Final Exam and Final Grades Finally Posted to WebCT

The final exam grades and final course grades have been posted to WebCT. Please note that all Blog Post and Investment Problem extra credit have been included in final course grades.

Exam 3 Grades

There was a one question curve built into your Exam 3 grade (as reported on WebCT). Your grade was calculated by taking the number you had correct plus 1 divided by 44 (the total number of questions).

If I said a two question curve on the Exam 3 review clip, I apologize. I might have rushed a bit to get the Exam 3 review up and ready after the exam.

Exam 3 Scores Posted

Exam 3 grades have been posted to WebCT.

WEEK 8: July 20th with the FINAL EXAM on Saturday, July 25th On-campus

*Review Exam 3 on-line.
*Read Chapters 16 (the final is comprehensive but I will give extra emphasis to Ch. 16), view Investment Problem video/audio clips, do practice problems etc..
*Read Chapter 20 (no video/audio clips for this chapter) and do practice problems etc. (the usual routine).
*Continue to Review Investment Problem (IP) clips. This is an optional bonus problem that will be part of the final exam.
*FINAL EXAM (and Investment Problem Bonus option) is Saturday, July 25th at 10 AM to 12:30 PM in room 147. 
*Please bring your photo ID, pencils, Scan-tron form, and calculator.
*The final is cumulative but emphasis will be placed on Chapter 16.
*The final exam is not mandatory if you do not want or need to improve your three exam scores. It is mandatory if you missed one of the three prior exams.
*You may also take the Investment Problem Exam without taking the final exam.
*Please note that for the IP Exam, you will receive the IP assumption only and you will have to work through the problem without any template or notes.

Exam 3 Review

The review for exam 3 has been posted. Please visit http://www.uta.edu/faculty/hansz/3325/summer/Exam3Sum09.wmv.

I will post scores to WebCT by Monday.

Blog Bonus Submission: Omar Gutierrez

Commercial Real Estate Feeling the Economic Strain
By Omar Gutierrez

The big real estate news of the year is around the declining home market. But has anyone paid attention to all of the office buildings around town with “Office Space Available.”

The commercial real estate market is struggling just as much as the residential market. Many businesses are unwilling to make long term lease commitments for their office space because they are unsure of their future. Those companies can’t really tell how much growth to expect in the next coming quarters, so committing to a standard minimum lease of 5 years may not be a good idea. They may not need all the say they leased, or it may be too small of a space. Real estate brokers and landlords are being forced to adapt to this changing demands of their clients.

The result is many brokers are allowing shorter term leases. In the case of a digital marketing firm Razor-360, they recently rented offices in Addison, TX for only 16 months. Typically, brokers and landlords turned down these types of leases. But in today’s economy, then need to do anything they can to retain tenants and generate income. An empty office space does not generate any revenue, so the tenants are beginning to have more power in the marketplace.

But companies who are confident in their futures are still willing to make those long-term leases. Paul Whitman, who heads Jones Lang LaSalle’s Dallas office said, “I’m working on a transaction right now where we are going to do a 15-year term. They are a company that has a solid feeling about who they are, what they’re going to do and how much space they need.”

Overall, the leasing market is down more than half-million square feet so far this year in the Dallas area. Everyone is trying to do what they can to survive this current economic climate. For those business tenants willing to do a longer term, landlords are wheeling and dealing with rental rates to ensure they have their continued business. But even brokers and landlords are advising tenants to sign shorter term leases if needed. Whitman said, “Would the landlord rather have a longer term? Of course. But they would rather have one year than zero.”

Works Cited

Brown, Steve. “Uncertain about future, companies signing shorter leases.” Dallas Morning News. 26 June 2009. http://www.dallasnews.com/sharedcontent/dws/bus/industries/commrealestate/stories/062609dnbusshorterterms.3bb000e.html

Exam 3 Announcement

Exam 3 tomorrow at 10 AM!

Bonus Blog Post by Amanda Wells

How is Commercial Real Estate in North Texas Holding Up?

It is no secret that the United States has been in a lot of trouble lately when it comes to the real estate market. Residential foreclosures can be spotted in almost any neighborhood and commercial building vacancies are not hard to spot either. Most have probably heard by now that Texas has taken less of a hit in the real estate market than most areas in the US, but a majority of the news is about residential real estate. This led me to examine a less popularized side of the real estate market in today's economy- commercial real estate. This post will examine how commercial real estate in the DFW area is holding up during this economic downturn, both relative to past years in DFW and relative to other areas of the country.

The North Texas commercial real estate market has no doubt seen some decline in the last year. The retail market alone is expected to reach a 13.2% vacancy rate by the end of 2009. This is a rise of 1.8% from last year's rates in DFW, and these numbers are only for commercial retail space (fwbusinesspress.com). Although "retail construction is still chugging along" (viprealtyinfo.com), there have been some declines in the construction of new commercial space. While 6.4 million square feet are expected to be built this year, that is still a decline of 2.6% from last year (fwbusinesspress.com). All of this is, with no doubt, related to recent job losses in the area, and around the US. Not only are companies reducing their payrolls and in need of less commercial building space, but the loss of jobs causes families to spend less, which fuels the cycle of job-cuts and recession.

