OREGON REAL ESTATE ROUND TABLE

Tag: Mortgage

  • Foreclosure rate soars in suburbs, Steve Law, Portland Tribune


    While Portlanders continue to be plagued by home foreclosures, the number of distressed homeowners is spiking even faster in the suburbs these days.

    Foreclosure actions filed against homeowners in upscale Lake Oswego mushroomed 20 percent the first six months of this year, compared with the same period last year, and rose 10 percent in jobs-rich Hillsboro, according to RealtyTrac Inc., an Irvine, Calif., real estate data services company. RealtyTrac counted nearly 300 Lake Oswego properties socked with foreclosure actions from January through June and more than 500 Hillsboro properties.

    Foreclosures also shot up at a rate faster than Portland in suburban Oregon City, Milwaukie, Tigard, Tualatin, Sherwood and St. Helens.

    “The foreclosure activity that is occurring in suburban markets in Oregon is unprecedented,” says Tom Cusack, a retired federal housing manager in Portland who continues to track the issue via his Oregon Housing Blog. “It’s affecting not just rural areas, not just inner-city neighborhoods, but suburban neighborhoods, probably more substantially than any time in the past,” Cusack says.

    From January through June, foreclosure filings grew 6.5 percent in the city of Portland, compared with a year earlier, and 8.5 percent in Portland suburbs, not counting Clark County, according to RealtyTrac data.

    In 10 different local ZIP codes — three in Portland and seven in the suburbs — foreclosure actions were filed against more than 2 percent of all properties the first six months of 2010.

    Dominating local market

    Realtors say a record number of foreclosures dominates the area housing market, depressing home prices but also attracting bargain-hunters looking for distressed properties.

    “Either you’re helping people get into them or helping get out of them,” says Fred Stewart, a Northeast Portland Realtor who operates a website listing foreclosed homes for sale in Multnomah County.

    Distressed properties account for “40 percent of the business right now,” says Dale Kuhn, principal broker for John L. Scott Real Estate in Lake Oswego.

    Every suburb is a unique real estate market, so it’s hard to generalize why some are experiencing more foreclosures now than before. In West Linn, for example, foreclosure filings were down the first six months of the year compared to a year earlier, while things are going in a different direction in its affluent neighbor to the north, Lake Oswego.

    Explanations vary

    One factor could be that many borrowers of modest means took out subprime loans, which were the first to go through foreclosure when those loans “exploded” and reset to much-higher interest rates. Working-class neighborhoods had the highest foreclosure rates in the early months of the Great Recession.

    “They got hit the hardest first,” says Rick Skaggs, a real estate broker at John L. Scott in Forest Grove.

    In the Portland area, an unusually high number of middle-class and affluent borrowers took out interest-only loans and Option ARM or negative-amortization loans. Option ARMs (adjustable rate mortgages) allowed the borrower to pay a minimum monthly mortgage payment — akin to a credit card minimum payment — while tacking more principal onto the loan. Option ARMs and other alternative loans took longer to unravel than subprime loans, and many are now winding up in foreclosure. And those mortgages were more common for more expensive properties.

    They were ticking time bombs, like subprime loans, but they had longer fuses, says Angela Martin, of the Portland public interest group Our Oregon.

    Stewart offers another reason for the surge in suburban foreclosures. He’s noticing a larger pool of buyers now for closer-in Portland neighborhoods, as people seek to avoid long commutes. People selling distressed properties in Northeast and Southeast Portland have more options to sell than someone saddled with an unaffordable mortgage in a suburb, Stewart says.

    Tables turned

    Recent state and national statistics also reveal a counterintuitive trend — affluent homeowners are going into foreclosure lately at a higher rate than others.

    Cusack recently analyzed data for Oregonians who took out traditional 30-year Federal Housing Administration loans since mid-2008. He found that the greater the loan amount, the greater the chances those became problem loans.

    “The default rate and the seriously delinquent rate were higher for higher-income loans,” Cusack says.

    Business owners and other affluent homebuyers who settled in suburban markets also had more resources available to hold onto their homes than lower-income homeowners, at least during the earlier stages of the Great Recession. That may explain why places such as Lake Oswego are seeing such an upsurge in foreclosures now.

