Key Features of the New Housing Rescue Plan

I got this great article from Realtor Magazine, which always simplifies complicated plans into something we can all understand:
"The government’s newest housing rescue effort, which was announced Friday, includes these key tenets:
As much as $14 billion of the Troubled Asset Relief Program (TARP) will be made available to pay for writing down second liens for loans whose borrowers refinance through the Federal Housing Administration.
Lenders that facilitate refinances through the FHA will be required to write down the principal of the first mortgage by at least 10 percent so the home owner has a loan-to-value ratio no higher than 97.75 percent.
Lenders of second liens will be offered incentives of 10 cents to 21 cents per dollar of principal they write down in connection with an FHA refinance.
Borrowers who lose their jobs can apply to have their mortgage payments reduced for three to six months while they search for a new job.
Borrowers with a payment still greater than 31 percent of income after they find a job will be considered for a permanent loan modification.
To encourage more short sales and “deed in lieu” of foreclosure transactions in which the lender settles the loan for less than is owed, the government will double assistance to borrowers to $3,000 and increase incentives to subordinate lien holders and investors to $6,000."

Source: Reuters News (03/26/2010)

Mortgage Defaults Only Getting Worse in Clackamas County

With a week still left in the first quarter of 2010, mortgage defaults are up in Clackamas County. The area includes rural communities, as well as Oregon City, Lake Oswego, West Lynn and Wilsonville. From the first quarter of 2009 to 2010, defaults are up 18%, and from the last quarter of 2009 to now they are up 24%. In an area that was thought to be on the rebound as far as the real estate market is concerned, this is not good news. It means that residents are not making money like they used to, and they are probably underwater on their homes, so they are walking away from them. More bank owned homes on the market will keep competition high, and prices low.

White Collar Professionals Can't Afford Homes in Portland

A major gauge of affordability and a realistic way to look at home values is to see if middle class, white collar, professional people can afford to by homes in the city on their salary. For Portland, the answer is no. The Center for Housing Policy released an in depth study on affordability around the nation, explore and read more here. Based on the graph above it It is easy to see that teachers, nurses and police officers cannot qualify for an average home in Portland on one income. With 2 of the fields dominated by women, this puts a major cramp on one of the largest groups of home buyers- single professional women.  It is also easy to see that if you do not have a white collar job, such as janitorial work, there is basically no way that you can buy an average home, let alone as the sole breadwinner for a family. The drop in prices over the last few years has been seen as a crushing blow to the middle class, but I think it was necessary to make homes actually affordable for middle class families. If prices had kept going up, then families with 2 incomes in white collar positions wouldn't even be able to buy a nice home. 

Bank of America Acts to Relieve Counrtywide Mortgages

Bank of America announced that they will have a very limited relief program for those that obtained mortgages through Countrywide Financial, the most notorious for aggressive loans that backfired and toppled the industry. While the media has been hyping the program all day, it will only affect a small percentage of homeowners who might be foreclosed on. BofA explains the program this way: "A borrower owes $250,000 on a house now worth $200,000. Fifty thousand dollars of that balance would be moved into a special interest-free account.

As long as the owner continued to make payments on the $200,000, every year $10,000 in the special account would be forgiven until either the balance was zero or the housing market recovered and the borrower once again had positive equity."
On paper this plan sounds amazing, and will really keep people in homes and keep values from dropping even farther. Hopefully BofA will stick to the spirit of this program and modify as many loans as they can.
Read the New York Times article here.

Guide to Home Buyer's Tax Credit

Click the image to enlarge

Source: Fixr

Portland is the Greenest City!

The greater Portland Metro ranked first out of 43 U.S. metro areas in a report on America’s “green cities.”
The “Green Cities Index” ranks metro areas on a variety of environmental factors, including traffic congestion, transit use, water quality, carbon emissions, LEED-certified projects and number of “green” jobs. Our city did well for having LEED Certified buildings and building projects, and minimal sprawl, but didn't do as well for travel time for commuters.
The rest of the top 5 is: #2- San Francisco-Oakland-Fremont, Calif., #3 Honolulu, #4Austin, Texas, and #5 Boston.
Read the full article here.

