Ken Robinson, Broker

Ever since I can remember, I have been fascinated by airplanes. When I was a little boy, I remember my parents would occasionaly take my brother and me to Dallas to shop, have dinner and sometimes see a movie. If we had extra time to kill, my Dad would go to Love Field where we would watch the Jets take off and land (this was long before DFW Airport!). I always hated it when it was time to leave. I could have stayed for hours.

During this same time, my parents had a boat and would take us to the lake on the weekends. The road that we took passed by an Air Force base that always had planes landing and taking off. I can remember straining to see the planes parked on the runways in the distance. Since the base was off limits to civilians, I always wondered what was going on that I couldn't see.

Just over 10 years ago, middle aged crazy struck! I have always wanted to take flying lessons, but always found some excuse for not following through. With the proper encouragement from my better half, I signed up and took my first lesson. I was hooked!! All the questions I had always been curious about, such as how a plane flys, what all the runway signs mean, what do the numbers on the runway indicate, etc. were now being answered. And my first Solo, what a thrill and an awesome feeling of accomplishment. When I passed my check ride less than 6 months later and became a "Certified Private Pilot", I remember feeling like I had conquered the world!

During my entire training, the main lesson that is taught over and over to all pilots is "Never stop flying the airplane". No matter what happens or what distractions occur, always fly the airplane.

One day, on short final to the airport, my instructor popped open his door and started screaming at me like a frightened passenger would. I couldn't believe what he had done! He made me reach over and close his door while continuing towards the airport to land. I still remember the shock of what had happened and him telling me to "Fly the Plane". Lesson learned!

With the recent ups and downs in the Real Estate and Stock Markets, I am reminded of the lesson learned years ago, "Fly the Plane". No matter what the distractions and stresses encountered, we all have to keep moving forward and doing the right things. Panic never solves any problem. Keeping a level head will lead you to the right solutions as our economy begins to turn around.

Recently, the Stock Market has been trying to rebound and the increase in activity we are seeing in the Real Estate market are good signs that the airport and a safe landing are on the horizon!!

With all the talk about the Stimulus Package trying to revitalize Wall Street, Main Street and the credit markets, it's a fair question to ask how that is affecting our local Real Estate market? After all, it's our tax dollars being dished out at a record pace!

In Collin County, we are fortunate that our market has not seen the decreases in value as the rest of the nation has. For the most part, values are flat. I've recently heard speakers refer to that as "The New Up!"

As for the Stimulus Plan, the $8,000 tax credit for new home buyers is creating an increase in activity in our market. Also, with the continuation of the increased FHA loan limits, we are still able to obtain mortgages up to $271,050. While this does not buy a 6,000 square foot mansion, you can still purchase a very nice home in Frisco, Texas.

Where I question the effectiveness of the Plan is what is going on behind the scenes in the mortgage market for conventional loans. Lenders now require adjustments to the interest rate for lower credit scores. While this practice has always existed and should, the scores being effected make no sense.

In Texas, the average credit score is around 675. Private Mortgage Insurance Companies (PMI) are suddenly not offering coverage for borrowers with credit scores below 680. So if you have a score below 680 and FHA is not an option, you may be required to put down 20%.

For purchases and refinances, if your score is between 680 and 700, there will be not only an adjustment to your rate from the lender, but also the PMI rate. Between 700 and 720, another hit. And yes, between 720 and 740, another! This has limited some refinances since borrowers may not be able to take advantage of the lower rates currently available in the market because after the adjustments, their new rate is not any lower than their existing rate! It also unnecessarily increases the interest rate on a purchase transaction.

While I do not want to return to the loose underwriting standards of sub-prime loans that created some of the challenges of today, someone with a credit score of 700+ and 10% down or 10% equity on a refinance should not be penalized on rate. That will not Stimulate the housing market. Without the housing market turning around, it will be difficult for our economy to recover in the short run.

The pendulum that swung way to far to the left that allowed loose underwriting standards on loans has now swung too far to the right. With increased awareness by you and our elected officials, it will move back towards the middle and help to accelerate our recovery.