Vancouver Wa Real Estate Blog

Welcome to the world of distressed sales. In today’s market, short sales and REOs make up more than 40 percent of sales nationwide and far more than that in areas such as Southern California and Florida, where home prices have dropped significantly in the last two years.

 The many challenges involved in buying and selling short sales in vancouver wa create what many practitioners are calling a new Wild West atmosphere that’s cooling their ardor to get involved in distressed sales. It turns your hair gray.

 It’s also scaring away buyers at a time when prices and interest rates are low enough for consumers to snap up real bargains. The result is a lost opportunity for the industry to shrink its massive overhang of inventory.  I have buyers who’ve told me, ‘I’m not doing this anymore because I don’t want to jump through these hoops,.  So, we’re missing out on a big portion of the buyers out there.

 Although hard-selling lenders are only one of the problems, they’re among the most common.

Crystal Boldt General

Real Estate Pros Push for Better Washington Short Sales

As anybody who has dealt with one knows, short sales should be renamed “long sales.” But that could be changing.

One of the real estate professionals leading the charge to revamp the short-sale process is George K. Wonica, owner of Wonica Real Estate & Appraisals on Long Island, N.Y., and chair of the NATIONAL ASSOCIATION OF REALTORS® Conventional Finance and Lending Committee.

Wonica already has met with 10 mortgage bankers and servicers in Florida to address the problem, and plans a similar meeting this summer in Las Vegas. He points to the uniform short-sale form developed by the California Association of REALTORS® as a good example of what the industry needs.

Short sales appear to be good for both banks and buyers. A study by Connecticut-based Clayton Holdings Inc. showed lenders from May to October 2008 lost an average 37 percent through short sales versus 56 percent on homes sold after foreclosure.

Lenders recognize this and are trying to speed up the process. David Knight, a senior vice president at Wells Fargo Home Mortgage, says, “We think (a) short sale is superior to foreclosure … A short sale is not a bad deal all around.”

Additional liens are often the big holdup, but there could be progress on that front. In April, Bank of America, a major holder of second liens, announced that it would accept 5 percent of sale proceeds after real estate commissions and other costs on short sales. Previously, it had sought 10 percent.

Source: Inman News, Gilbert Mohtes-Chan (05/07/2009)
via REALTOR® Magazine-Daily News-Real Estate Pros Push for Better Short Sales.

Crystal Boldt Foreclosures and Shortsales

Total Vanocuver Home mortgage loan applications inched up last week, according to the Mortgage Bankers Association weekly applications survey.

The Market Composite Index, a measure of mortgage loan application volume, was 979.7, an increase of 2.0 percent on a seasonally adjusted basis from 960.6 one week earlier. On an unadjusted basis, the Index increased 2.4 percent compared with the previous week and 43.7 percent compared with the same week one year earlier.

The refinance share of mortgage activity decreased to 74.4 percent of total applications from 75.3 percent the previous week.

Interest rates rose slightly last week:

• 30-year fixed-rate mortgages increased to 4.79 percent from 4.62 percent.
• 15-year fixed-rate mortgages increased to 4.57 percent from 4.45 percent.
• One-year ARMs increased to 6.36 percent from 6.23 percent.

Crystal Boldt General

Five Maintenance Issues Clark County Homeowners Shouldn’t Ignore

Consumer Reports magazine advises home owners not to put off important maintenance projects, noting that waiting until the economy rebounds could end up making the repairs more costly while putting a family’s health at risk.

The magazine identifies five crucial maintenance issues:

• Check the gutters: Clogged gutters, broken fasteners and separations where the gutters meet the fascia board will lead to roof leaks if they haven’t already.
• Inspect the roof: Cracked, curled and mussing shingles mean a roof is nearing the end of its useful life. Cracks around chimneys, skylights, and roof valleys can also suggest the roof might be leaking.
• Look for bugs: Termites and carpenter ants can bore through a home in a few short years. Probe the sill plate on top of the foundation with a screwdriver to check for rotten wood. Also look for carpenter ants and termites along windowsills and walls.
• Avoid mold: Mold and mildew can cause musty odors, dank air, and make residents sick. Check under carpets and around windows for visible mold or mildew.
• Don’t ignore cracks: Foundation cracks wider than 3/16 of an inch can be a problem. These require examination by a structural engineer.

Read more tips for selling @ http://www.crystalboldt.com/steps_to_a_positive_showing.php

Crystal Boldt General

The lack of commitment is a key problem in distressed sales. Without a commitment to hang tough for the many months it takes to close the deal and/or submitting multiple offers on many short sales at the same time, derails efforts of buyers who are committed to that one property. 

Salespeople and potential buyers are creating problems when they make offers on several clark county short-sale properties at once in the hopes of finding one that will make it to closing.  The salespeople who encourage buyers to make offers on several short-sale properties to see which deal sticks, are also wasting other agents and sellers time. 