Still, the DFW area is strong for many reasons. "The DFW market ranks No. 9 among the top 10 investment markets", states one article from Star-Telegram. This is partly related to the fact that North Texas is the home to several large companies, including ExxonMobil, DFW Airport, and AT&T (star-telegram.com). The Barnett Shale and the new Cowboys stadium have also provided many jobs in the area, although these will eventually phase out.

"The report (ranking DFW as No.9) does not paint a pretty picture for the nation's commercial real estate markets. Ongoing drops in property values, more foreclosure and delinquencies, and the limping economy will continue to crimp property cash flows, according to the report" (star-telegram.com). But DFW is expected to thrive and job growth, as well as relatively good commercial occupancy rates, will keep North Texas healthier than the rest of the nation, even if some things have slowed down. Local commercial investors are starting to use some of their saved-up cash to invest in North Texas again, and out-of-state investments are starting to slow, which is bringing the area back to a more normal position (fwbusinesspress.com).

The overall picture that is painted here is that DFW is clearly not recession-proof, as commercial building has slowed from previous years, property values have declined, and vacancy rates have risen. But for many reasons, North Texas is thriving far better than the rest of the United States and businesses should do well. Analysts tag DFW as one of the first markets that will "surge ahead when the economy begins to improve. The DFW market is expected to see signs of growth as early as 2010" (viprealtyinfo.com). All of this is very hopeful for the commercial real estate market of North Texas, as well as the rest of the real estate market in the DFW area.

-Amanda Wells

Sources:

Fort Worth Business Press: "Recession Worries Impacting North Texas Retail Market"

Star-Telegram: "DFW Should Weather Commercial Real Estate Downturn"

VIP Realty: "Dallas Commercial Real Estate"

VIP Realty: "The State of the North Texas Commercial Real Estate Market: What's Next?"

Summer 2009 Drop Date

Last Day to Drop Thursday, July 16, 2009.

Bonus Blog Submission - Kellie A. Brooks

House Flippers, Once Booming, Now Hurting As Well

In today’s economy, every aspect of the real estate industry is struggling. Eric Holbert, is no exception. His house flipping company has taken a dramatic hit in this recession.

“The economy has affected my business tremendously. It is very slow and unpredictable”, Holbert said.

House flipping is purchasing a house or property then selling it for a profit. Most of the properties require some type of remodeling before it can be put back onto the market for resell.

In today’s economy, few people are buying homes let alone refurbishing and reselling them. Holbert’s company, Holbert Custom Services, is one of many that are struggling to stay afloat. In his business, he sells homes to low income families, becoming their landlord. The government pays a portion of the rent and the families pay the balance. These families, already struggling before the recession, are hurting even more.

“My tenants are having trouble keeping their jobs, and they are having trouble paying rent at the same time.” He said.

So how is his company surviving? He has cutback on purchasing additional homes, opted for cheaper fixtures, and he budgeted his personal money in case his tenants aren’t able to pay their part of the rent.

Holbert mainly works in the Fort Worth area.

“The area that I work in is poverty ridden.”

In this industry some people take advantage of low income families, Holbert said. So he does his part to help families in need. Although tenants might struggle making their payments, he chooses these homes because they’re cheap and easier to fix up.

“Real estate has always interested me and I have always thought I could get wealthy from it”, Holbert said.

He looks for homes that are run down, condemned, and not of interest to most realtors or buyers. After Holbert and his team make the improvements, the once dilapidated homes are appealing.

“I look for a house that’s really in bad shape. Then I put a vision of what it can look like and I make it happen.” He said.

The recession will not last forever. So Holbert is trying to position his company to weather the downturn and become profitable again.

“It will improve because we have a great president. I think he is a lot more intelligent than the last president. He understands what it is to be down.”

WEEK 7: July 13th with EXAM 3 on Saturday, July 18th On-campus

*Read Chapters 12, 17, and 18 view video/audio clips, do practice problems etc. (the usual routine)
*EXAM 3 Tuesday, January 6th from 10:00 AM to 11:30 AM in Room 147. Exam 3 will cover chapters 8, 9, 10, 11 (big chapter!), 12, 17, 18, and 19.
Please bring your PHOTO ID, pencils, calculator, and Scan-tron answer sheet.
*TVM Tutorial Final Deadline. Please turn-in at 10 AM. You must complete this or I have to give you an automatic 'F' for the course.

Reminder: Next Exam

The next exam is a week from this Saturday. Just a friendly reminder. Hope you are keeping up this the material!

WEEK 6: July 6th

*Read Chapters 19 and 11 view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*Please note that Chapter 11 is a very big chapter with lots of additional materials to cover from the website.

Heads-up

Exam 3 contains a large amount of information. Although we will take a couple weeks to cover the material, you must keep up with the assignments each day going forward.

Also, it is important to remember that the final exam is cumulative (will cover the entire course).

TVM Tutorial Completions Posted to WebCT

Your TVM Tutorial status (complete or no complete) has been posted to WebCT.

TVM Tutorial Completions Posted to WebCT

You TVM Tutorial status has been posted to WebCT.

WEEK 5: June 29th

*Review Exam 2 on-line. Link will be posted on the course blog.
*Read Chapters 8, 9, and 10 view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*If you are interested in pursuing the Investment Problem Bonus Option, please review the Investment Problem clips this week.
(You will need to start practicing the IP now. Please note that for the IP Exam, you will receive the IP assumption only and you will have to work through the problem without any template or notes.)

