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Larry and I took 24 hours and embarked on a little trip for a weekend getaway to Port Townsend.  We began with a ferry ride at Edmonds to Kingston, and then took Hwy 104 all the way across the Hood Canal stopping at Port Gamble to antique and be tourists.  We stopped at the sea shell museum and general store–and took some pics.  We wandered through a gift shop and antique store on the street right next to the water, and then drove on to Port Hadlock.  There we dropped into the Ajax Cafe where we arrived just in time to not need a reservation!  What a great place for people watching!  We enjoyed live music, guitar and clarinet and flute on a stage just big enough–they were having fun!  The decor is eclectic, none of the dishes matched, there were movie posters, black and white photos of celebrities, costumes, tons of hats hanging on the walls, lots to look at.  The food was brilliant–and then as the evening went on, more and more folks tried on hats.  Larry found a wig and a tie that transformed him into a People started taking photos of each other–complete strangers were playing with each other–it was brilliant fun!

We ended up in a B&B in Port Townsend, F.W. Hastings House, Old Consulate Inn, relaxing, and with a 7 course breakfast in the morning.  Lots of antiquing in the morning and good coffee and gift shops all around. 

Here is a link to the Lowe’s Newsletter–it’s got great info for getting your yard ready for Autumn.

September Newsletter–Lowes

The Fed cut the short term interest rate by .5% today in a move to improve the housing market. The stock market responded with immediate gains of about 1.5%, showing a hopeful outlook for recovery and a soft landing for the wider economy.

From CNN Money, “The federal funds rate, an overnight lending rate that banks charge each other, is important since it influences the amount of interest consumers must pay for various types of debt, such as credit cards, home equity lines of credit and auto loans. The rate cut should help some beleaguered home borrowers who are set to see monthly payments on adjustable rate mortgages rise later this year.”

The immediate response among the lenders that I work with? Rates dropped in many conforming loan products. This should allow people who need to refinance to do so with a very attractive rate, and move into a long term product, especially for those who want to stay in their homes for the long haul.

What is Walk Score? 
Walk Score shows you a map of what’s nearby and calculates a Walk Score for any property. Buying a house in a walkable neighborhood is good for your health and good for the environment.  The walk score of the Space Needle, for example is 89.  Bill Gates’ house walk score is 6.  Our house is 65.  The higher the score, the more walkable the location.  How does the site calculate walkability?
 How It Works
Walk Score calculates the walkability of an address by locating nearby stores, restaurants, schools, parks, etc. Your Walk Score is a number between 0 and 100. The walkability of an address depends on how far you are comfortable walking—after all, everything is within walking distance if you have the time. Here are general guidelines for interpreting your score:

· 90 - 100 = Walkers’ Paradise: Most errands can be accomplished on foot and many people get by without owning a car.
· 70 - 90 = Very Walkable: It’s possible to get by without owning a car.
· 50 - 70 = Some Walkable Locations: Some stores and amenities are within walking distance, but many everyday trips still require a bike, public transportation, or car.
· 25 - 50 = Not Walkable: Only a few destinations are within easy walking range. For most errands, driving or public transportation is a must.
· 0 - 25 = Driving Only: Virtually no neighborhood destinations within walking range. You can walk from your house to your car!

 Check it out via our website:  www.ComeBuyAHouse.com

 Whether you are buying or selling a home or just want to know what the current values are in your neighborhood, you will find our Free MLS Search and email reports to be a useful tool.  
The main use of our search is for buyers who can preview the market or actively search for their next dream home.  Yet that’s not the only purpose.  If you are preparing to sell you can see what neighborhood prices are, which homes are in competition, and how they are being marketed.  This information along with your ComeBuyAHouse.com team’s current knowledge of the market will be useful as you place your home for sale.    
Homeowners who want to stay put and just want to be in the know, can simply track the current neighborhood values accurately using MLS listing data.  
Sign up on our website anytime!   ComeBuyAHouse.com

 This past couple of months found a number of lenders closing their doors, and others including the largest lender in the nation, Countrywide, in tight circumstances.  Those that are still with us have made huge changes in the loan programs they are offering.  Gone are the days of low interest stated income, stated asset, 100% financing, or loans that are likely to lead to borrower default. 
This is a good thing

