Monday, December 26, 2011

Housing Market: What’s Behind and What’s Ahead


The housing market in 2011 was a year that saw changing trends and breaking records.

Mortgage Rates

15- and 30-year fixed mortgages hit record lows during 2011. via

Freddie Mac’s Primary Mortgage Market Survey showed the interest rate for a 30-year fixed-rate loan averaging 3.91% last week, the lowest in the 40 years of the survey’s history. The average interest rate for a 15-year fixed-rate mortgage was 3.21% — also a record low.

Mortgage rates are expected to remain low well into 2012.

Greg McBride, a senior financial analyst at, commented that “for well-qualified buyers interest rates should be no impediment to home buying in 2012.”

Foreclosures & Loans

There were 14% fewer foreclosure notices served in November year-over-year. via Business Week

The  rate of foreclosure filings slowed considerably in 2011, as banks and servicers responded to the documentation and processing challenges from 2010.

The foreclosure liquidation rate is anticipated to rise next year. via

With the settlement between the states’ attorneys general coalition and the major lenders and servicers coming to a head, Zillow sees an increase “either in conjunction with a settlement… or, alternatively, in the aftermath of the settlement effort falling apart.”

Home Values

The slide in home values since 2008 slowed in 2011. via International Business Times

Zillow projects that home values will fall 35% less this year than in 2010; and the Case-Shiller Home Prices indices show that the rate of decline slowed from the second quarter of this year to the third quarter (from 5.8% to 3.9%).

Home values will likely fall a bit more to finally bottom out in 2012.

Jonathon Miller, president and CEP of Miller Samuel, predicts that the decline will be considerably less than this year.

Home Sales & Starts

In 2011, new single-family home sales are on pace to hit a record low of 301,000. via Business Week

On the flip side, however, existing home sales rose to 4.42 million this fall, the highest in 10 months.

Total home starts (houses and apartments) jumped 9.3% month-over-month. via Internation Business Times

This rise from October to November represents the fastest pace in more than 18 months. Although single-family home construction remains stalled, Fitch Ratings projects a 6.7% gain in residential housing starts next year.


The Housing Market Index rose to 21 from last month’s 19. via Mortgage News Daily

The National Association of Home Builders (NAHB) surveys its members monthly to compile the index. Although not huge, 20 is the highest the index has been since May 2010.





Monday, December 19, 2011

Are Home Values Finally Stabilizing?

Zillow Real Estate’s latest market report says maybe

On a year-over-year basis, the Zillow® Home Value index declined 5.1 percent. Zillow reports that “the rate of monthly depreciation has stabilized around -0.2 to -0.3 percent over the last few months.”

Of the 156 metropolitan statistical areas covered by Zillow, while 95 showed monthly depreciation in home values, 39 areas actually saw an increase in monthly home value this past October. Twenty-two (22) areas remained flat.

The nine markets that saw the largest year-over-year home value increases from October 2010 to October 2011?

  • Tulsa, OK— one-year price gain of 6.2%
  • Oklahoma City, OK — one year price gain of 3.1%
  • Lincoln, NE — one year price gain of 2.7%
  • Madison, WI — one year price gain of 1.3%
  • Honolulu, HI — one year price gain of 1.3%
  • Fort Collins, CO — one year price gain of 1.3%
  • Fort Myers, FL — one year price gain of 0.4%
  • Pittsburgh, PA — one year price gain of 0.4%
  • Boulder, CO — one year price gain of 0.2%

Another sign of stabilization is the decline in the foreclosure liquidation rate — at 8.1 out of every 10,000 homes being liquidated as of October, 2011 — down from the all-time high of 10.7 out of every 10,000 homes in October, 2010. That’s a drop of nearly 25 percent.

For more details on the Zillow Home Value Index and the latest Zillow Real Estate Market Report, check out these articles:

Monday, December 12, 2011

The Housing Market One or Two?

Analysts disagree over definition and future of the market

Last week, while some real estate analysts offered a somewhat rosy outlook regarding “stabilizing home prices for non-distressed property,” several industry experts from news sources argued that you cannot simply split the market in two pieces — distressed and non-distressed to paint the picture you want.

So what’s the bottom line? Is the market flat, dropping or rising?

Month over month, CoreLogic report that home prices overall fell 3.9 percent in October, and the S&P/Case-Shiller home price index was down 3.9 percent in September (which represents a three month running average of both distressed and non-distressed sales).

