Saturday, June 28, 2008

Multi-Family Foreclosure

Sorry, folks, but I couldn't remember when I posted last or what I posted about. I was shocked when I logged on to find that I hadn't updated my blog since Wednesday. Too long! I haven't looked at my site meter in months.

I have a bunch of material (really, I do) but don't have the time to put it up lately. I want to update you about where our business is going, but that will have to wait for another time. Until then, I want to share marketing material that came in the mail last week. I would just go ahead and provide a link to this ad, but you have to join to see the details of the listings. I'm going to punch it out real quick, so if you see any glaring typos, do tell.

Maryland Manor Townhomes
4600 West Maryland Avenue
Glendale, AZ 85301
(Lender Owned)
32 Units
Proforma NOI $270,389

Cushman & Wakefield has been exclusively retained to market the above referenced property on behalf of an out of state lending institution. The property was recently foreclosed on and is in various stages of construction completion. The current owner has expressed a willingness to consider providing seller financing to a qualified buyer.

Maryland Manor Townhomes was built to home builder specifications and possesses spacious units averaging 1,344 square feet. All units have attached two-car garages as well as full size washer and dryer hookups. The property is in a quality infill location and is within close proximity to numerous employment opportunities, entertainment, shopping, and schools.

This is an excellent value add (sic) opportunity for an investor to finish construction on this property and either rent or sell the finished units.

My Commentary

Puhleeeeze!! At that price, the CAP rate is only 8.4%. However, from the pictures it shows, it will need a large investment from the buyer before the units can be sold or leased. In this market, especially in Arizona, it makes no sense to try to get full price for a foreclosed incompleted multi-family dwelling.

Thirty of the units are 1300-1400 sf. We had apartments that were over 1200 sf. I can tell you that the make readies will kill your bottom line. Between the carpet and paint alone, even on a year lease, much less with the skips, we felt as though we couldn't keep up. If you try to clean the disgusting messes out of the carpets, this chases away the better qualified renters.

Sell the finished units? Ha. To whom? They show comps of $164,000 (1317 sf) to $395,000 (1851 sf), while the sales price is $100,000/unit. But we have no idea what date the sales were and how much others are going for in the area. Plus, by the time the project is completed, who knows how much they'll be worth. AZ was hit hard.

Bottom line: When I see "value added" in a marketing flier (no matter how thick and shiny), I run for the hills. That's a death knoll, if ever I heard one.

Wednesday, June 25, 2008

Do Fingerprints Count As Confidential Information?

We reorganized the office last weekend. We were able to throw out catalogs and other unnecessary items, and shift desks. When I cleaned off a desk and shelves, which my husband wasn't using, for my own personal space, he decided that he liked it better and moved in. No problem. I just cleared off the desk he had occupied, so that I could finally have someplace to put my ever burgeoning workload (right now I work on a tiny desk in the common area of the house). It turned out so nice that he started to eye it again. Too late. I had already set up shop there.

To keep the kids occupied while we were knee deep in 2007 promotional products catalogs, we asked them to shred a large stack of papers. They have been shredding for years now and are experts in the field. However, we had more than I had thought and it ended up making a humongous mess (after cleaning up, I'm still finding it all over the house). Here is a portion of it:

After a few hours, they pooped out. I took over until the machine decided it was done, too. After big shredding episodes, I like to dispose of every item as I need to rather then piling it on top of the machine. However, my husband failed to receive that memo. It's a pain to do a few pages at a time because we unplug the shredder for safety reasons. So, for one piece of paper, we'd have to plug in the machine, turn it on, shred, turn it off, and unplug it again. (But this takes much less time than the hours devoted to stacks and stacks of documents.) And, once someone puts an item on top of the shredder, it just keeps piling up.

When I took over the task this weekend, I noticed that not everything designated for the confetti maker had personal information on it. I like to shred items with confidential business trademark data, bank statements, or the thousands of credit card applications and checks that we receive. However, as I became entranced by the monotony of my motions, it took me a while to realize that I was shredding shiny fliers that come in bills and other mailings.

I shook off my daze and asked my husband if he had placed these items to be shred. He said that he had. I guess he considers a fingerprint to be confidential personal information. I tried to weed out what didn't need to be there, but, unfortunately, the machine died before I had a chance to ask it's forgiveness. It had overheated--probably in it's anger at having to consume that in which no thief would ever be interested. The next morning, after I had cajoled and convinced it that only the most important intelligence remained, it finally cooled down enough for me to finish.

