Good news/bad news

So for the good news: mortgage rates are lower than they have EVER been in recorded history. Can you believe that? Rates are 'around' 4% and some say they may fall UNDER 4% if this QEII is successful. What's the bad news? Atlanta home prices (per the National Association of Realtors) have fallen 12.3% for the 3rd quarter, relative to prices a year ago. Not only that, the median sales price for ATL is $113,500 which is 34% lower than the peak prices of 2007. The odd thing about that is that I've heard so many say that ATL really didn't have much of a 'bubble' in real estate (truth be told, we had a bubble in real estate construction--which is why oversupply still exists)! Regardless of all that, keep positive and let's get people in houses! Time to move out of that basement and get into your new home! I hope sales remain strong for the next few months! Have a great weekend, Bo

Why HVCC killed the mortgage business

As a closing attorney, I am on the 'front lines' as it relates to real estate. People ask me about the current trends or "what's really going on" as it relates to real estate. When I talk about our current conditions and why we remain 'stuck' in this real estate recession, my typical response has nothing to do with Wall Street or sub-prime loans--it's all about a little-known regulation called "HVCC" (I bet the mortgage people out there just had a collective shiver up their spine).

The concept behind HVCC (Home Valuation Code of Conduct) was noble enough--a loan officer should not be able to 'push' an appraiser into giving a higher value for a property. HVCC insulated the appraiser from loan officers entirely by using Appraisal Management Companies (AMC's) who now handle the entire appraisal process (LO's submit the property; the AMC will line up the appraisal and provide the finished product to the LO/Lender). Again, sounds reasonable, right? Well, the law of unintended consequences kicked in and the AMCs have either used low-cost providers that aren't very experienced or they've used appraisers that aren't up to speed on the area. Think of your own part of town--could you guess values on properties 20 miles away? I know appraisers aren't guessing (and this is not to throw rocks at qualified appraisers) but some of the people the AMCs use seem to be 'going through the motions' and (as they aren't getting paid market rates for their work) they aren't producing the best quality work. Low-cost providers aren't typically the best products (e.g. you get what you pay for).

My typical analogy for this is take someone who lives in the burbs and typically appraises mega-mansions worth $1M or more out in North Fulton--what happens when they have to do an in-town 'bungalow' that essentially would (should?) be valued at the same pricing? Typically, it doesn't compute and they have issues setting the true value for that in-town property. I hear that LOs can now 'appeal' values with the AMCs and changes are coming (perhaps the 'death' of HVCC?). Sure, HVCC isn't the only culprit, but it's one 'behind the scenes' issue that continues to haunt us. Likewise, there are even more dark clouds on the horizon as new legislation may create more levels of government interference in the industry, again with good intentions (such as lowering costs for borrowers).

Take FHA for an example. With FHA loans, there is an up-front mortgage insurance cost (that is rolled into the loan) and a monthly MI premium. So here's some info about the newly revised FHA program--the up-front MI is now lower (only 1% of the loan amount vs. prior amount of 2.25%). Great, it will cost your borrower less to get that loan, so hooray, right? Wrong! While the up-front charge is now lower, the monthly premium is now higher (from .55% to .90%)! I read an example in the AJC noting a $200K purchase price and a loan of $193K. Old monthly MI was reportedly $88 a month and the new MI will be $148/month! OUCH. The up-front MI is a one-time thing--but that extra $60 is due every month. So again, what sounds good ("lower costs") may not turn out to be a good deal for consumers!

The bottom line is this--many of the relaxed lending standards began years ago with the stated goal of getting more people in houses. Unfortunately, standards were 'too' loose and some people got in over their heads. We are now mopping up from that mess and now we face even more issues with tight credit, no credit and even the foreclosure moratorium is going to affect our industry. Regardless of all that, we shall persevere! Get out there and get some business! If you're over 5% and need to refi, get moving while rates are crazy low! Remember us when you need a closing attorney, no matter where you or your clients are located! Have a great week, Bo

Steroids for the Economy?

This is great commentary--time to get off the drugs! The best comment is in the summary/end of the article: "Waiting for the recovery and removing the things that are holding it back (wasteful spending and regulation) is the healthiest way to create sustainable growth." AMEN While we're at it, what about all the foreclosures being "on hold"? That will only delay the inevitable (e.g. we need to work through the foreclosures that are out there so we can finally hit bottom with home prices). THEN we can see a true recovery. Whenever you tinker with market forces, 'bad things' can happen-in this case, it's just dragging out our issues. Final thought--we are 'on hold' until November. Win or lose, people are waiting to see how the chips fall. Once that happens, people will begin making their move (e.g. if Congress goes GOP, then businesses may see positive things on the horizon--if Democrats remain in power, they will either a) continue to sit on their hands or b) figure out a 'plan B'). Time will tell, eh?