Exam 2 Results Posted to WebCT

Exam 2 results have been posted to WebCT. We will use WebCT to review Exam 2 (no audio/video clip for Exam 2).

At your convenience, please log on to WebCT and you will find a new "Exam 2 Review" exam setup under the WebCT category of "Tests." Please take this exam again as a review. You may now submit answers until you choose the correct answer. This review will be available until the end of the summer semester.

Exam 2 On-line this Saturday

Please have your UTA student ID ready and available during the on-line exam on Saturday. Thank you. jah

Exam 2 On-line this Saturday

Exam 2, our on-line exam, will be administered through WebCT this Saturday starting at 9:50 AM. Please logon at 9:50 AM sharp (please note that you may need to refresh your WebCT browser to view Exam 2).

I have a posted a short, three question survey for a little practice with WebCT testing procedures.

GTA Contact Information: 2009SummerClass@gmail.com

Mr. Seo is our Graduate Teaching Assistant for REAE 3325 Online. His main responsibilities will include time-value-of-money tutoring, TVM tutorial grading, and examination administration and grading.

Seo was the TVM Tutor for the Department of Finance and Real Estate so he is an expert with this aspect of the course. If you have any questions about time-value-of-money or the TVM tutorial, you may contact him at 2009SummerClass@gmail.com. You can converse by e-mail, phone, or make a face-to-face appointment. If you would like Seo to call you, please include you phone number in the e-mail.

Exam 2 Scores and Online Practice Module on WebCT

Exam 1 grades have been posted to WebCT. Your WebCT scores include a one question curve. Your grade was calculated by taking the number of correct questions and adding one. This amount is the numerator and the denominator is the total number of questions (35 total questions). All of the exam statistics for the class are also posted on WebCT.

I have not posted TVM completion status. Please give until the end of next week to post TVM completions.

This coming Saturday is Exam 2, our one on-line exam. I have created a very short, three question practice model to make sure we are all using WebCT correctly. When you check your exam score, please go t0 the assignments and tests section and complete this three question model (should take you no more than a minute). Thanks!

WEEK 4: June 22nd with EXAM 2 on Saturday, June 27th On-line

                *Review Exam 1 on-line. Link will be posted on the course blog.
*Individual exam scores will be posted on WebCT.
*Read Chapters 5, 6, and 7 view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*Exam 2 will be held online on Saturday, June 27th at 10 AM to 11 AM. Exam 2 will cover chapters 2, 3, 4, 5, 6, and 7.
*This exam will be 50 or fewer true-false and multiple-choice style questions.
*You must log into WebCT promptly by 9:50 AM (exam will start at 10 AM).

Exam 1 Review Posted

I have just posted the link for the exam 1 review. You can find this link on our course homepage under the Week 5 assignments.

To link to the exam review wmv file directly, please go to http://www.uta.edu/faculty/hansz/3325/summer/exam1Su09.wmv.

Thanks to everyone for being prepared for exam 1. From an administrative standpoint it went very smoothly.

Seo and I are currently working on grading the exams. I hope to have your Exam 1 scores posted by Sunday night.

Student Question: Qualifying the Buyer

Answer to student question (below):

Let me know if you had any technical difficulties viewing this video. One student has so far but I checked it and it seems to be ok.

The answer to Qualifying the Buyer Problem 1 is on the bottom of the course homepage and pasted below. PI stands for Principle and Interest which is call the 'Debt Service' or mortgage payment. This is calculated using your calculator based on the terms of the mortgage. The MHE starts with PI and adds items like monthly property taxes, insurance, homeowners association dues, and mortgage insurance, if applicable.

Qualifying the Buyer Problem 1:

PI=$614.30 (n=260, i%=.10/12, PV=70,000, FV=0, solve for PMT)

MHE = $614.230+ $84+$21+$24=$743.30

TMD=$743.30+$380+$65=$1,188.30

SMI=$3,200+$240=$3,440

MDR= MHE/SMI = $743.30/$3,440=.2161 --> Make the loan

TDR=TMD/SMI=$1,188.30/$3,440=.3454 ---> Make the loan



Student Question:
On problem 1, in the video for Mortgage Underwriting, i am having extreme difficulty in trying to figure out how you came up with the MHE of $743.22. I'm not sure if i'm completely missing something, but i cant find any information in the text and i have tried several ways of adding up the numbers to try and get even close to that number. Also, what is meant when you say "debt service of $614.23?" Please explain how to calculate MHE. Thanks!

WEEK 3: June 15th with EXAM 1 on Saturday, June 20th On-campus

*Read Chapters 2, 3, and 4 (lots of material in these chapters), view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*Chapters 2, 3, and 4 will be on EXAM 2 but you will need to cover these chapters at the beginning of Week 3.
                *Exam 1 on Saturday, June 20th at 10 AM to 11 AM in room 147 Business Building.
*The exam will cover chapters 1, 13, 14, and 15. Also, this exam will have emphasis on TVM.
*The TVM Tutorials are due at the start of the exam 10 AM on June 20th.
*Please bring your UTA photo ID, a Scan-tran answer sheet (as specified in the syllabus), pencils, and your calculator (see exam instructions below).
*Exam 1 will be 50 or fewer multiple choice style questions.
*Bring your completed TVM tutorial (with original signed certificate page) OR your TVM prior completion form.

