week to the lowest point since May 28, 2009. Whether May 28, 2009 is the summer is open to some debate. The summer solstice usually is considered the technical beginning of summer which occurred on June 21st this year. Some consider Memorial Day the beginning of summer which was May 25th. Either way this is the lowest we have seen the 30 year mortgage rate in the last 3 months.

The question of course is why mortgage rates are falling. Generally once the economy starts improving interest rates should rise. I think what has happened is that while the actual economy has improved the expectations about the economy have fallen. During the last 2 months people thought the economy might experience a V shaped recovery. Basically once the economy turned around it would recover quickly.

But since that time more people are now expecting a U shaped recovery. Basically the economy is going to recover but it's going to occur more slowly. On the positive side these lower expectations could be lowering mortgage rates. Here are mortgage rates for the last few weeks.

Aug 20, 2009
30-yr 5.12 15-yr 4.56 5-yr ARM 4.57 1-yr ARM 4.69

Aug 13, 2009
30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

As we can see for the last few weeks the 30 year mortgage rate has been hovering from 5.20 to 5.29 until this week when it abruptly fell to 5.12. In addition to rates we like to look at mortgage payments. We took today's rates and translated them into a mortgage payment for a 200k loan. We also did the same thing with rates from August 6 (2 weeks ago) and rates from January 15 (6 months ago).

Aug 20
30-yr $1088.35
15-yr $1536.12
5-yr ARM $1021.7
1-yr ARM $1036.07

Aug 06
30-yr $1100.69
15-yr $1543.3
5-yr ARM $1040.88
1-yr ARM $1046.91

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

As we can see there is some savings compared to 2 weeks but nothing too substantial. Compared to 6 months ago a mortgage payment would be 1.83 percent more. So basically we are seeing rates and mortgage payments slightly higher than 6 months ago and slightly lower than the last few months.

What we are going to see moving forward depends on the economy. If we experience a V shaped recovery we should expect mortgage rates to move up quickly. This is because the massive amount of money the US government has poured into the economy during the recession should lead to inflation when the economy recovers. But if the economy experiences a U shaped recovery and continues to lurk around in the doldrums we should see low interest rates for the next few months.


Ki lives in central Texas and works in the real estate market in Austin. His website escapesomewhere provides a mortgage rate widget along with a mortgage calculator widget.
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Aug. 24, 2009 - Is 2009 The Year of Real Estate Bargains?

Everyone has felt some of the impact of slumping real estate prices over the past two and a half years, from homeowners trying to tap into shrinking equity to commercial property investors seeing smaller returns and greater vacancies. As 2009 reaches the halfway mark, however, the case for real estate's turnaround is becoming more and more apparent. By 2010, home and commercial property prices will have stabilized further, and interest rates will certainly have risen somewhat. As a result, the next three to six months may be the best opportunity to lock in an attractive mortgage rate, while still reaping the benefits of the best buyer's market in decades.

Many factors influence the real estate market during a recession. However, in the United States, geography plays a much larger role in deciphering statistics which tend to be quoted as national averages. When home prices fall across the country, there is legitimate cause for concern. But the recently released Case-Shiller index provides some promising clues that suggest otherwise. In 7 of the 20 surveyed areas, prices increased between March and April. In several other metropolitan areas the decrease in prices was much smaller than in previous month-on-month comparisons. Most importantly, the nationwide aggregate pace at which home prices have fallen is slowing, with the difference between April and March prices falling a meager .78 points.

This trend points towards stabilization across the board, even as several regions continue to experience contraction. These parts of the United States experienced increased growth throughout the "bubble period," which gained momentum after the dot-com bust, culminating in the spectacular drops seen throughout mid-to-late 2007. This period was marked by two unusual phenomena: the context in the real estate market of speculative and historically high home prices, combined with artificially low interest rates and under-regulated financial products.

These factors are essentially risk-based, and as the financial sector melted down the risk was priced into the record write-downs and subsequent contraction. The extent to which this effect will reinforce any further nominal decreases in home prices remains somewhat uncertain. Their effects will still likely be minimal and take more time to observe. In some of the more adversely affected areas, foreclosures are still high, but no longer the record-setting numbers seen in previous quarters. In addition, any government measures that may be implemented may stem foreclosures further and reduce potential risk to a marginal level.

This systemic and speculative risk has now largely been priced into the market at this point, as evidenced in recent data. Many investors have already begun buying into the markets which continue to grow quietly. This has been occurring in areas which prices have been more stable, such as the Northeast and in states like Texas, where places like Round Rock have continued to grow seemingly unabated. In fact, according to recently released census data, four of the fastest-growing cities in the US are in Texas. This is also reflected in the S&P Shiller index on Dallas home prices, which swung upward 1.7 points between March and April. Many other larger cities in New England and the Pacific Northwest have also continued to experience some growth despite the recession, albeit less than in boom years. These area's track records make them strong contenders for investment or home purchase.