    “If you paid a half-million for anything in Lake Oswego in 2007, you’re ‘under water,’ ” Stewart says. That’s the term for people who owe more on their mortgage than their home is worth.

    Portland bankruptcy attorney Ann Chapman, of the firm Vanden Bos & Chapman, is seeing an uptick in affluent clients coming to her office.

    They had been turning to pensions, savings and family money to hold onto their homes and businesses, Chapman says. But as the economic downturn grinds on, some clients see the best option as dumping their home and filing for bankruptcy reorganization.

    Affluent homeowners make a more sober assessment when they realize their homes aren’t going to be worth the mortgage amount for many years, she says. “They’re going to potentially be less emotionally involved when it comes to stopping the bleeding.”

    It’s often a different story for lower-income homeowners who hope to hold onto the only homes they’ve ever had, or hope to have. “They get blinded by their optimism or their paralysis,” Chapman says.

    Little relief in sight

    Many Realtors say it’s a great buyer’s market now for those who have steady jobs, because interest rates are low and prices have fallen so much. But don’t expect the onslaught of Portland-area foreclosures to end any time soon.

    “We are nowhere near the end if you look at the number of homeowners that will ultimately be at risk,” says Martin, citing a new study by the North Carolina-based Center for Responsible Lending. Based on that study, she figures Oregon is only halfway through the foreclosure crisis, in terms of the number of people affected by foreclosures.

    Skaggs says he wishes he could be more positive, but he doesn’t see the light at the end of the tunnel. He just spoke with an investor last week who is about to walk away from five rental homes and let the bank take them back. Three of the homes are in the Beaverton area, one is in Bend and one is on the Oregon Coast.

    “I probably know at least 15 people that in the next month or two are going to walk away from their homes.”

    stevelaw@portlandtribune.com

    http://www.portlandtribune.com/news/story.php?story_id=128216600543594000

  • Oregon’s homeownership program to receive an additional $49.2 million, by Jeff Manning, The Oregonian


    Though it’s months away from awarding a single dollar to struggling homeowners, Oregon’s newly established foreclosure-prevention program keeps growing.

    Oregon’s Homeownership Stabilization Initiative is in line to receive another $49.2 million, the U.S. Treasury Department announced Wednesday. That’s on top of the $88 million already awarded by the Treasury.

    Oregon officials are still refining the details of its program and won’t be ready to begin dispensing money until the end of the year, said Michael Kaplan, director of the program.

    “We’re thrilled,” Kaplan said. Even with the addition of the new money, he said, “we have so much more demand than we have resources.”

    The foreclosure epidemic has claimed thousands in Oregon, largely due to the state’s high unemployment. Though it remains far behind foreclosure epicenters like Nevada and California in sheer numbers of foreclosures, Oregon is now seeing new mortgage defaults increase at the third-fastest rate in the country.

    The new funding comes amidst a heated debate in Washington, D.C. about government spending and the spiraling federal deficit. While many economists argue the government needs to increase spending to jumpstart the economy, others maintain the country is drowning in red ink.

    With the new anti-foreclosure money, the Obama administration is sending a clear signal it intends to continue to inject public money into the economy.

    In addition to the new foreclosure prevention money, the Department of Housing and Urban Development announced Wednesday the launch of new $1 billion short-term loan program for at-risk homeowners.

    The 24-month loans will be available to homeowners facing foreclosure in part due to “a substantial reduction in income due to involuntary unemployment, underemployment or a medical condition,” HUD announced.

    Sen. Jeff Merkley, D-Ore., who has emerged as a vocal advocate for individuals slammed by the economic crash, hailed the new programs. “This funding will help Oregonians who have lost a job through no fault of their own while they get back on their feet,” said Merkley.

    Obama first announced formation of the Hardest-Hit Fund in February, steering money to the 17 states most impacted by the foreclosure wave. The Treasury Department announced Wednesday that it is sending another $2 billion to the program, aimed at states where unemployment has remained high.

    Qualifying standards for Oregon’s program are still being worked out, as are many of its details. Tentatively, the state envisions four different types of aid:

    Loan modification assistance will help homeowners who are on the verge of successfully modifying their existing mortgages but require a small amount of additional financial resources to do so.