Order reigns supreme again in our work area! To ensure that it stays that way, I placed a sign on the shredder that reads: "Do Not Place Items Here. Shred Immediately!" I think that will do the trick . . .

. . . until the sign mysteriously falls into the jaws of death and a flier for a free gift from the credit card company shows up in its place.

Tuesday, June 24, 2008

Reward for Being Responsible

We see and read much of the plight of homeowners who are experiencing foreclosure. For most, we now know that it's due to rising interest rates and unmanageable new payments. We've been told about rotting pools, abandoned pets, homeless children, and vandalized properties, and bankrupt lenders.

In some areas the foreclosure rate is estimated to be as high as 40-50%. When I drive through some neighborhoods, it's downright depressing. I've already talked about how obvious many of the foreclosed homes are. I think of the families who have been displaced and the havoc this has wreaked on the country's economic status.

But, what about the owners on those streets who didn't fall into the greed trap? Who didn't obtain second mortgages or houses too big to afford?

It's estimated that 30% of homeowners own their properties outright. Even considering the rising prices of goods, these people may have no problem weathering this storm. They've done the right thing their entire lives--paid their bills in full on time, resisted the temptation to buy large depreciable items, lived below their means, provided necessities for their families. Those who pay their rents on time also must suffer from the actions of others.

What's their reward for living responsible lives?

Lower property values, higher rents (in some areas), eviction due to a landlord's default, unsightly views of foreclosed homes, vacant streets, loss of neighborhood friends, criminal activity in previously safe areas.

Those who live a life accountable to their income must be relieved that they will not be experiencing the plight of those who didn't. However, they also may wonder, "Was it worth it to work so hard and sacrifice in order to pay my obligations?"

We all know the answer to that one.

Friday, June 20, 2008

Homeschoolers Threaten Our Cultural Comfort

Thanks to MB for this article.

*SONNY SCOTT: Homeschoolers threaten our cultural comfort *


Daily Journal

You see them at the grocery, or in a discount store.

It's a big family by today's standards - "just like stair steps," as the old folks say. Freshly scrubbed boys with neatly trimmed hair and girls with braids, in clean but unfashionable clothes follow mom through the store as she fills her no-frills shopping list.

There's no begging for gimcracks, no fretting, and no threats from mom. The older watch the younger, freeing mom to go peacefully about her task.

You are looking at some of the estimated 2 million children being homeschooled in the U.S., and the number is growing. Their reputation for academic achievement has caused colleges to begin aggressively recruiting them. Savings to the taxpayers in instructional costs are conservatively estimated at $4 billion, and some place the figure as high as $9 billion. When you consider that these families pay taxes to support public schools, but demand nothing from them, it seems quite a deal for the public.

Homeschooling parents are usually better educated than the norm, and are more likely to attend worship services. Their motives are many and varied. Some fear contagion from the anti-clericalism, coarse speech, suggestive behavior and hedonistic values that characterize secular schools. Others are concerned for their children's safety. Some want their children to be challenged beyond the minimal competencies of the public schools. Concern for a theistic world view largely permeates the movement.

Indications are that homeschooling is working well for the kids, and the parents are pleased with their choice, but the practice is coming under increasing suspicion, and even official attack, as in California.

Why do we hate (or at least distrust) these people so much?

Methinks American middle-class people are uncomfortable around the home-schooled for the same reason the alcoholic is uneasy around the teetotaler.

Their very existence represents a rejection of our values, and an indictment of our lifestyles. Those families are willing to render unto Caesar the things that Caesar's be, but they draw the line at their children. Those of us who have put our trust in the secular state (and effectively surrendered our children to it) recognize this act of defiance as a rejection of our values, and we reject them in return.

Just as the jealous Chaldeans schemed to bring the wrath of the king upon the Hebrew eunuchs, we are happy to sic the state's bureaucrats on these "trouble makers." heir implicit rejection of America's most venerated idol, Materialism,(a.k.a. "Individualism") spurs us to heat the furnace and feed the lions.

Young families must make the decision: Will junior go to day care and day school, or will mom stay home and raise him? The rationalizations begin. "A family just can't make it on one income." (Our parents did.) "It just costs so much to raise a child nowadays." (Yeah, if you buy brand-name clothing, pre-prepared food, join every club and activity, and spend half the cost of a house on the daughter's wedding, it does.)And so, the decision is made. We give up the bulk of our waking hours with our children, as well as the formation of their minds, philosophies, and attitudes, to strangers. We compensate by getting a boat to take them to the river, a van to carry them to Little League, a 2,800-square-foot house, an ATV, a zero-turn Cub Cadet, and a fund to finance a brand-name college education. And most significantly, we claim "our right" to pursue a career for our own "self-fulfillment."

