Archive for August, 2009

Be on guard when seeking foreclosure help

Be careful. Please.

Consumers should be EXTREMELY WARY of for-profit companies that promise to help you avoid foreclosure — only to take your up-front money and accomplish nothing.

These companies advertise heavily, so be especially on guard when you hear their pitches.

AJC reporter Carrie Teegardin wrote a sad story in Sunday’s paper about companies that target desperate homeowners trying to hang on to their houses. These companies prey on consumers searching for any good news, hitting them up for thousands of dollars in up-front fees that would be better spent on paying the mortgage.

“It’s one of the most despicable crimes you can commit,” R. Scott Palmer, chief of Florida attorney general’s mortgage fraud task force, told Teegardin. “It’s taking the last penny a consumer has, and on top of that they lose their house and their credit.”

Instead, consumers should go to nonprofit agencies, which do not charge, such as Consumer Credit Counseling Service of Greater Atlanta.

In …

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Power Breakfast: Troubled banks, hospitality, executive pay

Georgia banks continue to trip up on our housing problems.

Banks are having trouble unloading entire subdivisions that have been foreclosed on, many barely inhabited and only partially completed.

AJC reporter Paul Donsky writes in Sunday’s paper that so-called “zombie” subdivisions are most prevalent in outer-ring suburban areas. “A staggering 150,000 vacant housing lots across metro Atlanta are available, more than a decade’s supply at current absorption rates,” Donsky writes.

Meanwhile, mounting losses on problem real estate loans were largely responsible for pushing more Georgia banks onto a list of troubled financial institutions, AJC reporter Russell Grantham writes.

At the end of June, Georgia had 49 banks with high scores on the “Texas ratio” — a measure that gauges the risk that an institution could fail. That’s about one in six of the state’s 300-plus banks.

Also in the AJC:

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CCCS: Grocery spending rises, gas expenses way down

The people at Consumer Credit Counseling Service of Greater Atlanta have been crunching numbers lately on grocery and gas spending.

It seems that consumers seeking their help have seen their grocery expenses rise consistently over time. But there has been considerable relief on the gas front.

For groceries, CCCS clients spent an average of $363 in July. That’s up from $351 last July and from $311 in July, 2007.

Meanwhile on the gas front, CCCS clients spent an average of $193 in July. That’s way down from last summer when they spent $289. In fact, gas expenditures are down to about where they were in July, 2006.

One explanation is the decline in oil prices. Another is that some consumers have changed their driving habits.

What have you seen with your gas and food bills over time? To cope, have you changed any of your habits?

For instant updates, follow me on Twitter.

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What the unemployment numbers mean

The bleeding is slowing down, but the patient is still sick. That’s one way to look at today’s unemployment numbers.

The government reported that the national unemployment rate fell slightly in July to 9.4 percent, from 9.5 percent in June. Economists had been expecting a small increase.

Meanwhile, employers shed many fewer jobs than economists had been expecting — 247,000 were lost in July. That’s down considerably from the 443,000 job losses in June.

The numbers are an encouraging sign, given the sharp increase in joblessness over the past year. But there’s still a widespread belief that the unemployment rate will rise in the coming months. Certainly, there is no cause for celebration as employer payrolls continue to contract. Until hiring picks up, the job market will not improve.

One of the reasons for the decline in the unemployment rate — the first since April 2008 according to the Associated Press — was that hundreds of thousands of people left the labor force after …

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Power Breakfast: Unemployment, income, banking giants

Today will be a big day with the national unemployment numbers for July coming out this morning.

Most economists expect an increase from the current 9.5 percent level, probably ticking up to 9.6 percent or 9.7 percent. Job losses are expected to slow to a pace of around 320,000, compared with 467,000 in June.

Already in metro Atlanta, unemployment has risen to 10.7 percent, with the state labor commissioner expecting it to peak at 11.5 percent to 12 percent in the coming months.

AJC reporter Michael Kanell writes that the recession has pushed metro Atlanta’s per capita income to 112th place out of 366 areas studied by the federal Bureau of Economic Analysis.

Per capita income in metro Atlanta last year was $37,655 — down 0.2 percent from the year before, according to the report released Thursday.

Also in the AJC:

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Will you buy another home?