    Mortgage payment assistance will help economically distressed homeowners pay their mortgages for up to one year.

    Loan preservation assistance will provide financial resources that a homeowner may need to modify a loan, pay arrearages, or clear other significant financial penalties after a period of unemployment or loss of income.

    Transitional Assistance will help homeowners who do not regain employment during the period of mortgage payment help with the resources needed to move to affordable, most likely rental, homes.

    http://www.oregonlive.com/business/index.ssf/2010/08/oregons_homeownership_program.html

  • The Path to Fannie Mae and Freddie Mac Approval, Reoblogsite.com


    So, you have been a mortgage broker for a while now, and you think you are ready for the next step: approval by Fannie Mae and Freddie Mac as a Seller and Servicer, so you can service your own loans.

    In general, to be an approved Seller and Servicer for either FNMA or FHLMC, you are going to need to meet the following requirements: a corporate net worth of $500,000 to $1 million; adequate warehousing lines; three letters of reference; errors and omissions insurance and fidelity insurance; an excellent quality control program; and personnel experienced in all aspects of mortgage origination, processing, underwriting, funding and shipping, administration, service accounting and, of course, servicing itself.

    These are only general, minimal requirements, so let us take a more detailed look at the requirements and the process. I preface the following information with the understanding that the reader realizes that approval of a firm by FNMA or FHLMC is at their complete discretion and is, to a great extent, a judgment call based upon your total package and all the factors included in it. All requirements are subject to change.

    As far as FHLMC approval goes, net worth requirements are either $1 million or $500,000, depending upon whether you use the generally accepted accounting principles (GAAP) net worth of $1 million, or the FHLMC definition of acceptable net worth ($500,000). Unfortunately, a lot of potential applicants are not aware of the $500,000 net worth possibility. Even a call to Freddie Mac still found the operator not aware of that option, and claiming $1 million was a hard, fast requirement to be approved.

    Acceptable net worth is defined by FHLMC as GAAP net worth minus any of the following: goodwill, purchased servicing, capitalized excess servicing, investments in joint ventures, investments in limited partnerships, REO, property, plant and equipment, receivables from affiliates, investment in affiliates, other intangibles and other assets, and deferred taxes on capitalized excess servicing. Audited financial statements are to be provided as part of the approval package.

    One requirement that many still think is in force, but is not, is the requirement that a mortgage company be approved by HUD-FHA in order to be a FHLMC Seller and Servicer.

    Additional requirements include having an acceptable quality control program; Errors and Omissions insurance and Fidelity insurance of $300,000 minimum coverage; a business plan (specific and reasonable for short and long term strategies); three reference letters from investors; credit reports on managing executives; adequate experience in origination and sales; and experience in underwriting, administration, default management, REO servicing and investor accounting, and servicing. Servicing is usually the weak spot for mortgage companies. You must show that whether or not you use a sub-servicer, and you have staff with more than adequate ability and knowledge to handle servicing. FHLMC no longer says you need a specific amount of servicing on the books to be approved and, in fact, you can be approved with no servicing, but the stronger the package, the more likely you will be approved.

    If you are accepting Third Party Originated (TPO) loans, you also have to provide information on your standards and procedures for accepting and servicing them, since there have been so many problems with the history of these loans.

    In order to apply to FHLMC, you request an application package (call 800-Freddie) and follow the instructions completely. You will need to submit resumes, financial statements, credit reports, a business plan, various certifications, the approval you want, a list of parent or subsidiary companies, corporate liaisons in various corporate capacities, any legal problems with company or managing officers, a list of investors (including their reference letters), a list of your warehouse lenders, quality control program and questionnaire, number and quantity of loans originated and sold in the last two years, number and quantity of loans serviced plus your delinquency ratios, copy of insurance coverage and all other pertinent information you feel would help your package. There is a $1000 application fee.

    As far as FNMA is concerned, their requirements are very similar to those of FHLMC. There are differences, though, and as I list the general requirements (FNMA also can request any additional information it needs; the application package is a guideline and basis from which to work), any item that is different will be identified with an asterisk.