In the broader picture, the Federal Reserve has forecasted a positive GDP in the last half of 2009, after which more competitive investment will end the current buyers market. Buying a home or commercial property will likely not be such a bargain for some time to come, as history shows cycles such as these tend to come every thirty years, with larger dips every sixty or so. That means if you're in for the long haul (or even if you're not) the time may have come to look at real estate once more.


Ki lives in Austin Texas and helps people looking to invest in Austin real estate. On the site, buyers can search for homes in the Austin MLS. He also publishes a monthly blog with trends and statistics on Austin Texas real estate.
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Aug. 14, 2009 - Commercial Vacancies, the Next Real Estate Bubble to Burst

News headlines throughout major U.S. cities note record-high commercial vacancies, along with a decrease in the asking price for commercial rental space. As was predicted by several major real estate statisticians earlier this year, the next real estate bubble to burst is commercial properties.

Based on statistics compiled by Cushman & Wakefield (C&W), the commercial vacancy rate hasn't been this high since mid-2005. C&W, a global commercial real estate brokerage and consulting firm, found that vacancy rates increased in 24 of the 32 major markets they surveyed.

Colliers International, a global commercial real estate service provider, noted that rental office space is becoming abundantly available. Nationally, office space vacancies in major business districts jumped from 12.5 to 13.74 percent in the second quarter of 2009. Suburban markets increased 1.95 percent to 16.28 percent. In addition, the firm found that the asking rent in major districts dropped by 3.2 percent during the quarter to an average of $38.25 per square foot. Average asking rent in U.S. cities overall, however, are now more often priced at around $25.00 per square foot.

Both firms note that the market has been pummeled by increased supply and a decline in demand due to the economic downturn. Executive Managing Director Maria Sicola asserted that elevated unemployment numbers translate into the reduced demand reflected in higher vacancy rates. More than 66% of 6.5 million square feet of newly constructed commercial space was still vacant at the end of the second quarter of 2009.

Michael Cohen, a research strategist for Property & Portfolio Research (PPR), stated that the firm's expectation was that vacancies would reach historic highs in office, apartment and warehouse space in 2009. According to ING Clarion Real Estate Managing Director David Lynn, the hospitality market has been dealt the biggest blow with major cutbacks in business and leisure travel.

Most cities across the nation are experiencing a rise in commercial vacancies. Phoenix has a 17.4 percent vacancy, Chicago's is at 15.4 percent, Washington, D.C. holds an 11.7 percent rate, Las Vegas exceeds 20 percent, Kansas City is higher than 18 percent, Providence, Rhode Island is now over 30 percent, and so on.

Along with the rise in commercial vacancies, insurance companies are becoming more concerned about liability associated with vacant real estate. Vacancies present additional risks not applicable to occupied real estate. Commercial insurance companies are encouraging owners of vacant real estate to minimize risk by implementing the following:

* Notify insurance company of vacancy, become informed and follow policy terms that apply to vacant property.
* Advise local authorities that property is vacant.
* Remove all combustibles, debris and any unnecessary materials from vacant property.
* Inform local fire department of materials left that could impair fire-fighting.
* Inspect property weekly, have someone watch the property or hire a guard service to daily drive by to observe property.

With real estate vacancy numbers not anticipated to see daylight for some time to come, this is wise advice, indeed.

Ki moved to Austin to attend college, and stayed to work in Austin real estate. He created a website encouraging buyers to search for Austin homes for sale. His site also has information on Austin Commercial real estate and general information and statistics on Austin real estate.
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Aug. 14, 2009 - Are Mortgage Rates Primed To Rise

Mortgage rates rose again this week. This is the third time in the last 4 weeks that mortgage rates have risen. Why are mortgage rates rising? There are numerous factors at play but generally once the economy recovers it's expected that inflation, and mortgage rates, should rise. The last month of generally positive economic news has probably helped nudge mortgage rates up. Although rates are increasing they are increasing in small steps and not large strides. Since July 16th the 30 year rate has only moved from 5.14 to 5.29. While this is interesting it's certainly not a huge move upward. What is interesting is that the current (small) upward movement in mortgage rates might be the beginning of the rise that many in the financial industry have predicted. If the economy continues to rebound this could be the beginning of mortgage rates steadily moving up to 10% or higher. This is of course dependent on the continued movement of the US economy out of the current recession. While the government has made some statements about curbing inflation it seems more concerned with making sure the US exists the recession. Of the 4 major indexes 3 moved up this week. The 30 year note rose from 5.22 to 5.29, the 15 year mortgage rose from 4.63 to 4.68 and the 5 year arm rose from 4.73 to 4.75. The 1 year arm fell from 4.78 to 4.72. What is also interesting is that when rates were at their lows a few months ago the 5 and 1 year arm was higher than the 30 year fixed rate, which is highly abnormal. Since the 30 year rate has gone up (and the arms have stayed down) the 30 year rate is now above both arms. And now the spread between the 30 year rate and the arms is back to normal. Below are the rates for the different mortgage products for the last few weeks and for January 15 (6 months ago). Aug 13, 2009 30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72 Aug 06, 2009 30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78 Jul 30, 2009 30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80 Jul 23, 2009 30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77 Jul 16, 2009 30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76 - - - Jan 15, 2009 30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89 In addition to rates it's always interesting to look at actual mortgage payments. We took today's rates and using a mortgage calculator translated them into a payment for a 200k mortgage. We also did the same thing with rates from July 30, 2009 (2 weeks ago) and January 15, 2009 (6 months ago). Aug 13 30-yr $1109.36 15-yr $1548.44 5-yr ARM $1043.29 1-yr ARM $1039.68 Jul 30 30-yr $1104.4 15-yr $1549.47 5-yr ARM $1043.29 1-yr ARM $1049.33 Jan 15 30-yr $1068.75 15-yr $1545.36 5-yr ARM $1104.4 1-yr ARM $1060.23 As we can see that while rates have risen the effect on a mortgage payment (looking at the 30 year fixed rate) is relatively small. So what is our advice to potential buyers looking for a mortgage? I would start the process of looking for a lender/mortgage early on. Financing is stricter than it has been in the past and its good to start the process early so any potential problems can be resolved (i.e. credit report problems or extra documentation that is needed). Additionally, with a possible spike in inflation looming there is more of a risk of rates rising than falling so it makes sense to lock in early.
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Aug. 14, 2009 - U.S. Bankruptcy Judge's Ruling Could Change Foreclosure Laws Nationwide

