OREGON REAL ESTATE ROUND TABLE

Author: Fred Stewart

  • Foreclosure leaders focused on 4 states in new metro list, Catherine Clifford, CNNMoney.com staff writer


    The 26 cities with the highest foreclosure rate in the nation are all located in four hard-hit states, with Las Vegas topping the list, according to a report released Wednesday.

    Metro areas in California, Florida, Nevada and Arizona topped the foreclosure filing list for the first quarter of 2009 in a report from RealtyTrac, an online marketer of foreclosed properties. A foreclosure filing includes default papers, auction sale notices and repossessions.

    Las Vegas had the highest rate of foreclosures of any city, with one in every 22 homes subject to a foreclosure filing in the first three months of the year. The rate of foreclosure filings was 4.5%, seven times the national average.

    Merced, Calif., had the second highest rate, with Cape Coral-Fort Myers, Fla., Stockton, Calif., and Riverside-San Bernardino-Ontario, Calif., rounding out the top five.

    “The metro areas with the highest levels of foreclosure activity in the first quarter of 2009 paint a picture of concentrated problems in a relatively small number of hard-hit areas,” said James J. Saccacio, chief executive officer of RealtyTrac, in a written statement.

    Foreclosure rates have been very high in the 4 key states throughout the bursting of the housing bubble, and so it was to be expected that cities from those states would pepper the top of the list.

    However, it was a surprise to see the list so top heavy, according to Rick Sharga, senior vice president at RealtyTrac.

    “The concentration of troubled metro areas within the hardest-hit states, candidly, was even more severe than we expected it to be,” Sharga said. “The degree to which those four states dominated the rankings surprised even us.”

    New problem cities: Meanwhile, some metropolitan areas had a surge in foreclosures. Boise City-Nampa, Idaho, in 27th place, Provo-Orem, Utah, in 37th, and Charleston-North Charleston, S.C., in 51st were examples Sharga gave of areas that had particular strong gains in filings.

    Sharga said the rise of foreclosures in additional regions indicates new factors influencing the housing market as the recession drags on.

    “What we believe we are seeing is some of the areas with unemployment problems,” said Sharga. “These are people living paycheck to paycheck and, when the paycheck is gone, suddenly they can’t afford to make their mortgage payments.”

    The data for RealtyTrak’s metro area foreclosure report is collected from 2,200 counties across the nation, and those counties represent more than 90% of the U.S. population. Some 203 areas are covered by the report.

    Across the nation, foreclosure activity in the first quarter hit a record high, according to another RealtyTrac report issued last week. Total foreclosure filings reached 803,489 in the first three months of the year, the highest monthly and quarterly totals since RealtyTrac began reporting in January 2005.

    The national report also found that the worst of the foreclosures were centralized in a handful of worst-hit states. California, Florida, Arizona, Nevada and Illinois accounted for nearly 60% of the total foreclosure activity in the first quarter, with 479,516 properties received foreclosure filings in those states.

    http://finance.yahoo.com/news/Foreclosure-leaders-focused-cnnm-14996946.html

  • Multnomah County Foreclosure site updated


    New foreclosure reports listed on the multnomah county foreclosure web site. This week a new addition is the bank owned property lists (REO List) for the month of February 2009. This list consists of properties that were forcloused or deeded back to the lender in lew of foreclosure. Some of these homes are on the market but most are not. These lists will have the name and contact information (address) of the owners (lenders) of the property. Contacting the owners for status might allow an opportunity for you to purchase any of these properties in post foreclosure.

    Mulnomah County Foreclosures
    http://multnomahforeclosures.com/

    Fred Stewart
    President
    Stewart Group Realty Inc.
    fred@sgrealtyinc.com
    http://www.sgrealty.us/
    503-289-4970 (Phone)
    503-296-2336 (Fax)

  • Montavilla Craftsman Bungalow $399,500 w/Contract Terms


    Outstanding early Portland Bungalow with all of the old world charm a person could ask for. Hardwood floors, large kitchen, finished basement, fenced back yard with large deck.

    Located in one of Portlands best neighborhoods and near Providence Hospital. Just a short walk away from Laurelhurst Park, Bus and MAX lines, and freeways. There are many restuants and shops in the area and even during rush hour you are minutes from downtown Portland or a good ride if you bike.

    Owner will consider selling home on Terms (Land Sales Contract) with 5% downpayment. Call Fred Stewart for more details.

    4928 NE Flanders
    Portland, Oregon

    Fred Stewart
    Stewart Group Realty Inc.
    info@sgrealty.us
    503-289-4970

  • Multnomah Foreclosures Web Site Updated: http://multnomahforeclosures.com/


    Multnomah County Forclosures (http://multnomahforeclosures.com) has been updated with the largest foreclosure list to date. There is also a new Mortgage Broker of the week listed. Brian Collins of Sound Mortgage.

    The foreclosure list for 10 other Oregon counties are also listed on the site this week.

    Multnomah County Foreclosures
    http://multnomahforeclosures.com

  • Minimum Credit Score


    It seems my industry (mortgage) continues to see changes weekly, if not daily. I received this message from one the lenders we do business with (Suntrust Mortgage).

    IMPORTANT UPDATE REGARDING REVISED MINIMUM CREDIT SCORE REQUIREMENT FOR ALL LOAN PRODUCTS – Effective for Locks and/or Credit Packages Received on or After Monday, March 23, 2009

    Effective for locks and/or credit packages received on or after Monday, March 23, 2009, a minimum credit score of 660 will be required for ALL borrowers on ALL loan products (traditionally underwritten and AUS processed), regardless of the AUS approval.

    This is concerning conventional loans (less than $417K) fannie & freddie. FHA still allows a min. credit score of 620.

    Now, while this is only one lender, it is likely other lenders will follow suit. Just another sign of the times, that the credit markets continue to “tighten” and credit scores are becoming more important when buying a home.

    Have a good weekend.
    Thank you for the opportunity to serve you,

    Paul Dean
    Principal
    Evergreen Ohana Group
    5331 SW Macadam Ave, Suite 287
    Portland, OR 97239

    Toll Free: (800) 387-7355
    Office: (503) 892-2800 Ext.11
    Fax: (503) 892-2803

    Website: http://www.evergreenohana.com
    Email: pauld@evergreenohana.com

    OR ML-21, WA510-LO-33391, WA WA:520-CL-50385

    PS. Your business and loyalty are truly valued. I strive to provide all my clients with the very best professional service possible. If a friend or family member would appreciate this level of service, please don’t keep me a secret!