If you had to do it all over again, would you buy another home?

The rate of homeownership is forecast to keep tumbling in the next decade to lows not seen since the 1980s, USA Today reports.

The percentage of households that own homes hit a peak of almost 70% in 2004 and 2005. By the second quarter of this year, that slipped to 67.4%, according to the Census Bureau.

Now, a University of Utah analysis projects it’ll drop to about 63.5% by 2020 — the lowest since 1985, USA Today reports.

“It will fall steadily by about half a point per year,” says Arthur C. Nelson, director of the university’s Metropolitan Research Center. “We’ll have far more renters in the future.”

What about you? Will you look at renting in the future instead of buying?

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Power Breakfast: Factory rebound, clunkers, mortgage giants

This recession is having an interesting effect on manufacturing.

The sick part of this economy for decades, factory production is being looked to in this quarter for help in spurring a recovery. That’s partly because many companies have to replenish their inventories after letting them become depleted in cost-cutting moves.

Now, in another sign of life, AGCO says it’s considering building a plant in the U.S. in the next few years that could employ 2,000. Georgia is being considered as a possible location, writes AJC reporter Peralte Paul.

After years of global growth through acquisitions, the Duluth-based maker of farm equipment wants to boost its market share in the United States, chairman and chief executive Martin Richenhagen said.

“We’re not as big in the U.S. as we want to be,” Richenhagen told Paul. “We want to be double in five years from our current market share of 10 percent.”

That strategy, he said, likely means the construction of a tractor …

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Can Phil Mickelson win a Waffle House franchise?

Can a Masters champ run a Waffle house?

That’s what a bankruptcy court judge is going to decide.

AJC reporter Joe Guy Collier writes that golfer Phil Mickelson has joined a group that is bidding on SouthEast Waffles, the largest independent franchisee of Waffle House restaurants. Nashville-based SouthEast, which has 105 outlets in Tennessee, Alabama, Mississippi and Kentucky, filed for bankruptcy protection a year ago.

GS Acquisitions includes Mickelson as a principal, as well as Steve Loy, CEO of Gaylord Sports Management; and Terry Pefanis, former chief operating officer of Big Idea, best known for its VeggieTales series. It submitted a bid of $20.2 million bid, Collier writes.

There are two other bidders competing with Mickelson’s team:

– Waffle House, the Norcross-based franchisor of the chain. It bid $21.4 million.

– MNM Waffles submitted a $24.7 million bid.

The amount of the bid is only one factor, Scott Riddle, an Atlanta bankruptcy attorney, told Collier. The court …

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What needs to happen with the DOT and transit?

Time after time, the Georgia Department of Transportation seems to come off like the gang that couldn’t shoot straight.

AJC reporter Ariel Hart writes today that the DOT’s transit program “is riddled with financial management problems,” according to a federal report. The problems were so severe that the federal government has frozen DOT’s transit grants.

One problem: A Georgia grant funded a bus route with no stops in Georgia.

This news comes on the heels of scathing reports on DOT’s financial practices by the state auditor and inspector general, Hart writes.

We all know how important transit will become if we’re ever going to get out of our congested mess. Business leaders often say that transportation is the No. 1 issue confronting metro Atlanta’s future.

What should be done — about the DOT in particular or our transportation problems in general?

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Power Breakfast: DOT finance mess, Pepsi, bankruptcy, solar

Business leaders often rank transportation as the most important issue facing metro Atlanta. Well, here our two disconcerting news stories on the topic today.

A federal report has concluded that the Georgia Department of Transportation’s transit program is riddled with financial management problems, writes AJC reporter Ariel Hart.

The problems were so severe that the federal government has frozen DOT’s transit grants, which average about $28 million a year.

Mass transit, of course, is one of the ways out of the congestion mess we’re in.

On the airline front, Hartsfield-Jackson ranked 17th in the nation for on-time arrival performance in June. That’s down from the No. 4 spot a year ago, writes AJC reporter Kelly Yamanouchi.

Meanwhile, Delta had the highest rate of consumer complaints reported to the federal government in June among airlines ranked, with 1.61 complaints per 100,000 passengers boarding planes.

The airport and Delta have been key selling points for the region …

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