Mortgage Electronic Registration System (MERS) has been used by lenders nationwide to track mortgages via the system's database. Lenders who are members of the program are represented in the enforcement of a promissory note secured by a mortgage. A U.S. Bankruptcy Judge in Nevada ruled earlier this year that MERS could no longer represent lenders foreclosing on homeowners in bankruptcy unless the actual loan document could be produced.

Typically, a mortgage note goes through several iterations of sale to different mortgage lenders, which makes it difficult to produce original loan documentation. When lenders begin foreclosing on homeowners in bankruptcy, the original note is often not available.

MERS is a program that was initiated by several lenders over 20 years ago to simplify the complicated mortgage process. The system is designed to track mortgages and any associated sale of the note via a central database. Over 60 million mortgages are currently monitored by the program. Lenders who are members are represented by MERS throughout the foreclosure process.

Although the bankruptcy judge's ruling presents a roadblock for lenders in the foreclosure process, it is not the first time MERS was challenged in court. The same ruling was handed down in a Florida court; however, the company eventually won on appeal.

For homeowners who owe more than their home is worth, or are unable to pay their mortgage payments, the ruling may only delay proceedings for about a month or more. In attempts to further assist homeowners in default on their mortgage, a Nevada state representative introduced legislation to allow homeowners in financial hardship to ask for arbitration in their mortgage default process. This would overstep service providers like MERS, and require mortgage lenders to be involved, instead.

Even though it was handed down in Nevada, bankruptcy attorneys in other states have voiced appreciation in regards to the ruling. One noted Houston attorney stated that the new law could have a nationwide impact on the ability of lenders to enforce mortgage loans. In addition, it throws some negotiating leverage onto the playing field that was not available before for homeowners in foreclosure going through bankruptcy.

A deluge of complaints have been filed against service providers in regards to aggravating the excessive number of foreclosures initiated in the past two-and-a-half years. On the other hand, MERS argues that its services enable a broader range of home lending options for homebuyers.

The program maintains current mortgage information and ownership, and avoids the astronomical millions associated with recording fees, along with the associated paperwork. MERS officials noted verbiage from one Florida court decision that stated the program was "innovative."

Will the decision hold up? Regardless, as in the Florida case, MERS immediately appealed the judge's decision.

The bigger question, however, is whether the ruling will catch fire in other states. Also, it will be interesting to see if the Nevada statesman's proposed bill will be cause for pause for legislation in other states across the Union.

With all the twists and turns we're seeing in the courts of late, anything could happen.

Ki's company is located in Central Austin. He maintains a website allowing buyers to search for homes in the Austin MLS. He has worked with Austin real estate for almost 10 years. His site has information and graphs on historical interest rates.
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Aug. 14, 2009 - Strolling Down South Lamar

South Lamar has become more and more popular for pedestrians, bicyclists, shoppers, and other visitors, and a stroll down the boulevard can include every imaginable activity and meal or drink. New additions to the "SoLa" scene include the Black Sheep Pub and a couple of other new eateries and pubs, as well as old favorites like the Saxon Pub and the Broken Spoke, both of which are landmarks on the Austin music and dancing circuit and regularly offer well known local musical acts.

The Black Sheep Pub is located a few blocks north of Kerbey Lane Cafe and Sonic Drive-in, and there is an outdoor patio out front with tables and chairs. The menu is down home and reasonably priced, and until recently, patrons could get a complimentary beverage with their meal, since the restaurant had not gotten its liquor license. The burgers are big and inexpensive, and the fries are crispy and spicy, along with the tator tots, which have gotten tremendous word of mouth among the neighbors.

Across the street and a few blocks south, the Half Price Books remains a mainstay among local residents, and used books, music, reading glasses, gifts, and lots of other unique items are available, most literally at half price, as the name promises. Next door to Half Price Books is the Old Alligator Grill and The Rockin' Tomato, both popular among locals.