Better quality mortgage products equals a better financial outlook for each of you, our clients, assuring the future affordability of your homes.
I always watch daily  interest rates on conservative products—30 year fixed, for example has been hovering around 6.25-6.5%.  A very good rate.  If you are a W-2 worker, with good credit and reasonable income, assets and even a small down payment, you are the kind of borrower that lenders really want right now, and they show it by offering low rates to you.  If you are about ready to refinance, this would be a great one to consider.
Already, our lenders are releasing modified versions of some of the more versatile loans like the Option Arm, and Jumbo Loans with Stated Income. 
Reverse Mortgage:  a better tool than you might think
As the nation ages and baby boomers reach that magic age of 62, more and more of us will be interested in a product known as a reverse mortgage.   I am certified in reverse mortgage origination. 
In a nutshell, a reverse mortgage is a cash flow/income tool. Unlike ordinary home equity loans, a reverse mortgage does not require repayment as long as the borrower lives in the home. Lenders recover their principal, plus interest, when the home is sold or refinanced by the heirs. The remaining value of the home goes to the homeowner or to his or her survivors. If the sales proceeds are insufficient to pay the amount owed, HUD will pay the lender the amount of the shortfall.
To know more about this product or to consult with Lynette regarding mortgage financing, please call or email us.

 It is a bit of a buyer’s market in many areas, and some good deals are to be had!
In general, houses for sale are spending longer times on the market than in recent years, and some areas are showing signs of prices coming down. Buyers: sellers who need to sell quickly are selling low. Sellers: Fear not, you can add value to your property and negotiate in creative and
tangible ways.  
The mortgage market and interest rates are contributing factors to this market change.  (Please see the next article for mortgage market info.)
Still the house value trend in Seattle is good news. According to the Seattle Times, in the 2nd quarter of 2007, Washington State led the nation with 5 cities in the top 20 for appreciation, with the Seattle/Bellevue/Everett areas up 9.89%,
“Washington State led the nation with the number of cities in the top 20 for appreciation with five. In order, there are: Wenatchee (up 23.54 percent), Longview (up 13.6 percent), Seattle/Bellevue/Everett (up 9.89 percent), Tacoma (up 9.34 percent) and Spokane (up 9.3 percent). And, the state had no cities in the bottom 20, which were located primarily in California and Florida.”  Seattle Times
The rest of the Seattle Times article includes national information.  If you would like to have the entire article in print or via email, please send an email request to us at ComeBuyAHouse [at] gmail.com
——-Lynette and Larry
 

GSE Changes Could Ease Mortgage Concerns
The two secondary mortgage market giants Fannie Mae and Freddie Mac could help ensure stability in conventional mortgage markets if the government would temporarily lift a restriction on how much in mortgages they can hold in their portfolios, NAR told a federal regulator in a letter sent jointly with the National Association of Home Builders and the Mortgage Bankers Association.

The main function of the two government-sponsored enterprises is to ensure mortgage market liquidity by buying mortgages from lenders and bundling them into securities for sale to investors. But Fannie Mae and Freddie Mac also buy and hold a portion of the loans in their own portfolios.

The companies’ regulator, the Office of Federal Housing Enterprise Oversight, limits this portfolio activity to a combined $1.4 trillion. Easing that limit would send a powerful signal to lenders and borrowers that mortgage markets will remain flush with liquidity, NAR says.

The Financial Services Roundtable, which represents large financial institutions, has sent a letter to OFHEO, saying that easing the portfolio limit makes sense given recent volatility in capital markets. Fannie Mae CEO Daniel Mudd has suggested raising the limit by 10 percent.

For now, no cap hike is planned, although credit availability will be closely watched going forward, OFHEO Director James Lockhart said in a letter to Sen. Charles Schumer (D-N.Y.), who sits on the Senate Finance and Banking committees and has called for a cap hike.

— REALTOR® Magazine Online

The news is all over the place–from my lenders I get daily updates with program changes, rate changes and borrower criteria changes.  Then I also hear– “bring us the mortgages anyway–we’ll get creative”.  I’ll be honest with you–it is not as easy to get a loan as it used to be in recent years.  So — OK — they’re more realistic now, and we won’t find ourselves two years later with an outlandish payment we can’t afford. 

This blurb came to me from Realtor Magazine: 

Borrowers with good credit but without 5 or 10 percent to put down are likely to be shocked at the rate they’re offered, if they’re offered a mortgage at all.

Lenders are eliminating certain products altogether as well as requiring higher credit scores and down payments, more extensive appraisals, larger savings accounts, and additional income verification.

To Washington state appraiser Bill Hanson, the shift is dramatic. He says lenders are “asking for unrelated information, such as permit numbers for remodeling work,” he says. “Before they would ask: ‘Is the home still there and does the roof leak?’”

“We thought the dust was going to settle, but instead, it just blew up,” says Mitchell Reiner, president of Mortgage Associates, a Los Angeles-based lender that does business in 48 states. “Everyone is being affected.”

