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06server readers ore SMART PROGRESSIVE INVOLVED INFLUENTIAL GOOD LOOKING \($9 are agserver oauertisersr Get noticed by Texas Observer folks all over the state and nation. Let them know about your bookstore, service, restaurant, non-profit organization, event, political candidate, shoe store, coffee house, boutique, salon, yoga studio, law practice, etc. TheTexes Observer ADVERTISE IN THE OBSERVER! REASONABLE RATES GREAT EXPOSURE Call 512-477-0746 and ask for Julia Austin or e-mail [email protected] ke g , \(Merver reaaersr Consider advertising your business or non-profit in the Observer. GOOD FOR YOU GOOD FOR THE OBSERVER Greetings, coffeeshops and retailers! To learn about our free shipping offers, volume discounts, custom roasting and blending, and private labeling 731-1811 or email [email protected] bigbendcoffee. corn. No order is too big or too small! “the best coffee ever sipped” Texas Highways Magazine 100% ORGANIC 8\(fAIR TRADE ERTIFIED Artisan-roasted in Marfa, Texas call us toll-free: , -,,shop online! All of our coffees are Certified 100% Organic, which means they are cultivated, harvested, and processed without the use of synthetic pesticides, herbicides, or fertilizers. All of our coffees are Certified Fair Trade, which guarantees that these small family farms employing traditional artisanal methods receive a fair price for their products. Subprime loans are typically adjustable rate mortgages that lure in homebuyers with ultra-low “teaser” interest rates that jump after the first two or three years. As the housing bubble expanded in recent years, the subprime market became catnip for lenders. But as the rates on loans spike, homeowners suddenly find they can’t afford their monthly payments. Foreclosure becomes almost unavoidable. In August, nearly 244,000 homes were foreclosed nationwide, a 36 percent increase from July and a rise of 115 percent from the previous year, according to RealtyTrac, a group that compiles foreclosure data. Texas had the ninth highest foreclosure rate in the nation in Augusta 36 percent increase from July. Shapleigh believes that’s just the beginning. At nearly 40 percent, the border city of McAllen boasts the country’s highest percentage of subprime loans. Moreover, the nation’s top five subprime refinance marketsand seven of the top 10are all in Texas. If the housing market in those cities crashes, the state’s economy could suffer. “Texas could be the epicenter of this deal because of all the subprime lending in about six counties,” Shapleigh says. He says many Texans could lose their homes, and state and local governments could lose property tax income. He warns of a potential budget deficit for the 2009 legislative session. A recent congressional report documented the potential economic cascade of a further crash in the housing market. The report, by the Joint Economic Committee of Congress, estimated foreclosures on 2 million homes with subprime mortgages nationwide by the end of 2008. The foreclosures could weigh down property values by more than $100 billion. That drop in value would deprive state and local governments of $917 million in property taxes, according to the congressional report. The senator recently requested that Gov. Rick Perry call a special legislative session next spring to address a looming foreclosure crunch. In his letter to Perry, Shapleigh proposed that state officials encourage lenders to find alternatives to foreclosure. He also suggests increased state funding for nonprofit housing counselors, and requiring that borrowers receive some counseling and education before taking out a risky subprime loan. The governor’s office has said Perry has no plans to convene a special session, though he is “monitoring the situation.” NOVEMBER 16, 2007 THE TEXAS OBSERVER 7