Willamette National Forest is the Best in the Nation

                                                                                             Oregonian file photo
 The best at storing carbon, that is. Those of us who have spent time there will also agree that it is the best for hiking, skiing, camping, and sightseeing. The Wilderness Society ranked all federally owned forests, Willamette coming in #1, and 2-9 are also located in the Pacific Northwest. The Willamette National Forest ranks second in the world for carbons storage, behind Australia. Carbon storage is important because the forest takes the carbon out of the air, and keeps it until it is released through burning. The more forests that store carbon well, the healthier the environment is. Forest management to healthfully allow forest fires will in the long run let the forests store more carbon, and not have devastating fires that sweep through massive amounts of acreage at a time.

Mortgage Rates Will Rise in April

The Federal Reserve is going to stop buying mortgage backed securities on March 31st, effectively stepping aside to let private investors start buying them again. Since the Fed started buying MBSs about 18 months ago mortgage rates have been incredibly low, around 5%. This has helped keep the real estate market moving, and let people refinance at more affordable rates than they might have been locked into. Once the Fed steps back, rates will rise. Experts are expecting them to go up to anywhere between 5.7% and 6.5%. While not has high as the market has seen before (15%!) this might slow down the market a bit. But, if rates continue to rise without slowing down, don't expect the Fed to stay out of it! They will step back in if rates go too high, in the long run they want the core financial industry of real estate to get healthy again, only then will consumer confidence really be back.
Read more info here.

USDA 100% Financing is Gone for 2010

The last standing 100% financing option has run out of money for this year. The USDA Rural Housing Fund finances properties in rural areas, and is targeted for lower income buyers. But, with a giant increase in participation in the program, they will stop new mortgages in April. Most mortgage banks and brokers have already notified Realtors and clients that it will no longer be available. This is a really tough thing to have happen when the market for lower income buyers in rural areas was improving. With so many foreclosures and short sales out there, and the first time home buyer tax credit available, many people who never thought they would be able to own a home were shopping for houses. The rest of the month and April will see a major decline for the rural market, which is most areas outside of larger towns, so most of Oregon, Washington, the rest of the West will see a decline in purchases.
Read more here.

4 Online Tricks Not To Fall For

Even the most savvy internet surfer can fall for tricks that Realtors and lenders use, even when they aren't meant to deceive. Here are some common things to watch out for:
1. Digital Deception: Realtors know how to use Photoshop, fish-eye lenses, and editing to make a home seem bigger, cleaner, newer, and generally nicer than it is. Go see the house in person before falling in love.
2. Zestimates: Ridiculous differences in values come from all the major real estate websites. The only real way to know the value of your home is to have a few Realtors do Comparative Market Analysis, or to hire an appraiser. Both will look at similar homes that have sold recently in your area, and based on how similar or different your home is, give a price to list or sell for.
3. Super Low Mortgage Rates: Lenders online and in real life will site mortgage interest rates that only the most qualified buyer can get. They are just a starting point, depending on your credit score, down payment, and income, the rate will be higher. This spring is probably the end of low rates though, so don't be discouraged.

4. Gorgeous Descriptions: In my experience, the nicer a house is, the less I have to say about how nice it is. I'm too busy listing all the features to embellish on the view, the neighborhood, or how it is the perfect home for any buyer. Drive by a house that sounds too good to be true. You know it will be.  

Mint.com Has Changed My World

I love love love Mint.com! Not only does it let me see all of my account activity on my phone, but it breaks it down into the best details. For instance, I can see how much money I have spent at my favorite coffee place in the last week, month, and year. It's a lot higher than I thought. For those of you unfamiliar with the site, it is a really private and popular site that lets you track your bank accounts, credit cards, loans, and spending. Also, if you have investments you can view them. I love the site for how simple it is, you don't even have to have your account numbers, just your online banking user names and passwords. I also follow their blog, which has a great post today. It's an interactive map with info on the best cities for working mothers, based on income, living expenses, unemployment, crime, schools, daycare, and several other categories. I'm always checking to see where Portland ranks on any "best" and "worst" lists. I think we could have done  better on this one. Portland only made the top 10 in Lowest Property Crime (#4), Lowest Violent Crime (#1), Best Quality of Schools (#4), and Lowest Healthcare for Working Mothers (#6). Anyway, check out the post here to see all the best cities.