Removing the distressed sales(foreclosures and short sales) from CoreLogic’s analysis, however, home prices fell just 0.5 percent in October.

The Wall Street Journal noted that for the first nine months of 2011, non-distressed property prices were relatively stable, with only a two to three percent decline year over year. A real estate analyst from Barclays, a proponent of looking at the two market segments separately, feels that if the pricing trend continues (distressed pricing dropping while non-distressed pricing stabilizes), it could have the effect of “stabilizing something else: home-buyer confidence.” Only time will tell.

For more details, see:

Monday, December 5, 2011

More and More Experts Say Principal Reduction Is the Answer

Why does the head of Fannie Mae and Freddie Mac refuse to consider it?

Last week, a group of Democrats from the House sent a letter to Edward DeMarco (who currently heads up the agency (FHFA) that oversees Fannie Mae and Freddie Mac) asking for a better answer as to why he refuses to implement a principal reduction program at Fannie and Freddie.

The letter cites industry experts, all of whom advocate principal reduction as necessary to bring the housing market and economy out of the dumps, including:

  • Chairman of the Fed, Ben Bernanke
  • a former Chairman of the Council of Economic Advisers
  • a former Vice Chairman of the Fed
  • a former Special Inspector General for the Troubled Asset Relief Program

Even Greg Lippman, the former Deutsche Bank AG trader who made a fortune betting against subprime mortgages, has weighed in on the side of mortgage reduction. Now chief investment officer for a New York-based hedge fund, Lippman wrote a letter to investors saying “principal reductions are necessary to help ameliorate the housing crisis.” (For more on Lippman’s perspective and additional expert opinions, read this Bloomberg News article.)

DeMarco claimed in a Nov. 16th hearing that his agency has “concluded that the use of principal reduction within the context of a loan modification is not going to be the least-cost approach for the taxpayer.” (For a great summary of DeMarco’s exchange with Rep. John Tierney (D-MA), read this post on Fire Dog Lake.)

According to the Democrats behind the letter, DeMarco has too long been spouting “superficial excuses about why principal reduction programs are not feasible at Fannie Mae and Freddie Mac, despite a growing chorus of economists and other experts who believe these programs serve the long-term interests of taxpayers.”

Felix Salmon, an award winning financial journalist, boils the likely real reasoning behind DeMarco’s stance down to the following:

If we [the FHFA]do principal reductions, the accounting conventions finally grow some teeth, and we’re forced to take a write-down. Since we don’t want to recognize reality and take that write-down, we’re simply going to avoid doing principal reductions instead.” (read Salmon’s full post on “Ed DeMarco’s Obstructionism” here)

The Democrats’ letter calls for DeMarco to provide documentation that proves there are statutory provisions preventing FHFA from letting Fannie Mae and Freddie Mac reduce mortgage principal. In addition, they asked DeMarco for an analysis that compares the financial implications of foreclosures with the cost of debt reduction. DeMarco’s deadline to provide these documents is December 9th

Monday, November 28, 2011

Holiday Mortgage News. More of the Same

Rates continue to hover near historic lows

The short holiday week saw little change in mortgage rates.

According to Mortgage News Daily, the Best-Execution Rates for Friday, November 25th ranged from 3.875% (“very few”) to 4.125% (“some”), with most seen at 4.0%. Realty Times reported the results of Freddie Mac’s Primary Mortgage Market Survey for the three-day week:

  • 30-year fixed-ratemortgage averaged just under 4.0%, down from 4.40% a year ago
  • Average rate for 5-year adjustable-rate mortgages (ARMs) reached a new low of 2.91%, down from 3.45% last year
  • Average rate for 1-year ARMs was 2.79%, down from 3.23% last year

Although home sales were slightly up in October, according to the National Association of Realtors (NAR), they could have been even better had there not also been a high number of failed sale contracts in October. NAR’s chief economist attributes the failed contracts in part to appraised values not matching the negotiated sale price and to tight credit standards.

Monday, November 21, 2011

Time to Be Thankful For Housing Market News?

Recent forecasts predict better times ahead in 2012

Although small, a slight uptick in the housing market next year is predicted. A survey by MacroMarkets of more than 100 economists and industry experts shows they expect home values to go up — just a little. About .25 percent in 2012 and a total of 1.1 percent through 2015.