 Agents can also derail transactions simply by not preparing well. One-third of homes listed as a potential short sale have no business being called that.  In many cases, the seller really can’t make a qualifying hardship case to the lender. To save everyone time and effort, agents should carefully qualify sellers upfront to be sure they have a genuine hardship.  

 Agents can also derail transactions involving sellers who have a legitimate hardship by simply being unprepared and submitting an incomplete proposal. The property might have several junior liens that the listing agent never took the time to learn about, creating a snag later in the process and raising a question in the lender’s mind about the preparation of the agent. At a minimum, agents should go to a lender only after they’ve prepared a complete, well-organized proposal to the lender, because absent that the deal is unlikely to survive the rigors of the process, creating a bad experience for everyone, particularly buyers. 

 We’ve got to start creating an experience that reasonably resembles a traditional buyer experience or we are doing damage to our industry.

Crystal Boldt Foreclosures and Shortsales

Crystal Boldt General

Lowering Washington Home’s  Mortgage Rates May Have Risks:

The Federal Reserve has so far spent about $250 billion on low-interest mortgages acquired from lenders by Fannie Mae and Freddie Mac.

The purchases, which could eventually top $1 trillion, are one part of the financial buyout many people understand and support. This spending has driven mortgage rates to record lows, encouraged people to buy houses, and helped many people refinance out of lousy mortgages.

It all looks good on paper, but some economists are warning others about some risks. Here are a few of their concerns:

● The Fed is creating new money to pay for this, which will eventually encourage inflation.

● When the Fed stops buying, rates will increase quickly and substantially.

● Not too many investors are interested in the low-yielding mortgages, so it is likely taxpayers will have to foot the bill.

Source: The Wall Street Journal, Peter Eavis (04/02/2009)

via REALTOR® Magazine-Daily News-Lowering Mortgage Rates May Have Risks.

Crystal Boldt Mortgage and Financing

Banks Get New Leeway in Valuing Assets for Vancouver Wa properties

The Financial Accounting Standards Board (FASB) has approved a rule change that allows banks to report on their income statements certain assets at their value in a normal market. They’ll only be required to write them down to market value if the drop is “other than temporary.”

The fall in asset values would be indicated on their balance sheets, but critics contend that the change will permit banks to put off recognizing losses from bad loans. Another change approved by the FASB will force banks to disclose the impact of the new reporting rules, though the extent of the disclosures remains to be seen.

Source: New York Times, Floyd Norris (04/03/2009)

via REALTOR® Magazine-Daily News-Banks Get New Leeway in Valuing Assets.

Crystal Boldt General

Lenders Cut Credit for Reliable Clark County Proeprty Borrowers

Lenders are cutting credit lines and pushing down credit limits on their best-paying customers, which ultimately can reduce these frugal customers’ abilities to get mortgages.

A new study by Fair Isaac says 11 percent of U.S. consumers had their access to credit trimmed during the six months ending last October, even though they pay their bills on time and have good credit scores. That’s more than double the 5 percent of consumers with poor credit whose access to credit was reduced in the same time frame.

People who pay on time aren’t very profitable for lenders, says John Ulzheimer, president of consumer education for Credit.com, because they don’t carry balances or pay late fees.

The affect of these cutbacks is cumulative, credit experts say. When lenders close accounts or cut limits, it can hurt consumers’ credit scores and make it harder for these good payers to get other loans, including mortgages.

Source: USA Today, Kathy Chu (04/03/2009)

via REALTOR® Magazine-Daily News-Lenders Cut Credit for Reliable Borrowers.

Crystal Boldt Mortgage and Financing

Vancouver Foreclosure Prevention Plan

When people lose homes to foreclosure, our communities, the housing market, and our economy all suffer.

Separate from the stimulus package, President Obama has made up to $200 billion available to shore up investor confidence in the mortgage secondary market and up to $75 billion in incentives to encourage lenders and borrowers to refinance troubled loans. The effort is critical because of the destabilizing impact of high foreclosures and distressed sales, says NAR.

The plan details include:

• Help for home owners making their payments but at risk of default. Home owners with a conforming loan could be eligible to refinance as long as their mortgage doesn’t exceed 105 percent of the home’s current market value.

• Help for home owners already in default and in need of loan modification. For lenders that voluntarily agree to lower a borrower’s payment so that it makes up no more than 38 percent of the borrower’s income, the government would share the cost of lowering the mortgage burden further.

• Doubled resources to Fannie Mae and Freddie Mac. To encourage investors to buy the secondary market companies’ mortgage-backed securities, the government promises to back them to up to $400 billion, twice the current amount.

Guidelines for the program could be out before April 1. If you’re working with borrowers who are having trouble keeping up on their mortgage, tell them to call their mortgage servicer or a HUD-approved nonprofit housing counseling agency.

The stimulus package and foreclosure plan are a good start to solving the nation’s economic woes, says NAR 2009 President-elect Vicki Cox Golder. “By helping good people caught in bad mortgages, we’re keeping inventory from being added to a market already under stress.”

Crystal Boldt Foreclosures and Shortsales