    You need a corporate net worth of at least $500,000, a quality control program, experienced personnel in all areas pertinent to the business, proof that the personnel have not had any problems when employed at other FNMA-approved entities, a servicing system in place (your own or sub-services), Errors and Omissions and Fidelity insurance (same dollar amounts), references, credit reports, history and scope of the business, list of any owner of five percent or more of the company, audited financial statements, estimated volume to be sold to FNMA during the first 12 months, and availability of all key personnel for an on-site interview with FNMA staff.

    In order to apply to FNMA, call the nearest regional office and request an application package. You will return the following information (some of it on their forms): areas you operate within; the approval you are applying for; any legal disclosures of problems with the company or personnel; narrative on history and scope of the company; resumes in same areas as FHLMC; investors you are currently servicing for; proof of Errors and Omissions and Fidelity coverage; financial statement; quality control program; FNMA Selling ad Servicing Contracts; estimated first 12 months sales volume; quantity and dollar amount of loans originated in the last three years; credit authorizations; number of employees in servicing and origination; liaison personnel in selling, underwriting, servicing and investor accounting; number and dollar amount of loans serviced; list of delinquencies; list of warehouse lines; and various certifications, along with a $1000 application fee.

    To summarize, if you have, or are willing to acquire, the net worth, the insurance and plenty of experienced personnel, and can show you have the corporate capacity to meet all of the approval requirements of FNMA or FHLMC, maybe you should consider becoming a Seller and Servicer. The mortgage business is in an improving cycle, with the housing market (new and resale) beginning to show signs of coming alive again. This may be your time. But remember, it is not right for everyone, so be sure the approvals and servicing would fit into your corporate goals.

    REOBlogsite.com
    http://www.reoblogsite.com/reo-management/the-path-to-fannie-mae-and-freddie-mac-approval.html?utm_source=twitterfeed&utm_medium=twitter

  • Oregon gets federal money to help unemployed avert foreclosures, Charles Pope, The Oregonian


    WASHINGTON — The Obama administration released $600 million Wednesday to help unemployed homeowners in Oregon and four other states avoid foreclosure.

    Oregon, where one in every 76 homes is facing foreclosure, qualifies for $88 million.The money will be used to help distressed homeowners.

    The money will be available to state housing authorities in Oregon, Ohio, South Carolina, Rhode Island and North Carolina “to support local initiatives to assist struggling homeowners in these five states that have high percentages of their population living in areas of economic distress due to unemployment,” the Treasury Department said.

    According to Treasury, the money will augment “targeted programs to expand options for homeowners struggling to make their mortgage payments because of unemployment, as well as programs to address first and second liens, facilitate short sales and/or deeds-in-lieu of foreclosure, and assist in the payment of arrearages.”
    State officials in Oregon estimate that up to 7,400 homeowners will be helped.

    Among other things, Oregon will:

    — provide funds to assist with loan modifications, including through principal reduction and arrearage payments.

    — provide up to six months of mortgage payment assistance for an unemployed borrower or a borrower experiencing other financial distress. Lenders or servicers would be required to match for up to an additional six months.

    — offer funds to ensure a successful modification or pay arrearages or other fees incurred during unemployment or financial distress once a homeowner has regained employment or recovered from that financial distress.

    — provide assistance to borrowers who participated in the state’s Hardest Hit Fund unemployed borrower program but did not subsequently regain employment in order to facilitate a short sale or deed-in-lieu of foreclosure. This assistance would be matched by lenders or servicers.

    In all, states estimate that approximately 50,000 struggling homeowners will receive aid.

    Wednesday’s announcement is only the latest in the Obama administration’s efforts to dent the foreclosure crisis.

    The money is part of the $2.1 billion is directing from its existing $75 billion mortgage assistance program to a total of 10 states. Each state designed its own plan. Treasury approved money in June for Arizona, California, Florida, Michigan and Nevada.

    In the latest package of aid, Ohio will receive $172 million — the largest amount of money. That could aid around 15,000 homeowners by helping borrowers pay their mortgage for up to a year while they search for jobs. It could also provide incentives for mortgage companies to reduce borrowers’ mortgage balances.