A half block east, on Manchaca at Lightsey, the small strip center has many interesting businesses, including an inexpensive family medical practice that accepts walk-ins called Access Co-Medical, an unusual convenience store called On the Run, and a family-friendly Laundromat with WiFi access and T.V., as well as a supply of reading material and courteous, helpful employees.There is also a spa and beauty shop called Olga's and a comic book and cards store, both with unique products.

A quick walk north and one arrives at Walgreen's, which is open twenty-four hours and has an amazing array of cosmetics, grocery items, clothing, medicine and toiletries, and almost everything else. The Sonic is just across the street, and one block south of Walgreen's is Austin's venerable Matt's El Rancho, which has been reincarnated numerous times over the years and is one of the most well-established restaurants in Austin. Matt's is famous for their shrimp enchiladas and coconut pralines, among other delights, and there is something for everyone, including a frosty margarita for the adults.

The neighborhoods east and west of Lamar are some of the only ones remaining in the Austin real estate market where one can find affordable housing, and there are many kitschy old fourplexes and duplexes, as well as interesting homes and small apartment complexes. It is a quick walk to these homes and apartments from the strip of restaurants and clubs, and anything can be found within a few blocks of these homes.

Until recently, an art show called Art Outside was held regularly at the Enchanted Forest, an outdoor venue with a creek running through it and every imaginable type of artwork, music and dance, and many of the artists and musicians make the SoLa area their home as well. The Forest is near the intersection of Lamar and Oltorf, and an organic foods lunch stand called Organic Seeds is currently operating near the Forest, with positive reviews from those who've had the pleasure of dining there. Seeds offers patrons a choice of healthy wraps, coffee, breakfast tacos and other favorites.

A block south of the intersection of Oltorf and Lamar is a local coffee bar and music spot, with beer, wine, and lunch specials called the "Irie Bean". It is another locally owned venue and has great coffee, wine, sandwiches, and occasional live music, so it's another hidden jewel in SoLa. Every sidewalk leads to something new and/or different, including Irie Bean.

South Lamar is one of the oldest yet fastest growing areas in Austin, and homes are reasonably priced,compared to many areas of Austin, so stroll down the boulevard and take a look, and you'll like what you see.Friendly neighbors always make you feel welcome, and there is always something to do.

Ki maintains a website on Austin Texas real estate. His site allows buyers to search for listings in the Austin MLS he also writes a blog with updated information on Austin real estate.
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Aug. 8, 2009 - Mortgage Fraud at All-Time High

From sea to shining sea, lenders struggle with costly mortgage fraud. Although, the fraud itself is not new, a recent FBI report reveals that the numbers are mounting and the methods used by scammers are becoming more, well, creative.

From 2007 to 2008, the FBI's annual report showed that the industry experienced an increase of more than 83.4 percent in actual mortgage fraud dollars. Last year mortgage fraud cost lenders in excess of $1.4 billion in liability, says the FBI report, and higher figures are expected for the 2009 fiscal year. Just through June of 2009, fraud figures exceeded the previous year during the same time period by around $208 million.

There were over 63,000 incidents reported by lenders regarding mortgage fraud in 2008, which was 33 percent more than reported in 2007. Increased reported incidents are partly attributed to more intense scrutiny of borrower details. Reporting inflated income in order to buy a larger home, or applying for modification under the pretense of a false job loss, have been identified as increased contributors to fraud more recently.

In the report, the FBI attributes much of the fraud to market insiders, which includes mortgage brokers, real estate agents and brokers, lenders, property appraisers, title companies, underwriters, accountants and others. Stating that insiders are attracted by the allure of low-risk, high-yield returns, the report does not expect the numbers of those involved in fraud to diminish. Due to the complexity of the mortgage process, industry insiders find ways to make a quick buck without drawing immediate attention.

Tighter lender requirements that are making it more difficult to obtain a mortgage are a contributor to the strained industry. In addition, many in the mortgage industry are no longer experiencing the benefits of the long gone real estate boom and turn to fraudulent methods to fill the gap in income.

Along with traditional methods, other major targets expected to be pursued by fraudsters are minorities and seniors struggling with foreclosure, along with federal economic stimulus programs. State-wide incidents in Florida reveal increased numbers of Hispanics being defrauded by Hispanics operating fraudulent companies under the pretense of financial and foreclosure assistance.

Federal programs operating under the Emergency Economic Stabilization Act (EESA) and the Housing and Economic Recovery Act (HERA) have opened the door to additional fraud opportunities, and are expected to become new targets for fraudsters.

California has revealed incidents of mortgage fraud perpetrated by organized crime and gang members. Along with new fraud methods, traditional modes are expected to increase and will be more closely monitored by the mortgage industry and law enforcement as communication methods become more enhanced.

The FBI is bracing itself for record high mortgage fraud. In attempts to get a handle on the mortgage fraud epidemic, the federal branch created the National Mortgage Fraud Team (NMFT). The FBI will use the team to further continue to partner and provide valuable information to the mortgage industry and law enforcement in order to capture and deter mortgage fraud perpetrators.

