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September 2009

Sep. 29, 2009 - Mortgage Rates Remain at Summer Lows

Mortgage rates remained steady this week. The 30 year again was at 5.04 which is a low for the summer. The other mortgage products remained relatively stable this week except for the 1 year arm which fell from 4.58 to 4.52. Below are rates for the last few weeks. As we can see overall for the last month rates have been steadily falling. But overall the movement has been very small with 30 year rates only dropping 1/10 of a point in the last month.

Sep 24, 2009
30-yr 5.04 15-yr 4.46 5-yr ARM 4.51 1-yr ARM 4.52

Sep 17, 2009
30-yr 5.04 15-yr 4.47 5-yr ARM 4.51 1-yr ARM 4.58

Sep 10, 2009
30-yr 5.07 15-yr 4.50 5-yr ARM 4.51 1-yr ARM 4.64

Sep 03, 2009
30-yr 5.08 15-yr 4.54 5-yr ARM 4.59 1-yr ARM 4.62

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

Feb 19, 2009
30-yr 5.04 15-yr 4.68 5-yr ARM 5.04 1-yr ARM 4.80

In addition to rates we like to look at mortgage payments to provide some perspective. We determined mortgage payments for a 200k loan based on today's rates and rates from September 10th and February 19th.

Sep 24
30-yr $1078.53
15-yr $1525.9
5-yr ARM $1014.55
1-yr ARM $1015.74

Sep 10
30-yr $1082.21
15-yr $1529.98
5-yr ARM $1014.55
1-yr ARM $1030.07

Feb 19
30-yr $1078.53
15-yr $1548.44
5-yr ARM $1078.53
1-yr ARM $1049.33

This kind of shows the same thing in that there has not been a lot of movement in mortgage rates. A payment two weeks ago would be $3.68 more a month (or 0.3% percent more).

Its also interesting that rates are exactly where they were six months ago. Of course six months ago mortgage rates were more newsworthy because at the time 5.04 (for a 30 year mortgage) was an all time low. So although 5.04 is no longer an all time low (rates dropped below 5 in April) and we are not seeing as many stories in the news mortgage rates are still very, very low by historical standards.

The two questions of course are why mortgage rates are not moving, and how long they will stay this low. The expectation is that eventually mortgage rates are going to move up. Some have suggested that mortgage rates could move above 10 percent in a year or two. The idea is that once the economy recovers mortgage rates (along with inflation) will start marching upwards due to the massive government spending during the recession. It seems that although the economy is recovering its doing so rather slowly and this is helping keep mortgage rates down for now. The other question is how long mortgage rates will stay down. My expectation is rates will probably not see that much movement until we see movement in the economy. Once the economy starts moving we should see rates start to move upward.


Ki bikes Shoal Creek when he is not working. He has focused on Austin real estate since graduating. People interested in the Austin market can perform a graphical Austin home search on his site. His site also has a graph of historical historical mortgage rates along with a mortgage rates widget.
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Sep. 29, 2009 - Preventative Medicine Can Save Lives and Money

While Congress debates healthcare reform, there is no debating the results of recent studies on Americans' health. In the last few weeks studies have shown that Americans are not living as long as they should be, our health continues to be undermined by our bad habits and new cases of Alzheimer's are being reported in record numbers.

The U.S. Centers for Disease Control and Prevention reported last month that the average life expectancy in the U.S. is 78 years, an increase of 1.4 years over the last ten years. However, this is actually one of the lowest numbers among developed nations; even people in Cuba live longer on average. Yet, Americans have the highest healthcare spending per capita in the world (LiveScience).

There are also indications that this number may be the peak for American life expectancy if trends in childhood obesity continue. Not to mention Americans' bad habits with eating, smoking and exercise that persist despite all the information out there about the benefits of healthy living. Another recent study from Oxford University showed that middle-aged male smokers who also have high blood pressure and cholesterol died a decade sooner on average than their peers without these factors for heart disease.