In a word... Capitalism

THIS ARTICLE is simply amazing! Typically, economic commentary isn't very political but this one is pretty direct in saying what they think.

Be honest-how can you disagree with this? If you work and earn, you get it. If you sit on your butt and wait for someone else to bail you out, you will disagree with this. Amazing article...

Why am I so 'amazed'? It's right off the pages of Atlas Shrugged (the novel by Ayn Rand from the late 1930's). What's next for us? Is that our future? God help us...

Tell us how you really feel, Bernie Marcus!

The title of this interview says it all: Democrats are anti-business. Political pundit? Rant by some conservative talking head? Nope; Bernie Marcus! This article gave me a link to his interview--he doesn't hold back! Here's a link to the interview as well. It's a long one though... Cheers!

Newt Gingrich's message for Labor Day

Read this article! There was not a lot of press about Congressman Boehner's call to fire President Obama's Economic team, but this article makes it clear that it's time for some real CHANGE in D.C.!

(Full text of Boehner's speech here)

Big Ben says "Loosen the Guidelines"--Hear hear!

As an Atlanta closing attorney, we are on the front lines of the real estate and mortgage business and see 'what's really going on'. In lieu of continuing to generically (is that a word?) blame this all on "Wall Street" (which did contribute to this mess a few years back) let's take a look at one of the major reasons why we are STILL not seeing a solid real estate recovery--tight guidelines! (and appraisals--try googling HVCC if you want more info about well-intended legislation with unintended consequences) We see it all the time-people with good jobs, credit and income who cannot get a loan. With mortgage rates hitting an all-time low of 4.44% it's an awesome time to buy or refinance! Click on THIS LINK for a video from THINK BIG work small. Cheers, Bo

By the numbers: JOBS and Housing

What's important for our nation's economic recovery? Two things dominate--unemployment and the housing market (yes, government spending is a huge issue but many expenditures relate heavily to the two issues above). The tax credit originally did its job as people rushed to purchase homes last fall. There was a pretty solid push this Spring (prior to the April 30 cut-off date) but it was not as 'robust' as the fall of 2009. In fact, new home sales in May 2010 dropped to the lowest pace in the 47 years records have been kept! Right now, housing starts are down but home completions are actually up as it appears builders are focused more on finishing homes already started versus breaking ground, which is in-line with the tax credit and the June 30 close date deadline (which has been extended to September). If housing starts remain this slow, new home inventories will continue to decline which will in turn help clear the way for more recovery.
As a side note, the NAHB (National Association of Home Builders) says each new home built in the US creates the equivalent of 3 new jobs for a year and generates around $90,000 in taxes paid (local and federal) and impacts many industries (such as raw materials, goods like appliances and faucets, etc.). When I say that the housing recovery is key to our nation's recovery, you can see what I mean now! In ATL, we were overbuilt prior to the crash; that's why we were really hurt by the downturn. Even now there are over 89K homes for sale in ATL, which is a 14 month supply. 150K vacant lots = enough to supply builders for the next 4 years per a report by Wells Fargo Securities. More foreclosures = even more inventory!
Bright notes? Our unemployment rate has declined 3 months in a row (still around 10%) and our fundamental growth models remain intact. Factor in all the Fortune 500 companies here, the world's busiest airport, and our strong ports in Savannah, we are still a very attractive area for job creation. With that being said, we may not be back to 'normal' for another few years. The Fed agrees; they noted that the recovery is weakening in many parts of the country.
Final thoughts? Stocks are up this week due to upbeat earnings reports from many different companies/industries and there was a small drop in unemployment claims last week. Likewise, uncertainty in Europe is calming due to bank ratings remaining acceptable across the board after regulators crunched numbers on 91 banks (only 7 failed their tests per an AP report) and determined that most would survive further economic slowdown. The Euro rose and most European markets rose slightly on these reports as well. See? It's not all bad! Keep plugging away, and have I mentioned that rates are at their lowest levels EVER? Buy or refi NOW ; )

While I'm at it...

Metro ATL's unemployment rose to 9.9% in May (from 9.8%) per the GA Department of Labor. As for Georgia, the state's unemployment rate declined from 10.3% in April to 10.2% in May. For one final happy thought, May was the 32nd consecutive month GA exceeded the national unemployment rate (all per Atlanta Business Chronicle article 6/24/10).

When you're happy and you know it clap your hands....




