HARP program: Underwater Home Owners Get More Refinancing Help

Mortgage giants Fannie Mae and Freddie Mac announced that mortgage lenders will be able to offer up to $2,000 to home owners with little or no equity in their homes who are seeking to refinance their mortgage under the government’s Home Affordable Refinance Program.

The lender incentives may be offered to pay down mortgage balances, closing costs, or other expenses usually required of borrowers who are refinancing using the HARP program.

Up to $2,000 to home owners with little or no equity in their homes

The changes may encourage more underwater home owners to refinance — particularly those who had been reluctant to pay loan-origination fees or closing costs, which could total thousands of dollars.

The latest guidance “simply provides a clarification to lenders on benefits that can be passed back to borrowers on a HARP refinance,” says Meg Burns, a senior policy director for the Federal Housing Finance Agency, Fannie and Freddie’s regulator.

To date, nearly 1.8 million home owners have refinanced under the HARP program.

Need advice to avoid Foreclosure and Short Sale your property?  Let us help you.

Mortgage servicers have 30 days to make a decision on a short sale

Short sales are getting much shorter, Freddie Mac says. The mortgage giant launched a Freddie Mac Standard Short Sale program on Nov. 1 that sought to speed up the short sale process and make it easier and more transparent.“We estimate that the time to complete a short sale will decrease by approximately 50 percent to 75 percent,” as a result of the changes, writes Tracy Mooney, Freddie Mac’s EVP in a recent blog post.

Among the changes that took effect Nov. 1, 2012:

• Mortgage servicers have 30 days to make a decision on a short sale once they receive an application. If they need to negotiate with a third party, they have 30 additional days. A final decision on the short sale must be made within 60 days.
• Mortgage servicers are required to acknowledge they received the short sale application within three days of submission. Servicers must provide weekly status updates if they end up needing more time to review the application past the initial 30-day period.
• Mortgage servicers have authority now to approve short sales when qualifying financial hardships for home owners who are past due or current on their mortgage payments.
• Mortgage servicers are also now able to approve short sales without seeking a separate review by the mortgage insurance company.
• Following a short sale, home owners may be able to qualify for up to $3,000 in relocation assistance.

Each week, there are things going on that impact the short sale process. Sometimes there are big changes to federal and state policies that impact short sale processing and the distressed property world. Other weeks, there is news about government programs for distressed borrowers.

Call me at (425) 330-0663 if you need good solid information about Short Selling your home instead of waiting for the bank to Foreclose on you.

Unrealistically Low Appraisal Values in Up Markets Are a Problem

Real estate agents continue to report that unrealistically low appraisal values continue to jeopardize sales. Appraisal values are in some cases affected by REOs which in some cases are reported as being used as comparable properties.

In other cases, appraisals are reported as not keeping up with the market. Also, there continue to be reports of appraisers having poor knowledge of local conditions as they come from outside areas (in some cases as far as 100 miles according to one agent.

• “Appraisals and BPO values are likely low because of the sort of comps that are available on the market. REO properties and lower value sales comprise the bulk of market activity which in turn leads to low appraisal and BPO values.”
• “Appraisals are definitely a problem. We are in a Vacation, second home area and we are getting appraisers from 100′s of miles away to appraise Lake Property. They don’t understand the values.”
• “Buyers are coming in with cash to close the gap between low appraisals and sellers sticking to their house price.”

Book em danno

Our team is always looking for tools and resources that will help our clients make informed decisions in home buying. Now you can see what crime is like in that area you’re thinking about living in with Trulia’s Crime Map.

Drawing from three data sources, Crime Map starts with a national view for cities with available data, and then zooms into specific areas. Darker red areas and larger circles on the maps indicate more incidents, whereas green areas and smaller circles represent the opposite.

Click on regions or the scaled circles to see details on individual crimes during the past year.

This is good stuff and very useful for both home buyers and sellers.  For example, if you are thinking of selling your home, check out the crime stats in your area.  You’ll see what buyers are seeing when it comes to crime.

And then there’s the little things like permalinks for locations, filtering by crime type, quick zooms to locations with the most crime, and discussion pages. It’s that little bit of awesome sauce that makes for an extra informative application.

Report: Seattle Home buying Most affordable in decades

http://www.mynorthwesthomes.com

Home prices are at rock-bottom and so are mortgage rates.  According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index hit a record level of affordability.

Buying a home is now more affordable than it has been in the last twenty years.

The index shows that 75.9%  families earning the national median income of $64,200, could afford a new or existing homes.

