Myrtle Beach area home construction loan market picking up steam ...

MYRTLE BEACH When Grand Strand builder Jeff Skelley thought it was time to rebuild his business from the dregs of the Great Recession a couple of years ago, he went to see his longtime banker.

The problem was, what Skelley was looking for was a loan to build a spec house, one he wanted on the ground to show prospective buyers what he could do for them. He didn?t already have a buyer for the house, and banks were still shy about loans to build homes that weren?t already sold.

Skelley?s request and others like it caused his bankers at CresCom to think there might be a void in the home construction business and they began moving to fill it, said Travis Minter, the bank?s senior vice president for retail mortgage.

Now the bank is reporting that its construction loans this year already equal all of 2012 and it has enough business in the pipeline to double last year?s output.

Jerry Rexroad, president and CEO of Carolina Financial Corp., CresCom?s holding company, said that the bank?s construction loans could triple or quadruple the 2012 total by the end of the year.

CresCom isn?t the only community bank in the area to report increases in construction loan activity.

BNC and Coastal Carolina National banks also say their construction loan business is up this year, although not at the level of CresCom. Laurence Bolchoz, president and CEO of Coastal Carolina, said his bank is seeing a 20 percent increase in construction loan business this year, and like CresCom, some of those include loans for spec homes.

It is just this kind of community bank lending for home construction that Martin Yun, chief economist for the National Association of Realtors, recently told Grand Strand Realtors is needed to turn a burgeoning real estate comeback into a full-blown recovery.

Skelley, president of Nations Homes, said being able to build spec and model homes is important to his business because buyers of his custom homes, which have an average price of $525,000, like to see what they?re getting before spending that kind of money.

?A lot of people want to see, feel and touch things,? he said. ?To see a home already built gives them confidence.?

The position of local builders such as Skelley is different from that of national developers such as Lennar, Beazer and Ryland. While the local builders must get money from banks for what they build, the nationals can generate their own capital for constructing model homes.

Tommy Bouchette, president of BNC, said that while his bank has no spec homes in its portfolio currently, many of the construction loans it makes are for the kinds of custom homes that Skelley builds.

Like the other banks, Bouchette said BNC is seeing more construction loan requests than in the last three years.

But BNC, and other banks, want to make sure that builders or buyers who get construction loans have the money to repay them should something go wrong.

Skelley said CresCom made him put $100,000 to $200,000 in a bank CD before it gave him a loan for his first post-recession spec home loan, and he now keeps two spec or model homes either on the market or in construction at all times.

Minter said that Skelley?s request for a loan a couple of years ago didn?t spur CresCom to increase its lending for spec homes, but to realize there was a need for consumer construction loans.

Rexroad said that after the bank made a decision to move into the void, officials spent 2011 reviewing, enhancing and rewriting policies to offer consumers loans that would ease the process of building their own homes. It came up with three options.

The first was a traditional buyer construction loan, where the ultimate owner would borrow the money to build his or her home and pay it off with a second loan ? mortgage ? when construction was complete.

The second option, frequently taken by buyers who already own the land where their homes will be built, has an upfront construction loan that is automatically converted to a longer-term mortgage loan without a second set of closing costs.

And the third is where a builder finances the construction for a preapproved buyer.

Like other banks, Rexroad said CresCom isn?t interested in returning to the bubble-building days of 2007-08 where builders could get loans at one time for a whole group of spec homes and buyers/investors had to put little money down and give no information to borrow for the construction.

Verification of borrowers is extensive now and they need better credit scores to get money than in the not-too-distant past, Rexroad said.

Additionally, said Minter, ?The borrowers (now) have real money to spend. I mean 20 percent down.?

CresCom requires a 20 percent down payment for home loans now, but Rexroad said it is thinking about lowering the minimum to 10 percent as long as the borrowers buy prime mortgage insurance to cover the loan if they default.

The revitalization of construction loans, however, doesn?t come without risks, Rexroad said.

One is when a buyer takes a construction loan but his builder doesn?t finish the job. Rexroad said CresCom is involved in the choice of the builder to help avoid that pitfall.

The other comes if a builder doesn?t try hard enough to sell a spec home and it remains on the market too long, potentially draining the builder?s capital to the point that the loan is threatened.

Rexroad said CresCom guards against the latter problem with a change of lending attitude. It does not lend money for spec homes anymore, but to builders it knows will construct homes and sell them within a couple of months.

Rexroad said that after the board approved the new policies, the bank began to market the consumer construction loans aggressively. At first, builders and the banks approached the renewed lending activity cautiously.

The bank, obviously, was worried about the safety of the money it was letting out of its vault. Builders, Rexroad said, were wary of a laborious pre-approval process or construction loans that were hard to get.

Coastal Carolina?s Bolchoz said his bank, like CresCom, has some spec home loans on its books now.

And he noted that the increased construction and mortgage lending by community banks will be felt throughout the local economy.

?We have to do our part to put money back out there to help facilitate the recovery,? he said.

Contact STEVE JONES at 444-1765.

