Mortgage Rates January 16, 2013

Mortgage rates hit nearly 7-month high

Mortgage rates are still low, but a recent rise might make potential buyers consider locking in as soon as possible.

Bankrate (RATE) announced Thursday that 30-year fixed mortgage rates across the country have risen to 3.67%. According to Freddie Mac, that's the highest the rate has been since hitting 3.71% on June 14 of last year.

In case homebuyers are wondering, that rate is still really low. The rate on a 30-year fixed mortgage hasn't hit 4% or more since last March, and only did so then for about a week. It hasn't touched 5% since early 2011.

Meanwhile, the average 15-year fixed mortgage rate also climbed to 2.92% — the highest it's been since June 21 — while the five-year adjustable rate mortgage ticked up to 2.77%, where it hasn't been since August. {C}

There's a whole lot of demand behind that surge, as the National Association of Realtors notes that existing home sales are at their highest level since 2009, supply of homes on the market is the lowest since 2005 and median home prices are up 10% from last year and have risen for nine consecutive months. Foreclosures and short sales make up a shrinking portion of those home sales, accounting for just 22% compared to 29% last year.

New-home sales have taken off as well, jumping 15.3% within the last year as prices increased nearly 20% over that span. While Bankrate says the fiscal cliff debates and the upcoming debt ceiling talks have put some fear into the market, only 8% of respondents to its survey expect mortgage rates to rise in the coming weeks. The 67% who feel those rates are going to stay where they are, however, might find themselves in a buying mood should that debt ceiling chatter get more bleak.

By Jason Notte

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Short Sale January 16, 2013

Short Sale Time Saver: Remove non-institutional liens early

Short Sale Time Saver: Remove non-institutional liens early
by in Coaching

Short Sale Nightmares

If you are a short sale negotiator, a short sale listing or buyer’s agent, or if you are involved in a short sale transaction of any kind, I’m not sure whether you could imagine anything worse than this: five months to receive short sale approval, buyer’s loan documents are finally signed, and then you hear the unfortunate turn of phrase, “There’s a lien on the property (or against the seller) that needs to be removed before we can close.”

While I’m not a title expert, I can still advise that it is vital to order a copy of the preliminary title report on the property listed for short sale as soon as possible. Then, review the title report to be sure that all of the liens that are noted in the report are being removed and/or worked on as part of the short sale transactions.

Say, for example, that there are three mortgage loans and an HOA lien. Check in with whomever is doing the short sale processing to be sure that all of those items are being addressed with the short sale lender and are included in the proceeds of the sale.

What about non-institutional liens?

There are other kinds of liens, however, that are a matter against the individual and may not appear on the preliminary title report. These may include a child support lien, an abstract of judgment (like an unpaid credit card bill), or a federal or state tax lien. These items, if they appear when the title company (or your attorney or your escrow company) is doing their due diligence, may have an unfortunate impact on your short sale.

What short sale lender, for example, is going to be interested in paying off your seller’s unpaid child support bills?

That’s why it is so important to look into all the liens on the property as soon as possible. If you are the listing agent, have a look at the preliminary title report when you take the listing. If you are a buyer’s agent, ask for a copy once you have an offer that has been accepted by the seller.

By adhering to this practice, no party to the transaction is going to spend months and months working to get a short sale lender approval letter on a deal that may never close.

Think that this is tough to remember? Whoever first said “The devil is in the details” was probably referring to short sales.

Washington Real Estate Statistics January 15, 2013

Real Estate Statistics Q3 2012

Home Mortgages January 14, 2013

The New Future of Mortgages: An Explainer

The Consumer Financial Protection Bureau today released its first in a series of major rules that will shape the future of mortgages. The hotly contested measures, mandated as part of the 2010 Dodd-Frank financial reform bill, are generally somewhat less stringent than consumer groups wanted, and less onerous than lenders feared.

There are two parts of the new rule (PDF). The first part isn’t very controversial and applies to all mortgages. It requires lenders to evaluate whether a borrower will be able to repay a loan. What a novel idea, right? Well, this wasn’t the law before in most cases. Under the new rules, the CFPB says lenders must consider at least eight specific criteria, including a borrower’s income, assets, credit history, debt obligations, and employment status. Lenders must verify and document this information—so no more “no doc” loans. The CFPB just tells lenders what to look at, not how to evaluate if the borrower has the ability to repay. That’s up to the lender’s judgment.