  • Featured Listing: 3131 NE US Grant Place, Portland Oregon $829,900


    Historic Portland Home on prestigious US Grant Place. Impeccably restored 1923 Herman Brookman design is a one-of-a-kind opportunity to own a superbly restored vintage English Tudor originally designed for architect’s friend and plaster artist – both of whose work includes the Arlene Schnitzer Concert Hall. Vaulted barrel living room, formal dining room, breakfast room, kitchen w/ granite and custom wood cabinets, Sub Zero & Asko appliances. Large family room & custom-built home office, guest bedroom w/ full bath, master w/ vaulted ceiling. Incredible plaster moldings, Ann Sachs tile, Carrera marble, inlaid hardwoods, stone fireplace.

    ALL 3176 sq ft is fully restored and finished. Attached 360 sq ft 2 car garage is finished with built-in cabinets and sink.

    Seller Carry Terms Considered
    Down Payment: $275,000
    Interest Rate: 5%
    Term: 30 Year Term/18 Month Balloon Payment of balance of contract.

    Photos of this lovely home.
    http://www.zingding.com/usgrantpl/

    Kathleen O?Donnell

    THE O?DONNELL GROUP

    Commercial and Residential Realty

    503-281-1404 office

    503-519-3400 mobile

  • Banking Crisis for Dummies


    The financial crisis explained in simple terms ………………………..

    Heidi is the proprietor of a bar in Berlin. In order to increase sales, she decides to allow her loyal customers – most of whom are unemployed alcoholics – to drink now but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

    Word gets around and as a result increasing numbers of customers flood into Heidi’s bar.

    Taking advantage of her customers’ freedom from immediate payment constraints, Heidi increases her prices for wine and beer, the most-consumed beverages. Her sales volume increases massively.

    A young and dynamic customer service consultant at the local bank recognizes these customer debts as valuable future assets and increases Heidi’s borrowing limit.

    He sees no reason for undue concern since he has the debts of the alcoholics as collateral.

    At the bank’s corporate headquarters, expert bankers transform these customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS. These securities are then traded on markets worldwide. No one really understands what these abbreviations mean and how the securities are guaranteed. Nevertheless, as their prices continuously climb, the securities become top-selling items.

    One day, although the prices are still climbing, a risk manager of the bank (subsequently of course fired due to his negativity), decides that slowly the time has come to demand payment of the debts incurred by the drinkers at Heidi’s bar.

    However they cannot pay back the debts.

    Heidi cannot fulfill her loan obligations and claims bankruptcy.

    DRINKBOND and ALKBOND drop in price by 95 %. PUKEBOND performs better, stabilizing in price after dropping by 80 %.

    The suppliers of Heidi’s bar, having granted her generous payment due dates and having invested in the securities are faced with a new situation. Her wine supplier claims bankruptcy; her beer supplier is taken over by a competitor.

    The bank is saved by the Government following dramatic round-the-clock consultations by leaders from the governing political parties.

    The funds required for this purpose are obtained by a tax levied on the non-drinkers.

    Finally, an explanation I understand.

    This should clear up any / all questions… Enjoy! J

    Melissa Stashin

    Sr. Loan Officer / Branch Manager

    Pacific Residential Mortgage, LLC

    2 CenterPointe Dr. STE 500

    Lake Oswego, OR 97035

    (503) 670-0525 x113

    (971) 221-5656 Cell

    (503) 670-0674 Fax

    (800) 318-4571 Toll Free

    http://www.TeamStashin.com

  • Five Ways to Avoid Mortgage Foreclosure, Tips from Expertforeclosurehelper.com


    If you fail to make your mortgage payments on time or if you default on your payments, you are in danger of foreclosure. This happens more and more frequently in today’s economic climate. But it is possible to avoid mortgage foreclosure if you know what to do.

    Here are a few of the options that are available to you. These are only going to be open to you if you can get the cooperation of your lender.

    – See if your lender would be willing to re-arrange your payments based on your current financial situation. This may be referred to as a special forbearance and you may qualify for it if your financial situation has changed. To qualify for this you will probably have to provide information to your mortgage holder to prove that you will be able to meet the payments of the new plan.

    – Another option may be a modification of your actual mortgage. This would involve refinancing the amount owed and/or extending the term of the mortgage. The goal is to reduce monthly mortgage payments so they are more affordable for you.

    – You may qualify for an interest free loan from HUD to bring your mortgage up to date if you meet certain conditions. This is referred to as a partial claim and your lender can help you with the application process and explain the conditions of this type of loan. You can also contact your local HUD office for more details.

    – Another way to avoid mortgage foreclosure is to consider a pre foreclosure sale. The purpose is to sell your home and clear up your debts to avoid foreclosure and damage to your credit. If you know that you will be unable to make mortgage payments even if they are lowered, this may be something to consider. You will have to see if your lender will agree to give you some extra time to sell before foreclosing.

    – A final option which should be considered only as a last resort is a deed-in-lieu of foreclosure. In this case you are basically turning your house over to your mortgage institution instead of paying off the mortgage.

    Even though you will lose your home this may be a better option than losing it to foreclosure. That’s because your chances of obtaining another mortgage loan at some point in the future are better than if your home is lost due to foreclosure.

    These are the main alternatives that you have as you try to avoid mortgage foreclosure. Be sure to contact your lender at the first sign of financial difficulty so they can help you find the option that will be best for you.

    Learn about 6 practical steps you can take to avoid foreclosure.

    If it’s too late for that, find out how to stop a foreclosure by going to getforeclosurefacts.com

    Expert Foreclosure Helper
    expertforeclosurehelper.com

  • First Look at February Numbers – Bank-Owned & Short Sales Almost 30% of the Market, By Bob Broad


    I pulled preliminary numbers for February real estate activity in Portland, and want to report the following highlights: Pending sales volume is up from January, despite the short month. After all the month-end sales get reported we could end up with a ”nice” month. Preliminary numbers have us down to about 11 months of inventory. Since selling has been heaviest at lower price-points and especially with first time home buyers who are taking advantage of more affordable housing and tax credits, we’re not surprised to see healthier sales inventories in the east-side regions of Portland.