WebCT Setup

WebCT is now setup for the course. Please remember that we only use WebCT for posting grades and administering EXAM 2 online. Never contact me through WebCT e-mail. Always use reae3325online@gmail.com.

Please log-on to your WebCT and verify that you are enrolled in the course.

Thank you!

Week 2: June 8th

*Record the four exam dates in your calendar (also include the TVM deadline date).
*Read chapter 14 and view video clip (as always, do end of the chapter problems and exercises).
*Read and watch the video clips for the "Review Materials for Real Estate" pdf packet. Complete problem set 2 (review video clips for answers).
*Double check and make sure that you have recorded the four exam dates and TVM deadline in your calendar.
*Continue with TVM tutorial or turn in a Prior Completion form at the start of the first exam.
*Practice with your calculator (the time value of money menu).
-Make sure you know how to set your calculator's "payments per year" function.
-Know how to switch back and forth between "Begin Mode" and "End Mode."
*Read chapter 15 and view video clip (as always, do end of the chapter problems and exercises).
*Finish the TVM or the TVM prior completion form.
*Complete the "Review Materials for Real Estate" pdf packet problem sets 2 and 3. This is found near the Ch 14 materials.
*Read and watch the video clips for "Review Materials for Real Estate" pdf packet. Complete problem set 3 (review video clips for answers).
*Send two pictures to reae3325online@gmail.com if you like (not required). Include a picture of yourself and a picture that is important or of interest to you.  
I will include these photos is the slide-show above. It is nice to get to know some faces, even thought this is an on-line class.

Census Date

Census Date is Monday, June 8, 2009

Grade Posting Information

GRADES will be posted on WebCT. https://webct.uta.edu (login using your UTA username and password) Please do not call or e-mail requesting grades!

Student Question on Underwriting Video Clip

Answer to student question:

I am watching the clip right now and it appears to be ok. However, it did look like there was a problem with the very first slide. Let it run for a couple minutes and you should see the second slide.

If you have further difficulty, please let me know. This material is fair game on the first exam and final exam.

Cheers,
jah

J. Andrew Hansz, Ph.D., CFA
Associate Professor
Department of Finance and Real Estate
University of Texas, Arlington
Box 19449
Arlington, TX 76019
e-mail: ahansz@gmail.com
website: www.uta.edu/faculty/hansz

House for sale near UTA campus. See http://sites.google.com/site/1205Briarwood


STUDENT QUESTION:

Dr. Hansz,

I was viewing the video clip for Chapter 13 yesterday. I wanted to let you know that on the last video for the chapter 13, Buyer Qualifications, the slides were not all working. I saw the first couple of slides, but as you clicked through them, the page became blank. The two problems on qualifying the buyer that you presented, I was not able to view. Will there be problems on the test like the ones you presented? I checked the powerpoint slides and did not see the problems on the slides. I do not think that there is a problem with my computer, as I have been able to see all the other slides on the video as you present them, but I could be wrong. Just wondering if you have heard from other students about not being able to see the slides.

Thank you,

Dr. Hansz's Office Hours: M W 2 to 4 PM

My office hours will be from 2 to 4 PM on Mondays and Wednesdays. Please note, I will not have office hours on June 15, 17, 22, and 24.

Student Question: WebCT

Answer to Student Question:

The class will be added after the Census date. No grades yet so we will not need WebCT for the time being. jah

J. Andrew Hansz, Ph.D., CFA
Associate Professor
Department of Finance and Real Estate
University of Texas, Arlington
Box 19449
Arlington, TX 76019
e-mail: ahansz@gmail.com
website: www.uta.edu/faculty/hansz

House for sale near UTA campus. See http://sites.google.com/site/1205Briarwood

Student Question:
I understand WebCT will only be used for posting/checking grades, but I am not able to see the class through WebCT. It is not there. I called the helpdesk and they told me to check with you to see if you've uploaded the class to WebCT for student view. Please advise. Thanks in advance.

Reminder: View Orientation Clip and Read the Syllabus

Just a friendly reminder to please view/listen carefully to the 1 hour 9 minute orientation clip and read the syllabus carefully. Probably, 90% of the questions I get at the start of class are covered in the orientation/syllabus material. After reviewing these materials, please feel free to send your questions to me at reae3325online@gmail.com.

Student Question: TVM Prior Completion Form Download

Student Question:

I'm in your online class and I was reading your syllabus about the TVM tutorial. I have already completed this and I see you have a link on your syllabus to a PDF of the TVM completion form. The link was not working. I was wondering if you could e-mail me the completion form as I could not find it anywhere on the UTA website.

Response:

First, you need to make sure you have Adobe reader installed on your computer.

Can you "right click" on the link to the pdf then save the file to your desktop (then open it from you desktop)? Try this because the link works from my computer.

Finally, if you are near campus, you can always pick-up a hard copy of the form at the Department of Finance and Real Estate (room 434 Business) during business hours.

Week 1: June 3rd (but you can start earlier!)