    North Carolina is receiving $159 million, and South Carolina is in line for $138 million while Rhode Island is receiving $43 million.

    http://www.oregonlive.com/politics/index.ssf/2010/08/oregon_gets_federal_money_to_h.html

  • Multnomahforeclosures.com: Bank Owned Property List Update for July 2010


    July REO list for bank owned property has been added to Multnomahforeclosures.com . REO lists for Clackamas, Multnomah and Washington County has been addd to the site. The homes listed in these files were deeded back or returned to the investor or lender due to the finalizing of the foreclosure process. Many of these homes may already be on the market or will soon will be. It would not be a bad idea to contact the new owner of these properties and find out what their plans are when it comes to their future ownership of the property.

    Multnomah County Foreclosures
    http://multnomahforeclosures.com/

  • The Future of Fannie Mae and Freddie Mac to be decided August 17th, by Jim Kim, FierceFinance


    The most glaring omission from the Dodd-Frank financial reform act is without a doubt the lack of a plan for Fannie Mae and Freddie Mac. The government-sponsored enterprises remain encumbered with billions in toxic loans, and unfortunately, the movement to fix these institutions has been stuck on the back burner–until now. The Treasury Department has announced it will hold a conference on the future of Fannie and Freddie on Aug. 17. A Congressional hearing will be held in September.

    The administration seems bent on offering a concrete proposal in January, which is welcome news, as the travails of these entities are costing taxpayers a lot of money. So far the tab stands at $145.9 billion; it will likely end up topping $380 billion–which would make it by far the most expensive bailout effort to date.

    What sort of solutions will be discussed? I doubt anyone will argue that having some sort of body that guarantees mortgages and sells them for securitization is a bad thing. The key will be to somehow retain the salutary effects of this process, which can lower costs, expand the ability of lenders to make home loans, and protect lenders from rate shocks.

    Taking the long view, the rise of securitization has been a welcome development. The real estate crash has revealed that there’s a down side if you let securitization run amok. One theory, as noted by the New York Times, is that this process has led to lax lending. “If mortgage issuers passed along the default risk to Freddie Mac and Fannie Mae or to the buyers of mortgage-backed securities, those issuers would have little incentive to screen borrowers properly. While issuers often do have some skin in the game, the enormous amount of both securitization and sloppy lending during the boom made it natural to link the two phenomena.” Indeed, defenders of Fannie and Freddie have long argued that they were pressured to start guaranteeing non-prime loans, to expand the homeownership pie. On top of all of this, securitization has made it harder for loans to be worked out. These are certainly reasonable theories.

    The bottom line is that securitization of mortgage loans based on a sound lending standard is a good idea. But how best to do that? Perhaps the biggest issue is whether the government has a role in subsidizing this effort. And if so, what exactly is that role? What are your ideas?

    FierceFinance
    http://www.fiercefinance.com/story/future-fannie-mae-freddie-mac-be-decided-aug-17/2010-07-29?utm_source=twitterfeed&utm_medium=twitter

  • MultnomahForeclosures.com Update: New Notice of Default Lists Posted


    Multnomahforeclosures.com was updated today with the largest list of Notice Defaults to date. With Notice of Default records dating back over 2 years. Multnomahforeclosures.com documents the fall of the great real estate bust of the 21st centry. The lists are of the raw data taken from county records.

    It is not a bad idea for investors and people that are seeking a home of their own to keep an eye on the Notice of Default lists. Many of the homes listed are on the market or will be.

    All listings are in PDF and Excel Spread Sheet format.

    Multnomah County Foreclosures

    http://multnomahforeclosures.com

  • FHA CHANGES ARE COMING!


    Mortgage Insurance Premiums increased from 1.75 to 2.25% – Effective April 1st
    · Seller Contribution decreased from 6% to 3% – TBA early Spring

    · Increased Monthly MI – Effective date TBA

    Increased down payment for borrowers with lower credit scores TBA

    TAX CREDIT: Buyer must have a binding purchase contract by April 30th to qualify for tax credit.

    WHAT DOES ALL OF THIS MEAN?

    A 200k purchase price after April 30th may have up to a 15k impact on the borrower.
    (Assuming current rates stay the same. Well…we all know what happens when we assume J)

    ACTION REQUIRED:

    Convert any “shoppers” into BUYERS between NOW and April 30th!

    Don’t hesitate to call or e-mail with any questions you may have concerning how this will affect your clients.

