Thursday, January 8, 2009

Sandy Creek Power Plant Expanding Construction

New Power Plant Project Progressing

A single smokestack 30 stories high looms on the horizon of this rural town 15 miles east of Waco. Some 275 people are working there to build the Sandy Creek coal-fired power plant. Up to a thousand more could join them before the plant opens in 2012. Once constructed, the plant would employ about 100. Already, the construction traffic has helped quadruple Riesel’s sales tax receipts this year.

A coalition of environmental groups who see the smokestack as a pollution menace are trying to stop the project. And with the prospect of carbon regulation clouding the future of the coal industry, they say the political winds may be blowing their way.

Earlier this year, Dynegy, the lead investor in the 900-megawatt Sandy Creek plant, sold off part of its interest in the plant. Last week, its chief executive, said the company was “re-evaluating” its role in new coal plants, including Sandy Creek. The Sandy Creek plant is being built by a joint venture between Dynegy and the privately held LS Power Group. The joint venture sold off interests in the plant to Brazos Electric Cooperative in 2007 and Lower Colorado River Authority this summer and now owns just 64 percent of the plant.

Officials at San Antonio-based Zachry Construction say they are moving ahead as quickly as they can. Zachry will be bringing in many of its own workers from outside the area, and already a large RV park is under construction near Riesel for those workers. Zachry is also hiring locally through an employment office it set up in the middle of Riesel, and local hires for jobs such as welders, pipefitters and electrical workers will increase as the project progresses. (Previously printed in the Waco Tribune Herald.)

Frontera Development is a full service real estate development firm based in Waco, Texas. The firm focuses on residential, commercial developments and master planned communities that emphasize the values of New Urbanism and Traditional Neighborhood Development.

For more information, contact Mark P. Felton II at 254-495-1241.

Friday, January 2, 2009

Refi Mortgage Apps Up in Waco

Waco banks seeing a boom in mortgage refinance applications

Buzz up!Friday, January 02, 2009

By Mike Copeland

Tribune-Herald business editor

With mortgage rates hitting record lows, Mary Jo Teakell is seeing a growing backlog of refinance applications.

“We’re quite busy right now,” said Teakell, senior vice president at Extraco Banks, commenting on the surge in people wanting to get a lower interest rate on their homes.

Interest rates generally are hovering around 5 percent — a little lower on some days, a little higher on others.

Credit Crisis blog

Extraco Bank employee Mary Jo Teakell works through a stack of mortgage applications at her office on North Valley Mills Drive. (Jerry Larson photo)

“I can remember times when we thought 7 or 8 percent was a low rate,” said Rodney Kroll, president of Texas First State Bank. “We have the lowest interest rates now since 1970.”

Freddie Mac reported this week that average rates on 30-year fixed mortgages dropped to 5.1 percent, down from the previous record of 5.14 percent set last week.

It was the ninth straight weekly drop.

The average rate on a 15-year, fixed-rate mortgage has dropped to 4.83 percent, the lowest point since March 2004.

Local lenders said interest rates have been falling since the government announced in October its $700 billion bailout package meant to stimulate the economy. The Federal Reserve pledged last month to buy mortgage-backed securities to bolster the sagging housing market.

Holden Thomas at Excellent Mortgage in Waco said he’s seen refinancing applications increase three or four times the typical volume the office experiences.

“What I’m hearing is that rates probably will remain pretty steady until the beginning of the new year, then they may go down a little bit more again,” Thomas said earlier this week.

He said most of those refinancing are knocking at least $100 off their monthly mortgage payments.

“If you can refinance and lower your rate by 2 points or more, that’s worthwhile,” said David Littlewood, president of the First National Bank of McGregor. He added that he has noticed an uptick in refinancing activity at his bank the past 15 to 30 days.

He said those wanting to refinance their homes can expect to pay 4.75 to 6.5 percent, depending on their credit rating and the underwriting criteria used by the lender.

Thomas, at Excellent Mortgage, said the tightening of credit nationwide does extend to the refinancing arena.

“Yes, it is tougher to refinance,” Thomas said. “In the old days of subprime lending, you didn’t really need good credit or much equity. These days, you need a good credit score and good equity. People with fair credit, 600 to 700, can still get loans. But for those in the 500 range, there are not loans for them anymore.”

But Mike Thompson, president and CEO of Extraco Banks, had a little different take on the difficulty of refinancing.

“Is it tougher to refinance than it used to be? It’s really not. If the basic credit elements are in place, you have good equity and a steady job, it’s no more difficult to refinance than it’s ever been,” he said.

Equity is the amount of money a buyer has paid on a home. For example, someone who has paid $25,000 toward a home valued at $100,000 has $25,000 in equity in that home.

Some mortgage companies require at least 10 percent equity to refinance.

Bill Nesbitt, chairman and CEO of Central National Bank, said the bank is seeing its share of refinancing, but he would not call it a rush.

“Rates are low, but rates have been low for a long time, since right after 9/11,” Nesbitt said, referring to the Fed’s decision to lower interest rates several times after the terrorist attacks of 2001. “A lot of folks who were going to refinance have already done it.”

Opinions vary on how much interest rates should drop before refinancing becomes beneficial to a homeowner.

“It’s worth considering, even if rates drop only 1 percent, though it makes more sense at 1.5 percent,” Extraco’s Thompson said. “Now is a great opportunity to lower house payments and use that money to retire credit card debt.”

Several bankers said adjustable rate mortgages have fallen out of favor because fixed-rate mortgages are now so low.

The Mortgage Bankers Association reports that mortgage applications are at the highest level in more than five years.

More than 80 percent of applications are coming from borrowers looking to refinance at more affordable rates, the trade group said.

But homeowners locally are doing more than refinancing.

“We’ve seen a 20 percent increase in home improvement loans, so we can tell people are choosing to stay in the home they’re in and fixing it up,” Extraco’s Teakell said.

Teakell said she’s also seeing a jump in home equity loans.

Frontera Development is a full service real estate development firm based in Waco, Texas. The firm focuses on residential, commercial developments and master planned communities that emphasize the values of New Urbanism and Traditional Neighborhood Development. For more information, contact Mark P. Felton II at 254-495-1241.