Slowing the recovery down are the many foreclosures clogging the market. A recent article in Money Magazine notes that Freddie Mac predicts that in 2012, 4.8 million homes will be sold in total, while there are more than 5 million homes for sale. The market considers six months of housing inventory to be healthy — more than a year’s worth of inventory is a sign that the going will be tough to return to healthy market conditions.

For buyers and sellers in 2012, the recommendations are to “think small” and “price smart.” For buyers, looking at smaller properties mean smaller loans, smaller payments and smaller home costs overall (energy, water, etc.). For sellers, working with — and listening to — an experienced Realtor when it comes to setting the sale price of their home is critical. According to Trulia, about 25 percent of homes it tracks has reduced its price at least once, by an average of about eight percent.

And of course, for homeowners not looking to sell, now is the time to look at refinancing, as mortgage rates continue to hover at all-time lows. Considering that just recently 15-year mortgage rates were more than half a point less than 30-year mortgage rates, a homeowner who could afford the higher payment could refinance a $250,000 mortgage with a 15-year loan and save more than $100,000 over the life of the loan compared to a 30-year mortgage.

Monday, November 14, 2011

The Battle Over Principal Reduction Rages On

States, including NY and CA, push to include assistance for underwater loans

The latest settlement proposal between the states’ coalition and five major banks after 11 months of talks includes financing support for underwater loans, including refinancing, principal write downs and other forms of assistance. According to CoreLogic, about 22.5 percent of all residential mortgages are underwater.

Multistate talks to craft a settlement with the major banks stalled a few weeks ago when California State Attorney General Kamala Harris withdrew. Harris pointed to the combination of the banks’ demands for broader immunity from litigation and penalty for their earlier “abuses” along with the inadequate relief proposed for homeowners whose loans are underwater as unacceptable to protect the interests of California and California homeowners.

Earlier this month, Harris stated that she thinks the head of Fannie Mae and Freddie Mac should “step aside” if he will not approve principal reduction for underwater loans. PICO, a California community organizing network, pointed out in a press release that Fannie and Freddie “continue to keep more than one million California families trapped in unsustainable debt.”

The talks, led by Iowa State Attorney General Tom Miller and supported by the Obama administration, had recently increased the suggested penalties from $20 billion to $25 billion. The additional $5 billion, paid directly to state and federal governments, is intended for eligible victims of the five participating banks’ foreclosure processes — restitution payments are estimated to be between $1,500 and $2,000.

In addition to Harris, attorneys general from several other states including New York, Massachusetts, Nevada, Minnesota, Kentucky and Delaware have stated that they don’t feel that the proposed $25 billion settlement is adequate to protect their states’ homeowners.

Gathered from the following sources:

Monday, November 7, 2011

Obama Announces Expanded HARP Program

Two years later after its debut, how has the Home Affordable Refinance Program changed?

Last month, President Obama announced that the Home Affordable Refinance Program (HARP) was being revised and expanded.

HARP was introduced in 2009 as a measure intended, according to a statement by the President, to “make it possible for an estimated four to five million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at lower rates.” In the two years since HARP’s debut, not quite one million homeowners — or 20 to 25 percent of the intended beneficiaries — have received HARP assistance.

As reported on, there are two notable changes in the HARP guidelines, impacting borrower qualifications and lender obligations.

Elimination of LTV caps — The original guidelines for qualifying borrowers capped the loan-to-value (LTV) ration at 125 percent. The revised guidelines eliminate this cap, which is good news for borrowers in hard hit states including Nevada and Arizona, where some LTVs exceed 200 percent.

Elimination of Reps and Warranties — The other significant change is the elimination of some representations and warranties for HARP-participating lenders. By transferring certain lender obligations in the case of a loan going bad from the lender to the government, the government is encouraging more banks to participate in HARP, offering homeowners more options and access to loan modification choices.

Tim Manni, managing editor at, comments in his post that he anticipates these changes helping Fannie Mae and Freddie Mac (as only mortgages through either of these institutions are eligible for HARP) as well as the loan orginators, who are now able to take on more debt with less risk. Manni does not, however, see these revisions having a noticeable impact on the housing market’s biggest problem: distressed borrowers and shadow inventory. Borrowers who are behind or seriously delinquent are not eligible and REO held out of the market will not be impacted by the expanded guidelines.