*Check-in by sending an e-mail to Dr. Hansz at reae3325online@gmail.com.
*Read chapters 1 and 13 and view video clips for these chapters (as always, complete all end of chapter problems and exercises).
*Read and watch the video clips for the "Review Materials for Real Estate" pdf packet. Complete problem sets 1 (review video clip for answers).
*Start the TVM tutorial.
*Record the four exam dates/times in your calendar (also include the TVM deadline date).

IMPORTANT CLASS DATES AND DEADLINES: Summer 2009 8-week Session

Exams and Assignment Deadlines (Please record these dates in your personal calendar at the start of the semester! No make-up exams!)

*EXAM 1 Saturday, June 20, 2009 at 10 AM On-campus in room 147 Business Building.

*TVM Tutorial Deadline Saturday, June 20, 2009 (will be collected at the start of the exam).

*Census Date Monday, June 8, 2009.

*EXAM 2 Saturday, June 27 at 10:00 AM On-line.
(must be on-line at 9:50 AM for 10 AM start using a reliable Internet connection)

*Last Day to Drop Thursday, July 16, 2009.

*EXAM 3 Saturday, July 18, 2009 at 10 AM On-campus in room 147 Business Building.
*Final deadline for Blog Post Extra Credit assignment is July 18, 2009(see syllabus, you are encouraged to post earlier)

*FINAL EXAM Saturday, July 25, 2009 at 10:00 AM On-campus in room 147 Business Building. (cumulative final exam)
*Investment Problem Extra Credit will be held in conjunction with the final exam on July 25th (see syllabus).

 *Must bring Scan-tron, financial calculator, pencils, and student ID to all exams.

 If you have a conflict or difficulty with any of these important dates listed above, contact the Instructor during the first week of class to discuss the conflict. No make-up exams but remember, I drop your lowest grade.

ATTENTION ALL SUMMER SEMESTER REAE 3325 ONLINE STUDENTS AND PROSPECTIVE STUDENTS!

PLEASE READ THE FOLLOW BEFORE REGISTERING FOR THIS SECTION:

This is an ONLINE LEARNING SECTION. Students registering for this section should be highly motivated, disciplined, and capable of self-study and independent learning. Also, you should expect to put in 50% to 100% more time into an online class over and above a traditional face-to-face class. If you have any doubts about your motivation, discipline, ability to learn independently, or available time, I highly recommend that you consider taking this course during a full semester where we offer several traditional face-to-face sections (mornings, afternoons, evenings, and even Saturday sections on occasion).

8-WEEK SUMMER SESSION WARNING: This course will cover a lot of material and move very quickly. In fact, we will cover the same amount of material in this Winter Session as we do in a normal 16 week semester. This course should be your primary focus over the 8 week Summer Session period.

THREE OF FOUR EXAMS WILL BE HELD ON CAMPUS!  See below for examination dates and location (all on-campus exams will be held in room 147 Business Building). All exams will be objective style (multiple-choice) questions. Only the final exam is cumulative. In addition, there will be one Internet based exam. You must be available on-line for this exam (see exam dates and times below).
Your primary information sources for this course will be your (1) textbook, (2) video clips, (3) practice problems, and (4) student blog. In addition, I will have office hours for additional help. Please note that WebCT is used for administering Exam 2 and posting grades. Never contact me through the WebCT e-mail function. Always use reae3325online@gmail.com.

TVM ANNOUNCEMENT: You must complete the Time Value of Money (TVM) Finance Tutorial to receive credit for this course. The TVM Finance Tutorial is a Department requirement of all REAE 3325 and FINA 3313 students. If you have already completed the TVM Finance Tutorial in FINA 3313 you DO NOT have to do it a second time. You may submit a TVM Finance Tutorial prior completion sheet to Mr. Yongho Seo, Department of Finance and Real Estate, Room 424 COBA, Box 19449, Arlington TX 76019-0449. Click here to down load a pdf of the TVM Prior Completion Form.

FINANCIAL CALCULATOR: You will also need a basic financial calculator which can be purchased at the UTA bookstore, Wal-Mart, Circuit City, Fry's, and other retail outlets. Most students use a Texas Instruments (TI) or Hewlett Packard (HP) brand calculator. Exam 1 will cover the TVM material, so you need to move quickly on this.

VIDEO CLIP VIEWING INFORMATION: You must have a reliable computer, Internet connection, and a recent version of MS Internet Explorer (IE) browser (video clips can be viewed in IE only). For video clip viewing, the Firefox browser will not work. I cannot help you with any technical problems so please look into your available resources before registering for the course. If you have trouble with your computer, Internet connection, or browser, this distance learning format will not be convenient to you. You can reach the University HelpDesk at (817) 272-2208 or e-mail helpdesk@uta.edu. Or, visit the HelpDesk in person at the first floor of the Main Library (the best way if you are on campus).

Welcome Summer 2009 8-Week Session Students

Welcome to REAE 3325 On-line for Summer 2009 (8-Week Session).

To get started please send an e-mail to Dr. Hansz at reae3325@gmail.com. Please use this e-mail only (and no need to copy me with any other of my e-mail addresses).

Next, visit the course homepage at www.uta.edu/faculty/hansz. Click on the link for REAE 3325 Online Summer 2009. Please read the material at the top of the website carefully then find the syllabus and orientation video/audio clip. If you e-mail me questions that are covered on the orientation clip, I will ask you to review the orientation clip again.

