The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
Category Archives: foreclosure
March 2009 newsletter from Team Reba is hot off the presses…
Here is a link to my “March Real Estate Update”:
This Newsletter is full of interesting and useful information that we think you will enjoy whether you are a buyer, seller, homeowner, or renter.
This month’s issue includes topics such as:
Details Of The Recovery and Reinvestment Act of 2009
Why Buy a Home Now
Mortgages That Survived The Credit Crunch`
The Ripple Effect of The Non-Repayable Tax Credit
The Incentive for Greening American Homes
It’s a Good Time To Remodel
Plus a roundup of February real estate activity as well as much more advice and information.
We hope you enjoy this monthly newsletter. If you have any comments, please e-mail them to us. Or, if you would like to see a certain topic covered in future months, let us know that too!
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Distressed Property Consultant law gets modified…. finally!
A lot of people got bent out of shape back in June of 2008 when a new law aimed at stopping equity skimming on foreclosures went into effect. The initial premise of stopping others from scamming people in financial distress was good, in theory, but the actual law that went into effect was a far cry from what the Attorney General’s office had put forward.
Today, we learn that the law has been modified via HB 1132 to better qualify what constitutes a distressed property under the law, and what specific elements must be present in the transaction to make it fit, or not fit, the definition. It’s even nicer that the update will go into effect immediately and there is no waiting period.
I don’t want to get too excited just yet as this only just passed the House and it will be going to the Senate soon under SB 5221. Let’s hope the same unanimous vote occurs within the state Senate!Cymbalta Tramadol Withdrawal
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A small bit of good news for homeowners selling in short sale position
Congress has amended The Mortgage Debt Relief Act of 2007 to The Mortgage Forgiveness Debt Relief Act and Debt Cancellation. The amended act contains expanded coverage and an extended deadline to 2012.
http://www.irs.gov/individuals/article/0,,id=179414,00.html
The MFDRA does not cover properties that are considered vacation homes or investments. Homeowners need to be sure and fill out the correct forms as it’s not an automatic situation, be sure to read the IRS details via the link to learn more.
Are we getting the whole story about this condo purchase gone bad?
In the Feb 20th Seattle Times edition there is a story about 6 immigrants that are suing because of what they believe to be bad behavior on the part of the preferred lender and the developer of a Bellevue condo project. Just reading the headline got me on edge. Here’s why…
We start out with being notified this immigrant buyer was attempting to purchase a $1.5M condo on a $20k a year annual salary. WHAT? You’ve got to be kidding me. Even just hearing those two numbers in the same sentence regarding a purchase already smacks of seemingly ridiculous hopes of someone thinking they won the Lotto. There is NO WAY that someone at that income level would be able to afford or qualify for a condo or home at that price point. I’m annoyed that an agent was involved in recommending (or say they say) that this person buy a condo – not because I don’t believe in people having the joy of homeownership – but because the agent most likely is aware that this person was putting in an offer on a property that they could not afford. In my initial consults with new clients we discuss their income levels and seek out pre-approval status prior to looking at any properties.
Here are some of the additional items of concern for me about how the buyer behaved:
Borrowing $75,000 for earnest money – was the lender made aware that this was his source of funds? Most lenders I know REQUIRE knowing where the funds are coming from, especially if they are borrowed, and there is usually a seasoning requirement of up to 60 days, if not longer. In this scenario it is very likely the friend is expecting an interest return when the money is repaid so this must be evaluated by the lender as well. The lender must assess all debt-to-income ratios and borrowed EM or down payment funds would qualify under this definition. They didn’t say this money was a “gift” but that it was borrowed. HUGE red flag.
There are over 400 posts of comments on this story and several of them reference publicly found information about these so called targeted and taken advantage of immigrants. Some of those items found are that the individuals in this story have been party to several purchases of property over the past 5-7 years and that they have also been the subject of at least 2 foreclosure processes on recent purchases. Hmmmmm…. smells like speculative investing to me.
My business partner and I walked away from a whole lot of these in the past several years because in many cases outright fraud was happening. Did you know that lying on a mortgage application is mortgage fraud and is a felony? Many people we spoke to in first consults would tell us that they’d be letting their lender know that they intended to purchase as owner-occupied while knowing that they had no intention of ever residing on the premises. You wouldn’t believe how many people were amazed to hear they were committing a felony by doing this. I would tell them that we weren’t interested in doing business with anyone who would be involved in this kind of practice and if they were set on this being their method of writing up contracts they’d have to find another agent to do it as I wasn’t interested in losing my business (which is what would happen because I’d lose my license permanently if involved in this kind of fraud) just to help them make an additional $5k on a single deal. Many people went and found other agents to work with, so I can sleep at night knowing I work with ethical clients. The thing is, these people who were lying were just hoping to save a 1/4 to 1/2 percentage point on the loan’s interest rate or to by-pass the investor ceiling limit put in place by the developer.