The second part of the law creates a new category called a “qualified mortgage.” Remember that phrase—you can expect to hear a lot more about it because it’s likely to become the new standard mortgage in the country. To be considered “qualified,” mortgages must follow specific product and underwriting criteria. They can’t have some of the features that proved to be disastrous in the housing bubble: terms longer than 30 years, structures where the principal balance increases (aka negatively amortizing loans), balloon payments, and fees and points that cost more than 3 percent of the loan. On the underwriting side, the most important new factor is that the borrower can’t have a debt-to-income ratio above 43 percent, meaning they can’t spend more than 43 percent of their monthly income paying debts, including mortgages, credit cards, and child support.

Here’s where the legal part kicks in. If a lender follows these criteria when lending at the prime interest rate, they will have strong protection from many lawsuits by consumers. The lender gets the benefit of the doubt that it properly assessed the ability of the borrower to repay, so a borrower will only be able to challenge whether the loan was truly “qualified.” If the loan has a subprime interest rate, consumers will have more legal options. A borrower will be able to say that even though the loan fit the “qualified” terms, the lender should have nonetheless determined that the borrower couldn’t really afford the loan. The bureau made this distinction because it says subprime borrowers tend to be more vulnerable to unscrupulous lending, a senior CFPB official said on a background conference call with reporters.

To make things even more confusing, because these changes are so massive and come at a time when the mortgage market is still fragile, the bureau is building in a transition period. During this period—which will phase out over seven years—loans will be considered “qualified” if they follow the standards set by Fannie Mae (FNMA), Freddie Mac (FMCC), or other government housing agencies, even if those standards differ from the CFPB’s.

Alys Cohen, a staff attorney at the National Consumer Law Center, said in a statement that the qualified mortgage rule “invites abusive lending and erodes the progress made by Dodd-Frank.” She said the legal safe harbor for prime qualified mortgages provides “absolute shelter” for reckless lenders and that the 43 percent debt-to-income ratio was too high for lower-income borrowers. The Center for Responsible Lending generally praised the rules, calling them a “reasonable approach to mortgage lending—for the most part.” In a statement, CFPB Director Richard Cordray said that “no standard is perfect, but this standard draws a clear line that will provide a real measure of protection to borrowers and increased certainty to the mortgage market.”

The bulk of the new rule is final and set to go into effect in January 2014. The bureau has walked back from a finalized rule before, but that’s unusual for regulators, particularly for regulations of this magnitude. In the coming weeks and months, the bureau plans to unveil other mortgage regulations, including standards for servicing loans, compensation for loan officers, and a simplified disclosure form. A whole new mortgage world is coming soon.

Weise is a reporter for Bloomberg Businessweek in New York. Follow her on Twitter @kyweise.

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Q3 Real Estate Update January 13, 2013

Q3 Real Estate Update

Seattle Area Real Estate January 13, 2013

Stop by and see this home today, 1PM-4PM

Not in the market for a $2.7M home? No worries…come visit us anyway! This is a fun house and area to tour. As we've said before, Blakely Court is one of our favorite streets in all of Seattle. The views in this area are absolutely stellar. This particular lot has an exceptional view and you feel right on top of the water. But come see for yourself… Conversation and cookies are always free.

Home Improvement January 13, 2013

How to Winterize Your Home on a Budget

How to Winterize Your Home on a Budget

Securing your home against winter is always a prime consideration for homeowners, no matter where you live. Regardless of what direction the cost of heating oil, propane and other fuels is heading, it makes good sense to ensure that you and your family stay comfortable the entire season while protecting your investment.

The good news is that it doesn’t have to be expensive. There are a surprising number of easy things you can do at minimal cost that can maximize energy savings this winter. Below are suggestions for budgets of $100, $250 and $500 (at current prices), as well as some ideas that cost nothing.

Read on here.