Finally, please make note of all the examination times and locations. Three of the four exams will be held on-campus and all exams will be administered on Saturdays starting at 10 AM.

Final Course Letter Grades Posted

Your final course letter grades have been posted to WebCT. I will be posting your Final Exam grades and bonus points, if applicable, in the next couple days.

Week 16 (May 4, 2009):

Final Exam Week and (optional) Investment Problem Bonus
*Continue with Chapter 16 (the final is comprehensive but I will give extra emphasis to Ch. 16) and read Chapter 20, view video/audio clips, do practice problems etc.
(the usual routine for each chapter).
*FINAL EXAM (and optional Investment Problem Bonus) is on Saturday, May 9th at 10 AM in room 147.
*Please bring your photo ID, pencils, Scan-tron form, and calculator.
*The final is cumulative but emphasis will be placed on Chapter 16. It is not mandatory if you do not want or need to improve your three exam scores. (It is mandatory if you missed one of the three prior exams.)

Exam 3 Grades Posted to WebCT

Sorry for the delay. I have been away from a reliable Internet connection.

Grades have just been uploaded to WebCT. Please check your Exam 3 grade. Thank you.

TVM Completions Posted to WebCT

Sorry about the delay here. I have the TVM completions to WebCT.

Interestingly, I have up to 10 students who did not turn in the TVM tutorial. Please don't forget, you automatically get a "F" grade for the course if you do not successfully complete the TVM tutorial.

Week 15 (April 27, 2009):

*Read Chapter 16 (the final is comprehensive but I will give extra emphasis to Ch. 16), view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*Review Investment Problem (IP) clips. This is an optional bonus problem that will be part of the final exam.
*Review Exam 3. Please download the file at www.uta.edu/faculty/hansz/3325/online/f08/exam3S09.wmv

Exam 3 Review Posted (use the address below)

The review for EXAM 3 has been posted. Please download the wmv file at the following address: www.uta.edu/faculty/hansz/3325/online/f08/exam3S09.wmv.

I will be posting the exam scores and updated TVM completion to WebCT, but this might not be accomplished until the end of the week. I will make a blog post as soon as WebCT has been updated.

Blog Bonus Submission: Share the Problem and the Blame

Blog Bonus Submission
Share the Problem and the Blame

Turn on the news or radio, open up a newspaper or magazine or simply talk with friends’ family and co-workers and the state of our nations economy will be discussed, dissected and judged. At the very heart of our financial woes lies the mortgage crisis and ever-increasing foreclosure rates, as we see more and more people removed from their homes and forced to find alternative living situations. Most of us are quick to blame big business and banks for their greed and investors and regulators for their lack of foresight and discipline, yet who’s really to blame for this financial blunder that is bringing our nation to its knees?

To understand the problem, it requires a look into the past to see where we began and the reasons behind those decisions. Since the Great Depression, federal regulation has changed the mortgage lending industry in an effort to create equality and uniformity in the lending process. Generally speaking, the government prefers people to own homes rather then rent since this provides many benefits to both the homeowner as well as our governing bodies. One such effort was the 1977 Community Reinvestment Act (CRA) which attempted to provide home loans to low-income individuals and families who did not meet the credit or financial criteria. Many feel that this was an effort to help minorities and other segments of our population who had been historically denied the same opportunities as others. While the debate on whether the CRA was created by left-winged lobbyists or provided needed opportunities sparks interesting conversation, that fight will have to wait for another day. This act laid the foundation for companies to provide sub-prime mortgages to borrowers who did not meet their high standards, allowing businesses to loan money to riskier individuals. In the nineties, banks began to see more and more pressure to extend these loans even further and the standards they had previously set began to slide lower and lower. According to Thomas J. DiLorenzo, a professor of economics at Loyola College in Maryland and author, banks have been pressured, coerced and forced into lending billions in the sub-prime market, bringing risk and bad assets to their company and the industry.

Wikipedia reports that as of March 2007, the subprime mortgages value was an estimated $1.3 trillion making up between 18%-21% of the total originations between 2004 and 2006. This number jumped from less than 10% in 2001 to 2003; while these subprime loans would comprise almost half of the total foreclosures of 2007 and roughly 16% of subprime adjustable rate mortgages were either 90 days past due or were already in the foreclosure process. At the same time we hear stories of a single woman on disability purchasing a home worth $300,000 or a family making less than $35,000 a year refinancing their home for $400,000 and getting $100,000 cash out. We wonder how lenders could be so blind and find it impossible to understand why investors are putting billions of dollars into these terrible loans. To understand how these kinds of things are happening, I spoke with a friend who is currently going through foreclosure and will soon lose his house.

His name is Matt, he is 26 years old, single and purchased a home in Arlington in 2003 for $225,000. When he was approved for the loan, he and I were roommates and two of our friends, who were also roommates, decided it would be a great idea for us to find a house to rent, rather then live in apartments. At some point, Matt decided he could buy a home and we could pay him rent, thereby offering him a return on his investment. He called various banks mortgage lenders, including Countrywide Home Loans, Wells Fargo and First Option Mortgage and was promptly denied by all three since his credit was in the mid 500’s and his debt to income ratio was staggering. Even their subprime mortgage department turned him down as his numbers didn’t fall into even their low guidelines. He then went to an individual mortgage broker who told him it wasn’t a problem and he would get him approved, which he did. Matt got the money, got the home and the four of us moved in to his beautiful home soon after.

