Obama administration to order lenders to cut mortgage payments for jobless

Hot off the press from the Washington Post – if you or someone you know is unemployed and having trouble paying their mortgage, help could be on the way in the next six months.

Obama administration to order lenders to cut mortgage payments for jobless
Renae Merle and Dina Elboghdady, Washington Post Staff Writers 
Thursday, March 25, 2010; 6:01 PM

The Obama administration plans to overhaul how it’s tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday.

Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower’s income, which would typically be their unemployment insurance, for up to six months. In some cases, administration officials said, a lender could allow a borrower to make no payments at all.

The new push, which the White House is scheduled to announce Friday, takes direct aim at the major cause of the current wave of foreclosures: the spike in unemployment. While the initial mortgage crisis that erupted three years ago resulted from millions of risky home loans that went bad, more recent defaults reflect the country’s economic downturn and the inability of jobless borrowers to keep paying.

The administration’s newest push also seeks to more aggressively help borrowers who owe more on their mortgages than their properties are worth, by encouraging lenders to cut the loan balances of millions of these distressed homeowners and possibly refinance into loans backed by the Federal Housing Administration. The problem of so-called “underwater” borrowers has bedeviled earlier administration efforts to address the mortgage crisis as home prices plunged.

The new initiatives are expected to take effect over the next half year and will be funded out of money remaining in the $700 billion bailout program for the financial sector, administration officials said. They said no new taxpayer funds would be needed.

The announcement comes as the administration faces increasing pressure from lawmakers and housing advocates to overhaul its foreclosure prevention efforts. So far, fewer than 200,000 borrowers have received permanent loan modifications under its $75 billion marquee program, known as Making Home Affordable. And the Inspector General for the Troubled Assets Relief Program has raised concerns that many borrowers may redefault even after receiving relief under the program.

In the meantime, there is a growing backlog of distressed borrowers awaiting help from their lender and threatening to hamper efforts to stabilize the housing market. The “program will not be a long-term success if large amounts of borrowers simply redefault and end up facing foreclosure anyway,” the inspector general said in a report released earlier this week.

In addition to mortgage relief for unemployed borrowers, the program features several other key elements, including several steps to address the growing population of borrowers who owe significantly more than their home is worth. Underwater borrowers now make up about a quarter of all households, according to First American CoreLogic. Economists consider these homeowners at higher risk of default because they cannot sell or refinance their home when they run into financial troubles.

For one, the government will for the first time provide financial incentives to lenders that cut the balance of a borrower’s mortgage. Banks and other lenders will be asked to reduce the principal owed on a loan if it this amount is 15 percent more than their home is worth. The reduced amount would be set aside and forgiven by the lender over three years as long as the homeowner remains current on the loan.

Until recently, administration officials had been reluctant to encourage lenders to cut homeowner’s principal balance, worrying this would encourage borrowers to become delinquent. But as federal regulators have struggled to make an impact on the foreclosure crisis, those qualms have weakened.

Second, government will double the amount it pays to lenders that help modify second mortgages, such as piggyback mortgages, which enabled home buyers to put little or no money down, home equity lines of credits. These second mortgages are an added burden on struggling homeowners, especially when their total debt, as a result, is greater than their home value.

Federal officials have estimated that about half of all troubled homeowners have a second mortgage and last year launched a program to encourage lenders to restructure them, but has struggled to get the effort off the ground.

Third, the administration is increasingly turning to the Federal Housing Administration to help underwater borrowers who are still keeping up their payments. The aim is to help these borrowers refinance into a more affordable loan.

Pass along, especially to your friends and family members who have been struggling with the issue of not being able to refinance due to their employment situation.

~Kori

What’s your home worth? Zillow may not know (in Portland, that is)

KATU news recently reported on Zillow in the Portland area – “What’s your home worth? Zillow may not know”.  I added the commentary in the title of (in Portland, that is) because depending upon your region and the local rules governing this data the information can be very different.

The professional appraisal of this home in the Alameda neighborhood of Northeast Portland turned up a valuation "definitely in excess of $500,000." But plug the address into Zillow.com, and you'll see a "zestimate" of only $424,000.

The article uses a subject property in the Alameda neighborhood of Northeast Portland(this is my stopping grounds – born, raised and still reside in the general area).  There are some very valid points about why using Zillow in this particular area is difficult – homes on “the ridge” can be two to three times larger than the homes on the side streets so for an electronic application that simply takes into consideration public records (i.e. tax records, title reports, etc.) these broad swings in property type create more of an average vs. a true valuation.