Ki provides a free search of Austin MLS listings on his website as a service provided for those curious about austin real estate. He has lived in Austin for over a decade. His site provides updated information on Austin real estate and mortgage rate trends
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Aug. 8, 2009 - The Clarksville Dog Park in Austin Texas

Clarksville, which is a historic neighborhood in central-west Austin, has a hidden jewel few people know about: the "Dog Park", as it has been known for years. Clarksville is a very eclectic community in the central Austin real estate market, in fact some would say eccentric, but very unique, and the residents love their pets.

Between 9th Street and 10th Street, and a few blocks east of West Lynn, there is a beautiful, green park, shaded by huge, old trees with green leafy canopies covering most of the park, and many of the locals regularly bring their children and dogs for a run through the park, or to chase Frisbees or sticks, or just play or relax.

The Dog Park also has a small pool with water just over waist high, and treehouses and other structures for kids as well as dogs to climb. Many a summer afternoon, moms with their young or teenage children make the trek from Clarksville to the Whole Foods Market, or even the Fresh Plus grocery store, with fresh fruit and bakery goods, and climb into the trees or lay a blanket down under the shade of the foliage and while away the day, watching other dogs and dog owners go through the ritual of the daily exercise and potty run.

The memory of a cold, crisp apple or pear, eaten with your child or pet, as one daydreams or even falls asleep, are the memories that keep families in the Clarksville area for generation after generation, since these activities seem to remind the locals of the past, when life was simpler and slower.

There is also a baseball field in the park, and other recreational equipment and facilities, including a basketball goal, and trails for hiking, or running with a partner or pet.

After a few hours of sunshine and exercise, the soda fountain at Nau's Pharmacy is the perfect place to have a frosty milkshake or home made cheeseburger, and it's a short walk from the park to Nau's, or even Cipollina's West Austin Bistro, which is an Italian Deli adjacent to Fresh Plus.

While walking to Whole Foods, which is a few blocks east at the corner of Lamar and West 6th Street, the sidewalk traverses various eclectic shops, including a liquor store and smoke shop with a wooden Indian standing guard at the door called Wiggy's, along with a card shop and gift shop, and eventually the sidewalk meanders all the way to 6th, where cold ice cream is waiting at Amy's, to cool off the kids, as well as adults and sometimes even dogs.

While in the area, a stop in at Waterloo Records and Video is sure to provide entertainment for the evening, and the entire walk between West Lynn and 6th is so well kept and brightly lit that the pedestrian feels they are in a movie set, with neon over every doorway, trees and plants on every corner, and friendly people all around.If you prefer reading to TV or movies, stop in at Book People and discover every kind of reading material as well as jewelry, snacks, and lots of other neat stuff.

So for a complete day or fun, start at the Clarksville Dog Park, take a brisk hike to Lamar for a snack or drink, and get a book, movie or some music for the evening. Later, you might consider a hearty meal or cold, refreshing libation at the many other restaurants and clubs in the area, and be sure to bring your dog, or your kids, or just go by yourself!!Donn's Depot usually has live music and little or no cover, and it's another longlasting Clarksville establishment, at 5th and West Lynn.

Ki moved to Austin to attend the University of Texas. After graduation, he stayed to work with Austin real estate. He maintains a website where buyers can search for Austin homes for sale. His site also provides a blog with news and statistics on Austin Texas real estate.
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Aug. 8, 2009 - Mortgage Rates Stay Even

The saying "No news is good news" might be applicable with the recent trend with mortgage rates. For the last 2 or 3 weeks for the most part rates have stayed pretty much unchanged. The reason why this could be considered good news is that the economy and stock market seem to be improving. There was a lot of discussion that an improving economy would lead to inflation and in turn higher interest rates. While I still think we are eventually headed to higher interest rates it's nice that at least that is not happening now. This week the 30 year mortgage rate dropped from 5.25 to 5.22. We also saw the 15 year rate drop from 4.69 to 4.63. The 5 year arm and 1 year arm both dropped .02 points this week (4.75 to 4.73 and 4.80 to 4.78 respectively). Below are rates for the last few weeks and from January 15th (6 months ago).

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

Jul 16, 2009
30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76

Jul 09, 2009
30-yr 5.20 15-yr 4.69 5-yr ARM 4.82 1-yr ARM 4.82

Jan 15, 2009
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

Looking above the 30 year mortgage rate has only moved from 5.14 to 5.25 in the last month which is remarkably stable considering the changes in the economy and the mortgage industry. Rates are still higher than what we saw six months ago but the change is not huge. To illustrate this let's look at changes in actual mortgage payments. Using our free mortgage calculator we took today's rates and translated them into a payment for a 200k loan. We did the same thing with rates from July 23 (two weeks ago) and rates from January 15th, 2009 (6 months ago).