 

 

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Home Improvement Tips Soundproofing January 12, 2013

Weekend Warrior: 5 Simple Ways to Soundproof Your House

5 Simple Ways to Soundproof Your House

Is five minutes of silence too much to ask for? If there’s an amateur guitar player or a husband who watches football at full volume living with you, then yes, it might be.

To maximize your peace and quiet around the house, try a few of these easy soundproofing strategies. These tips will reduce vibrations, plug sound leaks and absorb noise. How great does that sound?

Plug sound leaks.

Pretend sound moves like water throughout your house. To stop the sound, you need to plug the leaks. To do this, buy some acoustic sealant and apply it around any gaps between your overhead lighting fixtures, door casings and switch boxes.

Use rugs and carpets.

Rugs, carpets and even drapes help reduce ambient noise. If you have a loud room that’s “naked,” consider adding a new throw rug or carpet. It will help dampen the noise and spiff up the room at the same time.

Add a layer of drywall.

Drywall is a dense material that stops noise, so it’s a perfect soundproofing addition. You don’t have to double-drywall your entire house. Just focus on the noisiest areas, like your kid’s room, or the areas you want to keep particularly quiet, like your office. For this project, we recommend hiring a contractor.

Install acoustic panels.

Acoustic panels absorb sound, which makes them a perfect buffer around particularly loud rooms (like a music room). You can even turn your panels into a work of art with these custom acoustical treatments from Soundproof Cow.

Switch your doors.

If your home has hollow core doors (these are light weight and inexpensive), there’s probably a lot of extra sound passing through them. To quiet things down, consider replacing them with solid core doors, which you can find at your local hardware store for about $60-$80.

BrightNest is a free site that provides tools and tips to homeowners to help them save money, get organized and keep their home in great shape.

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Seattle Restuarant Guide January 11, 2013

Dining Out: Seattle Champions Of Cuisine

Dining Out: Seattle Champions Of Cuisine

Rundown Seattle the three best new restaurants of 2012.

#3: Sweet And Sexy: Shanik
It hasn’t even been a month but it’s safe to say that Meeru Dhalwala’s Shanik is going to be as big a deal as her two Vancouver restaurants. They’re still working out some kinks, but lines out the door for salmon in potato curry and spiced lamb popsicles are well worth the wait.
500 Terry Ave. N., South Lake Union (206-486-6884)

#2: King Biscuit: The Wandering Goose
Seattle's not a town known for great biscuits, but Heather Campbell's setting out to change all that. The buttery, flaky Southern-style ones here are the restaurant's claim to fame, but don't miss out on the Hangtown Fry, an impossibly delectable combo of fried oysters, pork belly and poached eggs.
403 15th Ave. E Capitol Hill (206-323-9938)

#1: Big Splash: The Whale Wins
Renee Erickson’s new joint helped make the Fremont Collective one of Seattle’s hottest destinations this year. The Whale Wins is all about generous portions of simple, rustic food cooked brilliantly. The wood-fired oven and communal seating make it feel like an old-school European village restaurant, but the bright décor and huge windows are pure Seattle.
3506 Stone Way N., Wallingford (206-632-9425)

Seattle Real Estate Market Recovery January 11, 2013

Predictions: 10 Healthiest Housing Markets of 2013 Includes Seattle

Predictions: 10 Healthiest Housing Markets of 2013 Includes Seattle

In real estate, as you might have heard, location is everything. It’s relatively straightforward to figure out which neighborhood in a particular town is the right location, location, location for your needs – schools, character, proximity to amenities and things like crime rates and commutability render a given neighborhood more or less of a good fit for a given home owner.

But how can you tell which cities you should feel optimistic about in the coming year?

It’s all about the fundamentals, folks.

I sat down with Trulia’s Economist, Jed Kolko, and asked him for his short list of spots across the country that he projects will be the healthiest housing markets in 2013, and for his rationale behind picking the cities that made the list. Kolko explained: “The healthy markets that made the list have strong job growth (Bureau of Labor Statistics), which bodes well for housing demand; low vacancy rates (U.S. Postal Service)–low enough to encourage new construction, but not so low that inventory and sales are restrained; and low foreclosure inventory (RealtyTrac), since foreclosures tend to hold back recovery.”

 

Read on here.