Monday, October 31, 2011

Unexpected Results in Home Sales

New home sales slightly up, while pending home sales are slightly down

The annual pace of new home sales increased a bit more than expected in September, rising 5.7 percent from the previous month. At the same time, although economists had forecast a 0.4 percent gain, contracts for pending home sales declined in September by 4.6 percent.

First time buyers are behind the slight rise in new home sales, as evidenced by the proportion of lower-priced, entry-level homes under contract. Bob Nielsen, chairman of the National Association of Home Builders (NAHB), notes “these consumers are very dependent upon federal policies and programs that support homeownership, such as the mortgage interest deduction and low-down payment mortgage options.”

The number of home buyers able to take advantage of historic low mortgage rates and pricing on existing homes is limited by the combination of low consumer confidence, high unemployment and limited access to credit. Nonetheless, although pending home sales declined from the previous month in the largest month-to-month change since April of this year, the National Association of Realtors (NAR) monthly index shows a year-over-year increase of 6.4 percent.

For more details, read these articles:

Thursday, October 27, 2011


Foreclosure fears foster true grief.

Reports of foreclosures by the millions have been in the news so much over the past few years that to some, it might seem like the new normal. As a real estate professional, in the trenches with financially stressed homeowners every day, it never feels like business-as-usual.

The prospect of losing ones home is a major source of grief, and often, goes hand in hand with other tragic setbacks like; job loss, divorce, death of a loved one, mounting medical bills or skyrocketing mortgage payments.

Unfortunately, the first stage of grief is denial. That’s even more the case when the threat of foreclosure is looming.

No one wants to talk about financial trouble—even when millions of others are in the same position. It’s completely understandable. But for homeowners who are behind on mortgage payments, decisive action is often the most critical step toward ensuring the best possible solution.

As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, I help homeowners everyday deal with the grief and uncertainty that accompanies the prospect of losing a home. In the process, I can help homeowners get on a path toward financial solvency.

If you or someone you care about would like to change the course of a life that’s facing foreclosure, I can help. Please contact me today at 503-371-5209 or

Monday, October 24, 2011


A lesson that should be taught in all schools . . And colleges....

Back in September of 2005, on the first day of school, Martha Cothren, a social studies school teacher at Robinson High School in Little Rock , did something not to be forgotten. On the first day of school, with the permission of the school superintendent, the principal and the building supervisor, she removed all of the desks out of her classroom.

When the first period kids entered the room they discovered that there were no desks.

'Ms. Cothren, where're our desks?'

She replied, 'You can't have a desk until you tell me how you earn the right to sit at a desk.'

They thought, 'Well, maybe it's our grades.'

'No,' she said.

'Maybe it's our behavior.'

She told them, 'No, it's not even your behavior.'

And so, they came and went, the first period, second period, third period. Still no desks in the classroom.

By early afternoon television news crews had started gathering in Ms.Cothren's classroom to report about this crazy teacher who had taken all the desks out of her room.

The final period of the day came and as the puzzled students found seats on the floor of the deskless classroom, Martha Cothren said, 'Throughout the day no one has been able to tell me just what he/she has done to earn the right to sit at the desks that are ordinarily found in this classroom. Now I am going to tell you.'

At this point, Martha Cothren went over to the door of her classroom and opened it.

Twenty-seven (27) U.S. Veterans, all in uniforms, walked into that classroom, each one carrying a school desk. The Vets began placing the school desks in rows, and then they would walk over and stand alongside the wall. By the time the last soldier had set the final desk in place those kids started to understand, perhaps for the first time in their lives, just how the right to sit at those desks had been earned..

Martha said, 'You didn't earn the right to sit at these desks. These heroes did it for you. They placed the desks here for you. Now, it's up to you to sit in them. It is your responsibility to learn, to be good students, to be good citizens. They paid the price so that you could have the freedom to get an education. Don't ever forget it.'

By the way, this is a true story.
And this teacher was awarded Teacher of the Year for the state of Arkansas in 2006.

Please consider passing this along so others won't forget that the freedoms we have in this great country were earned by U. S. Veterans.

Senate Votes to Raise Loan Limit

Hoping that higher conforming loan limits will help housing market

Last week, the Senate voted to approve the high-balance conforming loan limit to $729,750 in wealthier neighborhoods, as part of a larger spending bill.

As of October 1, 2011, the largest conforming loan (loans that are eligible to be purchased or guaranteed by Fannie Mae and Freddie Mac) limit returned to $625,500 after several years of a temporary extension to $729,750.