Source: The Wall Street Journal, Jonathan Karp (08/14/2007)

This article came to me in a newsletter, and I share it with you:

Industry visionary Stefan Swanepoel speaks out

RISMEDIA, August 13, 2007–The public media this past week headlined the apparent surprise “mortgage meltdown” as many reported the filing for bankruptcy protection by the nation’s 10th-largest residential financer; American Home Mortgage Investment Corp., Melville, New York. Real estate, contradictory to its glamorous profile a year or two ago, was again headlined but this time as the big bad wolf. So is this the end of the real estate mortgage Merry-Go-Round? Probably not, as I haven’t heard “a certain lady sing yet!”

So what’s happened? The sub-prime mortgage meltdown has spilled over into other areas of the residential mortgage market, including the jumbo market. For example Wells Fargo, one of the nation’s biggest mortgage lenders, recently raised the interest rates on it 30-year, fixed-rate, non-conforming jumbo loans to 8%. Overall the interest rates on these so-called jumbo loans have risen nearly 25 basis points in the past week, and are up nearly 100 basis points over the last 90 days. Concerns are even entering the commercial arena as increasing speculation among the hedge fund fraternity notes that the greatest risk may be for mortgages issued at inflated price levels in the commercial real estate market.

Ah, so what do we have today? A “Mortgage Meltdown” as the media, both in print and TV, has labeled the fiasco. This is largely based on the fact that market conditions in both the secondary mortgage market and the national real estate market have deteriorated to the point that many mortgage businesses are no longer viable or as profitable as before.

But then maybe they should never have been in business or should be penalized for not preparing for a shifting market. Only the foolish could really have believed that the “gravy train” was going to ride in perpetuity. Numerous prominent blogs warned about the bubble. Yes some were a bit over the top but many spoke the truth; we were forewarned. In the 2007 Swanepoel Trends Report published back in January dedicated an entire chapter to what it titled “The Bubble, Exotic Loans, Fraud and Declining Commissions have created The Hangover.”

But just like in the new CBS reality program “The Power of 10,” greed on the side of home owners, and of course mortgage brokers, lured millions of homeowners with the promise of irresistible low monthly payments and the illusion of owning the “American Dream” – whether they where qualified for it, or not.

So now, or soon, as millions of homeowners experience the clutches of the financial vice-grip tightening we have a market that is in a quandary. The result will most likely be a continuing rise in the number of delinquencies and foreclosures, particularly among low-income borrowers in conjunction with a declining housing market in many areas across the county.

With an estimated $130-billion in mortgages that have payments being reset this year, the adjustable-rate mortgage, once a solution, is now a ticking time bomb. These homes seemed affordable when house prices soared and home equity credit lines were the ticket to luxury cars, swimming pools and overseas trips.

But now the Pied Piper has come to collect. You can’t live in “Never-Never Land” forever. Borrowers are now getting a lesson in what the words “adjustable,” “deferred” and “balloon” really mean. The resulting ripple-down effect is placing even more pressure on declining property values.

However, what is surprising is that in those areas where housing prices have already stalled or fallen, many people appear to be truly flabbergasted and shocked; looking for someone to blame. Valid or not, Realtors as well as mortgage brokers may carry the proverbial “bulls-eye” on their back as many search for a scapegoat.

Realistically of course, house prices had to come down. It is simple economics 101 - supply and demand. If there are more sellers than buyers the market will be flooded with homes that simply won’t sell until prices drop and they become affordable again for the early phase speculators and opportunists.

According to Allen Fishbein, director of housing policy for the Consumer Federation of America, “What happened in a lot of expensive real estate markets is that first-time home buyers who felt they could not afford a home otherwise, took on a loan that had lower monthly payments than a traditional mortgage would have.”  That means borrowers who can’t afford their payments can’t count on being able to sell their homes, while lack of price appreciation means many don’t have the equity in their homes they need to refinance at a good interest rate. Both factors make foreclosures more likely.

But maybe it’s not all that bad as the doomsayers say it is. According to the Mortgage Bankers Association, overall, 4.41 percent of mortgages are delinquent, up from 4.34 percent a year ago, but lower than they were three years ago. So, that means 96 percent of mortgages are being paid on time. That’s not too bad – we are still far from a real “Meltdown” as the media painted our industry this past week.

Good it’s not -but a meltdown it isn’t. Let’s just say we are in a much needed correction for a real estate and mortgage market.  Markets that have been too strong for too long.  At the same time, however, the market creates numerous opportunities to grow a business and gain market share. As with any trend or change, knowledge is the key and being pre-warned is also strategically smart.