(sound of crickets chirping)

Today's little ray of sunshine...

Actually, this could be titled "The Economy turns to the darkside", or so it seems right now! Today's consumer confidence numbers dropped almost 10 points--the first drop since our last 10 point drop (February 2010-the index had risen monthly since that month's report). There are two components to the Consumer Confidence Index-one that measures how consumers feel about the economy (now) and the other assesses their outlook over the next six months. As noted previously, it's all about JOBS. Not the health care debate (debacle?). Stocks even dipped below 10,000 today (around 2pm the Dow is still around 9900 (will the Dow even close above that this week?). To put numbers into perspective, this index hit an all-time low of 25.3 in February 2009. Above 90 = solid economy, over 100 = strong growth. Todays' number? 52.9 (down from May's 62.7, with the expectation today's numbers would be 62.8).

What else is a mess? Housing. Sales of new homes fell 33% in May, to the lowest level ON RECORD after the government tax credits expired (and to be honest, April's closings/contracts were not as amazing as we had hoped). What other fun statistics do I have for you? Auto sales are expected to slow for June (have you seen more 0% finance deals advertised? Yep, I thought so too). Companies tracking auto sales expect a 9-12% drop for June sales, so you can expect to have more TV ads screaming at you between your reality programs (is there anything else on TV?). A quote from George Pipas (Ford's top sales analyst) notes that "The two big issues with consumers right now are employment growth and income growth, and they're not seeing much of either." Well stated...

So again, consumer confidence is in the toilet, sales of new and previously owned homes fell last month, auto sales are down, stocks are down (but hey, Bond sales are up!) and it is expected that the unemployment rate will creep up to 9.8% from 9.7% when numbers are reported this Friday. The only positive things to report relate to home prices rising in April (again, most likely due to the tax credit push) and consumer spending (remember, that's 70% of our Economy) rose 0.2% last month with personal income rising 0.4% (so more saving, less spending).

Finally--what other 'big picture' items could dump us into a DD? (no, not Pamela Anderson, that would be a "Double Dip" as in recession) Unfortunately, there are several disturbances in 'the Force' that are still unsettled. Globally, Asian markets fell after indexes related to China's economic activity fell and European indexes fell sharply after Greek workers walked off the job to protest budget cuts (how's that Socialist thing working out for you?). So roll that into our own government budget cuts, end of fiscal stimulus programs, problems in Europe and a slowdown in China--could that force a double dip recession? Time will tell. But for the United States, 2 comments attributed to a broker in NY (Doreen Mogavero) ring true: "People are starting to see that this recovery, as it is, is going to take considerably longer than anybody had anticipated." Relating to jobs and the job report, "That is the core of the recovery here. People have to feel they're going to work. If they don't they're not going to spend money." Again, well stated. So how confident are you? I'm not feeling it today... Ask me tomorrow or something...

Clark Howard says it's time to refinance!

No surprise, as rates are so low! Contact me for any tips/ideas about lenders, etc. Read Clark Howard's article HERE!

Recovery?

So where are we now? Yes, the tax credit has expired and we're close to the end of the original closing date of June 30, though there are rumblings that the 'close by' date may be extended into September. That can help the mortgage guys 'catch up' and get the loans closed, but it doesn't do much to really 'create' business. One reminder-if you have a qualified military client, the tax credit still applies (thru April 2011).

We still have a mixed bag as it relates to real estate. Georgia is number 6 in terms of homes having 'negative equity' (commonly called 'underwater', where the loans on the home are higher than the current value of the home). The US rate was reportedly 23.7% in May (11.3M out of 47.7M mortgages) vs. GA's 28.7% (457,652 of 1.6M). The top 5 states were Nevada, Arizona, Florida, Michigan and California. Similar numbers are reported for foreclosure listings in the 1st quarter with Florida and California making up 29% of that total. If you add the next 5 states (TX, GA, AZ, IL, MI) that total rises to 52% of all foreclosures reported! The worst may be over, but there are still high numbers being reported for homeowners being over 30 days late. Why is this trend so strong? Most foreclosures should currently (emphasis on should) be due to typical 'life events' versus people being stuck with bad loans. Unemployment is reason #1, along with other 'common' factors such as divorce, illness and a new trend of people 'walking away' from underwater mortgages. One soapbox issue is the fact that many mortgage companies will not talk to a homeowner UNLESS they are delinquent. Yes, if you are paying on time and you're underwater, I am hearing that the banks (esp. the monster-mega-banks) will not consider a modification of any sort until the borrower is at least 3 months behind. That is a sad commentary for people who are trying to do the right thing as well as keep their home! But I digress...

