The TX economy continues to create more jobs albeit at decreasing rates while the nation’s
labor market is losing jobs. TX nonfarm employment increased 2.3%, but 0.1 decrease in U. S.
Higher oil prices, has driven the mining industry, followed by professional & business services,
leisure & hospitality, construction, education & health services industries. The complete
economic review is available at the TX A&M Real Estate Center’s website.
The U. S. House of Representatives has passed legislation that National Assoc. of Realtors
say will stabilize the housing market & stem foreclosures. It is called The Housing and Economic Recovery Act of 2008 - modernized the FHA by simplifying the procedure & making
these mortgages more available to thousands of families refinancing existing mortgages & keep
their homes. Hopefully those who can afford to own a home & want to do so will have that
opportunity.
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Shady lending is what sent many folks into foreclosure & these changes will occur:
1. no loan unless can document borrower’s income,
2. lenders to escrow money to pay taxes & insurance for risky borrowers,
3. limit & in some cases, ban - prepayment penalities,
4. prohibit lenders from making a loan - must consider borrower’s ability to pay from
sources, other than home’s value,
5. mortgage advertising to contain info on rates, monthly payments, etc.
6. lenders credit a mortgage payment to homeowner’s acct. on day it is received,
7. forbid brokers, etc. from “coercing or encouraging” an appraiser to misrepresent the value
of the house.
To become effective 10/1/08, but escrow requirements 3/1/10.
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The American financial system has weathered financial panics for 200 years & it can WEATHER
THIS ONE AS WELL, according to Dr. Mark dotzour, chief economist for the Real Estate Center
at Texas A&M U. The U. S. is in unchartered waters, but investors should not panic if a
major bank or investment firm rolls over. Dr. Dotzour said his theme since last July has been
‘expect the unexpected & expect the unprecedented. The govt & press have consistently
underestimated the severity of the situation for the past year. Now the govt is making continguent plans. “The financial turmoil is ongoing & our efforts today are concentrated on
helping the financial system return to more normal functioning”, according to Reserve Chair
Ben Bernanke.
From the Greater Tyler Assoc. of Realtors: average months of inventory since 2004 - 7-8 mos,
average months of inventory 2008 - almost 10 mos.
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