Recently, a client in Seattle mentioned that a friend is having problems keeping up with payments on their Washington Mutual mortgage. They had asked the lender about mortgage modification options and were told they didn’t qualify.  1)  If it has been more than A month since they spoke with Wa Mu about it,  they should try to talk to them again (now Chase Mtg) .  Loan Modification programs have been changing as the federal money works its way through the system.  It may well be that A month or two ago,  Wa Mu had nothing to offer in the way of a loan modification, but now they may be able to help.

2) Your friend should also check out www.makinghomeaffordable.org  It is a federal govt web site to help people find out If they qualify for one of the federal bailout programs.  3) Rather than wait for foreclosure to happen,  (if 1 & 2 above don’t help)   they should consult an attorney to figure out Which of their options is best for them.  The 3 main options are selling the house as a short sale,  going to foreclosure, or Filing for bankruptcy.  They need an attorney to sort out the pros and cons , and which is best depends on their circumstances. It is important that the attorney they consult with is NOT a bankruptcy attorney – their advice is usually to file for bankruptcy.  I can recommend good attorneys for this type of consult.  It will cost about $300 If a short sale is the best option,  I can help with that.  I have had considerable training this year on how to handle short sales effectively. (See www.CDPE.com )A short sale usually does far less damage to one’s credit history ,  and that damage goes away after a few years.  The damage from A foreclosure never Goes away.   There are several other reasons that short sales are usually better than foreclosure; and in some circumstances,  bankruptcy may be the best option.  

Not a day goes by that we don’t see headlines somewhere about real estate prices.  Virtually all of these “news” reports refer to how much median prices have dropped.  Most readers are left with the impression that if, for example , the median price of homes sold in the Seattle area dropped by “X” percent,  then the value of homes has dropped by “X”percent.  While there may be some corelation between the two, it is certainly not a direct relationship.  Median price is the price at which half of the sale prices were above,  and half were below.  It speaks mostly to the mix of sales prices and not to the appreciation or depreciation of values.  A simplified example may be the best way to understand the point.  Let’s say in month one, an area had 9 sales , one sale at each of the following prices:  $1.2M , $1.0M , $800K , $700K, $600K, $500K, $400K, $300K, and $200K.  That month, the median sale price would be $600K - 4 sales above $600K and 4 sales below $600K.   Then in month two, the high end sales began to decrease and there were 9 sales;  the highest being $1.0M and an additional sale in the low end.  Now the median sales price is $500K .   In month three, the high end sales continued to slow, and there was one sale at each of the following prices: $800K, $700K, $600K, $500K, $400K, and two sales at $300K and $200K.  Now the median sales price is $400K.   In month four, the high end sales continued to slow and the highest sale price was $700K , and an additional sale on the low end - again 9 sales but now the median sales price is $300K.  In this example, the median sales price has dropped 50% in four months.  The value of homes in the area has not dropped 50% and probably did not drop anywhere near 50%.  It is the mix of high end vs lower end priced homes that sold that has changed.  Yet the headlines begin to create a self-fulfilling prophecy.  Median sales price statistics are readily available but seriously misleading.  Real estate markets are highly localized and to understand how much the value of homes in an area has changed, far more in depth analysis of comparable sales in the area is needed.  

Seattle area first time homebuyers will soon be able to claim their $8,000 tax credit at closing.  

Legislature approves loan program to give home-buyer credit early

By AUBREY COHEN
SEATTLEPI.COM STAFFFirst-time home buyers would get their $8,000 tax credit as a state loan at closing, under a measure the state Legislature has approved.The federal government is offering the income tax credit to first-time buyers who buy a home through November, but won’t pay the credit until after buyers file this year’s tax return. The new budget amendment would set up a “Tax Credit Advance Loan Program” to give buyers the money as a loan at closing, meaning they could use the money for down payments, then pay it back when they got their tax refund.The Washington program is an amendment to the state’s general operating budget, which the Legislature has sent to Gov. Chris Gregoire. State Treasurer James McIntire wrote the budget amendment, which won support from the Washington Realtors and the state Housing Finance Commission, which would administer the program.”If this down payment program can be put in place, it will remove one of the biggest roadblocks to home ownership for first-time home buyers,” Greg Wright, president of Washington Realtors, said in a news release. “Down-payment loans would open the door of home ownership to thousands of hard-working families that have had their part of the American Dream delayed. Combined with lower home prices, some of the lowest interest rates in history and the wider variety of homes available, this is a win for families in Washington and a key to our economic recovery.”The program authorizes the state treasurer to deposit $25 million in a financial institution, which would then open a line of credit for the Housing Finance Commission. Washington Realtors will provide up to $400,000 to cover any borrower defaults.Officials plan to finalize implementation details of the plan after Gregoire approves the budget 