Deep down, however, we know that our generation has eaten its seed corn. We lack the discipline and the vision to deny ourselves in the hope of something enduring and worthy for our posterity. We are tired from working extra jobs, and the looming depression threatens our 401k's. Credit cards are nearly maxed, and it costs a $100 to fuel the Suburban. Now the kid is raising hell again, demanding the latest Play Station as his price for doing his school work ... and there goes that modest young woman in the home-made dress with her four bright-eyed, well-behaved homeschooled children in tow. Wouldn't you just love to wipe that serene look right off her smug face?

Is it any wonder we hate her so?

Wednesday, June 18, 2008

Hats Off to Single Working Parents

For the past 11 days, I've been a single working mom.

No, it's not what you think. I'm not permanently single. My husband took our two oldest sons to Rome for their respective graduations. A few years ago, when he was working for a Catholic non-profit agency, he organized a trip to Rome. Unfortunately for me that year, he also went on a pilgrimage to Jerusalem, a couple of cruises, and other work-related travel.

By the time the Rome trip came around, I asked him not to go. Selfish? Yes. Necessary? Yes. He readily agreed that he had spent too much time away from the family that year already, and backed out of the trip. Ever since then, he's been itching to go. So, for the past two years, he's been planning to take our sons.

With a frequent flier ticket for one and a travel contact who allowed them to hook into a Rome trip for a group from another state, it was as economical as we could make it. So off they went.

I was more than happy to take over the business completely for this short time AND to watch over my now shrinking brood--I was left with five, ages 20 months to 11 years. My husband spent many days (and nights) trying to get the business to a place where I would just need to "manage" it for a week and a half. Needless to say, he ran out of time. Prior to their departure, he and the boys spent the night close to LAX. He sent my oldest son off on a different flight, then spent so much time putting everything that I needed to know in writing (pertinent phone numbers, dates, schedules, etc.) that he and my other son missed their flight.

None of us knew that they lock international gates one hour before departure. They arrived 50 minutes before and didn't have to check anything in. However, the airline (I don't want to say which one, cough--Delta--cough) couldn't care less. They also didn't flinch when my husband told them that his other son would be in Rome waiting for them. He and the other two passengers who arrived in time, but late, were out of luck.

They had to wait 24 hours before their trip began, so they missed an entire day in Assisi--as in St. Francis of Assisi. However, they soon caught up with the group and had a wonderful time. They broke away for the last two days and went out on their own.

My oldest son is still touring Europe. He doesn't have any definite plans, but is e-mailing me regularly. He also has a cell phone with a European Sim card.

Anyway, with that explanation, I've been a single working mom. I don't recommend it. I have a new appreciation for those who never get a break. I had a sitter a few times, but that didn't provide me with nearly enough time to do what I needed to do. The physical exhaustion was the worst for me. I think I spent 3/4 of the day cleaning up--breakfast, lunch, dinner, and in between. My teenage son usually handles many chores during the day when he's home. My husband takes over after dinner. The kids were a great help and really super, but there are just some things that they are not old enough to handle--like hauling the giant kitchen trash bag out to the cans. They were able to pull the wheeled trash cans up the driveway and out to the street, though.

It's been scorching hot here and we soon noticed that parts of the lawn were dying. Since I don't know how to adjust these sprinklers (I was a pro at our other house), my 11 year old and I were forced to spend time watering by hand--he the front, and I the back. The lawn is now overgrown and it pains me (and my neighbors, I'm sure) to see it. However, none of us here know how to operate the ride on. That'll be my son's first duty when he returns. I'm sure he's aching to get back to start his chores again.

For the business, I carried my cell phone and my husband's. We have the toll free office number forwarded to my husband's cell phone. I only answered it when it was quiet. Other calls, I returned as soon as it was safe to lock myself in another room. The most fun I had was personally interacting with our local suppliers (I usually handle the out of area suppliers by phone or e-mail). They're really awesome at what they do.