    Bank-Owned and Short Sales are Selling in Portland
    Over 25% of all the transactions in February were with bank-owned properties and properties requiring third party approval (short sales and relo’s). 18% of the active listings today are either bank owned or require third party approval. Over 1/3 of the closed sales in Beaverton and Tigard areas were on these “distressed” properties. Similarly deal hunters were active in Lake Oswego last month. Half of the current listings are vacant. This is down slightly, which is good. Nonetheless, we have noticed that many of today’s vacant listings become tomorrow’s short sale and/or bank-owned property.

    We stand ready to help you understand how to maximize your proceeds if you want or need to sell. Call us for a free consultation, and we’ll show you how we can court our extensive buyer traffic to get your pricing strategy right and connect you with your target audience. If you’re ready to purchase, we can help you find the right home and negotiate great terms.

    Sign up here for our Investor Notification for Portland Bank Owned, Short Sales, Fixers & Foreclosures

    Portland Real Estate Cafe
    http://www.portlandrealestatecafe.com

  • Market Update: $1,000,000 Houses in Portland, Betty Jung, All About Portland Blog


    The other day in a post, I said the low end and the extreme high ends homes are selling. This Million $ market segment is doing better overall than some of the other price ranges have been doing in Portland’s metro areas. Although total market time for areas such as Lake Oswego (268 days), West Portland (169 days), and Tigard (180 days) are high, this $1,000,000 price range has had shorter market times per RMLS™. These stats do not include condominium, attached or townhouses, they only include single-family residential properties.

    Below are the stats from RMLS™ at the Million $ price point and higher in areas 147 Lake Oswego (zip codes 97034, 97035), 148 SW Portland, and 151 Tigard (zip codes 97223, and 97224):

    MILLION DOLLAR HOUSES 147-Lake Oswego
    148-SW Portland
    151-Tigard
    2008-2009 Y.T.D.

    # Houses for Sale 131 98 7
    # Houses Pending 5 2 0
    # Houses Sold 47 57 2
    High List Price $19,500,000 $4,988,850 $3,999,000
    Low List Price $1,049,950 $1,080,000 $1,200,000
    Average List Price $1,956,593 $1,783,814 $2,423,800
    $ Sq. Ft. List Price $418 $331
    Average Sq. Ft. Listed 4679 5383 4751
    High Sold Price $3,150,000 $4,300,000 $3,749,000
    Low Sold Price $1,030,000 $1,000,000 $1,200,000
    Average Sold Price $1,496,919 $1,447,144 $2,474,500
    $ Sq. Ft. Sold Price $337 $280 $454
    Average Sq Ft. Sold 4646 5319 4951
    Average Days On The Market 85 122 121
    % Of Sold to Original List Price 89.93% 77.86% 88.9%
    2007-2008 Y.T.D.

    # Houses Sold 118 122 1
    High Sold Price $5,250,000 $4,000,000 $1,100,000
    Low Sold Price $1,000,000 $1,010,000 N/A
    Average Sold Price $1,467,497 $1,441,579 N/A
    $ Sq. Ft. Sold Price $332 $296 $394
    Average Sq Ft. Sold 4426 4866 2792
    Average Days On The Market 110 85 11
    % Of Sold to Original List Price 91.52% 91.92% 79.14%
    Source: RMLS™

    Use of this article, photos and images without permission is a violation of federal copyright laws. (Copyright applies fully and automatically to any work — a photograph, a song, a web page, an article, pretty much any form of expression — the moment it is created. This means that if you want to copy and re-use a creative work in another format, that you find online, you have to ask the author’s permission to re-use their information.)

    (For more national and local real estate information, go to my website at http://www.bettyjung.com)

  • Rate Environment, by Michael Dolan, Broker Pro Mortgage


    Mortgage interest rates continue an upward creep. You may be one of 100,000s who got interested in a mortgage loan when the best rate hit 4.5% briefly in mid January. Rates fluctuated for a while before moving up slowly but steadily for the past month. They still remain low compared to last year.

    The President’s Tuesday night speech failed to help with rates as they moved up again Wednesday. Over the past month, we have had many speeches, laws, policies and plans that could have pushed rates lower. However, rates never really dropped except for a brief window on 15-yr mortgages.

    It’s true that anything can happen in this volatile financial situation. But based on the financial structure in front of us today, I do not see how rates will reverse their trend.

    If you planned to re-finance only because we were at historic lows, your window has closed. You might as well wait.

    If you had other reasons to re-finance, you can still get a very good rate. It’s probably a good idea to act soon. Many homeowners have moved off the sideline over the past week as they see what is happening. You may want to revise your desired rate target.

    If you are planning to buy, rates remain attractive – better than at any time in 2008.

    Michael Dolan

    BrokerPro Commercial and Residential Financing

    1001 SW 5th Ave #1100

    Portland OR 97204
    503-220-2705
    Mobile: 503-287-4876
    Fax: 503-961-9937
    http://www.brokerpromortgage.com
    Start Informed – Finish Faster

  • MACPLAN – Foreclosure Crisis Analysis, By Dave McDonald


    There are several updates and issues to bring to your attention. As things transpire I may not have time to e-mail pertinent updates to you so I have set up a blog at macplan.blogspot.com where you can go for the information. I will try to e-mail you when there is a new update on the blog. Here is what is happening now and what I am working on:

    1) Late last week the largest mortgage insurance company, The PMI Group, instituted a policy that they would no longer insure mortgages that were originated by brokers. By implementing this policy the Mortgage Insurance companies will speed up the consolidation and nationalization of the banks, hasten the downfall of most if not all non-bank lenders that utilize brokers as their main source of business, and force the small mortgage broker to consolidate under a larger bank environment. This policy will also put most appraisers out of business.
    The public, once again, is getting the shaft. By not allowing brokers to originate loans with less than 20% down on a purchase or less than 20% equity in the property for a refinance borrowers will have to go to the few remaining banks the exist who will be able to charge what the want because they won’t have competition from the brokers. A client that is over 80% Loan –To- Value that goes to a broker will be limited to an FHA product….which is insured by the government ad has not one but 2 types of mortgage insurance which in many cases makes it more expensive for the borrower than it would under a conventional loans with mortgage insurance. Again, customers wanting high LTV loans will need to go to banks, put up with higher rates, longer lines and bad service.
    Yesterday I spoke to the upper management at the PMI Group to get their side of the story as to why they are implementing this policy. They told me, unlike published reports, that it was not due to quality of the loan originations submitted by brokers. Their take was that they do not have the capital necessary to reserve for future losses. They say that their low stock prices make it harder to attract new capital. They say that this a strictly a company survival mode tactic to make sure they don’t take on any more risk until the delinquency issues on the current loans in the market place have run their course. They say if they were able to raise more capital then the policy could change back.
    I made clear to them what the ramifications of their policy implementation will do to the average borrower. I made clear that it will cause a domino effect with closing of the remaining non-bank lenders, brokers, appraisers and everybody else in the industry leading to a lot more unemployment while giving borrowers less loan options and higher rates.
    The bottom line, there are ways to fight this which I will go into later.