There is a ways to go yet before the higher limit becomes an actuality. The approved measure is attached to a spending bill brought to the Senate by Robert Menendez, D-NJ. If that larger bill is approved by the Senate, it then has to pass through the House of Representatives. The Republicans, who control the House, have decidedly different ideas as to how to stir up the housing market and economy, including eliminating Fannie Mae and Freddie Mac not expanding their eligible loan pool.

In a post in the Wall Street Journal, Edward Mills, an analyst for FBR Capital Markets, is reported as saying that “given the strong bipartisan support in the Senate, the chances of the re-raise are well above 50%.”

Monday, October 17, 2011

Foreclosure Activity Brings Both Good News and Bad

What more foreclosures and longer processing times may mean for the housing market

(map from

RealtyTrac® reported that foreclosure activity in the third quarter was up slightly (less than 1 percent) from Q2, and down 34 percent from the same period last year. September activity was down 6 percent from August, marking the 12th month in a row that foreclosure activity has decreased from the previous month.

An Associated Press article (found on notes that “A pickup in foreclosure activity also means a potentially faster turnaround for the U.S. housing market. Experts say a revival isn't likely to occur as long as there remains a glut of potential foreclosures hovering over the market.”

Although foreclosure filings may be on an upward trend, the foreclosure timeline seems only to be lengthening. According to RealtyTrac, foreclosures were completed in an average of 318 days in Q2, while the process took 336 days on average to complete in Q3. New York state’s average for completing a foreclosure was the highest in the country at 986 days. Compare that to Tennessee, where a foreclosure process averages about 94 days from beginning to end.

Monday, October 10, 2011

Take Control of Closing Costs

Expert tips on evaluating and managing the cost of your mortgage

As mortgage rates continue to stay at record lows, the costs of obtaining a mortgage are going up — according to Bankrate’s annual survey of closing costs, the average origination and title fees have jumped 8.8 percent from August 2010 to August of the this year.

Closing fees are not set in stone, and savvy mortgage shoppers can often reduce these costs or spread them out over time to minimize the financial burden.  Remember to be cool as ICE in negotiations, and you might save yourself some money:

ITEMIZE —make sure every single fee is identified and explained. Ask your lender to break down grouped fees line by line and to explain any fees that are unclear.

COMPARE —all lenders are not created equal. Compare loan costs from different lenders, and weigh the loan parameters as well. Low cost and no-cost loans often end up costing a lot more in the long term through higher rates and/or stiffer penalties.

EDUCATE —make sure you understand each fee and which ones have more play. Often “lender’s fees,” which can include loan-origination, administrative costs, wire-transfer, mortgage insurance application fee, among others, are the most negotiable. Third-party fees, fees that are passed through from another service provider to you, are less likely to be negotiable.

All experts agree, one of the best things you can do when applying for a mortgage is to request a Good Faith Estimate (GFE) from at least three different lenders. GFEs are a written estimate produced by lenders estimating all anticipated closing costs. Lenders are required by law to provide as accurate a GFE as possible to the inquiring borrower within three days after receiving a mortgage application.

For more tips on closing costs, visit these resources:

Monday, October 3, 2011

Mortgage Rates Continue To Hover At Record Lows

For qualified buyers, fixed and adjustable mortgages are more attractive than ever

RealtyTimes reported that Freddie Mac’s weekly mortgage survey, the first since the Fed’s Operation Twist announcement last week, found the average rate for conventional 30-year fixed mortgages to be at an all-time low of 4.01 percent.

As Ed Ferrara pointed out in RealtyTimes, these low rates are a reflection of the slow pace of the economic recovery. Nonetheless, this still offers home buyers in the position to buy (and borrow) an expanded opportunity to take advantage of the rare double whammy combination of low rates and low home prices.

FHA mortgage rates, which are ideal for borrowers whose credit is not the best, remain slightly higher than conforming mortgage rates. Given the easier credit qualifying, along with more inclusive policies regarding using approved gifts, housing grants and bonds for the transaction, these mortgages have been on the rise.’sweekly Mortgage Rate Radar puts the average rate for 30-year fixed-rate mortgages at 4.13 percent. Keith Gumbinger,’s vice president, noted that while the lower rates may help spur some additional economic growth,

“if the programs are successful, the economy will begin to grow more strongly, and that would tend to firm up interest rates over time. As such, the lowest mortgage rates as a result of the Fed program are likely to come sooner than later.”