Source: http://www.myrtlebeachonline.com/2013/05/10/3480733/myrtle-beach-area-home-construction.html

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Japan's steel inventory levels at two-year low

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Source: http://www.metalbulletin.com/Article/3203904/Japans-steel-inventory-levels-at-two-year-low.html

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Carbon Dioxide Level Passes Long-Feared Milestone

[unable to retrieve full-text content]The amount of the gas in the air has not been this high for at least three million years, and scientists believe the rise portends large changes in the climate and sea level.

Source: http://www.nytimes.com/2013/05/11/science/earth/carbon-dioxide-level-passes-long-feared-milestone.html?partner=rss&emc=rss

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The IQ Test

Update, May 10, 2013: On Friday afternoon, after this story had already been published, Jason Richwine resigned from the Heritage Foundation.

The Heritage Foundation's Jason Richwine

Courtesy of David Hills/The Heritage Foundation

Four years ago, long before he?d join the Heritage Foundation, before Marco Rubio was even in the Senate, Jason Richwine armed a time bomb. A three-member panel at Harvard?s John F. Kennedy School of Government accepted Richwine?s thesis, titled ?IQ and Immigration Policy.? In it, Richwine provided statistical evidence that Hispanic immigrants, even after several generations, had lower IQs than non-Hispanic whites. Immigration reformers were fools if they didn?t grapple with that.

"Visceral opposition to IQ selection can sometimes generate sensationalistic claims?for example, that this is an attempt to revive social Darwinism, eugenics, racism, etc,? wrote Richwine. ?Nothing of that sort is true. ? an IQ selection system could utilize individual intelligence test scores without any resort to generalizations.?

This week, Heritage released a damning estimate of the immigration bill, co-authored by Richwine. The new study was all about cost, totally eliding the IQ issues that Richwine had mastered, but it didn?t matter after Washington Post reporter Dylan Matthews found the dissertation. Heritage hurried to denounce it??its findings in no way reflect the positions of The Heritage Foundation??and Richwine has ducked any more questions from the press.

His friends and advisers saw this coming. Immigration reform?s political enemies know?and can?t stand?that racial theorists are cheering them on from the cheap seats. They know that the left wants to exploit that?why else do so many cameras sprout up whenever Minutemen appear on the border, or when Pat Buchanan comes out of post-post-post retirement to write another book about the ?death of the West??

Academics aren?t so concerned with the politics. But they know all too well the risks that come with research connecting IQ and race. At the start of his dissertation, Richwine thanked his three advisers?George Borjas, Christopher Jenks, and Richard Zeckhauser?for being so helpful and so bold. Borjas ?helped me navigate the minefield of early graduate school,? he wrote. ?Richard Zeckhauser, never someone to shy away from controversial ideas, immediately embraced my work.?

Yet they don?t embrace everything Richwine?s done since. ?Jason?s empirical work was careful,? Zeckhauser told me over email. ?Moreover, my view is that none of his advisors would have accepted his thesis had he thought that his empirical work was tilted or in error. However, Richwine was too eager to extrapolate his empirical results to inferences for policy.?

Borjas? own work on immigration and inequality has led to a few two-minutes-hate moments in the press. He wasn?t entirely convinced by Richwine, either.

?I have never worked on anything even remotely related to IQ, so don't really know what to think about the relation between IQ, immigration, etc,? Borjas told me in an email. ?In fact, as I know I told Jason early on since I've long believed this, I don't find the IQ academic work all that interesting. Economic outcomes and IQ are only weakly related, and IQ only measures one kind of ability. I've been lucky to have met many high-IQ people in academia who are total losers, and many smart, but not super-smart people, who are incredibly successful because of persistence, motivation, etc. So I just think that, on the whole, the focus on IQ is a bit misguided.?

But Richwine had been fascinated by it, and for a very long time, in an environment that never discouraged it. Anyone who works in Washington and wants to explore the dark arts of race and IQ research is in the right place. The city?s a bit like a college campus, where investigating ?taboo? topics is rewarded, especially on the right. A liberal squeals ?racism,? and they hear the political correctness cops (most often, the Southern Poverty Law Center) reporting a thinkcrime.

Source: http://feeds.slate.com/click.phdo?i=2dd638a1ee3b404cd4aae9b2edde9ada

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Ottawa eliminated Montreal in 5 games

MONTREAL (AP) ? Craig Anderson made 33 saves and Cory Conacher scored twice on a shaky Peter Budaj as the Ottawa Senators advanced to the second round of the playoffs Thursday night with a 6-1 rout of the Montreal Canadiens.

Ottawa took the best-of-seven series 4-1 and put a punctuation mark on its dominance in moving on for the first time since 2007, when the Senators lost in the Stanley Cup finals to the Anaheim Ducks.

The victory gives Ottawa time to rest up and heal bruises from the physical series before the conference semifinals begin next week.

Zack Smith, Kyle Turris, Daniel Alfredsson and Erik Condra also scored for Ottawa, underdogs as the seventh seed in the East, but bolstered down the stretch by the return of top players on defense Erik Karlsson and Jared Cowan.

P.K. Subban scored for injury-struck Montreal, which failed to solve Anderson. The Canadiens scored only nine goals in the series, while their own spotty goaltending allowed 20.