According to the American Heart Association, in the U.S. high blood pressure has fallen since 1999 by only 16 percent, high cholesterol by 19 percent, and tobacco use by just over 15 percent. "People exercise no more than 10 years ago, while rates of obesity have climbed sharply, especially among children."

As the healthcare debate in Congress gets increasingly more heated and the debaters seem mired down in semantics and politics, the bigger picture of how to make Americans healthier is getting buried under the mudslinging. President Obama has said that the present healthcare system is focused on "excessive defensive medicine." But even the majority of his proposals have to do with health insurance reform, not necessarily health reform. Again, it might seem like just semantics, but there is a difference.

NBC Nightly News reported recently that cases of Alzheimer's are rising at an alarming rate around the world. Every 70 seconds in the United States, a person is diagnosed with Alzheimer's and the number of cases is expected to increase 77 percent over the next 40 years. Again the studies showing the benefits of a healthy diet and regular exercise to help prevent this disease are largely ignored.

Perhaps if there was more emphasis on preventative medicine rather than the defensive medicine the President was bemoaning, health insurance and healthcare would cost a lot less. The cost of dealing with all the new cases of Alzheimer's will be "staggering," according to Dr. Nancy Snyderman of NBC. If more Americans have access to health insurance then they should receive better healthcare, including listening to doctors when they advise more exercise, healthier foods and less bad habits.


Ki works near downtown Austin. His website has followed the Austin Texas real estate market for several years. He has a searchable database of the Austin MLS along with a blog on Austin real estate with updated statistics and market analysis.
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Sep. 29, 2009 - Madoff's Mansions on the Market

Marshalls are preparing to put Madoff's mansions on the market, and victims of his ponzi scheme are hoping to cash in big time. Based on court records, the FBI is revving up to sell an estimated $30 million in real estate and property, all of which will go to his victims. The three homes on the way to market are a penthouse in Manhattan, a Montauk beach house on Long Island and a waterfront Palm Beach retreat.

Vacation real estate Madoff owned in Côte d'Azur that was seized by the feds back in March has since been sold. The chic three-bedroom Cap d'Antibes home netted $1.48 million noted the Justice Department. Funds from the sale are being held at the U.S. Marshall's office.

Marshalls opened the doors to Madoff's Manhattan luxury penthouse earlier in September giving the public a glimpse into the lifestyle of the previously rich rip-off artist. The two-story apartment was the location of Madoff's confinement during his house arrest.

Four fireplaces, a baby Steinway piano, antique rugs, custom-made furniture and other fine furnishings must have made Madoff quite comfortable while carrying out his Ponzi scheme. U.S. Marshall Roland Ubaldo said that the Manhattan penthouse was the crown jewel of all Madoff's properties seized by the government. It's easy to see why with all the lavish decorations and furnishings.

A wraparound terrace provides a stunning view of southern Manhattan. His and her closets contain Madoff's handmade Belgian shoes and boxes of designer clothing that are all packed away and awaiting auction. His den does not disappoint, either, with cherry paneling and a leather bull - his personal trademark.

According to court filings, the apartment was valued at $7.5 million by the FBI. One New York appraiser has his doubts about the appraisal. Miller Samuel appraiser, Jonathan Miller, said that what he'd seen of it so far would be considered fairly modest, in his opinion. He cited that it was not actually a Park Avenue duplex, which is what the press coverage had been calling it. Its address is on 64th Street and it sits a block east on the corner of Lexington.

The Montauk beach house with 3,000 square feet of living space sits on a one-and-a-half acre prime lot atop a bluff overlooking an ocean beach. It sits closer to the water's edge than would be allowed today due to earlier more lax zoning regulations.

Feds estimate its worth at $7 million, but tax assessments indicate its value at $3.3 million. Regardless, one real estate agent noted that the history and high-profile of the home may cause it to sell for as much as $10 million. Purchased in 1980, the Madoffs originally only paid $250,000 for the home.