Under normal circumstances, I like to keep my contact with customers at a minimum because my husband is the sales contact. However, I had so many orders that I did visit a few of them, and call and e-mail others. I accomplished so much this week. The best part was collecting the checks and having to go to the bank several days in a row. There are still some outstanding invoices out there because I wasn't sure what my husband was charging for some items and I didn't know how to complete the invoice on Quick Books. I just told the retailers that they'd be receiving their invoices soon.

I received a call from a lone retail customer. We now exclusively deal in a wholesale, or bulk, capacity. However, she had contacted my husband many months ago and now wanted a last-minute Father's Day present for her dad. I happened to have what she needed in stock, and was able to deliver it and pick up the check before Father's Day. It was very profitable for us, and came out of the blue. However, on this order, I had to come up with an invoice, since I would not drop off the items without payment. My husband had left me a few blank ones in case of emergency. I didn't want it to look hokey with my messy handwriting, so I actually typed out everything in a Word document, cut and pasted it on the invoice, and photocopied it. Luckily, my husband had numbered it already. All he needs to do now is input all the information from my invoice to the one his computer that he'll need for his records.

I was also given the contract for T-shirts for a Vacation Bible School at a local parish. I'd like to say that it was my expert sales technique that sold them on our company, but A) I don't have a sales technique, and B) I was referred by a friend. I did, however, with a bit of help from my husband in Rome, compute our costs, give them an estimate (and small discount), order the shirts, and send in the artwork. They want them completed by July 1, but I think they'll be done this week. Cool!

As for Purchase Orders, I usually send them electronically to my suppliers after my husband completes them because he knows exactly what the customer ordered. Since I'm in Order Fulfillment, I track the P.O.'s and art approval from that moment until the products are delivered. I did place many orders and reorders with our local suppliers last week, but we do so much business with them that all I had to do was send them an e-mail, call them, or tell them what I needed in person. These orders will be tracked by the invoices we receive from the supplier. Now that I think about it, I don't even know if my husband will need P.O.'s for them. Just one more question to ask him when he recovers from his jet lag.

During these past 11 days, I realized that there's still so much for me to learn in our business, but I also discovered that I can do it myself~if I have to.

Thursday, June 12, 2008

Can't Blame Him

I'm extremely busy this week and have many work-related duties outside the home. Since I'm dealing mostly with suppliers, I've been able to take the children with me. I also had to drop off some orders.

One was at a school, so I thought that I'd take the kids so they could see what one looks like. I walked into the administrative offices and had to stifle my gasp. It was beautiful and resembled a doctor's office. My how things have changed! The kids, however, were not impressed. But the school was very impressed with the GIANT graduation banner that they ordered.

Anyway, I didn't think I'd have time to post again until next week (yes, we are that busy--yippee!). However, in perusing the headlines tonight while the kids watched a segment of Adam-12 on DVD, I saw this article. It's about a man who becomes violent when a guy cuts in front of him at the Costco gas line.

OK, I can totally see where Crowbar Guy is coming from. I was just starting to wonder A) Why is the Costco gas station always packed now--regardless of the time of day? and B) Where do all of these people come from and don't any of them have jobs (okay, that's more like B and C, but I thought I'd slip the second part in)?

I haven't been keeping up with the gas prices lately (what's the point, right?), but Costco now must be significantly cheaper than the other stations. My friend told me that we weren't supposed to buy gas on Mondays, but I didn't get that memo, either. Doesn't matter. I think people camp out at Costco until they open the next morning. There are no slow times there now. Gosh, how much can gas be when it's still well over $4 there?

As much as I can empathize with Crowbar Guy's frustration at someone cutting in front of him, I have a teeny weeny confession to make. When we first joined Costco, I was pulling into the station, watching all the long lines, when I noticed an opening in a front pump. No one in that line seemed to be interested in occupying the space, so I was more than happy to do it. I didn't notice if I received any dirty looks that day. Once I realized how the system worked there, I now patiently await my turn--even when the baby is screaming her head off.

Oh, by the way, I drive real slow now, too. Twelve-seater vans aren't known for their economical mileage. Just another reason for someone to drive around me and give me the one-finger wave. I smile and wave back, too--but I use all of my fingers.

Tuesday, June 10, 2008

How HUD’s Mortgage Policy Fed The Crisis

Put down your fork. Here's an article that you don't want to read while you're eating. It really made me sick.

Monday, June 9, 2008

Who Benefits From Class Actions?


But you probably already knew the answer to that one. No offense to my many legitimate attorney friends.