Five years later, Matt continues to work his job waiting tables and working valet on the weekends in Dallas, but the rest of us have moved on and moved out. He has other roommates from time to time, but more often than not he’s not getting the income that he needs to pay his mortgage. We looked over his original loan paperwork and discovered that not only had the broker changed Matt’s credit score, but he changed his job, his income and financed the property as a rental with the Matt actually making money from the people he was supposedly renting to. The broker did the deal, charged a $7,500 brokerage fee on top of the $2,500 in other fees added into the loan and promptly sold the loan to Countrywide.

Countrywide, one of the original companies that denied Matt, now owned the servicing rights to the loan, but had sold the actual loan via mortgage backed securities through Fannie Mae. Not only did the broker make a killing on the loan, but he set it up as a one year interest-only ARM loan, despite assuring Matt that it was a 30 year fixed, principle and interest payment loan. Rates steadily increased from 2003 to 2008 and every year Matt saw his interest only payment go up and up, while his balance remained the same. Since then, the broker has closed up shop and is nowhere to be found.

I see two major issues that the majority of us fail to realize and the media fails to mention in their analysis and judgment of the situation: there were a lot of small brokers, firms, title companies and appraisers that plaid a key role in the lending of subprime mortgages and individuals should also be responsible for their actions, in spite of the underhanded dealings of banks and brokers. In the end, many of the people who are in foreclosure or are behind on their payments never should have purchased or refinanced their home to get cash out because they were unable to afford doing so. Just because a bank is willing to give you money, doesn’t mean you should take it; each of us is responsible for what we do. If they bank or broker was dishonest, you still enjoy a three day right of rescission on your primary residence, three days to comb the paperwork to make sure everything is in order and correct. If you are unable to do so or don’t want to take the time, hire an attorney to do it for you. How many people who were misled would have paid a few hundred dollars to an attorney if they could have prevented the situation they are in?

My point is simple, yes banks made bad loans, yes the government failed to regulate properly, but how many times can we blame others for our mistakes? Many people are in terrible situations and have lost most, if not everything and I truly feel sorry for them. I’m sure it was a very hard lesson to learn, but hopefully we will all realize that we have to be responsible and make sure that our own business is in order when it comes to our finances.

Kenneth M Sturgill

http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

Blog Bonus Submission

The Changing Face of Irving, TX

For many North Texans life and the Dallas Cowboys are twisted into one thing. The same can be said about Irving, TX. On October, 24, 1971 the Dallas Cowboys made the switch from the Cotton Bowl to the newly built Texas Stadium, and put my home town of Irving on the map. As you can already see from the new stadium being built in Arlington, and what we heard from the professionals during business week, new stadiums are explosive to local economies. They create new jobs, new roads, and new businesses, which completely transform a community into something new and better. In the 1960’s Irving had a population of about 50,000 people, and after the stadium was built the population boomed to the 200,000 plus population estimate we have today. But what happens to a city when its main attraction is gone?

In 2004, Irving lost its partnership with the Cowboys when Arlington voted to build a new stadium in its city. 2004 was also the first year that Irving voted to allow the sale of alcoholic beverages. Irving was already anticipating the loss of revenues created by Texas Stadium, but this proposition was voted down. In late 2008 it was voted on again, and passed, I believe because residents were anticipating the loss of the city’s largest revenue earning real estate property. With the Cowboys leaving and a lagging economy, the city is looking to transform its downtown into more of a Downtown Dallas type of feeling. Plans for new housing communities, condos, lofts, bars, and restaurants are all in the works. Downtown Irving is not much to look at right now, with only a few historical buildings, some banks, and other small businesses. McDougal Companies is company in charge of the redevelopment process With the Trinity Railway Express line stop right in downtown; it connects Irving directly to DFW airport and to Downtown Dallas. This is a prime location for redevelopment and will greatly compliment all the development that has been done in the cities northern areas of Las Colinas and Valley Ranch. Different apartment complexes in the Downtown area that “haven’t met code” have already begun to be demolished to make room for the new project. I am completely for Irving to clean up this area and redevelop, but it is interesting to see how the city quickly goes about creating new codes and stricter enforcement of an area they have neglected for years when they see a potential for profit. New ordinances are also changing the face of Irving. The first of which is on multifamily housing, making apartment owners clean and improve there properties, if they want to keep them. Other ordinances are involved with sign standards, convenience store standards, and commercial standards. All of which are supposed to create a more visually appealing Irving.

A team of agents for the McDougal Company have been canvassing the downtown area informing the people of their project and making offers for their homes. My best friend and his wife lived in the neighborhood, and had met with one of the agents on several occasions. The agent let my friends know that this was going to be a ten year project and that they were just in the early stages of it. The agent then talked about how they were going to rejuvenate the area into a downtown city life. A new housing community would be built to replace their old homes. The company plans to buy all the homes in the area without the city having to use the power of eminent domain. Since the project has a large economical potential, the city has the power to take the property for public use. He then offered them a chance to sell their house to the company. After of few months of negotiation with the agent, my friends decided to sell there 88,000 dollar home for 118,000. Thirty thousand dollar turn on a house in this economy, and for only owning the property for two years is great. With only a small percentage of the homes sold so far, who knows how high they will be willing to go for each property.