    Melissa Stashin

    Sr. Mortgage Banker/ Branch Manager
    NMLS #40033

    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

  • Oregon ended 2009 11th in nation for foreclosure, Portland Business Journal


    Lenders foreclosed on 34,121 Oregon homes in 2009, three times more than in 2007 and well ahead of national trends.

    According to year-end figures released late Wednesday by Irvine, Calif.-based RealtyTrac Inc., there were 90 percent more foreclosure actions involving Oregon residences in 2009 than in 2008 and a whopping 303 percent more than in 2007, when the meltdown began.

    The picture wasn’t any better nationwide, with nearly 4 million foreclosure filings against 2.8 million U.S. properties, 21 percent more than 2008 and 120 percent more than 2007.

    The report showed that 2.2 percent of all U.S. homes or one in every 45 residences received at lease one foreclosure filing during the year.

    “As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” said James Saccacio CEO of RealtyTrac. “After peaking in July with over 3621,000 homes receiving a foreclosure notice, we saw four straight monthly decreases driven primarily by short-term factors: trial loan modifications, state legislation extending the foreclosure process and an overwhelming volume of inventory clogging the foreclosure pipeline.”

    Nevada, Arizona and Florida had the nation’s highest foreclosure rates while California, Florida, Arizona and Illinois together accounted for half of all activity.

    Oregon ranked 11th, with 2 percent of all homes affected, or one in 47.

    Clackamas, Columbia, Deschutes, Jackson, Jefferson, Josephine and Yamhill counties had Oregon’s highest foreclosure ratings.

    Washington state ranked 24th, with 35,268 foreclosure actions, 132 percent more than in 2007.

    http://portland.bizjournals.com/portland/stories/2010/01/11/daily33.html

  • Colonial’s failure could make mortgages more scarce, CNN Money


    The collapse of Colonial BancGroup poses another hazard to the still-shaky housing market: Mortgages could become even harder to get.

    The Southern regional bank, based in Montgomery, Ala., was the largest remaining player in warehouse lending, which provides short-term financing to independent mortgage bankers. At one time, these mortgage bankers originated half of all U.S. home loans using these funds.

    Today, the warehouse lending market is decimated. In 2007 it was worth an estimated $200 billion; now there is just $25 billion available — 25% of which belongs to Colonial. With Colonial’s failure, those funds could become even more scarce.

    “It’s like if they shut down half the concession stands at the baseball game,” said Scott Stern, CEO of the Lenders One mortgage bankers group in St. Louis. “It means the guy who’s last in line is going to have to wait a lot longer to get a hot dog, and in this market who knows what the price is going to be when he gets there?”

    The money began drying up when investors started shunning mortgages not guaranteed by government-backed agencies such as Fannie Mae. These loans, made by the independent mortgage bankers, had become closely associated with the worst excesses of the housing bubble.

    Among the biggest players in the market were Countrywide, rescued last year by Bank of America, and Washington Mutual, which collapsed last September. This year, two other prominent lenders had to unwind their warehouse business: National City, the troubled Cleveland bank acquired last fall by PNC; and Guaranty Bank, the Texas thrift that warned last month that it expects to be taken over by regulators.

    To be sure, everyone isn’t fleeing the market. ResCap, a troubled home lender owned by the government-supported GMAC finance company, said earlier this year that it would expand its warehouse lending business. Citi said this month it expects to put $2 billion into warehouse lines this year.

    But with small banks failing and pulling back and many larger players, such as JPMorgan Chase and Wells Fargo, not aggressively pursuing new business, few expect the new entries to reopen the market.

    Thus the industry is lobbying Washington to give government-backed Fannie Mae, Freddie Mac and Ginnie Mae a bigger role in warehouse lending.

    But with those entities already backing some 90% of current U.S. mortgage originations — and taxpayers on the hook for potentially hundreds of billions of dollars of losses at Fannie and Freddie — that idea is proving a hard sell.

    Still, mortgage bankers are hoping the latest tremors in the banking industry will make Washington more receptive.

    “We’re trying to show people how important this is, but I’m not sure the urgency is there,” said Glen Corso, a longtime mortgage industry executive who now heads the Warehouse Lending Project that’s advocating an expanded federal role. “We’d like to see a private solution, obviously, but failing that we need to get something in place to keep financing flowing.”