Budaj made 23 saves in place of the injured Carey Price.

Desperate to stay alive, Montreal came out quickly and Anderson robbed Rene Bourque with the glove on a one-timer in the opening moments.

At the other end, Budaj was on the hot seat and the nerves showed early as the Senators scored on their third shot. A generous rebound was left in front for Smith to backhand into an open net only 2:17 in.

Another puck slipped behind Budaj off a post and Conacher was there to tap it in 10 minutes later.

Montreal got one back on its first power play with 15 seconds to go in the period. Subban sent a low point shot to the far corner.

The Bell Centre crowd booed as Turris gave Ottawa a 3-1 lead with a short-handed score midway in the second period. The Senators center was pushed into Budaj by Tomas Plekanec and was on his hands and knees in the crease when Condra's shot went in off Turris' arm. The goal was confirmed by video review.

It was eerily quiet at the 21,273-seat rink as the Senators scored on three straight power-play chances. Alfredsson wristed a shot in, Conacher beat Budaj from the left side, and Condra poked in a loose puck in the crease at 16:12.

Montreal's season was over.

The Canadiens had five players injured in the series, including Price and forwards Brian Gionta, Lars Eller, Brandon Prust and Ryan White.

NOTES: Montreal finished last in the conference last season and rose to second in the lockout-shortened 2013 campaign. But it went into a funk late in the regular season and never recovered. ... Michael Blunden made his playoff debut for Montreal, while Budaj got his first career postseason start. ... Robert Mayer backed up Budaj ... Ottawa had no line-up changes from Game 4.

Source: http://news.yahoo.com/ottawa-eliminated-montreal-5-games-015837694.html

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Report: Nuggets GM Masai Ujiri to be named NBA Executive of the Year

Nuggets general manager Masai Ujiri will be named executive of the year. (Photo by Garrett W. Ellwood/NBAE via Getty Images)

Denver Nuggets general manager Masai Ujiri is expected to be named the NBA Executive of the Year on Thursday, the Denver Post reports. Ujiri assembled a Nuggets roster that won a franchise-high 57 games but lost to the Golden State Warriors in the first round of the Western Conference playoffs. Nuggets head coach George Karl was named the NBA Coach of the Year on Wednesday and forward Kenneth Faried won the NBA?s Walter Kennedy Citizenship award for community service.

Ujiri helped acquire Andre Iguodala from the Philadelphia 76ers as a part of the four-team trade that, most notably, sent Dwight Howard to the Lakers. Along with several draft picks, the Nuggets gave up Arron Afflalo and Al Harrington to land Iguodala.

Ujiri is the first African-born GM in major American sports.

Source: http://tracking.si.com/2013/05/08/nuggets-gm-nba-executive-of-the-year/

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McDonald's cuts Angus burgers from menu

NEW YORK (AP) ? McDonald's is cutting the Angus burger from its menu.

The Oak Brook, Ill.-based chain had said earlier this year that it was evaluating whether to continue selling the Angus Third Pounders, which were introduced in 2009. The company also said at the time that it was it was cutting Chicken Selects and Fruit & Walnut Salad.

The changes come as McDonald's looks to keep up with shifting tastes, even as it underscores the affordability of its food. Notably, the Angus burgers were among the chain's priciest items.

At a time when the restaurant industry is barely growing, McDonald's has been playing up its Dollar Menu in ads to boost sales and steal customers away from competitors. Even if that hurts profit margins, executives say the strategy is critical to gaining market share and ensuring the long-term health of the company.

But Richard Adams, who consults McDonald's franchisees, noted that Dollar Menu has also made the Angus burger a less attractive option at around $4 to $5.

"When you can get four or five burgers off the Dollar Menu, nobody's going to buy the Angus burger," he said. "The Dollar Menu has become a real problem for these chains."

Without elaborating, McDonald's Corp. said in statement Thursday that the Angus burgers "may still play a future role on our menu." It said it was removing the burgers and Angus snack wraps to "make room for new and exciting choices for our customers."

McDonald's did not immediately say whether the burgers and snack wraps remained available in some restaurants. But at a McDonald's in a Detroit suburb, the menu noted this week that they were no longer being sold.

The burgers and snack wraps were still listed on the menu section of McDonald's website on Thursday.

In a bid to attract more customers in their 20s and 30s who are looking for fresher options, McDonald's recently added chicken McWraps to its core menu. According to an internal company memo obtained by Ad Age, the chain referred to the wraps as a "Subway buster" that would keep customers from heading to the sandwich chain.

Additionally, the chain now offers a version of its Egg McMuffins made with egg whites and a whole grain muffin. Customers are able to substitute egg whites into any breakfast sandwich.

McDonald's isn't the only one trying to refresh its menu. Burger King, Taco Bell and Wendy's have also been rolling out new items aimed at improving the image of their food. But traditional fast-food chains are trying to evolve in a tough economic climate, when they're also catering price-conscious customers.

___

Follow Candice Choi at www.twitter.com/candicechoi

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2013-05-09-US-McDonald's-Angus-Burgers/id-cdf57e9c827b4845ba09329a8b7b0225

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