This past week was the best week for new sales in King County residential sales since July 2, 2008!  72% of the areas in the King County MLS are now either balanced markets (3 to 6 months of inventory) or are sellers’ markets (less than 3 months of inventory).   Months of inventory is a key measure of local market activity.  It takes into consideration both the current rate of new sales per month and the number of homes for sale (inventory).  For example,  if a given area has 90 homes for sale, and that area has been selling 30 homes per month, then it has 3 months of inventory.   Just a few weeks ago, virtually all of the areas in the King County MLS were “buyers markets” - more than 6 months of inventory. Week by week the stats are showing fewer buyers’ markets and more markets that are either balanced or sellers’ markets.  Clearly, our market is turning for the better, although you’re not likely to see that in local headlines.  More and more buyrs are taking advantage The $8,000 first time homebuyer tax credit…. which is only good for purchases that close before Dec 1, 2009.

Homeowners who are, or are about to be behind on mortgage payments have options.

If there is equity in the home, and the owner can afford the home: a) reinstate the loan by making up past payments and late fees, or b) see your lender about a loan modification, or c) check with lender to see if you can qualify to refinance at today’s lower rates.

If there is equite in the home, but the owner cannot afford the home: a) sell the home or b) see an attorney to discuss bankruptcy .

If there is no equity in the home: a) talk to a Realtor who is knowledgeable in dealing with Short Sales (a CDPE is a good choice)  or b) let the home go to foreclosure .  An attorney can help you understand the pros and cons of each option.

In the Seattle area, Rick Reimer can help you meet some of the best lenders and attorneys who are appropriate for these discussions.

A short sale in real estate occurs when the proceeds from the sale are not enough to pay closing costs and the amount(s) owed on the mortgage(s).   A condition of the short sale is that the lender(s) must agree to accept less than the current balance on the mortgage(s) and to release the mortgage lien on the property.  The difference may be forgiven by the lender (full satisfaction), or may become an unsecured debt. The seller gets the property sold, doesn’t have to bring money to closing,  and cannot get any proceeds back from the sale.  The lender(s) avoids the costs foreclosure and the seller’s credit history is typically damaged less than it would have been by a foreclosure.  As property values have declined, short sales have become more common, even in relatively healthy real estate markets, like the Seattle area.

Whether you’re a distressed homeowner (behind or may be about to become behind on mortgage payments) or just want to know about refinancing or loan modification options, check out http://makinghomeaffordable.gov .  Due to a decrease in the value of homes, many homeowners who pay their mortgages on time have been unable to refinance and take advantage of historically low interest rates.  Check out new programs that may help.  Let me know if you need a referral to some really great mortgage professionals in the Seattle area. rreimer@windermere.com  

Rick Reimer of Windermere Real Estate/N. E. Inc in Kirkland has earned the prestigious Certified Distressed Property Expert (CDPE) designation, having completed extensive training in foreclosure avoidance and short sales. This is invaluable expertise to offer at a time when the area is ravaged by “distressed” homes in the foreclosure process. Short sales allow the cash-strapped seller to repay the mortgage at the price that the home sells for, even though it is lower than what is owed on the property. With plummeting property values, this can save many people from foreclosure and even bankruptcy. More and more lenders are willing to consider short sales because they are much less costly than foreclosures. In the King County / Seattle area,  more than 5,000 homes are in danger of foreclosing. It is happening in all price ranges. Local experts say that even high-priced homes are not immune. This CDPE designation is invaluable as I work with sellers and lenders on complicated short sales.  It is so rewarding to be able to help sellers save their homes from foreclosure. Alex Charfen, founder of the Distressed Property Institute in Boca Raton, Fla., said that Realtors® such as Rick with the CDPE designation have valuable training in short sales that can offer the homeowner much better alternatives to foreclosure, which virtually destroys the credit rating. These experts also may better understand market conditions and can help sellers through the emotional experience, he said.  The Distressed Property Institute opened in January 2008 and provides training on-site and online. The CDPE is the premier designation for Realtors helping homeowners in distress and handling short sales. “Our goal is to educate as many people as possible so we can help as many homeowners as possible,” Charfen said. For more information or to discuss the alternatives to foreclosure call Rick at 206 550-8259 or email to rreimer@windermere.com

Welcome to Rick Reimer’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Kirkland.