The low rates seem to be spurring increased refinancing activity, but not yet having the hoped-for impact on purchase loans. Inman News reports that the Mortgage Bankers Association’s weekly survey shows refinancing requests up 11.2 percent from the week ending September 16th to the following week. Demand for new purchase loans rose 2.6 percent from the previous week, to reach about the same level as the same time last year.

Monday, September 26, 2011

Fed Announces Operation Twist

New plan focuses on mortgage rates; experts’ response is mixed

After a two-day closed door policy meeting last week, the Federal Reserve announced its latest effort to stimulate the economy: “Operation Twist.”

The crux of the plan is to put downward pressure on long-term interest rates by shifting $400 billion from short term Treasury holdings to longer term Treasuries.

Writing for MarketWatch, David Weidner explains that driving long-term interest rates even lower than they have been could help banks by increasing financing activity and generating more fees and transactions. Moreover, he adds, “many homeowners on the edge of being underwater on their home loans would have an opportunity to cut their housing costs. What the banks lose in profit margins — they are currently borrowing for nearly nothing and lending for 4% or more — would potentially be offset by fewer bad loans.”

Economic and housing industry experts are not convinced the outcome is going to turn out to be what the Fed expects and wants it to be. Interviewed for an article in Forbes Magazine, Steve Blitz, senior economist at ITG Investment Research, said that “borrowing is about confidence. If I’m uncertain about growth in my income, I’m not going to go get a mortgage.”

At the same time, as noted in an article on Zacks,

“While all eyes remained fixed on the Federal Reserve’s announcement, data about a surge in the existing-home sales in August was hardly factored in. According to the National Association of Realtors: “Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 7.7 percent to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July, and are 18.6 percent higher than the 4.24 million unit level in August 2010.”

Zacks’ article concludes with Lawrence Yun, NAR chief economist, observing that although some of the upswing in existing-home sales in August could be attributed to delayed sales from earlier in the year, “favorable affordability conditions and rising rents are underlying motivations.”

Tuesday, September 20, 2011


Hi Everyone I'm privileged to be jointly presenting a real estate investing seminar with Michael Blanchard CPA of Johnson-Glaze & Co., P.C. This should be a time chock full of information about how you can take advantage of this real estate market and the investment opportunities. Topics will include an update of the Salem real estate market, evaluating properties and deal considerations, managing taxes, and more. Please consider joining's Free!

WHEN: September 28th, 2011 6:30 - 8:00 pm (doors open at 6:00pm)

WHERE: Best Western Mill Creek Inn (Across from Costco, off Hawthorne)
3125 Ryan Drive SE Salem, OR

WHO: RSVP PLEASE TO Michael Blanchard by telephone or email:

Can't wait to see you there!

Monday, September 19, 2011

NAR Offers Recommendations to Federal Agencies

A three prong approach to helping the housing market recover

In a recent article, the Associated Press reported that RealtyTrac Inc.’s latest data show bank actions against defaulting mortgage holders rose 33 percent in August from the previous month. As the existing and future inventory of foreclosed upon, or real estate owned (REO), properties continues to loom over the housing market, the National Association of Realtors (NAR) issued a letter to federal agencies urging more backing for loan modification programs, as well as lending initiatives and short sale support.

Responding to a request for input from the U.S. Department of Housing and Urban Development, the Federal Housing Finance Agency and the U.S. Department of the Treasury, NAR sent a letter strongly advocating that the government work to expand financing opportunities. NAR outlined three major areas it feels would have the most and best impact on the housing market:

  1. Providing financing opportunities to qualified borrowers — to both relieve the current REO inventory and help forestall adding to the inventory.
  2. Strengthening pre-foreclosure programs such as loan modification and short sales).
  3. Overseeing and encouraging the disposition of REO inventory — utiliizing local expertise (e.g., contractors, real estate brokerages, professional property managers) as needed.

While stressing that financing should be provided to qualified homebuyers according to strong underwriting guidelines, the letter pointed out that private capital supporting the mortgage market has all but disappeared in the last three years — and that the lack of financing opportunities powers lowering home values, which increases the volume of upside-down mortgages and thus the number of homeowners facing default and foreclosure.

Monday, September 12, 2011

Is A Low Appraisal Putting a Spoke in Your Deal?