Listed under Madoff's wife's name, the Palm Beach hideaway is valued at $7.5 million. Featuring a pool, 8,753 square feet of living space, five-bedrooms and seven-bathrooms, the two-story home sits on a waterfront half-acre plot. Included in the property is a boat dock where Madoff parked his now-seized yacht, the Bull. It is a 55-foot fishing vessel reportedly worth $1.5 million.

Well shaded by lots of large trees and a large second-floor veranda, the house sits just down the shore from a location where Madoff lured in many of his victims, the Palm Beach Country Club.

Madoff is making amends in his not-so-luxurious jail cell and the hope is that the victims he left as carnage will be reimbursed for some of their loss and suffering.

Ki lives in Central Austin. He works in the Austin real estate market. His website lets people search the Austin MLS. His site also has information on Austin real estate as well as a search for Homes in Pflugerville
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Sep. 29, 2009 - Investing in Rental Property

Foreclosure City has created the perfect storm in many major cities in the U.S. - the perfect storm for investors to find great real estate deals, that is.

Large inventories, low interest rates and homeowners hungry to sell all make certain cities ideal for picking an affordable home or two. Before you break a leg rushing out to buy that bargain real estate, however, you'll want to keep in mind the most important factors in a successful real estate deal.

Location, condition, price and financing are all consideration you'll want to keep in mind in order to successfully find and acquire a great real estate deal.

If you're looking to buy rental property that will be paid for monthly, then you may want to set your sights on lower-middle-class areas. Most owners who occupy their homes in these areas keep their homes well maintained.

Although you'll want to avoid obvious signs of a bad neighborhood, like boarded up homes or gang graffiti, accessible transportation and recent signs of construction can translate into good income on rental properties. It is important to note that prospective renters with children will want to live in areas with good public schools. Neighborhoods where homes are similar in size and have similar amenities are also preferred, along with areas where homes are mostly three-bedroom, two-bath or more.

Homes that are less than ten years old are more favorable, since almost all of its systems will be current, and no major renovations should be needed for some time. If considering a home more than 50 years old, make sure all systems have been updated, from wiring to plumbing. If not, you're going to be investing a lot of money on repairs.

The ideal situation would be to purchase a home that does not need repairs; however, there are an abundance of homes on the market today that need significant repairs, but can be bought at bottom basement prices. Many are owned by the lender, and are uninhabitable. Others may not need anything more than a coat of paint or new carpet.

If you decide to make an offer on a home that you think is in need of repair, make sure you make it contingent upon the inspection of the home, along with an acceptable estimate for all necessary repairs.

Price may not be that easy to determine, since the sale of so many distressed properties have negatively impacted the sale price of all homes in the area. Bank-owned properties are in need to be sold, though. Banks are interested in holding property; they are interested in making money off the property based on interest. Many have been willing to take a loss on property just to unload it.

Your target on a bank-owned property would be to offer 50 to 60 percent of the listed price, depending on the condition of the property. The more work that needs to be done, the deeper the discount you ask for. That will give you a starting place for negotiations.

Your final frontier to conquer in your investment is financing. Fannie Mae may be where you'll want to start on your quest for financing. Also, check with your local lender. Mortgage brokers often can find you the very best deals on interest rates and many can be located easily on the web. Just make sure they are reputable. Ask for all fees in writing prior to signing anything.

Ki loves to bike the Austin hill country. He has worked with Austin real estate for almost a decade. His website has a search for Austin homes along with a Austin real estate blog that allows investors to keep tabs on the Austin market.
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Sep. 22, 2009 - The Benefits of Composting

Here are some eye-opening statistics: According to the Environmental Protection Agency, yard trimmings and food waste account for 23 percent of the U.S. waste stream. That means things that break down quite well naturally, like grass clippings and apple cores, are sitting in landfills creating tons of methane gas. Why is that so bad? "Methane is a greenhouse gas that remains in the atmosphere for approximately 9-15 years. Methane is over 20 times more effective in trapping heat in the atmosphere than carbon dioxide (EPA)."