  • Important New Regulations Affecting Closing Dates!


    From the Desk of Phil Querin, Partner, Davis Wright Tremaine, LLC, PMAR/OREF Legal Counsel

    Although the initial annual percentage rate (APR) on a residential loan is disclosed in the Good Faith Estimate early in the purchase transaction, it can change before closing. Under the new rules enacted in the Truth in Lending Act, effective on July 30, 2009 (last Thursday), if the actual (i.e. the final) APR varies from that initially disclosed on the Good Faith Estimate by at least .125%, then there is a mandatory additional three (3) business day waiting period before the transaction can close. So if the final APR isn’t disclosed until late in the transaction, it could potentially force the three (3) business day period to extend beyond the closing date set forth in the Sale Agreement.

    As you know, the Oregon Real Estate Forms (OREF) closing date is written in stone – there are no automatic extensions – so if it appears that the APR could be held up or there is any indication that the APR will change at closing, brokers would be well-advised to get seller and buyer to agree in advance to a written extension as a contingency if the final APR causes the three (3) business day period to extend beyond the scheduled closing date. OREF will be meeting shortly to consider some additional language for the new sale agreement form, although it won’t actually get printed and distributed until early next year. In the meantime, I have recommended to my clients that they may wish to consider adding an addendum to their sale agreements with language such as the following: ” In the event that Buyer’s final Annual Percentage Rate (“APR”) differs from the APR initially disclosed to the Buyer in the Good Faith Estimate by .125% or more, the Closing Deadline defined in the Real Estate Sale Agreement shall automatically be extended for three (3) additional business days in accordance with Regulation Z of the Truth in Lending Act ,as amended on July 30, 2008.”

    This, of course, is subject to the review of the companies’ principal broker and legal counsel.

  • Multnomahforeclosures.com Updated with New Notice of Default Listings


    The new update of the Multnomah Foreclosures web site (http://multnomahforeclosures.com/) includes NOD listings dating back to February of 2008. This data was added because we had it and there has been a lot of interest in this data by the visitors of the site.

    Multnomah Foreclosures
    http://multnomahforeclosures.com/

  • Multnomah Foreclosures Web Site Updated


    The new update of the Multnomah Foreclosures web site (http://multnomahforeclosures.com/) includes NOD listings dating back to February of 2008. This data was added because we had it and there has been a lot of interest in this data by the visitors of the site.

    Multnomah Foreclosures
    http://multnomahforeclosures.com/

  • Short Sale vs Foreclosure – EFFECT ON CREDIT, By Paul Dean, Evergreen Ohana Group


    I thought this information would be beneficial to know, when you are dealing with sellers on a Short Sale basis. Many consumer don’t realize the impact of a short sale on their credit. Read the attached article and commentary from our credit agency below. There are a couple KEY pieces:

    1. Foreclosure – lenders won’t do another loan for 4 yrs. (Bankruptcy is now 4yrs also)

    2. Short sale – if they keep payments current and their credit is relatively intact, and they do due diligence with the lender to determine how they will report the Short sale on their credit report (ie. “settled” is the best, Deed in Lieu is the same effect as a “foreclosure”) this will result is the least amount of damage to their credit rating. That also goes for a Notice of Default (NOD), even though a foreclosure process was started and the seller is able to sell the home prior to it actually going to foreclosure sale, this will be reported as “foreclosure in process” on their credit, which is treated as a “foreclosure” for credit scoring purposes.

    3. Oregon is not a deficiency State. Meaning that Oregon does not pursue the seller for any deficiency. The banks just take the loss, the seller’s credit is damaged, and that’s the end of it.

    4. The biggest advantage to sellers in a Short Sale is keeping payments as current as possible and getting the lender to reflect the account as “settled”. That will allow this borrower to secure another home loan sooner (maybe 2yrs), rather than if a foreclosure or NOD (4yrs) is reported on their credit.

    I think this is valuable information to share with your sellers.

    To Your Success,

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

    Office: (503) 892-2800 Ext.11
    Fax: (503) 892-2803
    Email: pauld@evergreenohana.com
    Website: http://www.evergreenohana.com
    OR ML-21,WA 510-LO-33391, WA:520-CL-50385

  • 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 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!

  • 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