That was the highest percentage recorded in the 20-year history of the index, and a sharp increase from just three months earlier when 72.9% of all homes sold were considered affordable.

Today’s report indicates that home ownership is within reach of more households than it has been for more than two decades.

Those who obtain a mortgage, will be able to take advantage of rates that seem to hit a new low every week. This week interest rates for 30-year loans averaged a record low of 3.87%, according to Freddie Mac.

Where the deals are

The Seattle area is more affordable as well with 67.5 percent of homes within reach of those earning the median income of $85,600. That’s the highest number recorded since the index started in the first quarter of 1999.

Youngstown, Ohio is the most affordable major metro area in the nation to buy a home, according to the NAHB. The faded steel town, located in eastern Ohio, could be on the verge of an economic renaissance with new gas drilling techniques that could help exploit nearby gas reserves, according to the report.

There, 95.1% of homes sold during the quarter were deemed affordable to typical local households earning the area’s median family income of $54,900.

The other metro areas near the top of the list included Lakeland, Fla., Modesto, Calif., Harrisburg, Pa., and Toledo, Ohio.

Among small housing markets, Kokomo, Ind. had the highest housing affordability index with more than 99% of all homes sold there affordable to typical families. Fairbanks, Alaska, Cumberland, Md., Lima, Ohio, and Rockford, Ill. were all very affordable as well.

In other cities in Washington state, Spokane was the most affordable with 82.2 percent of homes within reach of those earning the median income of $60,300. Olympia recorded 81.8 percent; Tacoma, 78.5 percent; Bremerton-Silverdale, 70.1 percent; Bellingham, 69.7 percent; and Mount Vernon-Anacortes, 60.5 percent.

New Yorkers could only shake their heads at the housing opportunities available outside their metro area. Just 29% of the homes sold in the New York metro area during the last three months of 2011 were affordable for the typical local family.

That’s the lowest level in the U.S. — even though locals typically earned $67,400, roughly $3,000 more than the national median. It was New York’s 15th consecutive quarter as the least affordable metro area.

Nearly as expensive are housing markets in Honolulu, San Francisco, Santa Ana, Calif., and Los Angeles.

We’d love to be your trusted source for news, information and all things real estate. Call Dave and his team today at 425-330-0663 and start planning your house warming party!

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Housing market “healing itself,” numbers are “astoundingly good”

Pending sales may not appear to be much higher than 2011 (up 13.7 percent in January), but the numbers are very good, considering such factors as harsh weather and the tax credits that boosted sales at this time a year ago.

The latest figures from Northwest Multiple Listing Service show pending sales in January outgained the same month a year ago by 739 transactions. Brokers reported 6,132 mutually accepted offers in January to start the year with a 13.7 increase over the January 2011 figure of 5,393 pending sales.

Given that we lost a week with some of the worst weather in 16 years, the numbers are astoundingly good.  This is the first January in four that we can make a reasonable year-over-year comparison.  The numbers are no longer skewed by the artificial stimulus of various tax credits and incentives that date to 2009.  The improvement in the numbers show that the market is healing itself and standing on its own.

Declining inventory, extremely low interest rates, and positive job growth are contributing to rising optimism among industry professionals, but Northwest MLS directors say distressed properties continue to be a drag on the market’s recovery.

Inventory is down almost 20 percent from a year ago. Brokers added 6,666 new listings to inventory during January, with single family homes making up about 85 percent of those additions. At month end, MLS members reported 26,226 total active listings; a year ago, there were 32,647 active listings.

Despite the smaller selection, the price choices overall are wide ranging, from a low of $13,000 for a manufactured home in Sultan to an asking price of $26.8 million for a waterfront home on Mercer Island.

Snohomish County reported the sharpest drop in inventory, with the selection at about two-thirds of the year-ago levels (a decline of 32.6 percent). Several of the 29 MLS map areas within King County also reported declines of 30 percent or more in the total number of active listings.

The ongoing reduction of available inventory is still impacting the market.

The lower number of new listings coming on the market is due to a combination of factors, said J. Lennox Scott, CEO and chairman of John L. Scott Real Estate.  Among them are underwater sellers (who owe more on their homes than the current value), sellers with equity holding off for higher prices, and the lack of new construction/condominiums. The low number of new listings combined with the increase in sales activity is creating the shortage of homes for sale in specific areas and price ranges,” Scott reported.

Northwest MLS reported 3,469 closed sales last month, up nearly 8.2 percent from a year ago when members reported 3,207 completed transactions.