The EPA and many private companies are working on ways to turn methane and other landfill gases into renewable energy. But perhaps the best way to combat these harmful gases is to cut down on what creates them, which is something people can do in their own backyard. Composting is an easy and inexpensive way to help the environment, while improving your own garden.

Composting speeds up the natural process of the decomposition of organic matter by providing the perfect environment for bacteria to break things down. What results is a product that looks like dark, fertile garden soil that is full of nutrients to help plants grow. According the United States Department of Agriculture's Natural Resources Conservation Service, decomposing organisms--the bacteria--need four things to survive: nitrogen, carbon, moisture and oxygen. The key to good compost is to balance materials high in nitrogen, like fresh grass clippings, with materials high in carbon, like dried leaves. Ideally, the moisture is provided by rain, but that is a little hard to count on around here. A dousing from the garden hose may be necessary from time to time. Finally, the oxygen comes from turning and mixing the compost pile on a regular basis; the more often the materials are turned, the faster they break down.

Composting can be simple or elaborate, depending on how much yard waste you have, how quickly you want things to decompose and how much time you are willing to put into it. If there is little yard waste and no big need to use the compost for fertilizer, slow composting may be the way to go. This is simply using a small corner of the yard for piling compost materials, or putting them in a bin, and then letting nature takes its course, which may take as long as a year to produce good compost for fertilizer. If you are willing to put a little more effort in, it's possible to produce usable compost every few weeks.

Step one: Create a compost area, either directly on the ground with a layer of wood chips or in a bin. There are many styles of bins available at home improvement or hardware stores, but it is also easy to construct your own out of wire mesh or even using a large container you may have on hand. Make sure the area/container has good drainage, or you'll just end up with a smelly soup.

Step two: Start the pile with the following EPA recommended materials: grass and yard clippings, leaves, house plants, fruits and vegetables, coffee grinds and filters, egg shells, nut shells, dryer and vacuum lint, clean paper, cardboard rolls, cotton and wool rags, sawdust, shredded newspaper, fireplace ashes and hair and fur.

DO NOT use: Diseased/insect infested plants, chemically treated yard trimmings, pet waste, dairy products, meat and fish bones/scraps, oils or lards, coal or charcoal ashes.

Building the pile can be as high tech as alternating nitrogen-rich material with carbon materials or as low tech as putting things in the pile when they accumulate. Keep a small trash can under the kitchen sink for coffee grinds and appropriate food leftovers. Yard waste can be added directly to the pile.

Step 3: Keep the pile moist but not saturated.

Step 4: After the pile has had some time to accumulate, turn it on a regular basis to aid in the composting process. In a few weeks time you will have a nutrient-rich compost that can be added back into garden beds and even at the base of trees. Composting is a small act that has big rewards for gardens and the environment.


Ki went to school in Austin and never left. He works as an agent in the Austin real estate market. His site has a search of Austin homes for sale. His site also has information on Austin Texas real estate along with the neighborhood of West Lake Hills.
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Sep. 22, 2009 - How to Avoid Mortgage Fraud

News articles throughout the U.S. headline stories about indictments for mortgage fraud. Although you may think you could never be scammed, you should think again.

Above-average, intelligent, middle-class professionals have been duped as well as the average Joe. Almost no one is beyond the long arm of a mortgage scammer's reach. You can, however, become better educated in the antics of fraudsters in order to thwart the most common scams used.

Today, the most common mortgage scams played out in the media are perpetrated against those who are in danger of losing their homes to foreclosure and homeowners who are eager to sell their properties. Other types of mortgage fraud exist, too, though.

A good example of fraudulent practices against homeowners facing foreclosure is in the case of a recent Florida indictment. One financial company with offices statewide was indicted on several counts of defrauding trusting homeowners in default or facing foreclosure. Promising to help homeowners who were in default of their mortgages to keep their homes, the company was taking money from the homeowners without providing any assistance. Homeowners ended up losing their homes to foreclosure. More often, low-income and Hispanics were the victims.