    2) Obama’s Foreclosure Rescue Plan – I am currently reviewing this. It seems like a lot of the same old stuff and need a lot of questions to be answered:
    a) How are they going to implement the refinancing through FNMA and Freddie Mac for upside down borrowers? Where does mortgage insurance come in….are they going to do it without mortgage insurance. If mortgage insurance is required then San Diego is screwed again…because all mortgage insurance companies have designated us as a Declining Market. How is FNMA and Freddie going to get around that. Also, I understand that they will only allow up to 105% LTV….how is that going to help people that are upside down by 20-50%?
    B) The incentives given to servicers…are they going to be enough. The modification plan is still voluntary for the servicers.
    C) Throwing $400 billion more into FNMA and Freddie Mac to continue to buy mortgage backed securities that nobody else is buying and nobody can put a value on…is the govt over paying….and what are they paying for those securities. It is almost as if the government thinks that the securitization crisis has been solved. The buying up of the securities may have the effect of temporarily lowering rates but will those rates still be offset by the price and cost adjustments currently being added on by FNMA and Freddie.
    And when will the money that is printed to fund the buying of the securities get circulated….the printing of the money will no doubt cause inflation which will increase rates significantly.
    D) Currently in this plan there is absolutely no relief for people that have Jumbo Loan for more than the GSE Loan limit of $546250. Are we just going to let that deck of cards fall. One Jumbo default equals 3 or 4 condos…nobody has the guts to take this problem on.
    E) There is still no relief for people that own rentals. The Popular thing to say is that we don’t want to bailout speculators an investors. But what about they guy who has owned a rental for 20 years and did some refinancing to better his cash flow…but now his value is down, his payment is up, and it doesn’t cash-flow. He is not a speculator. He is one guy that owns a property that is rented out. He did not buy it recently and try to flip it. Most likely, he isn’t rich either. People like that need relief, as much as it is politically incorrect to say such things.

    3) The effect of the Stimulus Plan on mortgages – I am still digesting the 1100 or so pages. However, we do know that the loan limit for San Diego will go back up to $697,500. Once again, the key for this is how the loan limit is implemented and we are getting conflicting messages from the bond traders and the GSE’s. We do no that now there will a $8000 tax credit that does not need to be paid back for homebuyers that buy by the end of November. We do know that 2 Billion Dollars is going to be spent on local foreclosure prevention methods

    4) The Mortgage Crisis is an Urgent event that could eventually and pretty quickly cost Americans our Sovereignty. The fact that very little is being done correctly to break up the bank oligarchy, correct our financial problems, and produce solutions that will stabilize our economy is absurd.

    THE MACPLAN – An Action Plan For the Financial Crisis

    1) Currently, I am assembling plans and ideas from many various sourcesfrom bond traders to securitizers to asset managers to Realtors to come up with an overall, well thought out comprehensive mortgage crisis and foreclosure prevention plan. Most plans are there come from one view or the other….they are not comprehensive and don’t attack all areas. If you have any ideas please e-mail them to me. Once these ideas are collected, I will setup meetings where everybody can show up, voice their opinions, and add ideas to for speak against the plan. Unlike Congress, you will have ample time to read the initial plan before you go to the meeting.
    DEADLINE TO SUBMIT IDEAS AND PLANS: Sunday February 22nd
    SELF IMPOSED DEADLINE FOR PUBLISHING INITIAL PLAN: March 1st
    1st MEETING :tentatively March 1st at a place TBD

    2) The final plan will be put together based on the response of the meetings

    3) Once this plan is completed, then we will get it to our elected officials via e-mail, fax and regular. We will also post not only on my blog but several others.

    4) We will start not only an online petition but a handwritten petition to implement this that will be delivered to our officials

    5) SAN DIEGO ECONOMIC AND MORTGAGE REVOLT DAY – APRIL 1st

    This is where all of the mortgage and real estate professionals, our families, and our customers take to the streets to promote the plan that we come up with….yes picket the banks, picket intersections, rally at the park, etc.

    We will need a committee to put this on and I will be looking from leaders and non-leaders in all parts of the county to step up.

    Be looking for the MACPLAN to take form….we will eventually change the name but it’s good for now.

    Dave McDonalds Blog
    http://www.macplan.blogspot.com/

  • Home Purchase Tax Credit, By Paul Dean of Evergreen Ohana Group


    As you may know, I have been advertising and promoting the $7500 First Time Home buyer Tax Credit (which is really an interest free loan for 15yrs) expires on July 1, 2009. And there has been very little interest by the general public & buyers.

    THIS IS A NEWS FLASH: The new stimulus package may increase that credit to $15K for ANY purchase of a primary home, and IT DOESN’T NEED TO BE RE-PAID!!! This hasn’t been passed yet. But as soon as it is signed into law, I’ll let you know. This is the news from RIS Media today:

    “The enhanced $15,000 tax credit offers a powerful incentive for home buyers to get off the sidelines and represents the best opportunity for economic recovery,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “Congress must make sure that the full $15,000 tax credit remains in the final stimulus plan.”

    The bipartisan amendment to the stimulus package, offered by Sens. Johnny Isakson (R-Ga.) and Joe Lieberman (D-Conn.) and approved by unanimous voice vote, would create a $15,000 home buyer tax credit available to all purchasers of a principle residence for one year after its date of enactment. The tax credit would not have to be repaid and buyers could claim it against their 2008 and/or 2009 tax returns.