The potential for this project is endless. If this area is developed just right, Irving can become the new Frisco, right in the heart of the Dallas metroplex. Instead of being stuck in traffic for hours, a business person working in Dallas could hop on the train and take a 20 minute trip right to their front door. I was ready to move out of Irving when I graduated, but I am now thinking of buying some real estate in the area because of the great investment potential. The Dallas Cowboys have brought on great change for Irving and Arlington, and it will be very interesting see how far that change goes in the next decade. Hopefully the change will breathe new life into Irving and create a new real estate market. If you leave in the Irving area, check out the Irving website for new updates on the project.

By Brian Wisdom

References

City of Irving Website
http://www.ci.irving.tx.us

Irving Information
http://www.city-data.com/city/Irving-Texas.html

Dallas Cowboys History
http://www.nflteamhistory.com/nfl_teams/dallas_cowboys/stadium.html

Local Residential Housing Crisis

Bonus Blog Submission:
Local Residential Housing Crisis

By: Henry Bauer

Background

Foreclosures are reaching all time highs in many areas that were traditionally stable. The Dallas Morning News reports more than 90,000 vacant home sites available for buyers to purchase - many in far suburban areas of Dallas-Fort Worth. The economy has affected many industries including housing and real estate. People are desperately looking to rid themselves of any decreasing assets. Thousands of foreclosure signs are being put up in front of homes around the Unites States. So is this a buyer’s market? What are potential buyers doing? Are people using this as an opportunity to buy or should buyers wait for the market to stabilize?

Local Foreclosures

According to Steve Brown of The Dallas Morning News, “Home foreclosure filing in the Dallas-Fort Worth area has risen to a record high, with more than 5,500 properties facing forced sale next month. And the number of houses threatened with foreclosure in May rose 25 percent from a year earlier, breaking all previous records, according to statistics released Thursday by Addison-based Foreclosure Listing Service.” Most of these foreclosures are due to the fallout of the economy, resulting in homeowners being unable to pay their mortgage.

Homeowners

The biggest problem lies in the fact that local home owners cannot get rid of these toxic assets. Many sellers in this situation are desperately posting their homes for sale, but no one is responding. “They have no choice but to continue posting the properties for foreclosure while they negotiate with the borrowers,” says George Roddy, Foreclosure Listing Service president. Most of the current foreclosure postings are repeats, meaning they have been posted and heard no responses so they are forced to post again.

Builders

With the struggle to sell the homes that are currently owned, the market is flooded with homes and builders are having a difficult time reducing their inventory. Much of the home construction has been cut back due to the lack of available financing. There are numerous empty lots that are ready to be developed, but there is no financing to fund them. “Home starts have declined almost 67 percent, while the lot supply has fallen only 2 percent,” said local housing analyst Ted Wilson.

Local Investors

While the housing prices are low, wouldn’t it be best to invest now and take advantage of the low prices? Some would tell you yes. Others think waiting it out is an option that may prove to be positive in the near future. Larry Taylor is a businessman that is sure that this is a time to take advantage of the current housing situation. He has recently formed a partnership with an affiliate of Starwood Hotels and Resorts to buy land and lots in the DFW area. “We did this in the late 80’s, when we bought tons of property from the FDIC and RTC.” They would buy these cheap properties and fix them up to turn a profit. According to The Dallas Morning News, “Taylor’s new TD Star Land plans to invest $75 million in lots and vacant residential land in the D-FW area.” While Taylor and some investors see this as a time to pounce, other investors think time is what it will take to rebound. “As the demand for new homes strengthens, the demand and prices of lots will quickly firm up in the high-growth area,” said David Brown, who heads the Dallas office of housing analyst MetroStudy Inc. Most of the lots available today will probably be picked up by investors in the future rather than potential homeowners as in the past.

Conclusion

The bust in real estate in the DF-W area has definitely taken it toll on the local citizens, but it may ultimately create more opportunity for investors and stabilize the economy in the future. If investors have the courage to invest funds in houses and wait, with time these investments will stimulate the economy by providing affordable homes.

Works Cited

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijAap5OBWfi2QIQ7ciDB8e60w898g7F-9VEIpySfp53JzL04HwCJX4zYiRMx-FMFYjBcKoZh6s-EDzWkVLYu5kZhQMEuYgjesO-jIZosCx7ZfVmDI_D15LT4qou5n1OSIG2bh4-Wm-YLAz/s400/April+2008+foreclosures+chart.jpg “US foreclosures chart picture”

http://www.dallasnews.com/sharedcontent/dws/classifieds/news/homecenter/realestate/stories/041709dnbuslots.355be8e.html “Lots!”

http://www.dallasnews.com/sharedcontent/dws/classifieds/news/homecenter/realestate/stories/041609dnmetforeclosure.dff07822.html “HIGH FORECLOSURES picture"

http://blogs.trb.com/features/family/parenting/blog/decision-making.jpg “investor search picture”

“Filings jump to record,” The Dallas Morning News, April 17, 2009, p. 1D.

“What’s on investors’ minds? Lots!,” The Dallas Morning News, April 17, 2009, p. 5D.