In order to avoid mortgage fraud, you'll want to understand the motivation behind it. There are two basic classifications of mortgage fraud - fraud for property or housing and fraud for profit.

Fraud for property or housing typically occurs when a potential homebuyer desires certain property that they clearly cannot afford. The borrower submits intentionally fraudulent information regarding income, employment, assets or debt in order for the income to appear inflated qualifying the applicant for the loan. This is done with the thought that no one will dig deep enough to discover the facts. Sometimes, the borrower will enlist family members or mortgage professionals to assist in the fraud.

Lenders, however, often detect this kind of fraud through thorough review and validation of documents and by keeping diligent records. Contrary to what many might think, it is against federal law to assert intentional incorrect information on loan applications. Those who do are at risk of being charged with a felony and serving time in prison.

Fraud for profit scams often involve a group of mortgage professionals who defraud a potential homebuyer, a potential lender or a homeowner in danger of foreclosure. One example of this is a mortgage scam played out in the Midwest just recently. A builder, real estate broker, mortgage broker, and appraiser were all involved in a scam to inflate the value of homes in order to skim off the excess of the actual value. The difference of the value of the home versus the loaned amount was distributed among everyone involved in the scam.

After the discovery of the fraud, homeowners find out that they are stuck with paying for property that is valued less than what they actually loaned. Lenders, on the other hand, were forced to foreclose on some of these properties that ended up being worth far less than the amount owed on the property.

Another example may be the case of a dishonest mortgage broker who presents loan documents for a straw buyer - a buyer who does not exist, so fraudulent information is presented on the loan documents to create the illusion of a real buyer who can afford the property. The loan is dispensed and the mortgage broker walks away with the money with no intent to live in the home or pay for the property.

Sometimes straw buyers are represented by real people who participate in the fraud for financial gain. This often occurs, again, when there is no intent to live in the home and often with no intent to pay for the mortgage.

There are more mortgage fraud examples than there is space to write about them. The Federal Trade Commission (FTC) provides thorough information on mortgage scams and how to avoid them. Just go to their site at ftc.gov and search under look for the tabs under Consumer Protection. You'll find all you'd ever want to know about how mortgage fraud occurs and how to avoid it.

If you are facing financial difficulties that are making it difficult to pay your mortgage payments, you may want to enlist the assistance of an experienced financial advisor. If you do, however, make sure the company you hire is reputable. Check with your lender to see what programs they may offer or if they can refer you to a reputable financial advisor. You may also want to visit Fannie Mae or Freddie Mac sites for new federal programs available.

In addition, free advice is available through the U.S. Department of Housing and Urban Development (HUD) certified agents. Speak to a HUD certified housing counseling user by calling (888) 995-HOPE.

Ki works and lives in Austin. He has been involved with Austin real estate for a decade. His site escapesomewhere.com developed a Austin MLS search with houses and commercial properties. His site also has a Austin real estate blog with news and statistics.
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Sep. 22, 2009 - Mortgage Rates Continue to Drop

Mortgage rates have now dropped for 3 weeks in a row. We are not seeing a lot of movement. 30 year rates have only dropped from 5.14 to 5.04 in the last 3 weeks. What is interesting is that rates are dropping at all. Most of the news have focused on how inflation is pending for the US because of unprecidented government spending. But while the news has focused on pending inflation (and corresponding higher mortgage rates) mortgage rates have continued to drop. Mortgage rates are lower than at any point before 2009 (they were lower in April 2009). Below are rates for the last few weeks along with rates from February 12 (6 months ago)

Sep 17, 2009
30-yr 5.04 15-yr 4.47 5-yr ARM 4.51 1-yr ARM 4.58

Sep 10, 2009
30-yr 5.07 15-yr 4.50 5-yr ARM 4.51 1-yr ARM 4.64

Sep 03, 2009
30-yr 5.08 15-yr 4.54 5-yr ARM 4.59 1-yr ARM 4.62

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

Feb 12, 2009
30-yr 5.16 15-yr 4.81 5-yr ARM 5.23 1-yr ARM 4.94

As we can see in addition to the 30 year the other 3 major mortgage products all fell slightly as well. What interesting is how remarkably stable rates have been for the last 4 weeks. Comparing August 20, 2009 to today the most movement we have seen in any of the four mortgage products is the 1 year arm which has only fallen .11 points.