I like to use one of my client’s home as an example of the discrepancy of Zillow – an adorable bungalow, two blocks off Alberta on NE 27th (the heart of the Alberta Arts District).  She had refinished the hardwood floors, stripped the woodwork and re-stained, installed new “period” fixtures, fresh paint throughout, etc.  The value from Zillow – $20,000 in 2008.  Now this was not the height of the market by any means but $20,000.  Turns out, she had refinanced and given the $20,000 to an ex – he moved out, she kept the house.  Was her house worth $20,000, no – it sold for $312,00 with an offer in 30 days.

Now, I don’t think Zillow is a bad thing.  Zillow is a tool but it is not the final say.  One of the reasons Zillow’s data can be so skewed in Portland is because Zillow does not receive sales data from our local MLS system (RMLS); therefore, they cannot look at days on market (the longer you sit on the market the more your price will be impacted in a negative way - it’s best to price right and sell quick – you’re not leaving money on the table, you’re putting it in your pocket sooner and likely more than if you tried to hold out), it doesn’t see pending sales, and I’m not sure how it handles “distressed” properties (short-sale and foreclosures).  In the Seattle area, where Zillow began and still resides, the local MLS system has agreed to provide their data to Zillow which  results in more accurate “zestimates” than here in the the Portland area.

So, as with any on-line tool – take it for what it is, a tool.  Educate yourself by looking at a few different resources and then contact a REALTOR to run a current, local, market analysis.  Going back to the Alameda neighborhood, again, this is an area that I’m always talking about (the eastside in general) in my office meetings (my office is on the westside) – rules like “price per square foot” do not apply.  These homes range in age from the early 1900’s to present, some have finished basements, others not, some were “updated” oh, in the 50’s, 60’s or 70’s  and others today (as in now, not 1990).  All things must be considered (sorry for the little NPR pun) which is why it’s important to call in a professional who can give you a more comprehensive picture.

Zillow, Yahoo Real Estate, Realtor.com Home Values, Cyberhomes.com, etc… just tools like WebMD, Yelp, Ask, etc.  You might look at these sites to get an idea or a better understanding but you still go to the doctor or the mechanic for the solution.

Give me a call or drop me an email, I’d love to help you with your real estate needs.

~Kori

Metro Natural Areas Program receives a second positive review, gives $1.9 million in community grants

Great news for protecting some of our natural areas.  I recieved this press-release from Metro today – figured it may not make headline news but it’s always nice to hear something positive.

Metro Natural Areas Program receives a second positive review, gives $1.9 million in community grants
Projects include neighborhood-inspired light rail park-and-ride, creek restoration, natural area acquisition

Metro’s Natural Areas Program reached two milestones Thursday: an independent citizen oversight committee lauded the program for “staying on course,” and the Metro Council awarded $1.9 million in community nature grants.

Both accomplishments come shortly after Metro surpassed the halfway point toward its goal of protecting 4,000 acres with the region’s natural areas bond measure, which was approved in 2006 by voters in Multnomah, Washington and Clackamas counties. Combined with a 1995 bond measure, Metro has acquired more than 10,000 acres.

“Independent citizen experts are echoing our belief that Metro’s Natural Areas Program is both responsible and visionary in protecting the region’s best natural resources,” said Metro Council President David Bragdon. “It’s appropriate that, on the day independent citizens are expressing their support, we are funding innovative projects championed by five local communities.”

The Metro Council accepted its second report from the 20-member citizen-based Natural Areas Program Performance Oversight Committee, which is charged with evaluating voters’ $227 million investment in rivers and streams, wildlife habitat and outdoor recreation opportunities.

Business, real estate, finance and nonprofit professionals on the committee focused on the changing economic climate during the time period covered by the report, from July 2008 through December 2009. Because desirable natural areas typically aren’t on the market, some owners may be inclined to wait out the economy, the report said. But, the evaluation concluded, Metro’s “skillful, tenacious” team of real estate negotiators made recession-appropriate deals.

The committee also analyzed Metro’s response to previous citizen and expert recommendations, such as  strengthening public and landowner outreach, learning from every potential transaction and developing additional tools to measure the success of the program. In every case, Metro has responded by improving, the report says.

“The enthusiasm with which Metro staff greeted the committee’s suggestions is encouraging,” said committee chairman Peter Krainock, CEO of American International Supply Inc. “They exhibited a genuine willingness to accept feedback and grow in order to generate an excellent outcome.”

The committee also praised Metro for bolstering the outreach and geographic diversity of its Nature in Neighborhoods capital grants program – on display Thursday as the Metro Council made its third round of awards, totaling $1.9 million. New grants more than double the amount that’s been awarded since the program chose its first recipients in 2008, bringing the tally to $3.3 million.

Capital grants are designed to involve the community in innovative projects that incorporate nature in their neighborhoods as the region grows.  Criteria include “re-naturing” neighborhoods by improving their ecology, restoring rare habitats, demonstrating cost-efficient design solutions and providing public access.