The final issue that's dragging us down remains the job market. In May, employment increased. Good news? Not so much. Most of the improvement came from the government hiring 411,000 temporary census workers--the private sector only hired 41,000 for the month. Likewise, businesses are still relying on temp workers so there is still a good deal of uncertainty out there. One 'odd good sign is the amount of people quitting their jobs (told you it was odd!). The reasoning is this-if someone quits, they feel that they can find something better (i.e. they are not trapped in their current position b/c there is no alternative). SO you can make the argument that finally there are some 'greener pastures' for people to try.

I love listening to "Big Ben" (Fed Chief Ben Bernanke), especially when he's feeling positive about the economy as a whole. He noted that the European crisis will have only a "modest" impact on our recovery (don't we hope) and that we are "on track to continue to expand through this year and next." He did warn of a "slow reduction" in the unemployment figures and also seemed to hint that the Fed will not raise rates until next year. However, he warned about our record budget deficits, noting that if they are not reduced, it will hurt our economy in the long run, possibly leading to higher interest rates (homes, cars, etc.) and more expensive debt payments for Uncle Sam. His "happy" comment? At some point "things will come apart" if not. Oh goodie... SO, as we individually tighten our belts, our government has been warned to do the same--let's hope they listen! Cheers, Bo

Time for a Summer Vacation? Hope not...

As noted in last month's email, the tax credit has expired and related closings have to take place by the end of June. What about July? Are we all just going to be sitting around with nothing to do? I for one (a) hope that's not true and (b) don't believe it to be true. Yes, there are many issues lingering (like dropping prices and an ever-rising tide of foreclosures) but more core items are coming together (like economic growth, increased employment and better rates). If we could just get some common sense underwriting as well as reasonable appraisals, I think we'd be in much better shape! By way of reference, for a great article on the current state of appraisals, click here (great work, Jim!).
Home prices are still dropping, thanks to foreclosures. That isn't a problem for buyers (except as noted in the article above) but it is an issue for sellers. Yes, you can swallow your pride and lose several thousand on a sale in order to save many more thousands on a subsequent purchase, but first you need to find a buyer. What if there is a foreclosure and/or a short-sale around the corner? Unless they are in a hurry to buy, those properties may be more attractive as they can be purchased for pennies on the dollar versus your need to at least pay off your mortgage--therein lies the problem! I have no solution to offer, but at least rates are still incredibly low--the average 30-year is reportedly 4.78%, which is the lowest of the year (compared to December 2009's record low of 4.71%) and more positive news is being reported, except for the BP oil fiasco and European money woes. However, we are benefiting from their problems as investors seek a safe haven in our bonds (which in turn helped our rates). As Europe 'heals' and our recovery continues, however, rates are likely to move higher as investors seek higher returns and focus on riskier investments than our bonds. So go for it now (like all the other consumers applying to refi--currently the highest level since October 2009, per the MBA) and lock in while you still can!
Have a great holiday weekend; THANK YOU to all who serve (or served) in our military! God Bless America!

A tale of two stories

Read this article first; then read this article second. Same data, two different conclusions. On one hand you have Economists; you could say they are biased for the positive as they work for an investment company. As for the AP article, you could slam the author as being part of the evil 'mainstream media'. Who is right? We don't know yet. I for one like the Economists' prediction. Why? Well, other than self-serving cheerleading (e.g. real estate is our business) I do like to hear the positive spin, especially after so many negative news that has come down the pike. As for the AP? My guess is to sell newspapers, but I may be wrong. Who knows? As for noting that home sales will fall in the second half of the year... well, let's just say they are most likely not in our business. Yes, home sales will fall in the Fall of 2010. Why? Sales are typically slower in the Fall, but for the 2009 Tax Credit. So having sales drop in the Fall is not news to anyone in our industry--the Spring is 'where it's at' in terms of sales. Summer is somewhat busy but people are more focused on vacation and keeping the kids entertained. Likewise, most sales are finalized prior to the beginning of the school year so that the kids can be legally enrolled in the proper school. As for the Fall? It's just not that active, worse for the Winter. The bottom line is this--both could easily be right and/or wrong. As noted, I am hoping that the more rosy opinion is correct. Rates are still LOW and the inventory is still high so there are a lot of deals to find. If you want to buy a house, forget the tax credit for now; just ask for $8,000 (or more?) off the sales price! And sellers? Just remember you may lose money on the sale of your home, but think of the concessions you can ask for your replacement purchase? Ah, to be liquid... I'd love a mountain house and some rentals!!!