In addition to rates we like to look at mortgage payments. we calculated out the mortgage payment for a 200k house based on today' rates. We also did the same thing with rates from September 3 (2 weeks ago) and February 12 (6 months ago).

Sep 17
30-yr $1078.53
15-yr $1526.92
5-yr ARM $1014.55
1-yr ARM $1022.89

Sep 03
30-yr $1083.44
15-yr $1534.07
5-yr ARM $1024.09
1-yr ARM $1027.68

Feb 12
30-yr $1093.28
15-yr $1561.86
5-yr ARM $1101.93
1-yr ARM $1066.32

All in all we are not seeing much movement. For the 30 year rate compared to 6 months ago a payment for a 200k mortgage would only be 1.34 percent less (or $14.75 dollars).

So what should we expect to see moving forward. The majority opinion seems to be that we are headed for high inflation. And with high inflation we should also seem substantially higher mortgage rates. Although this is the majority opinion its not the only one. If the economic recovery fails to take hold we could see lower mortgage rates for awhile. Additionally, if the FED times things just right we could avoid inflation and high mortgage rates. I think this is unlikely though because the FED moving prematurely to hold off inflation could hurt the economic recovery.

What is our advice to people looking for a mortgage. My advice is to only consider a 30 year mortgage. With rates expected to increase there is no reason to get a 1 or 5 year arm. I often hear that someone is "sure" they will move in 3 years but plans often change, espically if the real estate market is slow and its difficult to sell the house.



Ki follows mortgage rates news and trends. He works as a Austin realtor. His site has a few mortgage widgets along with information on historical interest rates.
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Sep. 22, 2009 - Foreclosures of Rich and Famous People

Although the rich and famous are rich and famous, it doesn't mean that they are impervious to the popping of the real estate bubble. Many have succumbed to real estate woes as of late.

Ed McMahon had tabloids a talking when his real estate troubles became front page news last year. The now deceased celebrity attributed his dollar difficulties to alimony paid out to ex-wives and the economic downturn.

Aretha Franklin set the record straight about her exclusive Detroit suburban home. It went into foreclosure due to non-payment of property tax. She could have lost her $400,000 home to foreclosure due to $445 in back property taxes that accumulated into $20,000, since 2005. She said it was an oversight by her attorney. Once alerted of the situation, the Queen of Soul satisfied the debt.

Amber Frey, infamous ex-mistress of convicted murderer Scott Peterson lost her home northern California home to foreclosure. At auction, the asking price was over $200,000 less than the original purchase price. No one snatched up the deal at a low $305,000. She ended up surrendering the property to the bank.

Fantasia of American Idol fame came close to losing her home in Charlotte, North Carolina. The R&B singer settled with her Florida lender just days before the auction was scheduled to sell her pond-front home.

Extreme Makeover scandal hit the Harper family home in Atlanta, George when it went into foreclosure and would have been sold had it not been for ... even more ... generous donations. The most expansive Extreme Makeover ever seen was completed with much dedication, sweat and effort by volunteers, along with a deluge of donated dollars. Taking out a $400,000+ loan for a construction business that went belly up put the Harper's home in harm's way.

Laura Richardson, California Congresswoman, fell behind on property tax and mortgage payments in 2008. To the disdain of Sharon Helmar who sold it to her, the Long Beach home went into foreclosure and was sold. Neighbors noted that she did not keep up the lawn or take out her garbage.