HOAs Want Banks to Pay Association Fees

Home Owners Associations for condos and developments are hurting for fees due from bank owned units and homes. Traditionally, when a condo or house is foreclosed on the HOA doesn't have a way to make up for the lack of payments that property would have contributed. They often have to up the fees for all members to make up for the empty spots. Now HOAs are experimenting with a new method: reverse foreclosures. When a owner defaults on their mortgage and stops paying the bank and the HOA, they will no longer wait for the bank to foreclose, the HOA will file it's own foreclosure notice and take over the title to the property. The HOA can't sell the property, since the lender still has a lien on it for the original mortgage, so the HOA will go to court and ask a judge to give the property to the lender, in exchange for fees that cover the missing HOA payments. While any HOA could try this tactic, it is popular in condos with extremely high mortgage default and foreclosure rates.

Awesome Company and Product!

I don't usually use this blog as a place to promote specific business not associated with real estate, but I am going to today! My husband, Schuyler Silva, has a custom tree house business, Elevated Living.  He just had his image and website revamped. It's a really cool product, so check it out, become a fan on Facebook, tell all your friends, family, and neighbors with big trees exactly what they need. A tree house. The one in the photos above was installed near Sylvan Hill, in Portland. A family of 4 has a few wooded acres, and wanted something that the kids could play in now, but would also be elegant, durable, and accessable to adults for a long time. The deck is wide enough to have chairs, small tables, and 10 or so people on it comfortably. The railing makes it fairly safe, and umbrellas or canapies can be added for extra shade.

Buyer's Fatigue

If you've been looking for a home for a while now, you may being getting exhausted and overwhelmed. I have been there personally, and I think the only way to recover is to take a step back, maybe a week off the hunt, and mentally restart your search:
1. Revisit your motivations for buying in the first place and either recommit to the process or move on, with a full understanding of what you are giving up.
2. Be decisive and move swiftly to make a strong offer, when you find a place that would meet your needs.
3. Be ready to compromise, and plan to put your tax-credit money to use bringing the cosmetics of your home in line with your vision.
Once you have been able to wipe your mind clean of some of the dozens of houses that you have seen, maybe the market won't look so tired and sad.

Clean Energy Works Portland

300 lucky Portlanders who qualify with www.cleanenergyworksportland.org as lower income but needing to green up their homes will get help with reducing energy costs and carbon footprints. The pilot program will allow participants to pay for upgrades over a 20 year program on their utility bill. The program supports:
1. Weatherization, including insulation, air and duct sealing
2. Space heating, including high-efficiency heat pumps and furnaces
3. Water heating
So far 100 homeowners have participated, so don't delay!
Check out the website for more details, or call 503-546-8766.

Realtor.com and Move Inc Site Portland as One of the Greenest Cities

It's no surprise to Portlanders that this is one of the greenest cities in the country. Other than a general feeling of conservation and preservation, what really makes it so eco-friendly here? Nicki Kipen of Move Inc has an article on Realtor.com that covers many cities, but Portland is at the top, and here's what  he had to say:
"Affordable and accessible, this city straddling the banks of the Willamette River has long made sustainable living a priority. More than 30 years ago, with other cities in a freeway-building frenzy, Portland broke ranks and tore down a six-lane expressway to make room for a waterfront park. Since then the city has set an urban growth boundary to protect 25 million acres of forest and farmland, started a solid-waste program that recycles more than half of the city’s trash and erected more than 50 public buildings that meet tough standards set by the United States Green Building Council. One of the most bike-friendly cities in the U.S., Portland’s public transportation, Portland’s public transportation systems boasts a high rate of ridership. Add in one of the nation’s largest city parks – the aptly named Forest Park has 74 miles of running, biking and hiking trails – and Portland’s rep as the nation’s greenest city makes sense."