5 tips from the experts to help keep your transaction alive

A recent article from RIS Media discusses the increasing percentage of real estate deals that are getting snagged when the appraisal comes in lower than expected. According to the article, this past June and July alone saw 16 percent of real estate professionals reporting a sale cancellation as a result of low appraisals.

What can you do?

1. Negotiate with the seller to lower the price — clearly the simplest solution, though not always the easiest. The earlier in the transaction you address this, the more leverage you may have. Consider that this summer the average home sale took 88 days. Your seller may be willing to balance time against dollars.

2. Ask the seller to carry a second mortgage for the difference — this solution means that the buyer incurs more debt, although it doesn’t cost the seller any more.

3. Do your research — do you have any reason to contest the appraisal? Check the appraisal management company and specific appraiser’s credentials. Find out what comparables were used and don’t be shy about asking to see a list of recent comparable sales that justify the agreed-upon sale price.

4. Ask for a new appraisal — if your research uncovers some doubt or discrepancy, ask the lender to conduct a second appraisal. You might be charged for it, but if your research is convincing enough to you to think one is warranted, it might be worth the money.

5. Order your own, independent appraisal — this can go either way, as the bank will most likely ask the original appraiser to say whether they agree or not with your new one. If they don’t agree, the bank could request another, third, appraisal, or just reject yours altogether. On the other hand, if they agree with your new appraisal and the disputed factors you present, the original appraisal might be adjusted.

For more information, read these articles:

Monday, September 5, 2011

Housing Market Once Again Regional

Mixed recovery signals a return to localized shifts and trends

The S&P/Case Shiller home-price index, released last Tuesday, showed a 3.6 percent increase in home prices from the first quarter of this year to the second. According to the index, however, the average home price year over year dropped 5.9 percent for the first six months of this year compared with last year.

Average home prices are performing differently across the country — The S&P/Case-Shiller index tracks 20 “MSAs” (metropolitan statistical areas), of which, according to David M. Blitzer, Chairman of the Index Committee at S&P Indices, “eight bottomed in 2009 and have remained above their lows.  These include all the California cities plus Dallas, Denver and Washington DC, all relatively strong markets. At the other extreme, those which set new lows in 2011 include the four Sunbelt cities – Las Vegas, Miami, Phoenix and Tampa – as well as the weakest of all, Detroit.”

Mortgage rates continue to stay at record lows for the entire country — Last Thursday, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), which showed that the average rate for a 30-year fixed mortgage hit an all-time low (at least as far back as 1971) in August of 4.15 percent.

Demand for purchase loans remains down — The Mortgage Bankers Association revealed in a separate survey that, despite record low mortgage rates, demand for purchase loans remains lower than it has been since the 1990s.

Blitzer also noted that “these shifts suggest that we are back to regional housing markets, rather than a national housing market where everything rose and fell together.” In this buyer’s market, that means paying more attention to local sale price trends as cities and areas rebound differently around the country.

Tuesday, August 30, 2011


Renewed trust for tough times

Does it feel like trust is one of the major casualties of the economic meltdown of 2008 – followed by the “Great Recession,” the “Jobless Recovery” and now the threat of a “Double Dip Recession?”

Weren’t we assured that home values were destined to go up and up and up?

There have been lots of promises that help is on the way—and lots of warnings of scams and schemes that have only served to confuse the matter. So where’s a homeowner who’s underwater or overleveraged to turn?

Here’s the bottom line: the choices that homeowners make when they feel they are at the end of their rope will have ramifications for years to come on their ability to qualify for credit, their job prospects, their security clearance and their overall finances. When a family’s financial trajectory is rapidly heading in a negative direction, there’s no substitute for the helping hand of a knowledgeable expert who has the integrity, the experience and the training to reverse the course—someone who is tapped into regulatory initiatives and can separate fact from fiction.

It is my mission to serve as a credible source of information and perspective to homeowners who have found themselves in a tough situation and need help sorting through their options. That’s why I sought out the Certified Distressed Property (CDPE) designation—the most renowned and recognized credential in the distressed property field, and it’s why I continue to stay on top of regulatory and industry developments that impact options available to homeowners who are struggling with their current financial situations.

My message to homeowners who do not know where to turn: there is hope. Foreclosure is not inevitable and neither the government nor your bank wants to see that happen. No one expected to find themselves on the brink of foreclosure, but I have worked with countless clients who have managed to turn their financial trajectory around and get on a path of financial recovery.