Aug 06
30-yr $1100.69
15-yr $1543.3
5-yr ARM $1040.88
1-yr ARM $1046.91

Jul 23
30-yr $1098.22
15-yr $1548.44
5-yr ARM $1042.08
1-yr ARM $1045.7

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

From two weeks ago we are see a change of $2.47. This is pretty insignificant. When mortgage rates first started dropping we saw a difference of $35 from one week to the next running this same calculation. Compared to 6 months ago we see a rise of $31.94 or 2.98 percent. Considering the time frame this is still a relatively small change.

First off what is my advice for people looking for a home and a mortgage? I would still avoid arms. Nothing has changed basically arm's offer a small benefit right now but with most experts predicting higher rates in the future it makes sense to look in for a longer period of time with a 30 year fixed mortgage. What is our prediction moving forward? Long term I would expect rates to move up perhaps to 10 percent or more. In the short term I have been saying that it's hard to know. Know with the economy improving I would expect to see higher rates than what we are currently experiencing a month from now. That is assuming the economy doesn't start sliding backwards.


Ki lives and works in central Texas. His website covers the Austin Texas real estate market. It also has information on historical mortgage rates along with a mortgage rates widget
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Aug. 8, 2009 - The Small Community of Hutto, Texas

Hutto, Texas is a small community located seven miles east of Round Rock and northeast of Austin, Texas. The current population of Hutto is estimated at around 17k residents, and Hutto has been a very fast-growing city since the construction of State Highway 130, also called the Trans-Texas Corridor.

In the census of 2000, the population of Hutto was just over thousand people, but the recently built toll road has dramatically increased the population and the city is expected to continue expanding in the next few decades, as the highway nears completion.

Hutto was founded in the year 1876 when the International Great Northern Railroad passed through land owned by James Emory Hutto, for whom the city is named. Shortly thereafter, James Hutto sold fifty acres of local land to the New York Land Company for a town site. At the time, Hutto was a wealthy Williamson County landowner and cattleman, but a few years later, he relocated to Waco and entered the hardware business. At roughly the same time, numerous Swedish and German immigrants traveled to the area to begin new lives in the ranching and farming industries, which were becoming very successful in the Hutto area.

In 1915, a circus train stopped in at the Hutto train station and a hippopotamus escaped to nearby Cottonwood Creek, where it caused a commotion as local residents and railroad as well as circus employees tried to recapture the Hippo. The story caused a local legend to emerge, and eventually the Hippo became the mascot for the Hutto High School and its sports teams, as well as various other local businesses.

There are many activities in Hutto for the sports enthusiast as well as the gourmet diner, and some of the popular restaurants in Hutto include Mario's Mexican Restaurant and El Poblanito's, another Tex-Mex eatery. If the diner prefers a national chain, Chili's is sure to please, and there is a popular barbecue joint called Fat Thompson's as well.As for sports, the aptly named Hippo Stadium is home for the local Bulldogs, and there are many other sports-related facilities as well. The Hutto real estate market is also extremely affordable. It offers a much cheaper alternative than the nearby Pflugerville and Austin real estate markets.

Hutto also has a family-owned general store called Common Spirits which offers a variety of spirits and tobacco products, as well as basic amenities and grocery items at a reasonable price. The store is located on Front Street, and is a local favorite. As the city grows, there are more and more national brand stores and restaurants, but there is still plenty of local charm and family owned venues as well.

The new state toll road is expected to eventually spur the population growth to over 30k residents by 2010. The new toll road is the biggest transportation project currently underway in the entire United States, and the toll road connects the area to metropolitan Austin, and to other major thoroughfares leading to San Antonio and Houston, as well as nearby communities such as Pflugerville and Bastrop, as well as Bryan and college Station to the north.

One of the largest employers in the Hutto area is the T. Don Hutto Correctional Facility in nearby Taylor, Texas, which is just a few miles east of Hutto itself, and a family detention center that houses immigrants and their families. Hutto is also very well represented in the technology industry, with Agisca Technologies as well as Cypress Semiconductor, both of which are situated in or around Hutto.

Hutto is a very centrally located community, with access to many metropolitan areas, but a small town atmosphere and scenic rolling hillsides with parks, rivers and access to many local lakes and rivers.

Ki stayed in Austin after graduating from the University of Texas. He began working in Austin real estate. To aid buyers, he created a website escapesomewhere.com where they can search the Austin MLS. His site also provides information on neighboring communities like Pflugerville.
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Aug. 3, 2009 - Is It a Good Time to Buy a Home?

Austin area home sales are down from a year ago, but prices are holding steady. There are many factors making now a good time to buy: low interest rates, tax incentives for first time buyers and cooperative sellers. As consumers change their spending habits, houses are once again being seen as a long-term purchase of a home and not a quick investment. While the days of the house-buying frenzy are long gone, plenty of serious home buyers remain.

Like the rest of the country, Austin's real estate market is still lagging behind other areas of growth in the economy. While local economists predict Austin will gradually recover from this recession in 2010, housing isn't expected to rebound as quickly. Jim Gaines, a research economist with the Real Estate Center at Texas A&M University recently told the Austin-American Statesman that he sees the housing market ending this year with numbers comparable to those in 2002 and 2003. He predicts the Austin area median home price will end the year down somewhere between 1 and 5 percent. Currently the median home price is down one percent from a year ago.