AJC Survey

I had the opportunity to take a survey from our local paper, the AJC. One section asked to rank what I thought was the most important for the Atlanta Metro area. Using their topics, I ranked them as such: Transportation, Quality of Life, Economic Development, Regional Cooperation/Governance, Education and Health Care access and delivery. Why? As I drive up and down I-75 each day, our commute has gone from a 'typical' 45 minute drive to around an hour each evening. WHY? I have no clue. Driver's habits are one thing, volume is another and of course having trucks on the road are another issue (wouldn't that poorly planned 'northern arc' be great right now?). I got to give my 2 cents on education (I wish the teachers were allowed to TEACH), transportation (have GA take over MARTA and push it out to North Point Mall, Cumberland Galleria and the Mall of GA), the regional economy (again, fix transportation, and water woes--why do we allow so much lawn watering?), and quality of life (all of the above!). I gave a lot of thought to my answers; we'll see how they use the info!

Most/Least expensive vehicles to insure

Interesting article on what vehicles to consider (or not) as it relates to cost to insure. To be honest, however, if I could actually afford a Porsche 911 Turbo, I would hope that I could afford the insurance on it... (well, until I got several speeding tickets!). Cheers, Bo

4 Days until March for Babies!

Watch this : ) Click PLAY below! Thanks for your support!


Click here to help me reach my goal!">

"Southeast Economy Improved in March & April"

So the Fed's "Beige Book" report noted that the Southeast's economy saw some improvement in March and April. Specifically, retailers saw higher sales, increased traffic and that's a big plus as we all know that retail sales contribute around 70% of our economy. Car sales even rose a bit, despite Toyota's recall woes (offset by a big sales push) and Chrysler's continued slump. Homebuilders should be a bit more positive as housing starts have increased over the first quarter (yes, there was a small dip in March, but that was due to a large upward revision for February). Existing home sales have picked up a bit, but mainly in the lower priced markets (sub-$300K) due to the 1st-time homebuyer credit. As noted several times in the past, the $6,500 credit was a non-event as a) people aren't truly aware of it and b) the 5-year residency provision was too restrictive. Prices are still a bit lower due to all the foreclosures out there (expect more in 2010 and 2011 as ARM's continue to re-set). While there are still hurdles to obtaining home financing (tight underwriting and low appraisals) I keep hearing that common sense MAY actually be returning and lenders are having less trouble making loans (I even heard that there is a local company actually doing SECOND mortgages again, the horror!). We'll see how that sorts out; hopefully interest in homes won't fall off a cliff after 4/30/10 when the tax credits expire (for good). Georgia reported higher unemployment (a record 10.6%) which has outpaced the National average for 30 months. Labor Secretary Michael Thurmond notes that there are signs of growth, however, and while we may lose additional jobs in the short-term, a recovery may finally gain traction in Georgia. Finally, the FDIC extended protection for large deposits (Transaction Account Guarantee (TAG) Program, which guarantees non-interest-bearing deposits greater than $250,000, not that it affects me individually!) which will help smaller banks keep high dollar deposits in-house. Hopefully we won't see any new bank closures, but don't bet on it... Have a great weekend! Bo

I told you so...

Read this article to see what I'm talking about. Suffice it to say if you want to buy a house and/or refinance, make it happen SOON......!

More fun with Jobs and Rates (new and improved!)

Well, it seems ADP is reporting employers cut 23,000 jobs in March, when Economists had expected a GAIN of 40,000. What gives? Wondering aloud (no one is listening) if that had anything to do with the weather but I doubt that seriously. Friday's actual employment report (from the Labor Department) may tell a slightly different story as the ADP tracks real jobs (translation: private sector) while the Labor Department's numbers include governmental jobs, such as all those 2010 Census hires. Either way, Economists expect the Labor report to show an added 190,000 jobs in March, which would be great (and only the 2nd monthly increase since the recession began back in late 2007). UCLA economists noted that they expect the economy to continue to grow despite our high unemployment figures. They even rule out a double-dip recession and I agree. I doubt we'll have a V-shaped recovery (i.e. a sharp rise to contrast our sharp drop in the past) but I am hoping that those who say 'hockey stick' are incorrect (translation, if you look at economic numbers on a table/graph, you would see a large drop (check!) and a loooonnnnnggggg slow recovery, hence the name hockey stick). Either way, the UCLA people expect unemployment to average around 9.7% this year and it won't drop below 9% until 2012.

To totally contradict today's posting (referencing Fannie and Freddie predictions) a March 15 forecast from MBA (Mortgage Bankers Association) said they expect rates to rise to 5.8% in the final quarter of the year and even hit 6.2% in 2011 and 6.4% in 2012. Yikes!