Sports figures are not unfamiliar with foreclosure, either. Latrell "Spree" Sprewell, former NBA guard known for choking his then Coach P. J. Carlesimo, lost his 70-foot yacht and his Milwaukee home to foreclosure. Assessed at a mere $668,000, the home's value was nowhere near what most other sports professionals in his pay range own.

Jose Conseco experienced women woes, which caused him to lose his expansive 7,300 square foot Encino, California mansion. At least, that's his story. He said he lost $7 to $8 million on his two divorces that left him hard up for cash and was unable to pay his mortgage.

Not to anyone's surprise, Michael Vick's home was in foreclosure, since he was in prison and no longer could come up with the cash. Once NFL's highest paid player, the dog-fight diva was convicted and was to serve 23 months in prison. He was released earlier this year to serve out the rest of his sentence in home confinement.

Evander Holyfield, famous for his fight with Mike "I'll Bite Your Ear Off" Tyson, had his Fairburn, Georgia home in foreclosure. He was also behind on child support payments to a mother of one of his eleven children, and being sued for not paying $550,000 he loaned he owed to a consulting company.

Michael Jackson (King of Pop), MC Hammer (Hammertime fame), Veronica Hearst (Randolph Hearst widow), Scott Storch (previous hip-hop producer), Damon Dash (hip-hop mogul), Doug E. Fresh (rap icon), Vin Baker (former NBA star), Wyclef Jean (Fugees' frontman) and other famous actors, performers and sports professionals have all experienced foreclosure.

Ki graduated from UT with a CS degree. Now he works with Austin real estate. He has a website allowing buyers to search Austin MLS listings. He also keeps an updated blog on Austin Texas real estate.
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Sep. 14, 2009 - Mortgage Rates Stay Down

There were some expectations that mortgage rates would fall this week. Instead rates not only did not rise but fell slightly this week. The 30 year rate fell from 5.08 to 5.07 hitting a new low for the summer. The 15 year rate fell from 4.54 to 4.50. The 5 year arm fell from 4.59 to 4.51 while the 1 year arm rose slightly from 4.62 to 4.64.

The continuing fall of the 30 year rate is good news for the national real estate market which is in the midst of a lukewarm recovery. The 5 year arm is seeing more activity now that it is significantly lower than the 30 year arm. Personally I still would heavily favor the 30 year arm with the possibility of seeing double digit interest rates in 5 years because of heavy government spending. The 1 year arm since moving above the 5 year arm has moved into no mans land with there being virtually no reason to get a 1 year arm at this point in time. Below are rates for the last few weeks.

Sep 10, 2009
30-yr 5.07 15-yr 4.50 5-yr ARM 4.51 1-yr ARM 4.64

Sep 03, 2009
30-yr 5.08 15-yr 4.54 5-yr ARM 4.59 1-yr ARM 4.62

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

Feb 05, 2009
30-yr 5.25 15-yr 4.92 5-yr ARM 5.26 1-yr ARM 4.92

In addition to rates we like to look at actual mortgage payments to gain some more perspective on mortgage rate changes. Based on current mortgage rates we determined the mortgage payment for a 200k loan. We did the same thing with rates from 2 weeks ago and rates from 6 months ago.

Sep 10
30-yr $1082.21
15-yr $1529.98
5-yr ARM $1014.55
1-yr ARM $1030.07

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

Jan 29
30-yr $1085.89
15-yr $1560.82
5-yr ARM $1106.88
1-yr ARM $1061.45

Compared to 6 months ago the mortgage payment on a 200k loan is pretty much identical. The payment is $3.68 less a month or a third of one percent.

The real question of course is where mortgage rates are going. There are a few schools of thought. The first is that mortgage rates are going to skyrocket along with inflation caused by the massive government spending over the last few years. There is another school of that that mortgage rates should rise but only slightly and that massive inflation will be curbed by the Federal Reserve.

Either way no one is advocating that mortgage rates are going to fall much further. Therefore my advice would be to look at 30 year rates and to avoid 5 and 1 year arms like the plague. If the first school of thought is correct and mortgage rates rise they will probably not move dramatically until the economy recovers.