    This could be HUGE for our industry. Stay Tuned.
    Thank you for the opportunity to serve you,

    Paul Dean
    Principal
    Evergreen Ohana Group
    5331 SW Macadam Ave, Suite 287
    Portland, OR 97239

    Toll Free: (800) 387-7355
    Office: (503) 892-2800 Ext.11
    Fax: (503) 892-2803

    Website: http://www.evergreenohana.com
    Email: pauld@evergreenohana.com

    OR ML-21, WA510-LO-33391, WA WA:520-CL-50385

    PS. Your business and loyalty are truly valued. I strive to provide all my clients with the very best professional service possible. If a friend or family member would appreciate this level of service, please don’t keep me a secret!

  • Point of Order by Matt Stashin, Pacific Residential Mortgage Company


    We’ve all heard the news: the dark storm clouds of the financial meltdown will cost the taxpayer hundreds of billions of dollars, if not several trillion by the time it is all said and done. Unemployment numbers are set to skyrocket. The U.S. automakers need a bailout, following suit after so many others. Retail sales were down substantially during the holiday shopping season. People are keenly aware of the possibility of layoffs. Are we done yet? Probably not.

    But amidst the ominous storm clouds lingering on the horizon, if one looks very closely, a platinum lining is visible amongst those clouds. One first reaction might be, “are you kidding?”. However, after a bit of reflection, one can begin to see the sun reflecting off that platinum lining.

    Regardless of an individual’s opinion of the bailout, the soon-to-be former administration and the role of the government in residential housing, the opportunities available in the market place today are unprecedented. We all recognize home values have dropped substantially in almost every neighborhood. And if this is coupled with extremely low interest rates (did someone say rivaling the lowest in 40 years?), the buying power of the consumer has not been more keen.

    One doesn’t have to look far to find a bargain. And with these interest rates, all factors have aligned in favor of the buyer. Sounds pretty good, huh? Well, it is for those who have put themselves in a good position to purchase a home. History will show them to have been very savvy. It pays to buy low, at the incredible interest rates, and watch one’s equity build substantial wealth over time.

    In today’s marketplace, 20% down isn’t the only option. There still exist a limited number of financing options with little to no down payment. In order to better prepare one’s self, a quick check of your credit scores are in order. Freecreditreport.com is a way to find out how your credit history will be analyzed by lenders; credit scores in excess of 740 give access to the best programs and pricing on interest rates. At least 2 years on the job, showing steady income will help on the employment front. Assets are nice to have, but not necessary to have in abundance for all programs. One will want to make sure that checking account statements (2 month’s worth) show no overdrafts. In today’s marketplace, lenders are more cautious than ever when it comes to loaning money to buy a home, but obtaining mortgage financing is still relatively painless when one chooses to work with a seasoned professional mortgage broker.

    With a mini refinance boom going on due to these record low interest rates, one issue the mortgage industry will have to face is the potential for a scarcity of funds. Today, due to the federal government’s conservatorship of Fannie and Freddie along with the strategy to have the Federal Reserve purchase mortgages, many fears have been eased regarding the availability of mortgage money. But a new problem may be just ahead. Wall Street, which capitalized about 60% of the mortgage market, has all but disappeared. Banks are publicly being told to lend money, while their regulators are telling them to maintain adequate reserves, which translates into holding onto their cash. Couple this with the mass exodus of foreign investment into the U.S. mortgage market, and one can imagine a market in which there is more demand to borrow than there is money to loan.

    Consider this: the Treasury department is issuing T-bills with very low yields that may not be attractive to buyers and the Federal Reserve will, at some point, rely on the funding created by the sale of T-bills to have enough capital to continue to purchase mortgages through Fannie and Freddie. If the appetite for low-yield T-bills drops off substantially, which may be a very real possibility, a liquidity crisis in the mortgage market could manifest itself.

    How does this apply to someone today who is considering purchasing a primary residence, a second home or an investment property? My point is this: don’t wait. A scarcity of funds will cause interest rates to skyrocket, overnight. Jumbo funds seem to be disappearing already, although conventional financing to loan amount limits of $417,000 is readily available. Banks don’t seem to be interested in tying up their liquidity in large loan amounts. To me, this is a sign. Not a “doom & gloom” sign, but a warning sign nevertheless. My interpretation here is now is the time to act. The banking system is sound, but mortgage financing is not the banking system. And when capital is being used at the current rate due to the refinance boom, it sets me to wondering how this will impact the availability of funds for mortgage lending throughout the course of this year.

    The federal government has a very tenuous road ahead of it this year. The conservatorship of Fannie and Freddie was meant to be a temporary situation and, as it is currently in place, will terminate at the end of 2009. Between now and then, the best and brightest minds in our country will have to reinvent the mortgage market. With many banks still teetering on the edge, one must think these low interest rates will take a toll on the availability of funds. Who will be interested, long term, in 4.5% paper? As the stock market starts to rebound, investors will be looking for higher returns on their money and interest in current mortgage paper yields will wane thereby creating a scarcity of funding for new lending.

    Thought the storm clouds continue to linger, and they may even get a bit darker in the near future, It is my opinion that today is perhaps the best opportunity to invest in real estate that has existed in decades. For the money, this seasoned mortgage professional thinks now is the time to get mortgage financing before it becomes a scarce resource. Those that buy houses now will likely look like a genius down the road.

    Am I saying this is a sure thing? NO; any investment carries risk and should be carefully evaluated. But I am saying when one peers into the storm clouds above and sees the shiny reflection of the sun off the platinum lining, one should strongly consider that the combination of low home prices and low interest rates is a sign to buy before the clouds all break up and disappear. And everyone knows the opportunity has slipped away once the storm has passed. And so I say, keep wear a raincoat and keep an umbrella handy while shopping for a home out under the storm clouds.

    Matt Stashin
    President/CEO

    Pacific Residential Mortgage, LLC
    2 CenterPointe Dr. STE 500
    Lake Oswego, OR 97035
    (503) 619-0482 Direct
    (503) 670-0674 Fax
    (800) 318-4571 Toll Free
    http://www.pacresmortgage.com


  • ‘Liar Loans’ Earn Their Nickname, Michael Corkery, Wall Street Journal


    The failure of Hope for Homeowners to prevent foreclosures is sparking a blame game in Washington. The Department of Housing and Urban Development, which runs the voluntary program, says Congress made it too restrictive and expensive for homeowners.