Nationally, home sales have grown at a slow but steady rate since the beginning of the year. According to the Associated Press, sales of previously occupied homes rose by 2.4 percent from April to May, marking the third consecutive increase this year. Foreclosures across the country are bringing out the bargain shoppers and account for about a third of home sales nationally. This has also lowered the national median home price 16.8 percent from where it was a year ago.

Austin certainly has seen a rise in the number of foreclosures over the last eighteen months, but they don't seem to be affecting home values. Foreclosed properties have dragged home values down significantly in some parts of the country, exacerbating the housing crisis even more. However, Austin area foreclosures represent a relatively small fraction of the supply of homes on the market.

Just like the rest of the news on the economy these days, the housing market falls into the category of "not as bad as expected" rather than actual gains. The Standard & Poor's/Case-Shiller index measuring home values in 20 major cities is down 18.1 percent, a decline for the third straight month. However, the decline was not a record low and better than analyst expected, according to the Associated Press. In fact, eight of the metro areas in the index posted price gains, including Dallas with the largest increase at 1.7 percent. Overall the index is off nearly 33 percent from the peak in home prices in the spring of 2006.

So, is it a good time to buy a house? All indications are that home prices are fairly stable overall in the Austin area. In fact, analysts like Gaines believe it's much more likely that prices will creep up rather than take a sudden plunge. That may not be good news for the bargain hunters, but it does mean that buying a home right now is a sound investment.


Ki began working with Austin Texas real estate a decade ago. He created a searchable website where buyers can search for Austin homes for sale. In his free time, Ki enjoys the Austin music scene. He also writes on his blog which covers news and statistics on the Austin real estate market
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Aug. 3, 2009 - Most Common Lawsuits Filed Against U.S. Companies

Innumerous lawsuits are filed in U.S. courts every year. Many are settled out of court for astronomical amounts, others do or don't award the plaintiff at the end of the trial and still others are dismissed for lack of evidence. Making the top five of those filed against U.S. companies are as follows:

1. Labor/Unemployment - One of the precipitators to this is the escalation of layoff numbers over the past several years. The national unemployment rate climbed to 8.1% in February of this year, the highest it's been since 1984. This does not include the mass of individuals who have been laid off beyond the ability to receive unemployment. The layoff of high-level executives is not beyond the pale, either, which has sparked many of the lawsuits against companies today. The predominant lawsuits under this category, however, are wage and hour claims, discrimination (including age-related cases) and wrongful termination.

2. Contracts - Breach of contract lawsuits can be filed against companies when they do not fulfill their contractual obligations. Maybe the company did not deliver a product, or did not complete a service or did not fulfill something expressly documented in a signed contract you had with the company. In any situation where obligations of a contract are not fulfilled, a lawsuit may be the only way to resolve the dispute. These are particularly common in the services industry. Ralph the roofer committed to replace your entire roof for a specific amount of money to be paid upon completion. You paid Ralph upon the completion of the job. What you found out during the first rain, however, is that Ralph and his crew did a shoddy job. Ralph is elusive and non-responsive to your calls, so you hire another company to redo the job. You sue Ralph in attempts to collect your money back from him and his company. He breached the contract. He did not fulfill his contractual obligations.

3. Personal injury - There are innumerous frivolous lawsuits that occur in this category. Someone sees an opportunity to make some quick cash. They plan and execute a fake fall in the presence of witnesses, file a lawsuit and sometimes win hundreds of thousands of dollars in compensation. Companies have wised up to these incidents and many of them have monitoring equipment in place to capture the fraudsters on camera. This has been a great deterrent in litigation for these types of cases. There are legitimate incidents, however, where the company is directly at fault. To collect punitive damages, though, the plaintiff has to not only prove gross negligence, but also malicious intent.

4. Product Liability - You've probably heard about all the problems experienced a few months ago with the toys imported from China. Lead based paint was one of the primary concerns. Mattel had to issue a recall on several of the toys. Less than one month later, unfortunately, Mattel had to issue another recall. Liability lawsuits started rolling in. Mattel doled out $12 million to settle with 39 states to pay for damages caused by the tainted toys.

5. Intellectual Property (IP)/Patents - The most common types of IP are trade secrets, industrial design rights, patents, copyrights and trademarks. A disgruntled employee decides to sell trade secrets to a competitor after being laid off or fired. A successful salesperson takes his customer list with him when he leaves the company and uses it to when selling similar services for another company. An IT technician develops a product that uses his former employer's proprietary technology as the product's foundation. These are all examples of violating IP/patent laws that result in IP/patent lawsuits.