Most builders were putting in anywhere from 5-20% maximum investor purchases in their projects. Why would a builder put in these restrictions? Numerous reasons.
1. to keep from having to compete against investors in the resale of product.
2. to keep the values of the development up.
3. limit risk of the project.
4. to meet lending guidelines for the development.
In fact, some builders went so far as to start putting into their contracts language that limited the ability of purchasers to sell their properties within the first 1-3 years of ownership or they’d have to forfeit any gain on the property. Kudos to those that did and some of these developers actually had to take some sellers to court – and won. The agent’s involved in those transactions also had to give back their commissions earned as those funds came from the gain on the property value.
You see, most developments have phases built in to them and builders don’t want to see investors buying up in the lower cost early phases only to turn around and be reselling as they are continuing to try and sell their additional phases. If the investor has reasonable gain then they might be willing to sacrifice pricing to turn around the property and that hurts the overall neighborhood values. Much like what bank owned and short sale homes are doing to neighborhoods all over the country right now – depressing values.
It’s a shame that the Seattle Times didn’t do better research on the supposed “victims” in this story. My guess is that it was a strong headline grabber and it followed closely on the heels of Danny Westneat’s story of a man who lost his $14,000 earnest money to VEER Lofts. But in that case, I do feel somewhat sorry for that man as lending standards changed and he was most likely a realistic candidate for purchasing back then. VEER is one of the least expensive developments that Vulcan is building so I know that the prices aren’t that high. Most are around $250k – $400k and I’ve looked at them for clients of mine that qualify for that kind of lending amount. Follow up on his story showed many feeling sorry for the man and believing the developer should return the lost earnest money.
It seems that the comments for the $1.5M condo story are weighting much more on the side of people realizing that there is likely greed at play in this scenario and no one is feeling sorry for these folks. Many still blame the business people involved and I also believe that they’ve done a shoddy job, but when you have a buyer who is likely lying to start out with, no one is going to get it right. Methinks the couple shown in the story and their friends may want to be aware that it’s possible they will have legal action taken against them for mortgage fraud or at least that will be the defense of the developer if this goes to court.Ambien Book Buy Online
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Real estate classes from Team Reba now at Renton Technical College
It’s official! We’re in the catalog of classes for the Spring Quarter at Renton Technical College. There are 8 great classes to choose from that range from buying and selling homes to analyzing investment property, diversifying investment portfolios to include real estate, short sales/foreclosures, a women’s focused class (this one to be held at Renton’s own Red House wine bar & restaurant), and a panel discussion of how best to protect your property assets using LLCs or other methods. All classes but the “women’s night out” to be held on campus.
You can find the classes at this link to the online PDF document at RTC on page 14 of 19 in the “Real Estate” section:
http://www.rtc.edu/StudentServices/ClassSchedule/files/LifeStyle.pdf
sign up forms are also available online but must be printed, filled out and mailed in with payment to RTC:
http://www.rtc.edu/StudentServices/ClassSchedule/files/CommEd_RegistrationForm.pdf
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Team Reba’s February 2009 real estate e-newsletter is available
Click on the link to our “February Real Estate Update”
This Newsletter is full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.
This month’s issue includes topics such as:
“Real Estate Outlook: What’s in Store for 2009?”;
“Buy Now And Beat The Spring Rush”;
“Is A Mortgage Modification For You?”;
“Clutter-Free Helps Sell Homes”;
“Good Time To Buy A Vacation Home”;
“Repairs That Help Sell Your Home”;
Plus a roundup of January real estate activity as well as much more advice and information.
I hope you enjoy this monthly newsletter. If you have any comments, please e-mail them to me. Or, if you would like to see a certain topic covered in future months, let me know that too!
HomeSteps has a great buyer incentive program for offers submitted prior to Jan 31, 2009
Attention Prospective HomeBuyers
HomeSteps will pay up to 3.5%** Buyers Closing Cost Offer
Buy a HomeSteps Home and save! HomeSteps will pay up to 3.5%** of the purchase price in closing costs for all offers presented on HomeSteps homes between October 23, 2008 and January 31, 2009. With our generous offer, homebuyers save money with each qualified closing! No coupon required.
To qualify for this great money-saving offer, just ask your real estate agent to show you the available HomeSteps homes in your area. Then, upon qualified closing, you will receive your Ask an Agent buyer offer.
Don’t have a real estate agent? Team Reba is a HomeSteps approved agent! This offer only lasts until January 31, 2009, so make sure to ask us today about HomeSteps homes.
**Buyers Closing Cost Offer is valid only on owner-occupied, financed homes; a limit of 1% Closing Cost Offer for owner-occupied, cash sales. Buyers Closing Cost Offer must be mentioned to the HomeSteps Listing Agent at the time of initial offer on a HomeSteps home. Investor sales are not eligible for Buyers Closing Cost Offer. Promotion, bonuses, discounts and offers are not valid on auction or sealed bid homes. (Please note: HomeSteps will only pay up to 3.5% of your purchase price in closing costs, not to exceed the total closing costs. For instance, if your purchase price is $125,000, and your closing costs are $4,250, HomeSteps will only pay $4,250, an amount equal to 3.4% of your purchase price.) Seller reserves the right to remove any and all homes from this promotion at any time.