    Congressional leaders say the program’s failure — only 357 people have signed up since Oct. 1 — shows that lenders aren’t willing to modify loans voluntarily and they need to be forced to do so.

    But HUD officials say other problems are hampering the program’s success. In order to refinance through Hope for Homeowners, applicants must certify they did not supply false or misleading information on a previous loan application. The HUD program also requires homeowners to supply two years of financial records.

    HUD officials believe that people who used “stated income” mortgages which required no documentation of income, are having a hard time qualifying for Hope for Homeowners because of incorrect information on their previous loans. It might not all be the borrowers fault. In many cases, mortgage brokers and lenders fudged loan applications.

    Either way, it appears that stated income mortgages, which are known as “liar loans,” are earning their nickname.

    Here’s a list of the government sponsored and voluntary lender foreclosure prevention programs and how they are faring so far.

    http://blogs.wsj.com/developments/2009/01/02/liar-loans-earn-their-nickname/

  • Land Sales Contract Solution: Down Payment Installment


    SG_Logo_150x150

     

    What is most attractive about Land Sales Contracts or seller financing in general is the buyer and the seller can develop agreements that will fit each others needs. Recently a buyer and seller came to an agreement on the selling price of a home. The buyer had very little for a down payment. The seller proposed that the buyer make down payment installments during the term of the agreement. In this case the buyer and seller had to agree on a couple things. First they had to agree how much the down payment would be. Second they had to agree on how many installment payments the buyer could make. In this case, the contract for for 60 months and the seller and buyer agreed on a 48 month down payment installment plan.

    The Deal:

    Sales Price………$250,000
    Down Payment…….10% ($25,000)
    Buyer will pay 50% ($12,500) at closing and will pay the rest of down payment over 48 months at $260.42 per month.
    Interest Rate…….7%
    Payment………….$1496.93
    Payments Amortised over 30 years
    Buyer to pay Property Taxes ($1953 per year) and Insurance ($258) during term of contract.
    Contract Term…….60 Months (Balloon payment of balance due month 61)

    Monthly Payment Break Down

    Contract……….$1468
    Down Payment..$260.42
    Taxes…………..$162.75
    Insurance………$21.50
    Total……………$1912.92

    If the seller and buyer had agreed that the buyer was to make interest only payments instead of a 30 year amortization then the payment would be a little smaller.

  • Portland Development Commission Announces Home Buyer Workshops


    The Portland Development Commission announced 11 home buyer workshops in 2009. They’ll cover below market rate loans, home buyer tax credit programs and down payment assistance loans. They targeting moderate income buyers who need help reducing the cash they need to close the purchase or lower their payment. For more information, call 503-823-3400. Here’s a list of the workshops. All sessions start at 6 p.m.

    Jan. 13, 2009 – Kenton Firehouse, 8105 N Brandon
    Feb. 5, 2009 – Lents Baptist Church, 5921 SE 88th
    March 5, 2009 – Portland Development Commission, 222 NW 5th
    April 9, 2009 – Kaiser Town Hall, 3704 N Interstate
    May 14, 2009 – Lents Baptist Church, 5921 SE 88th
    June 11, 2009 – Portland Development Commission, 222 NW 5th
    July 9, 2009 – Kaiser Town Hall, 3704 N Interstate
    August 13, 2009 – Lents Baptist Church, 5921 SE 88th
    Sept. 10, 2009 – Portland Development Commission, 222 NW 5th
    Oct. 8, 2009 – Kaiser Town Hall, 3704 N Interstate
    Nov. 12, 2009 – Lents Baptist Church, 5921 SE 88th

    For More Information Portland Development Commission Neighborhood Housing Program
    http://www.pdc.us/housing_services/home_buyer/default.asp

  • Portland home price decline hits double digits, Ryan Frank, Front Porch Blog


    Posted by Ryan Frank, The Oregonian December 30, 2008

    Portland-area home values continued to reach new depths in October when prices dropped 10.1 percent compared to the same month in 2007, according to an index published today.

    The Standard & Poor’s Case-Shiller index, one of the most closely watched housing measures, reported the first such double-digit decline in Portland since prices began to fall in the summer of 2007. Prices have now fallen back to their January 2006 levels.

    Portland, along with Seattle and Charlotte, ranked among the top three markets in the index early in 2008. But their position has fallen as the housing crisis that began in the Sun Belt and Rust Belt states rolls through the Northwest. Portland and Seattle now rank No. 7 and No. 8, respectively, for the smallest year-over-year declines. Seattle and Atlanta also dipped to double-digit declines for the first time in October. (Check out Portland’s index since 1987 and an October 2008 ranking by city.)

    “While not yet experiencing as severe a contraction as in the Sun Belt, it seems the Pacific Northwest and Mid-Atlantic South is not immune to the overall demise in the housing market,” David M. Blitzer, chairman of the Standard & Poor’s index committee said in a statement.

    Beyond the northwest, the worst of the pain continued to be concentrated in California, Arizona, Nevada and Florida where speculators, growth and loose lending combined to drive prices far beyond sustainable limits. Phoenix, Las Vegas and San Francisco all fell more than 30 percent in October compared to a year earlier. The 10-city and 20-city composites also hit new lows at 19.1 percent and 18 percent, respectively.

    The New York Times’ home page, for now, has a very cool chart for that shows each of the 20 markets rise and fall in the housing boom and bust.

    http://blog.oregonlive.com/frontporch/

  • Pay Option ARMs – The Implosion Is Still Coming Despite Low Rates: Mr. Mortgage


    There is some serious Pay Option ARM (POA) misinformation going around. Everywhere you look there are stories about how the low index value on the LIBOR will automatically ‘fix’ Pay Option ARMs and drop borrower’s payments to almost nothing. Sorry folks, no cigar.  It is shotgun stories by the major media and television personality analysts that set the market and consumer up to for disappointment every time.  Over the past year and a half this is my forth story on why a particular bailout or market event will not help the POA’s.