Ki developed a website that acts as a resource on Austin real estate. On the site, buyers can search Austin MLS listings. In addition to the Austin real estate market his site also provides a few free mortgage calculators
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Aug. 3, 2009 - Mortgage Rates Start to Trend Upward Again

Although we are not seeing too much movement it looks like mortgage rates are starting to trend upward. It's interesting to note that the stock market had its strongest July in several years. Once the economy has a full recovery there are some predictions that inflation will spike and mortgage rates will hit double digits. We are a ways from that but its interesting none the less to see rates slowly moving up and the economy slowly moves into recovery mode. All four of the major mortgage products moved up this week. The 30 year mortgage went from 5.20 to 5.25; the 15 year fixed went from 4.68 to 4.69. The 5 and 1 year arm went from 4.74 to 4.75 and 4.77 to 4.80 respectively. Below are rates from the last few weeks and from January 15, 2009 (6 months ago).

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

Jul 16, 2009
30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76

Jul 09, 2009
30-yr 5.20 15-yr 4.69 5-yr ARM 4.82 1-yr ARM 4.82

Jul 02, 2009
30-yr 5.32 15-yr 4.77 5-yr ARM 4.88 1-yr ARM 4.94

Jan 15, 2009
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

In addition to looking at rates it's always nice to translate them into actual mortgage payments. We used a mortgage calculator to translate a 200k loan into a mortgage payment based on current rates. We also did the same thing with rates from 2 weeks ago and rates from 6 months ago.

Jul 30
30-yr $1104.4
15-yr $1549.47
5-yr ARM $1043.29
1-yr ARM $1049.33

Jul 16
30-yr $1090.82
15-yr $1543.3
5-yr ARM $1052.96
1-yr ARM $1044.5

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

So while payments are higher (assuming one got a 30 year mortgage) they are not that much higher. Compared to 6 months ago a mortgage payment (on a 200k loan) would be $35.65 more a month or 3.33 percent higher. Enough for a fee extra coffee's a month but nothing substantial. But if rates spike up to 10 percent (as some predict) the payment would be 1755.14 which would be a 58.92 percent increase.

So what is our advice? As has been true for the last year I would avoid the arms like the plague. Although rates are up over the last few months historically speaking rates are still very low. There are very few cases where it makes sense to get an arm and risk refinancing in a few years at potentially a much higher rate. And if rates go down substantially (which is pretty unlikely) one can always refinance at the lower rate.

Also in the same vein if one is considering getting a mortgage in the next month or so I would suggest looking in early if one can do so without extra fees. Although rates could go either way there is a more of a risk of them moving up than down over the next month.


Ki writes frequently about mortgage rates. In addition to providing information about Austin Tx real estate his site provides a mortgage widget and a free mortgage calculator.
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Aug. 3, 2009 - Cash for Clunkers Comes with some Caveats

Imagine being able to save the environment and the car industry all in one fell swoop. Imagine being able to give that effort a catchy name and get it quickly through Congress, too. "Cash for Clunkers" is the latest inception from the Obama administration to help the struggling economy, the ailing auto industry and the future of the environment. That is an impressive Band-Aid.

But as CNNMoney points out, some caveats should come with that offer of help. This initiative is the Consumer Assistance to Recycle and Save Act, part of the Supplemental Appropriations Act of 2009 passed in Congress earlier in June. The bill allows individuals and businesses to trade in older cars and trucks for new more fuel efficient models.

"New" is the operative word here. The government is offering refund vouchers of $3,500 or $4,500 in place of the ordinary trade-in value of a vehicle to go toward the purchase of a new, not used, vehicle. As CNNMoney pointed out, if you drive a clunker worth less than $4,500, maybe you shouldn't be enticed to buy a new car that is sure to include a monthly car payment.

Here's how it works: The plan runs from August to November 2009 and offers passenger car owners a $3,500 voucher if they trade in a car getting 18 miles per gallon or less for a car getting at least 22 miles per gallon. There is the same voucher amount for owners of pickups, minivans and SUVs who trade in vehicles getting 18 mpg or less for a vehicle getting at least 2 mpg more than their old vehicle. Not an impressive win for the environment.

The government ups the ante to a $4,500 voucher, however, if car owners purchase a new car that gets 10 mpg better than the trade-in. Owners of pickups, minivans and SUVs can get the $4,500 voucher if they purchase a new vehicle that gets at least 5 mpg better than the traded-in vehicle. To check the miles per gallon for any vehicle go to www.fueleconomy.gov.

Some of the fine print includes the fact that participating auto dealers must ensure that the traded in vehicles are rendered inoperable by crushing or demolishing them to keep them off the road. Trade-ins must be drivable vehicles of a model year 1984 or later, insured and registered to the same owner for the previous year.

Who it helps: This program is a benefit if someone is considering purchasing a new car anyway. It's important to know the trade-in value of a vehicle before heading out the door to car shop. There are several websites that offer this type of information, such as Edmonds or Kelley Blue Book. If a car is worth more than the $3,500 to $4,500 voucher, then the cash for clunkers is not a good financial move. Also, the voucher shouldn't be confused with other incentives auto dealers may be offering. As CNNMoney puts it: "Be sure to negotiate the purchase price just as you always would."


Ki developed a clearinghouse website of Austin MLS listings. On the site, Austin real estate buyers are able to do customizable searches it also has information and statistics on neighborhoods like West Lake Hills.
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