“A sellers’ market has returned in the areas close to the job centers of Seattle and Bellevue, up to the one million dollar price point,” Scott noted, adding, “We are also seeing the same situation in the more affordable price ranges in the surrounding market areas, caused by a shortage of inventory and healthy-to-strong sales activity.”

Echoing that sentiment was Northwest MLS director Frank Wilson, who said, “Inventory in many price points and locations is dropping and what buyers are finding are overpriced or under staged homes.” Wilson, the branch managing broker at John L. Scott Real Estate in Poulsbo, also foresees upward pressure on prices as choices become narrower.

For now, however, prices are showing mixed signs –stabilizing in some areas while declining or increasing in other areas.

The median price for last month’s closed sales of single family homes and condominiums (combined) was $214,990, down about 11.7 percent from a year ago when the median selling price was $243,500. The price changes ranged from year-over-year increases reported in five counties (Ferry, Grant, Kittitas, Mason, and Pacific) to declines of up to 40 percent (in Clallam and Grays Harbor counties).

“Price increases are muted by short sales and foreclosures that are causing low appraisal values,” observed Scott.

MLS directors Jacobi and Wilson agreed.

“We are simultaneously seeing the continued rise in pending and closed sales,” Jacobi stated. “Usually pent up demand and rising sales means that prices will be going up. But, unfortunately, that isn’t the case thanks to the high level of distressed properties that continue to drag down the entire market,” he explained.

“What is tempering our real estate recovery in Kitsap and much of Puget Sound are the short sales and REO properties that are on the market and the way the banks are dealing with their sales process,” said Wilson, while pointing to several encouraging signs.

All the pieces are in place for a more normal market in much of Kitsap, Wilson said. “With pending sales up 17 percent in Kitsap, buyers are taking advantage of the values this market is offering and the extremely low interest rates. If this trend continues we should begin seeing price appreciation as we progress into the year,” he remarked.

Improving numbers show the artificial stimulus of the tax credits was not the key to the recovering market, suggested Anderson. “Instead, today’s affordability has buyers in all price segments returning – and feeling more confident about the future.”

Northwest MLS director Darin Stenvers believes “the perfect storm is brewing.” He said the pent-up need for homes in good condition is creating shorter market times and sales close to the original asking price. “It is a great time for sellers who have been waiting,” said Stenvers, the office managing broker at John L. Scott Real Estate in Bellingham.

“The market is almost done with the needed correction,” Stenvers stated, adding, “Distressed homes and REOs are not going away fast but have slowed and should soon level off.” He also foresees a loosening of overly restrictive lending guidelines.

Reflecting on a real estate career that dates to 1990, Wilson said, “I remember at the height of the market people would say ‘I wish I would have bought some waterfront back in 2001…or I wish I would have picked up a couple of rentals a few years ago’.”  For these people, “the clock has been rolled back and you now have an opportunity to purchase real estate near the bottom of the market,” he suggested.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 22,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

Is The Seattle Housing Market Improving?

OK everyone is asking “is the real estate market better yet?” I say what area, what street, heck what time is it.  The point is it’s changing folks.  Mostly improving.  There is still a room to grow but we are seeing more people jump into the market.

The National  Association of Home Builders has an “Improving Markets Index” in an effort to track cities with improving markets. The good news is that the index grew last  month, with 40 cities being added to the 41 already on the list.

To make the list, a city has to show recovery as measured by three criteria:  housing price appreciation, job growth, and single-family housing permits.

By those measures, large metro areas such as Dallas and Philadelphia are  recovering, as are smaller cities including Denver, Honolulu, Indianapolis, and  Nashville.

We are seeing some real improvements in the Seattle market as well.  In some areas, multiple offers are in play.  If you’d like more information about your neighborhood, call us today.

Home Design Features Buyers Hate

Design glitches draw attention away from a home’s best features. Don’t let out-of-date fixtures and unappealing decor cost you a sale. While some buyers may actually appreciate “vintage” features, home and design experts say these 20 features almost always serve as a turnoff.

1. Dated and excessively bold or dark paint and tile colors, such as “Pepto Bismol” pink, Army Hospital green, deep plum, or jet black. Dark can be cool, but it has to be a color that’s popular today.

2. Lacquered or high-gloss painted walls that are expensive to repaint and show all defects. Likewise, faux- and sponge-painted walls can be so passe.

3. Painted trim that’s very dark-and costly to remove.

4. Wallpaper, which is a lot of work (and potentially expensive) to remove. Most disliked: Dated flowered or striped patterns.