    Like the failed mortgage modification efforts and foreclosure moratoria you read about almost daily, this will be a non-starter for most.  It is truly a shame how badly constructed these loans really are and how many home owner and bank balance sheets they have destroyed. These loans are much more toxic than Subprime ever was – at least with Subprime the principal balance doesn’t grow each month!  They are in a class of their own and ultimately will need a bailout of their own I am sorry to say.

    The POA was a favorite across all borrower types especially the middle to upper-end home owner in the bubble states. The broad failure of this loan type will have severe consequences on already depressed CA real estate and on the middle to upper-end home owners in particular.

    Monthly Payments / Neg-Am Set-up / Recasts / Qualifying / Negative-Equity

    Pay Option ARMs have four or five monthly payment choices. The majority pay the minimum monthly fixed payment rate, known as the ‘teaser’ rate.The percentage of borrowers who opt for the lowest payment has increased as values have fallen. The minimum monthly payment increases 7.5% per year regardless of what happens to the underlying index value. Therefore, this recent drop in rates means nothing for most POA home owner’s monthly mortgage-related outgo.

    With the low underlying index values borrowers won’t accrue as much negative amortization but at the end of the first 5-years, most will still see their payment jump sharply. If the underlying indices stay low for years into the future it will make for lower adjustments upward several years from now on subsequent resets, which may be helpful for some.

    But this drop in rates does little for those who have had their loan for a few years in the near-term. These borrowers accrued large amounts of negative-amortization as the indices soared from mid-2004 to 2007 and this has to be factored into the first reset.

    Past Underwriting Indiscretions — for much of the time that POA’s were in existence many banks qualified the borrowers at the minimum monthly payment rate or based upon interest only payments. Additionally, over 80% were stated or limited income documentation loans. Both of these factors make knowing how the borrower will react to even the standard 5-year hard recast nearly impossible to forecast given they were never underwritten to take into consideration a reset of any type.

    What also must be taken into consideration is that a large percentage of underwater, over-leveraged Subprime, Alt-A and POA borrowers are defaulting even prior to their reset date due to the epidemic amount of negative equity. POA’s were mostly originated at higher LTV/CLTV’s in the hardest hit states meaning they are significantly underwater even without the compounding effects of negative amortization.  In CA, a heavy POA state, 60% of all mortgage holders are either underwater or within 5% of being underwater unable to sell or refinance.

    Pay Options Have a Floor Rate That Always Results in a Payment Spike

    The margins (lender profit) were very high on these loans during the ‘POA mania’ portion of the great bubble.  I have seen as high as 5% but the average for Prime MTA-based POA’s is probably around 3.25% to 3.5%.  The rates below from a large-named lender still in existence today show margins as high as 4%. The margin rate will always have to be paid regardless if the underlying index value falls to zero, which is not possible. The 1HPP (one year hard pre-payment penalty) loan below was the most popular carrying a margin from 3.025% to 4.000% followed closely by the 3-year prepayment penalty loan.

    The program and rates below are from July 2006, which was the peak of ‘POA mania’.  It is based upon the MTA index, as 80% of all POA’s were and 80% of all Pay Option owners pay the minimum monthly payment.

    Reference key for program below: Start Rate = fully amortized ‘payment’ rate. This increases 7.5% per year.  Points = broker rebate (yield spread premium. This is the percentage of the loan amount paid by the lender to deliver that rate and margin). NPP Margin = No Prepayment Penalty.  1HPP = 1 year Hard Prepayment Penalty.  3HPP = 3 year Hard Prepayment Penalty.

    After 5-years, most POAs (other than Wachovia’s 10-year) will hard recast to pay off the remaining balance in 25-years. When the loan is recast, the payment required to fully amortize the loan over the remaining term becomes the new minimum payment, and the previous payment cap does not apply.

    Standard 5-Year Recast vs. Negative Amortization Limit Recast

    The 1st Standard 5-Year Recast occurs when the 61st payment is due. Standard 5-Year Recasts occur each 60 months thereafter.

    A new minimum payment is calculated for the payment due on the 61st month based on the fully indexed rate at that time, the remaining term of the loan and the loan balance at that time. There are no other payment options for this (61st) month. This new recast payment becomes the new minimum payment for the upcoming 12 months subject to a 7.5% (or whatever your payment cap is) increase the following 12 months and subject to a full recast 5 years from this payment recast, i.e. when the 121st payment is due.

    The 1st Negative Amortization Limit Recast occurs when (or if) the negative amortization cap is reached. Most Pay Options have a neg-am cap of 110% to 115%.  Wachovia has one of the highest at 125%. At this point, the loan is automatically recast for the remaining portion of the standard recast term (5 years) and then subject to recast at the normal scheduled (5 year) recast period.

    For example, if the loan reaches the negative amortization cap on month 59, the loan goes through a Negative Amortization Limit Recast. At the end of the 5th year, on the 61st month, the loan goes through a scheduled Standard 5-Year Recast.

    Most Pay Options Based Upon MTA Not LIBOR

    Roughly 80%+ of all Option ARMs were based upon the MTA, which is still over 2%. The remainder is based upon the COFI, COSI and LIBOR…probably in that order as well. Very few loans outstanding are true ARM loans of any kind are based upon a short-term LIBOR index.

    The MTA, also known as the 12-Month Moving Average Treasury index is the 12-month average of the monthly average yields of U.S. Treasury securities adjusted to a constant maturity of one year.  It is calculated by averaging the previous 12 monthly values of the 1-Year CMT (Constant Maturity Treasuries) Index.

    There is more…

    The CMT is a set of “theoretical” securities based on the most recently auctioned “real” securities: 1-, 3-, 6-month bills, 2-, 3-, 5-, 10-, 30-year notes, and also the ‘off-the-runs’ in the 7- to 20-year maturity range. The Constant Maturity Treasury rates are also known as “Treasury Yield Curve Rates”.  The CMT indexes are volatile and move with the market but more quickly than the COFI Index or the MTA Index (see historical graph below).

    Therefore, it would be something else if the CMT followed short-rates down to zero. I think if this happened there would be other things to worry about than a few hundred billion in Pay Options blowing up.

    **Please note in the chart above that even though the MTA is down to 2% now, it was as high as 5.25% in 2006 and 2007 forcing large amounts of negative-amortization on most all POA’s originated from 2004 until 2007.  When payment rates are so low and margins so high, many are sitting right up against their respective 110% or 115% maximum negative amortization limit which forces a hard reset prior to the 5-year scheduled reset.