Time is up! (and time to move to ATL!)

All too often you hear the phrase "For A Limited Time" tossed out in marketing. As noted in last month's email, time may be running out for these incredibly low rates due to TODAY's end of the Fed's $1.25T (yes, Trillion) program to purchase mortgage-backed securities (MBS). The program provided liquidity for Freddie and Fannie, keeping rates low and reducing financing costs. Low point? 4.71% for a 30-year fixed in December! But "what now" since the Fed is ending this program? I predicted a larger jump in rates but I have to retract based on what I've recently read (either way I hope rates remain low!). Estimates from Freddie/Fannie expect a rise of less than a quarter point in the next 3 months (a rise of about $30/month payment on a $250K loan). Why so 'low'? Right now the investment 'spread' for US Treasuries is low but higher for MBS so they are attractive to money managers, banks and pension funds (I also read that China is not buying as many Treasuries so be aware that the USA could face higher interest rates to finance our ever-increasing budget deficits, but I digress). In essence, the private industry players are stepping in to fill the void left by the Fed so rates should remain lower, though the (estimated) average will be just over 5% and under 5.25% (for reference, the average for the past decade was 6.2%). Note-the Fed is poised to 'jump back in the market' if there is a significant 'run-up' in rates.
So rates should be 'okay' but are we out of the woods yet? Well, we don't know what will happen after April 30th when the tax credits expire (actually, July 1 will be the true barometer as you MUST be under contract by 4/30 and you MUST close by 6/30 to get the final tax credit). Robert Shiller (of the S&P/Case-Shiller index) said "You don't make addicts go cold turkey. The credit interferes with the market in an arbitrary way, but ending it now would be psychologically powerful. People will be in a bad mood about buying a house." All I can say, try being a seller! Talk about a bad mood... or why not try to buy a short-sale? THAT'S truly 'bad mood' material!
Let's talk about ATL now. No less than the New York Times (albeit in blog form) noted "Don't count Atlanta out." Harvard Economics Professor Edward L. Glaeser notes that ATL has had its ups (#2 in population growth of 1.13M people from 2000-2008) and downs (annual building permits dropped like a rock from 2005-2009, highest of any other metropolitan area) but we have many things going for us. Click on the link to read the article but John Adams has a companion article that sums up his 3 maj or factors for our future success: ATL is dominant in the region, with no real rivals; we have a 'business-friendly' political environment; we have a highly skilled population (nearly 43% of adults have college degrees vs. 27% nationwide). Not only that, a recent KPMG study ranked ATL the second most cost-competitive 'large city'. They used a matrix of 26 cost components such as labor, taxes, real estate and utilities as it relates to 17 industries based on a 10-year time period. Tampa was #1, with a cost index of 96.0 (100.0 being the national baseline) and ATL was 96.3. Our ranking was based on our competitive business costs (office leasing, transportation, labor, employee benefits and corporate tax rate). Miami, Baltimore, and Dallas round out the top 5. LA, NYC and SF were the three most expensive.
SO tell your friends it's time to relocate to ATL! Buy now, save now, and pop some bubbly along the way!

Clark Howard on Health Care reform...

I respect Clark Howard's opinion on several things and disagree on a few as well. In this article, he spells out some details of health-care reform. I see that the 'average taxpayer' will be hit with $450 in fees to cover this plan. I don't think that this figure covers all the costs, but so be it... I guess we'll see what happens down the road, eh? I for one am scared of any governmental control. I expect them to start dictating (rationing?) tests. Remember the mammogram issue last year? Just wait... that's the tip of the iceberg!

Rates at 7.5% by the end of 2010?

Read this article to see what I'm referencing. Nothing new that I haven't said before but just further thoughts that you need to make that loan decision NOW before rates go up! I hope that I'm wrong, but it's highly possible that this will happen. Happy Monday, eh?

Headline today: Not much impact from repeat buyer credit"

In a word-DUH! Check out this post on my other blog about this silly tax credit. What a waste of time...

Watch this demonstration of the rise in unemployment rates in the US!

This presentation is scary! Looks like an outbreak of the plague... The question for Washington DC is "can it be stopped?"

Dear President Obama:

This is what I emailed the President (on www.whitehouse.gov) today:

Mr. President, with all due respect I feel your focus on health care reform is not your top priority. Take a look at the consumer confidence numbers released today; your focus should be on the Economy (as it should have been all along). I am unsure where the 1.5-2MM jobs have been created, but we obviously need much more. Less governmental regulation would be helpful; either way the healthcare initiative (however important) can wait another day. Right now people need jobs first. As an aside, if more people had jobs, they could afford healthcare. Thanks for your time.