It CAN be done! And it would be my privilege to help.

Monday, August 8, 2011


Handling the Stress of an Unaffordable Mortgage Payment

Whenever I research the latest foreclosure and distressed property statistics, the sheer number of Americans facing the stress of losing their homes amazes me. It is my goal to help as many homeowners I can either stay in their homes or relieve the burden of their mortgages. Knowing that there are so many that need my help is a driving force for me to continue doing what I do.

In fact, I just released another report that I’ve made available on my website today. It explains the CDPE designation and lists 10 options that homeowners can take advantage of to relieve the stress that comes with owing their mortgage lenders more money than they can afford to pay. You can find it at

The report also draws a contrast between short sales and foreclosures. Unfortunately, there’s a growing trend of “strategic defaulters” who think it’s smart to let their home go into foreclosure. As any one who follows this blog knows, there is nothing strategic about foreclosure; it’s one of the most long-lasting, negative financial challenges you can go through.

I’m excited about acting as a resource for more homeowners who have questions about what they should do. As always, if you know homeowners who may need my help, have them contact me immediately! Together, we can put them back on the path to financial stability.

Wednesday, August 3, 2011

Contentment - What's That?

As many of you know, I am a huge Dave Ramsey fan. I was a Financial Peace University leader when he first brought out the program and I currently serve as one of his Endorsed Local Providers. No one has so consistently taught debt-free living like Dave Ramsey. But not only does he teach it, he lives it out.

Our entire office was laughing in the Spring when we were making reservations on-line to see him live in Portland. I was buying tickets for my whole team, so it was an investment I wanted as a tax write-off. As you would expect, I normally use my business credit card for those kinds of things. We burst into much raucous roaring laughter when Dave's system would not accept my card - it would only take a Debit Card! Now that's integrity living.

Dave recently started a movement called the Great Recovery. You can access information about it at Included is a video from his kick off event that I would strongly encourage you to watch. In these times, all of us need Dave's positive kick in the pahtootie! I warn you; prepare yourself to be inspired.

In the meantime, as a person participating in the Great Recovery, I received this email from Dave, and I wanted to share it with you.

Recovering Contentment
Becoming content and stressing less.

It's tough trying to keep up with the neighbors. They have a newer car and a brand new SUV. They have kids in the best private school in the state.

The only time you see them is when they're talking to the landscaper or carrying bags in both hands into the house from their daily trip to the mall. You half-heartedly smile, wave and glance back at your 10 year-old car that needs a few repairs and a good washing.

"We are holding our own GREAT RECOVERY in the small town of Morrisville, Missouri. I am the Class Coordinator and we have 50 attendees in the class!"
—Troy from Facebook

Appearances are easy to maintain, until the truth catches up. Ken and Barbie next door with the "perfect" life are in debt up to their eyeballs. Ken is stressed beyond belief at work, trying to close every deal because he needs each one of them to make his payments. And Barbie's migraines are back because she's losing the fight to keep up with the other private school moms, who are fighting to keep up with their neighbors.

Peace is a beautiful thing. Resting in who we are and what we have is worth far more than we imagine. How can we be content? How can we rest? Trust. If we trust that God loves us completely and unconditionally, and He'll provide no matter what, we can be content. Consider the lilies and the birds. Remember?

"Then he said to them, 'Watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions.'"
— Luke 12:15

In Hebrews 13:5, we read this. "Let your conduct be without covetousness; be content with such things as you have. For He Himself has said, 'I will never leave you nor forsake you.'" He won't leave us! We can be content. We have money, but we don't love it. It doesn't have us. The kids aren't being tortured taking their PB&J to lunch and wearing hand-me-downs from their cousins. And we're not really missing anything at the theater anyway. Let's approach life like Paul.

Philippians 4:11-12
"Not that I speak in regard to need, for I have learned in whatever state I am, to be content: I know how to be abased, and I know how to abound. Everywhere and in all things I have learned both to be full and to be hungry, both to abound and to suffer need."

What Now?
Are you trying to keep up with the neighbors? If so, why?
Are you making a payment on something you can get rid of?
Are you actively trying to educate yourself on how to get out of debt?

If you haven't committed to learning how to handle money God's way, find an FPU class near you.

To Your Contentment,