Capital grants are available to neighborhoods, community groups, nonprofit organizations, schools, cities, counties and public park providers. Recipients must match Metro awards with outside funding or in-kind services worth at least double the amount of the grant.

“This program helps nurture new projects, giving them the best possible shot at funding,” said Sue Marshall, volunteer chair of the capital grants review committee. “Today, we’re recognizing five groups that had the right mix of creativity, resources and momentum.”

The awards spanned the region and support everything from natural area acquisition to creek restoration to public structures:

Re-Greening Park Avenue park & ride
Recipient: TriMet, Urban Green
Partners: North Clackamas Parks and Recreation District, Oak Lodge Sanitary District, North Clackamas Urban Watershed Council
Grant amount: $349,305
Total project cost: $1 million

Finding inspiration in Metro’s Integrating Habitats design competition, this project will create the region’s first sustainable, habitat-friendly light rail station and park-and-ride. When TriMet’s new orange line zips into Oak Grove in 2015, commuters will experience a re-created riparian forest, a natural stormwater treatment system and many other green features at the Park Avenue stop along Southeast McLoughlin Boulevard. Agencies and community groups are collaborating to showcase development that balances design excellence, ecological stewardship and economic enterprise. Project partners hope to restore the Courtney and Kellogg creek basins and promote low-impact development throughout the McLoughlin corridor – showing community members, Trolley Trail users and thousands of MAX riders how to restore ecosystems in a built environment.

Trillium Creek restoration
Recipient: City of West Linn
Partners: Mary S. Young Volunteers, Willamette Riverkeepers, Oregon Department of Fish and Wildlife,  Harris Stream Service, Robinwood Neighborhood Association
Grant amount: $55,330
Total project cost: $179,000

Students, volunteers and other community members will come together to restore a degraded stream system at Mary S. Young State Park, creating a healthy riparian corridor. Severe bank erosion has compromised the 1,045-foot section of Trillium Creek that will be transformed. The project will restore floodplain connectivity and enhance the rich diversity of native trees, shrubs and other plants along the riparian corridor and adjacent wetlands in this West Linn park. 

Baltimore Woods connectivity corridor
Recipient: City of Portland Bureau of Environmental Services, Three Rivers Land Conservancy
Partners: Portland Parks & Recreation, Friends of Baltimore Woods, Audubon Society of Portland, SOLV, Port of Portland
Grant amount: $158,000
Total project cost: $475,000

The Metro grant will help purchase four parcels, totaling one acre, within the Baltimore Woods corridor in North Portland. This acquisition will protect rare native oak trees and enhance the nature experience for bicyclists, walkers and joggers who will someday use this section of the Willamette River Greenway Trail envisioned along the adjacent street. These parcels are part of a larger natural area corridor connecting Cathedral Park and Pier parks. Active participation from city agencies, land trusts, non-profit organizations and the Friends of Baltimore Woods will involve the community in restoration and long-term stewardship. 

Crystal Springs partnership
Recipient: City of Portland Bureau of Environmental Services
Partners: Johnson Creek Watershed Council, Friends of Crystal Springs, Portland Parks & Recreation, Reed College
Grant amount: $311,480
Total project cost: $968,000

Crystal Springs has all the characteristics of an excellent salmon stream: It’s entirely spring-fed, which eliminates pollutants from urban runoff. Relatively consistent year-round flow and low temperatures attract some of Portland’s most threatened fish species. This project helps realize the stream’s potential by removing a culvert that blocks juvenile fish passage and restoring the floodplain and riparian habitat along 350 feet of the creek. Conservation easements or acquisition on three additional properties will allow future floodplain restoration.

Summer Creek natural area acquisition
Recipient: City of Tigard
Partners: The Trust for Public Land, Tualatin RiverKeepers, Tualatin Watershed Council, Fans of Fanno Creek, Washington County, Clean Water Services.
Grant amount: $1 million
Total project cost: $5.4 million

Metro will contribute to the acquisition of 43 acres of wetlands and mature forests at the confluences of Summer and Fanno creeks. The property is a high-profile natural area – the best remaining unprotected land in Tigard and, soon, the city’s second largest park. The site has functioned as an outdoor lab for students at Fowler Middle School. With the help of several community partners, this project will expand environmental education programs to students throughout Washington County.   

Metro, the regional government that serves 1.5 million people who live in the 25 cities and three counties of the Portland metropolitan area, provides planning and other services that protect the nature and livability of our region.
For more information about Metro’s Natural Areas Program, go to www.oregonmetro.gov/naturalareas

RMLS Market Action – February 2010

The February 2010 RMLS Martket Action Stats were published today.  Again, I keep saying it, and the proof is in the numbers, the market is picking up!  Slow and steady like the tortoise (we saw what happened when the hare lead the race in the late-90’s to mid-2000’s).