Ki lives in Austin Texas. He site has a graph showing historical mortgage rates. His site also has news and resources on real estate in Austin as well as a search of the Austin MLS.
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Sep. 14, 2009 - The Pleasures of the South First Street Area in Austin Texas

The South First Street area has become a vibrant community lately, especially for pedestrians and bicyclists, since it is so densely packed with new establishments and businesses. The area is very unique and quirky; many of the businesses cater to the music industry and other artistic types.

There are a number of interesting clubs and restaurants as well, most of which offer live music on a regular basis. Two such venues are Jovita's and Freddie's Place, both delightful locations with shady trees with well known as well as new musical acts which usually perform early in the evening, to the satisfaction of families with children and the slightly older crowd that prefers to be back home at a reasonable hour.

Jovita's has had a number of very well known local acts play the spot recently, including the Marshall Ford Swing Band and the Cornell Hurd Band. The crowd is usually dancing to the catchy tunes, and it's worth the visit just to watch the boot-scooting and vintage clothing worn by many of the dancers, most of which are early to middle aged.

Freddie's has an outdoor stage under the trees, and patrons can have a full meal, while accompanied by their dogs (which are allowed on the patio area), or just sit up front with a frosty drink and listen to the musical acts, many of which are newcomers but very enjoyable and professional. Both of these fine eateries are on the east side of 1st just north of Live Oak and Mary Street. Bouldin Creek meanders through the neighborhood too, presenting a lovely and peaceful sight.

Traveling south, one gets to La Reyna and La Mexicana, a well-known tex-mex joint and Mexican food bakery, respectively, and both have great food and other products as well, including jewelry at La Mexicana as well as convenience store fare. Across the street, very interesting vintage clothing can be found at Flashback, which is currently having a clearance sale and all of the items are very reasonably priced. Amelia's and New Bohemia are also vintage and retro shops, a few blocks south on the east side of 1st. Adjacent to Amelia's, End of an Ear can be found, with various types of music on CD, record, tape, etc., and occasionally live music as well.

Just north of End of an Ear and its small strip center, Sugar Mama's offers cupcakes and other bakery items and sweets for the hungry strollers, and their confections are out of this world.Another vintage clothing and curios shop called Secret Oktober is a few doors down from Sugar Mama's too. There are also numerous coffee shops, including Bouldin, Once Over, and Somnio's, and all three have a laid back atmosphere and outdoor tables under the trees.

Farther north on 1st, but within walking distance, is an Austin legend, El Mercado, which offers a varied Mexican Food menu and has been in different locations over the years, with this site being in operation for almost ten years itself. Another great Mexican food spot, Polvo's, is a few blocks down, just south of the intersection of 1st and Mary on the west side of street, and their food is outstanding as are their drinks, especially the margaritas.

One of the most interesting locations is the South First Trailer Park Eatery, which is a large lot on which various food vendors operate out of airstream trailers and stands, with the emphasis on hand held food such as wraps, burritos, and deserts, also popcorn. This site also offers free movies on a regular basis, most of which are family oriented, and can be watched under the stars with one's own refreshments, which are allowed due to the BYOB policy. This week, the Back to the Future series has been shown, to the sure approval of the neighborhood kids and kids at heart.

There are many old yet restored homes in the area, and they are reasonably priced, many being fixer-uppers. Those near the creek are especially appealing, and many are already in perfect shape, ready to move in. But the real estate prices in the area reflect the appeal of the area and far outpace the average prices in the Austin real estate market. For new residents who prefer not to cook, the Soup Peddler offers delivery of different homemade, gourmet soups on a daily basis, and deliver on bicycle to neighborhood patrons, and has received rave reviews from diners.



Ki works in Central Austin. He maintains a website focused on Austin real estate. The site allows future owners to search for Austin homes for sale. He also writes entries on his blog covering Austin tx real estate.
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