RHA offers another great class for landlords in Seattle
Seattle Landlord Tenant Law: Thursday. Jan. 8th, 3 – 6 PM Speaker: Chris Benis, Real Estate Attorney and RHA Legal Counsel
Time: 3:00pm-6:00pm
Location: RHA Conference Room, 529 Warren Ave N, Seattle WA 98109
Cost: $45 for members without clock hours
$60 for members with clock hours
-SPACE IS LIMITED PLEASE REGISTER EARLY-
Please RSVP before January 7, 2009. The landlord tenant laws of Seattle are unique and not always intuitive. In this class, we focus on everything that a Seattle landlord must know to comply with the City’s laws. Special attention is paid to the Just Cause Eviction Ordinance, Landlord Prohibited Acts Ordinance, Rental Agreement Regulation Ordinance, and Tenant Relocation Assistance Ordinance.
Click Here to Register for this class online Other Events:
South Sound Members Meet-up, Tacoma: Tuesday Jan. 13, 5:30 PM
King County Members Meet-up, Seattle: Friday Jan. 9, 8:30 AM
RHA’s Investment Club, Seattle: Jan. 20, 7 PM
Legislative Day, Olympia, Thurs. Jan. 29, All Day, + Evening reception
Reba commentary – if you own a property in the Seattle area this class will be important for you to attend to learn more about the very restrictive and required laws that you must follow as a landlord. These impact condos, townhomes and single family homes just as much as multifamily properties. There are no exemptions. Chris Benis is a well known and respected attorney who has been speaking and writing on these issues for many years and he’s got the practical background for the topics that will be covered in this class. I highly recommend it – especially if you’re self-managing property. Non-RHA members are welcome, but this class will help show you the value of being involved in an organization like this one. You can learn more about RHA at this link.
The times they keep on changin' and 2009 is no different – Redfin raises its prices
For 2009, the playing field will certainly be changing in terms of the number of people working in the real estate industry and related fields. I’d heard in one of my local REALTOR membership committee meetings that as of mid-year we were down some 5,300 active licensees in WA State which is quite a few. Some people think this is a good thing as it is purging the system of those that were here just for the boom days and who can’t make it when the “real work” begins. In other people’s views, we (the USA) are paying for our greed and it is being lampooned in a variety of ways online from YouTube videos to PowerPoint slides via email. I love these caricatures, although they are a little too close to the truth in many instances given what we’ve learned about the financial markets over the past 6-12 months and the greed that took us to these new lows. I hope to look back on these spoofs some day with different eyes and use them as a reminder of what can happen when people in power aren’t in check.
In some cases it will mean business model adjustments and one that was a bit interesting to me was the admission by Redfin that its former model didn’t work under the pricing strategy that they’d originally started with – and which I never personally thought would continue - so they are raising their prices. A recent online notice from Redfin gives the details. Looks like rebates are being reduced and they are raising prices on the costs of listings, but they are eliminating the costs of showing properties, an at one-time very contentious practice for their clients ($250 a pop after 2 free ones).
Surprisingly, what brought the pricing change to my attention was the posting of a challenge from another similar start up company made up of Redfin deserters called findwell. You can read the customer service challenge at this post. Why is it surprising? Mostly due to the fact that for a few years Redfin had a lot of local press, including online at Rain City Guide where I am a co-contributor, and I would have expected to see something about it there before anywhere else partly due to some of the other writers who followed their development closely - it seemed to be the personal joy of many who yearned for a change in how real estate was done. I was never hot or cold on Redfin, but rather just welcomed them as one of the many business models that exists in the very, very competitive landscape that is real estate – plus focusing online made sense, and as I already stated, I was a techie already so they weren’t really doing much of anything different than I was anyway in my own business at RE/MAX.
Oddly enough, I had joined the real estate industry 5.5 years ago having left the tech sector after watching a former CEO of a firm I worked with take it into near ruins by fleecing the firm of millions of dollars via forgivable loans. It was during the time of Enron and WorldCom and I hoped that starting my own business would assure I could take control of my own destiny. But, alas, the people in higher places got greedy yet again but this time in the lending industry and my working world was yet again impacted.
Thankfully, this time, I do have more control over my own destiny and my team will survive this change. Plus, we expect this change to help us grow stronger as we are picking up market share from those that are leaving the industry and we are finding our investment business picking up again after the years of being cautious with our clients with a lot of that due to the increase in foreclosures and short sales. Yes, much like Warren Buffett, we are being aggressive with our business growth while others are afraid and shrinking back. I’m looking forward to 2009 and what it will bring, just as much as I’m excited about what I will bring into 2009!Cheap Premarin
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