5. Kitchens that lack any dining space. Also, outdated, small-scale, and dirty kitchen appliances that look like they won’t perform.

6. Worn, cracked laminate countertops, and backsplashes or plastic cultured marble.

7. Outdated bathrooms with small sinks, short toilets, squatty bathtubs, and tight showers-all of which aren’t conducive to unwinding after a long day’s work, says Ames.

8. Lack of ample closet space in bedrooms, or no closet at all and no place to build one or add an armoire.

9. Dens, libraries, and family rooms without built-in bookcases or a space to include shelves.

10. Stained and worn wall-to-wall carpet in rooms or on stairs. Worst choice: shag. Also, worn linoleum that suggests a house was never updated.

11. Poorly built additions that don’t blend with a home’s architecture, such as a sunroom with tinted glass.

12. Shortage of windows or very small windows, which makes a home feels dark and gloomy.

13. Ceilings with so many recessed lighting spots that they resemble Swiss cheese and are expensive to remove. Worst offenders: big 6-inch diameter lights.

14. Too many rooms outside the kitchen and bathroom that have cold ceramic tiled floors.

15. Children’s bedrooms with a theme that runs through the carpeting, wallpaper, murals, ceilings, light fixtures, curtains, and furnishings.

16. Homes without a foyer or garage.

17. Too many mirrored walls, ceilings, doors, and backsplashes in a single room. The effect is dizzying, Ames says. One mirror magnifies, but many cheapen the look.

I Hate That Wallpaper!!!

18. Skimpy molding and trim, such as 1-inch baseboards.

19. Noisy, grinding fan in a bathroom that’s attached to a light switch so it can’t be turned off.

20. Inexpensive gold-colored light fixtures in any room. Also, Hollywood-style lighting with huge bulbs in a bathroom is also out of date, design experts say.

More Time Than Money? Measuring Your Motivation To Sell

Welcome to the Price VS Time dilemma that faces all homeowners. Pick a price, any price for your home. Now wait. Eventually, someday, someone will probably be willing to pay you that price. The question is – Do you have the time or the desire to wait for that to happen or would you rather sell your home now for a reduced amount of money?

The Price VS Time dilemma is the challenge of determining which is more important to you as a homeowner – selling quickly or selling for top dollar. Of course, it’s easy to bang the kitchen table with both fists and say I want both, but that’s unrealistic. In the real world every homeowner falls into one of two categories: the necessary seller or the optional seller. Let’s define these two vastly different types of sellers:

The Necessary Seller: Necessary sellers are homeowners who must sell their home and it’s not something they can avoid or put off. Perhaps they have a job transfer or job loss, a pending divorce, health condition, or a financial crisis that is causing them to sell. Regardless of the reason, they need to sell, and the faster the better.

The Optional Seller: Optional sellers are homeowners who have made the choice to sell. They aren’t forced to move, they simply would like to make a housing change. Perhaps they want to upgrade to a newer home, a larger property, or just as likely, maybe they are selling to travel or move closer to friends and family. The bottom line is it will be inconvenient if they don’t sell, but the world won’t end.

So which kind of seller are you – a necessary seller or an optional seller? The answer to this question is key to determining how you resolve the Price VS Time dilemma, but be careful as it’s not as easy it might sound. For instance there are tens of thousands of necessary sellers across the nation who desperately need to sell their homes quickly, yet they act as if they are optional sellers.
These sellers list their homes for inflated prices and then are shocked, frustrated, or even angry that their homes fail to sell within their pre-set timeframe. Another wrinkle facing both optional and necessary sellers today is the issue of rapidly declining prices in many areas of the country. While in a typical real estate market an optional seller might hold out for top dollar, this strategy can easily backfire in today’s market as their home may be worth significantly less the longer they hold out for a higher price. In addition while many optional sellers may not be forced to sell, they may want to sell quickly because of other motivating factors. If this is the case they will need to adjust their pricing strategy accordingly.

If you are having a challenge determining just where you fall on the motivation scale ask yourself this follow up question. If I listed my home for 90 days and it did not sell, what would be my next step – adjust the price or give it a little more time? If your answer is to adjust the price, this would seem to indicate that selling quickly is more important for you. On the other hand if you feel more inclined to give it a little more time, top dollar is more than likely your primary motivator.

To unravel the Price VS Time mystery further sit down with me or Dave and give us an honest assessment of the reasons why you are selling. By reviewing what homes similar to yours have sold for in recent months and the time frame it took those sellers to sell, we can help you to set a pricing strategy that meets all of your needs.