It seems that almost every week we receive a notice of a class action, of which someone in my family is fortunate enough to be in the "class." It seems that the lawyers are working overtime to find something to sue big corporations for. Whether it be cell phone service, automobile defects, insurance, homeowners' associations, computer companies, etc.--they've all been sued and we have become proud owners of the $.19 check when all is said and done. Once we were pleasantly surprised with a 10% discount for merchandise at a store that was sued.

Last week, I received a letter in my third grade son's name. The return address was the familiar "Class Action Litigation". This time it was against our health insurance company for not covering specific services. I found this odd since A) 99% of the services were for the baby and me, not my son, and B) they were covered according to the terms of my insurance (I'm particular about these things).

However, some law office found lackeys who agreed to be the ever important "Class Representatives." Therefore, I now have an opportunity to get reimbursed for services that I paid for out of pocket. OK. If my insurance company wants to settle and pay me in the process, that's fine with me, as long as they know that I didn't ask for it.

So, how much will the attorneys be awarded if this settlement is approved at the next hearing? Let me quote the pertinent clauses of the material that was sent to me. You won't need a magnifying glass to read my type:

"The Settlement has an estimated value of between $249 and $264 million . . . Class Counsel will apply to the Court for an award of attorneys' fees based on a percentage of the Settlement not to exceed 2.5 times their unreimbursed fees based on hourly rates, known as the 'lodestar' . . . Excluding fees and expenses that were previously paid to Class Counsel . . . total lodestar in the case is approximately $30,700,000 and the total expenses and costs are approximately $1,715,000."

Then it goes on to explain that it's the least they should get considering that they worked really hard for seven years at a risk due to the contingency basis. Let's see, $30M divided by 7. Hmmm. That would be over $4M a year. Yeah, I'd work for free for seven years, if I thought I may get that much at the end.

So, what do the Class Representatives receive for being used for a total of seven years? "Class Counsel also intend (emphasis added) to apply to the Court for an incentive award for the Class Representatives" (because if they paid them directly, they'd go to jail, like this guy--but that's just a small detail). It appears that there are three representatives, each will be requested to receive an amount not to exceed . . . . $1,000,000? No. $500,000? Um, no. $100,000? Not quite. Try $60,000. Let's see, $60K divided by 7. That would be a little more than $8,000 per year.

Doesn't seem fair, considering that without these folks the lawyers would have received nothing. Nada. Zero. Zilch.

Thursday, June 5, 2008

Outside My Kitchen Window

I woke up early this morning and did the first thing that I do every morning after I leave my bedroom. I moseyed up to my kitchen window to take in the peaceful view. Today I noticed, through an opening in the wall of trees at our property line, that there were people on the other side taking pictures. I thought it was rather odd to be posing for photos at 6:00 in the morning on an empty field. Then it hit me.

So I grabbed my camera and ran outside just in time to catch a hot air balloon inflate from almost nothing. Here is a 2 minute and 41 second super close-up video of hot air being pumped into a giant piece of fabric. Only click if you need a meditative break. The video below this one is more interesting.

This video is 2 minutes and 19 seconds of the final inflation and take-off. I've been treated to this view many times in the five years that we've been here, but never this close and from the very beginning. As I've mentioned before, we also had a hot air balloon land on our property, while we watched it jump the fence (because they were afraid of our dogs) and deflate next to our house. There must be a clause on our title called "HAB Easement", which explains that hot air balloons may do what they want, when they feel like it, wherever they please. That's fine with me.

If you don't have the time or the interest in watching the videos (can't blame you there), here are some stills that you can quickly peruse.

Wednesday, June 4, 2008


I thought I'd seen it all--and then I read this article yesterday. It's Buy One Get One free on steroids.

Just to synopsize, this developer in San Diego (who I've never heard of, by the way) is generously offering a $400,000 house for free with the purchase of a $1,600,000 home. Where do I start?

First and foremost, he's never going to sell those $1.6M houses anyway. And the $400,000 "row homes" will not be worth near that much in a few months, if they can even appraise for that already.

Secondly, why doesn't he just take $400,000 off the top of the expensive houses that he's desperately trying to unload? Well, it's probably because he's trying to rid himself of the expense of carrying the taxes, insurance, utilities, upkeep, etc. on the smaller homes. He also knows that the "luxury" houses won't sell for $1.2M, either--but it sounds so much better to get two houses than it does to have a 25% price cut. And, if he's already sold some at higher prices, he won't get as much grief from the current owners if the appraisals will still comp. A quick perusal of the web site tells me that this may be a motivating factor because it appears that five of the nine lots have been sold. When? Probably long ago and he's struggling by carrying the other four.