    Actual Pay Option ARM Payment Choices and 6-Year Payment Schedule

    Below are the five payment choices available of which the majority chose the ‘Minimum Monthly Payment’, option 1). Each year the minimum monthly payment rate increases 7.5% regardless of what happens to the underlying indices.

    Also below are the annual payment rates for the first 5-years up until month 61 and the hard recast. The loan scenario uses a $300k loan amount, 1.25% payment rate, 7.5% annual payment cap, 3.5% margin and is based upon the MTA taken out to the 61st month and first recast. With a 2.03% MTA and 3.5% margin the fully indexed rate is 5.53%.

    It is very important to note when evaluating the following schedules that:

    a) for much of the time that POA’s were in existence many banks qualified the borrowers at the minimum monthly payment rate or based upon interest only payments. Additionally, over 80% were stated or limited income documentation loans. Both of these factors make knowing how the borrower will react to the standard 5-year hard recast nearly impossible to forecast given they were never underwritten to take into consideration a reset of any type .

    b) the schedules below are for new loans originated today and not take in account many who have had their loans for a few years when the underlying index values soared. All of the previously accrued negative amortization has to be re-calculated into the payment upon hard recast at 5-years or at the maximum allowable negative amortization amount of 110% to 125%.

    POA Monthly Payment OPTIONS with MTA at Current 2.03% (Fully-Indexed Rate 5.53%)

     

    • 1) Minimum Monthly Payment: $999.76 (Deferred Interest/Neg-Am = $388.49)
    • 2) Interest Only Payment: $1388.25
    • 3) Fully Amortizing 30-year Payment: $1713.26
    • 4) Fully Amortizing 15-year Payment: $2459.70
    • 5) Fully Amortizing 40-year Payment: $1558.14

     

    POA Monthly Payment OPTIONS if MTA Falls to 1.03% in 12-Mo’s (Fully-Indexed Rate 4.53%)

     

    • 1) Minimum Monthly Payment: $999.76 (Deferred Interest/Neg-Am = $138.45)
    • 2) Interest Only Payment: $1138.25
    • 3) Fully Amortizing 30-year Payment: $1529.52
    • 4) Fully Amortizing 15-year Payment: $2303.11
    • 5) Fully Amortizing 40-year Payment: $1358.93

    Actual Year 1 through Year 6 – Monthly Payment Increase Schedule

    • 1) Year 1: $999.76 = Choice 1 – Minimum Monthly Payment (80% of cases)
    • 2) Year 2: $1074.74 = ($999.76 + 7.5% mandatory annual payment increase)
    • 3) Year 3: $1155.35 = ($1074.74 + 7.5% mandatory annual payment increase)
    • 4) Year 4: $1242.00 = ($1155.35 + 7.5% mandatory annual payment increase)
    • 5) Year 5: $1335.15 = ($1242.00 + 7.5% mandatory annual payment increase)
    • 6) *Month 61: = $1952.29 (Hard Recast to pay off loan in remaining 25-years)

    IF the MTA drops to 1.03% from its present 2.03% over the next 12-months (no change monthly until month 61):

    • 1) Year 1: $999.76 = Choice 1 – Minimum Monthly Payment (80% of cases)
    • 2) Year 2: $1074.74 = ($999.76 + 7.5% mandatory annual payment increase)
    • 3) Year 3: $1155.35 = ($1074.74 + 7.5% mandatory annual payment increase)
    • 4) Year 4: $1242.00 = ($1155.35 + 7.5% mandatory annual payment increase)
    • 5) Year 5: $1335.15 = ($1242.00 + 7.5% mandatory annual payment increase)
    • 6) *Month 61: = $1,707.59 (Hard Recast to pay off loan in remaining 25-years)

     

    In summary, while low interest rates are good overall, the effects that lower rates will have on the now ‘infamous’ Pay Option ARM will be muted for many reasons.  The broad failure of this loan type will have severe consequences on already depressed real estate values in the bubble states.

    The only way to ‘fix’ POA’s is to re-underwrite and aggressively modify like I talk about in my recent report Mr Mortgage: My Case FOR Mortgage Principal Reductions .

    **For those of you looking for another take on the Pay Option crisis with the same outcome, please check out my good buddy Dr Housing Bubble’s recent report entitled: Option ARMs For Dummies – Why 4.5% Rates Will Do Absolutely Nothing For These Toxic Assets.

    http://mrmortgage.ml-implode.com/

  • In Foreclosure? Say No To Fakes and Frauds


     

    It is amazing that just as we move out of an era of fraudulent loan officers, fake “Mortgage Planners” and Financial Trusted Advisers we are now being over run by a hoard of “Foreclosure Experts”.   Could these people be one in the same.  Just the times and the opportunities are different?

    When in foreclosure there are experts out there that can help you develop a plan of action.  These people are beholden in one way or another to the state of Oregon as in they have an ACTIVE Real Estate license, Mortgage Certificate or member of the Oregon Bar.  Bottom line, if they rip you off they it is harder for them to hide.   Your legal representatives and the state of Oregon can track them down and hold them accountable.

    It is never good to be in foreclosure.  But remember you only make the situation worse by not seeking the information you need to develop a plan of action.   Maybe you can not keep your home.  Maybe you should sell and buy another home on seller contract or lease option.  Maybe you can work something out with the lenders.  You have to treat foreclosure as an problem that can be solved and not the end of the world.

    Information is power and with right power anything and everything is possible.   Do rot sit in place, do not allow shame to prevent you from doing what you can to resolve the problem for you and your family.

    Lastly, do not listen to anyone that does not hold an Oregon License, Mortgage Certificate or member of the bar that promises to save your home or help you make your payments.  Those people have nothing to lose and everything to gain by gaining your trust.   If it sounds to good to be true….it is.  If it sounds like it is not legal….there is a good chance is it not legal.   If that little voice in the back of your head says hang up the phone…..hang up.   Use your common sence and reach out to people that can help provide you with real solutions.

    Well that is enough ranting.  Keep an eye on this blog.  Will be posting possible solutions to the problems you are facing.   If they work for you….great.  If they won’t help you in your situation, feel free to send me an email or post the question on this message board. 

     

    Fred Stewart
    President
    Stewart Group Realty Inc.