My 2 cents... Your thoughts?

How Interest Rates Move Video

Watch this video to learn "How Interest Rates Move". It's 7 minutes long but it gives you a great understanding of how rates work AND notes why rates will be jumping up soon AND why you want to get into the refinance process NOW or you'll be sorry! Don't delay, watch this as soon as possible! Cheers, Bo

Uh-oh... The Economy stumbles a bit...

Unemployment claims rose last week and inflation jumped more than forecast in January. Yes, there are still positive news items (manufacturing is up, cars are selling, new home permits up slightly and pricing stabilizing) but the core issue currently is the job situation (a reminder to those 'in charge'--it has ALWAYS been about jobs--NOT our health care). Why is this important? If inflation keeps rising, how does the Fed combat that? They raise interest rates! What will KILL home sales? Rising interest rates! (right Mr. Carter?) What else? Well, the Fed has been more or less buying loans (in simplistic terms). At the end of March, this will end, so we can see rates hike up based on the fact that it will be more difficult to obtain funds. This can also hurt home sales and refinances. I will expand on this soon, but suffice it to say that we are nearing a 'perfect storm' environment for home sales: the tax credit will expire soon (must be under contract by the end of March); the Fed will need to raise interest rates to combat inflation (prediction-by Summer); the Fed will stop shoring up the mortgage market at the end of March. bottom line-if you are on the fence, BUY OR REFI NOW!

As for health care, READ THIS from the AJC--I wish our politicians would....

What's really going on? Key word is 'underwater'.

This article from USA Today is spot-on. People would love to 'move up' but they can't get out of their old home! My old house in Smyrna is still rented (thank goodness!) but it may be worth less than my mortgages so it will be difficult to sell. Our current home is definitely underwater as the mortgages are easily $20,000-50,000 higher than the value (not that we're trying to sell/move). This is one of the main stories that every American should understand--and I wish Congress could understand it as well and try to stop regulating with silly new programs (HVCC anyone?) that have unintended consequences. Instead of the waste of time, money and resources on the health care debate, the focus should be on 2 things: jobs and housing. If you get those 2 areas sorted out, EVERYTHING will come together. I do feel that healthcare (like anything government regulates) needs to be reviewed and 'tweaked'. I am NOT in favor of governmental control and we need to see how both sides (Dems/Reps) can figure this out together--AFTER they sort out the economy! My 2 cents...

ATL job losses

Atlanta took a big hit with job losses, as did most large metropolitan areas. This press release from the US Bureau of Labor Statistics gives all the gory details. So out of the nation's 372 largest labor markets only ONE managed to squeak out a net increase in 2009--McAllen TX. ATL lost just over 105,000 jobs in 2009 and as you know our unemployment rate in Georgia is stagnant at just over 10%. Las Vegas lost over 7.4% of its workforce (they are "number 1" in the country, how proud they must feel) and we "only" lost 4.4%. However, if you look at year-end unemployment rates thirty-four of the top 100 markets ended 2009 with jobless rates of 10 percent or more (including ATL). Obviously, we have a long way to go and there may not be a 'silver bullet' for this problem. BUT there are additional signs that the economy is improving. Pending home sales are up, manufacturing activity is up and even car sales are up for many makers (GM, Ford and Nissan, for example, but not Chrysler, Honda or Toyota). Who knows, hoping that we start seeing some additional home sales soon (besides the people trying to get that last-minute tax credit). Keep praying for recovery! Take care, Bo

Headline of Disbelief

A headline today: Ford earns $2.7B in 2009 (EARNS--read it again!) If you read additional details it appears that this may not be sustainable but when was the last time you read something positive about the auto industry? (unless it was related to Cash for clunkers or the recent purchase of Saab by Spyker). I was pleased to see that headline. They did not sell out to the Government and they've been producing some great cars of late (finally we get the European Focus!) including the 41 mpg hybrid Fusion (Car of the Year winner). What's next for Ford? Hopefully the union won't destroy the company (ditto for the underfunded pension plan) and the new models continue to sell well--though the Mustang is currently losing the sales 'race' with the new Camaro. Time will tell; guess we need to re-examine the old ad tagline "Have you driven a Ford, lately?"

The Panic of 2008 in a nutshell...

