I am sure you have heard or read about Hurricane Dean hitting the Yucatan Peninsula and then heading for Mexico. As a Florida native, this time of year is especially concerning for me with the possibility of hurricanes like Dean heading our way. Another interesting thing that happens during this time of year is the volatility in the markets, especially when a storm gets close.

How are the two related? Some of you might know that the Gulf of Mexico has many oil drilling platforms. Hurricane Katrina caused millions in damage and caused gas prices to peak to over $3.00 a gallon two summers ago. To put it into perspective, I found a really cool blog, The Oil Drum, that has posted some Google Earth images that have mash-ups (see previous post about mash-ups) of the weather.

Scroll to the second picture, and you can really get a sense of why the market is so volatile when a storm comes through the Gulf.

Images like the one on The Oil Drum are perfect examples of how GIS benefits everyone. As the saying goes, “a picture is worth a thousand words.” I think the map showing all the oil platforms along the Gulf coast speaks for itself.

GIS is also being used in the recovery effort for victims of Hurricane Dean. An organization called Map Action has already sent people to Jamaica. The organization has created maps of affected parishes and potential flood areas. In the days to come, they will have more maps.

Feel free to leave your comments on the storm or other sites showing GIS data.

Over the last several months, I have received alto of feedback about our blog. The first thing everyone said to me was, “Yes I read it, but it did not make much sense to me.” While we all really love GIS here at GlobalMind and use it everyday, most people have not heard the term “GIS”. So, I thought I would give everyone some Internet sites that would provide good examples and descriptions about what GIS is and what it can do.

• Spatial Thoughts has put together a great post about the different areas that GIS is used. Areas such as emergency response, urban planning, marketing, insurance, health care and disaster relief are some of the areas he talks about. He also links some of the topics to other posts or sites with more information. This is a good blog post about how people are using GIS to make decisions each day.
• ESRI.com ESRI is the pioneer behind GIS technology. They wrote the GIS software that the majority of the GIS world uses.
• GIS.com is a site by ESRI that works to educate people about GIS.

After posting my account of the sub prime mortgage market and how I feel lenders are partially to blame, I went home and found a new Business Week waiting for me in my mailbox. On the front cover was “Bonfire of the Builders.”

The article talks about builders who got into the mortgage business have fueled the fire in the real estate market meltdown. I could not agree more. What is concerning is that these builders mentioned in the article were inflating potential homeowners earnings to make the loans work. Builders were out in the market pushing interest only and adjustable rate mortgages to get their homes sold.

The result is many empty homes in what was supposed to be the next up-and-coming neighborhood. Many families have either had to move and let their house go into foreclosure or many people dropped out of contracts before the homes were built.

My prediction is that although this mortgage crisis is going to be tough and probably affect many jobs, it is a necessary step in the housing market correction.

Most of you are probably aware of the sub prime mortgage market problems. It has been all over the news. Foreclosure rates are at an all time high, especially where I live (South Florida). Florida is ranked #2 in the nation in pre-foreclosure filings. How did we get here?

Mortgage companies are also to blame. In the years from 2001-2005 anyone and everyone could buy a house. If you made $10.00 per hour or $100.00 per hour you could buy a house. The mortgage companies were financing people at 100% financing or sometimes even more, 103% or 105%. This predatory lending has led to a high number of foreclosures, thus increasing the inventory of homes….yet again.

The mortgage problems are an indication of what types of loans have been written over the last 5 years. Traditionally, people would get a 30 or 15 year fixed loan. The principle plus interest payment would be the same for the entire loan. In the days of fast appreciating homes, people were faced with not being able to afford a home in their city with a fixed rate loan so mortgage companies decided to offer adjustable rate mortgages, interest only and negative amortization loans (also known as exotic loans).

Exotic loans are a good option for some people and for people who understand how they work, but the majority of home buyers who bought using an exotic loan have no idea how they work. Would you consider that predatory lending? I would and do! I think the mortgage industry needs to be held accountable. In my opinion, when you turn to a professional to handle your business you expect them to understand the details and provide your with the best solution.

Starting September 13th, exotic loans will have new federal guidelines. The most helpful change is that borrowers will now have to be qualified at their ability to pay on the full rate, not just the introductory rate, which is how so many people qualified before.