Sales activity was up in February 2010 both month-over-month and year-over-year.  We saw closed business rise 2.9% over January 2010 and 18.4% over February 2009!  No surprise, values are still down – the average sales price was down month-over-month 3.3% ($273,100 v. $282,400) – so what does this tell us? 

It’s still a great time to buy!  I hesitate to say it’s a buyers’ market, it’s THE market and everyone needs to adjust.  Sellers’ need to price their homes accordingly (which as we can see from above – right now, that’s 3.3% below what you would have listed it at last month).  It is still important to get it priced correct out of the gate and get your home sold – you’ll leave money on the table if you’re facing a price reduction in 30-45 days. 

So, does this mean it’s a terrible time for sellers?  NO.  Homes are still selling and selling quickly.  It’s about being ready for the market and pricing your home to compete!  Real estate is not a spectator sport and this is most definitely, not a spectator’s market. 

That’s why I hestiate to say it’s a buyers’ market – if you see a great property, it will be snached up.  Of my transactions over the past year – 67% were on the market for less than 30 days (that’s both buyers and sellers).  Again, it’s not a buyers’ or a sellers’ market – it’s THE market and you need to act accordingly if you want to take advantage of one of the best markets (and rates) we’ve seen in years.

~Kori

Portland’s “Versatile Stylist”: The Architectural Legacy of John V. Bennes

This Saturday at the Architectural Heritage Center, Portland’s “Versatile Stylist”: The Architectural Legacy of John V. Bennes.

Saturday, March 6, 2010
10:00 am – 11:30 am
General Public: $18, Members: $13
Pre-registration is strongly suggested

Between1906-41, John Bennes was one of Portland’s most prolific architects. Recent research has helped to define Bennes’ place in the architectural history of Portland and Oregon, and new information about him continues to be uncovered. This presentation by Larry Landis, University Archivist at Oregon State University, will explore the rich architectural legacy that Bennes created and share new information about some of his design projects. Born in Illinois and raised in Chicago, Bennes brought his knowledge of the work of Frank Lloyd Wright to Oregon in 1900. After six years in Baker City, he moved to Portland, where he introduced the Prairie Style to residential construction. He also designed hotels, movie theaters, warehouses, and other commercial buildings in a variety of styles, from Art Deco to Zigzag Moderne. Bennes also designed at least 35 buildings on the Oregon State University campus and the administration buildings at Southern Oregon, Eastern Oregon, and Western Oregon universities.

~Kori

Loan Modification… Now What?

If you, or someone you know, has completed the loan modification process but that simply is not enough to help you stay in your home – the federal government is coming out with a new program to help streamline the short-sale and foreclosure process.

On April 5, 2010, the U.S. government will be implementing the Home Affordable Foreclosure Alternatives (HAFA) Program. The HAFA is a secondary part of the Home Affordable Modification Program (HAMP), HAFA will help homeowners who, despite the loan modification, are unable to stay in their homes.  HAFA will help these homeowners by simplifying and streamlining the short-sale and deeds-in-lieu of foreclosures process. Certain requirements will still be required by homeowners to participate.

The National Association of Realtors (NAR) has released a brochure about the Home Affordable Foreclosure Alternatives Program and additional online resources, to help Realtors® explain the new program to homeowners, NAR’s HAFA resources explain how the program aims to streamline short sales and, in the process, save more families from foreclosure.

Everyone comes upon hard-times, if you are stuggling to stay in your home and are confused about your options, please give us a call or drop us an email.  We’re here to help you make sense of it and get you through the process.  Remember, banks do not want foreclosed properties on their books, they do want to work with you even if the person on the other end of the phone has been less than helpful.  We’ll help you navigate the process.

~Kori

Think You Know Green – Take These Green Guide Quizes

National Geographic’s Green Guide: For Everyday Living is a great resource for everything from greener vacation travel to how to harvest rain water for your home and garden.  Here’s a couple of quick quizes to test your eco-knowledge around the house.

Quiz: Whole house, where does money leak out of your house?

Quiz: Bathroom, are you water wise?

Quiz: Laundry room, save money and greenhouse gas emissions simply by rethinking the way you wash your clothes.

Quiz: Bedroom, how heathy is yours?

Quiz: Kitchen, is your kitchen full of water hogs and old appliances?

Quiz: Living Room, learn how to rid your living room of energy vampires.

So how did you do?  Check out the National Geographic GREEN GUIDE for other great tips on how to live a greener life.

~Kori