I received the following link in an email newsletter. I am amazed at how clearly this shows 'what happened' over the past few years. I have to agree at their summation that it is truly the government that failed us. Are you surprised to read that? Both parties have failed us. Again the time is NOW to boot them all out. We are at a critical point in the history of our country. It's time to clean house and it's time to enact term limits to get rid of the 'us and them' mindset that so clearly has infected Washington (not that our own Georgia legislature has the guts to enact ethics laws and limitations on lobbyists either, but I digress). You truly want change? Let's get some new blood and new ideas in Washington. It's time for a voter revolution! God Bless America...!

What does the President Read?

I received an email with a photo of PrezBO holding a book called "The Post-American World". The tone noted that it was written by a Muslim and was more or less anti-American (and you could allude to the fact that they were shaming Obama for reading it or it's proof of his Muslim and/or anti-American leanings). I clicked on the Snopes Link (and yes, I know that they have a liberal bias) but thought I would also go ahead and click to Amazon.com to read a review of the book.

I must say that based on the review (and the Q&A between the book author and fellow author Thomas Friedman) that I too would read this book! We need to be more competitive and I like Friedman's commentary that the USA needs to be on the cutting edge of energy technology (clean coal emissions, for example) so that we can sell that technology to rising nations like China. One 'takeaway' from that Q&A was a lightbulb comment--if we gave one standard 60 watt bulb to the next billion people that will be born we'd need 20 new 500 megawatt coal burning plants. WOW. SO, hopefully we have scientists and people much smarter than me working on clean technology solutions so we can continue compete on the global stage!

BoKnowsClosings...

This is going here as well as on my other BoKnows blog... My 2 cents on closings today! Cheers, Bo

I talked a bit about the new Good Faith Estimate and HUD-1 Settlement Statement for residential closings in my last newsletter. Yes, it's official and any new loan 'started' in 2010 will have the new GFE and new HUD. Expect a lot of questions and confusion on this but as with anything new, 'this too shall pass'. What I want to talk about today is somewhat self-serving but very important for the future. Why is choosing an attorney important? For that matter, why is closing a loan with an attorney important? First off, it's not all about fees. Yes, I know how self-serving that statement is. When you look at a new GFE or HUD-1 you'll see all of our fees combined are almost $700 (without lender's title). I know one firm that will do all that for just shy of $300. They may be a great firm, but we never set out to build a high-volume closing firm. I've been there--the lobby full of people waiting to close, delays, tempers and it seems that customer service is tossed out the window. When we chose to open this firm in late 2008 we knew that's not what we wanted.
So our fees are about the same as most closing attorneys out there and we all have to quote the same title insurance rates as dictated by our title companies. If the playing field (e.g. 'fees') is level, more or less, why choose us? We are all veterans here. We can handle your first-time homebuyer's questions with ease (and patience!). We can handle "issues" at the closing table (we've all been there before) with tact and finesse (yes, even me!). For that matter, we don't let files 'lay around' until the day before closing so there really shouldn't be surprises on closing day. Come see us again and I know you'll be pleased. And remember not to think of us as 'just' an in-town firm--we can close all over metro ATL!
Final topic--why close with an attorney at all? This is less relevant for purchases but there are a lot of options out there for consumers. Many large national lenders use 'closing services' to close transactions and issue title insurance. Yes, I've closed loans in homes (even a Starbucks or two). However, there is a huge difference between us and these companies. We believe (as do most Georgia real estate attorneys) that a closing should be handled by the firm from start to finish. We run (and clean!) the title, close the loan, issue the title insurance and fund it through our IOLTA (trust account). This should be the bare minimum that a licensed Georgia attorney should do but some lenders insert themselves into the transaction. A witness-only attorney is just there to watch you sign documents--where are they when you have questions or issues after closing? An out of state 'title company' or 'escrow provider' won't help you clear up a messy title with open loan deeds--if you can even get someone on the phone or in the correct department! The bottom line? Even if you don't choose Harris Wagner Law Group, do yourself a favor and choose a licensed, LOCAL Georgia attorney to handle your transaction. You could even say the same thing about lenders and agents as well. Choose wisely as your home is the largest investment you own!

Quick take on the economy

I have different items to work on today so here's my economics report for the current period: unemployment is still dragging down our country. In Georgia, it's really not going to be much better in 2010 as so many of our jobs were lost due to the housing implosion. SO housing is still going to drive this recovery--or not. If you have a mortgage in the mid-5's or 6% (or an adjustable that can 're-set' in the next year or so), you need to think about refinancing by Summer. Ditto for home purchases as there is not much time left on the homebuyer's tax credit. Housing starts are up in the South and competition for homes (new or 'used') will pick up again soon so act now before the crowds start bidding up prices. Act now before inflation kicks in and rates go back up (take a look at both the PPI and CPI if you need confirmation on that). Act now to get out from under the burden of rent!