This builder seems to be spread thin. Hopefully, for the current homeowners, he won't be filing for bankruptcy any time soon.

Tuesday, June 3, 2008

Differences Between Boys and Girls

My column was published in The Bugle last week. Our ad is printed right below it and we've received calls already! It looks great. I'm just so thankful that we have a fabulous graphic designer and that I'm able to work with a publisher as nice and patient as Nancy Knight.

Here it is:

My husband and I have five boys and two girls—in that order. Needless to say, we were shocked and afraid when we found that our sixth would be the first girl. I was afraid because I could raise a boy with my eyes closed. The activity and predictability in behavior was comforting to me.

Although they are all different, boys have some universal mannerism. They love guns. They enjoy playing outside with rocks, sticks, and mud. They bounce off the walls after dinner. The headlock is a favorite maneuver to perform on a brother. No animal is too gross to pick up—and kiss! Jokes about farts and poop will always result in raucous laughter, especially at the dinner table. Anything pink is forbidden.

Then our daughter came along. Now that she’s four, she loves weapons. She is fond of rocks, sticks, and mud. She isn’t afraid on any animal. And she’s the one starting the jokes that have to do with bodily functions.

But she does it all in a ballerina dress and shimmering shoes. Pink reigns the supreme color in our house. Her most favorite activity is playing tea party. She corrals the boys to join her. They usually don’t mind if I bribe them with real tea and some snacks. She loves to play with dolls, as did her brothers before her. But she doesn’t rip off their heads and bang the bodies together in mock war.

It’s not just all about hair bands and shoes for her. She’s also very caring and loving—when she’s not screaming at her brothers like Linda Blair in “The Exorcist”. She’ll remember when someone had an ache or pain and ask how they’re feeling. Although caring in their own ways, the boys seem oblivious to any need besides their own.

She mothers them all, even when they don’t want more than one. It doesn’t help that my oldest son has nicknamed her “Princess”. She believes that she really is one. Teaching her manners has been much harder than it was the boys. She likes to bark orders at people and expect that they will instantly perform for her. We all just look at her and wait until her feelings are hurt from the stares. She’s a girl. It doesn’t take much to send her a message.

She lets us know how she feels by expressing herself verbally, even if no one is listening. She will talk to herself about an upsetting situation until she feels better. In the morning, we all know where to find her when we roll out of bed—because she likes to sing while she’s sitting on the potty.

Yes, having girls has made our lives very joyful and entertaining—and our boys complete our contentment in ways too numerous to count.

Monday, June 2, 2008

My 5-Year ARM New Rate

A while back, I told you about my 5-year ARM, which is set to adjust this summer. I explained how I would request a "freeze", which was all the rage with the mainstream media a few months ago. And how it all ended.

On Friday, we received a letter from PHH/AMX with "information about pertinent changes to your monthly mortgage payment and interest rate." I didn't expect our payment to rise significantly, but I was still nervous about discovering how much the new one would be.

I skimmed the current rate information and formula for calculating my new rate (which I already knew) and skipped down to the new principal and interest payment. What do you know?! Our new payment is a penny less than our old one!! This will be locked in for one year (adjusting annually).

Our old rate was 4.75%. The index used for the new rate is the one-year T-bill weekly average, which is 1.94%. The margin used is 2.75%. I need to add the 1.94 and the 2.75 to get my new interest rate. This equals 4.69%. Although it's not explained in the letter, my loan docs specify that the result of adding the two will be rounded to the nearest one-eighth of one percentage point. That's why the new rate is the same as the old. Of course, if the index had been just a tad lower, my new rate would have been rounded to 4.5%--lower than my old rate.

Maybe, if other mortgages start to adjust in the same way (although many of them are based on different indices), this will do more for leveling off the real estate market than anything else. The bottom line is that the worst hit areas need to get rid of their inventory. One way to do that is to have lots of people buy foreclosures, but the prices may need to drop significantly more for this to happen. Another way is to stop the flow of properties into the market. If other mortgage adjustments don't increase as much as they were a year ago, then the rate of foreclosures will decline tremendously. Only time will tell.

As for us, we couldn't be happier that 1) our payment is less (even if it's just $.01) than last year, and 2) we didn't have to refinance for it to happen. I've been doing a little jig all weekend!