Purple HouseOK, the numbers are in for calendar year 2013.  In 3Q 2012, for the first time in five years, housing prices actually began to improve, month over month. The trend continued for much of 2013, although slowed during 4Q, which we might expect, given the Thanksgiving and Christmas Holidays [Memo to PC Police: Sorry for using such anachronistic and sappy terms, but I insist on preserving some semblance of our country’s Judeo-Christian heritage. So sue me!] Sorry, I got sidetracked, where was I? Continue reading “The 2013-2014 Portland-Metro Residential Marketplace – How Are We Doing?”

Take the Bonus and RunIntroduction. As the Big Bank scandals appear to be diminishing, I’ll admit that it’s probably time to get over the RATs (Rapers of the American Taxpayers), and move on to other more uplifting topics for this blog site. Perhaps I will…. Continue reading “Big Banks, Loan Fraud, and Moral Equivalence – Part One”

HouseThe Regional Multiple Listing Service (“RMLS™”) has today, September 13, 2013, published the statistics for August, 2013 in its monthly Market Action Letter.  Although some of the numbers are a bit off from last month’s feeding frenzy, they are still quite good. Herewith, excerpts from the report:

Closed sales (2,623) decreased by 5.2% compared to July (2,766), but represent the best August for closed sales in Portland since 2006 when there were 2,939! Continue reading “RMLS™ Portland-Metro Stats for August 2013 – Continuing Good News!”

Hands RaisedIntroduction.  On September 2, 2013 the online Wall Street Journal carried an article that should be of interest to thousands of folks who have weathered the last five years of unpleasantness, but in the process suffered a short sale, foreclosure or perhaps a deed-in-lieu-of-foreclosure.  The full article can be found here. Continue reading “New FHA Underwriting Guidelines – Good News For Former Distressed Homeowners Re-Entering The Marketplace”

OctopusOne of the most notable bi-products of the foreclosure disaster, was another disaster – the 2010 Dodd-Frank Act; a 2300 page tome bearing the names of two of the primary beneficiaries of the Lender Lobby, Chris Dodd, charter member of the “Friends of Angelo” [as in Angelo Mozilo, CEO of Countrywide] who gave sweetheart loans to his political cronies, and the irascible Barney Frank, whose distinction lies in the fact that while heading the Financial Services Committee in 2006, he patently ignored the credit and housing bubbles, while taking campaign money from one of his two largest contributors, the American Bankers Association.  And both men – in what can best be described as “biting the hand that fed them” – co-authored the uber-regulatory bill that bears their names, then promptly retired from the Senate, leaving the bureaucrats to write the 400 rules interpreting this wildly aspirational set of laws.[1] Continue reading “CFPB – A Bad Case of Mission Creep”

stk27730hndWell, this bit of news should come as no surprise: In anticipation of the January, 2014 implementation of the CFPB’s Qualified Mortgage (“QM”) Rules, Fannie and Freddie’s overseer, the FHFA, has already signaled its intent to purchase only QM loans in the future. Earlier this year, the CFPB, the mega-agency spawned by the unholy alliance of Chris Dodd and Barney Frank issued its QM guidelines, which if not followed, could summon a host of horribles the likes of which Pandora never imagined. For a discussion of these rules, go to my post here.

In a recent article titled “Enterprises Directed to Limit Purchases to QM Loans” the informative online site The M. Report, carried the following story:

 “… beginning January 10, 2014, the GSEs [i.e., Fannie and Freddie] will no longer purchase loans subject to CFPB’s “ability to repay” rule if those loans are not fully amortizing, have terms of longer than 30 years, or include points and fees in excess of 3 percent. Effectively, this excludes interest-only loans, loans with 40-year terms, and those with points and fees exceeding the thresholds established by regulations.”

The Take-Away. So for the balance of 2013, the GSEs will continue to follow their current purchasing guidelines.  What does this mean for potential borrowers who won’t be able to make the QM grade next year?  If I were an enterprising mortgage broker or Realtor®, I’d be beating the drum to my clients and customers that 2013 may be a pretty good year to get a home purchase loan.

And being the unrepentant critic I am about the unintended consequence of Dodd-Frank, the CFPB, under the guise of “protecting consumers”, is gradually pulling up the ladder to  home ownership for many deserving folks who still want their slice of the American Dream.  ~PCQ

FAQs

The local and national real estate markets have been on the ropes for five years. The third quarter of 2007 was the statistical peak for housing prices in the Portland-Metro area.  From that point forward, the real estate market went into a downward spiral from which it has never fully recovered. 

However, the third quarter of 2012 was the first time since the third quarter of 2007 that home prices have actually increased over the prior year.  Bend, Oregon is experiencing the same resurgence.

So for those homeowners still awash in negative equity, 2013 may be the last and best year to complete a short sale with a minimum of adverse consequences.  This is especially true since this year we know that if a home is short sold [or foreclosed, or deeded back in lieu of foreclosure] the seller will not have to pay income tax on the cancelled debt.[1]  We don’t know if the forgiveness law will be extended into 2014. The extension for this year was not even announced until early January 2013, causing a lot of anxiety for homeowners who were unable to complete their short sales by December 31, 2012.

What follows are a series of FAQs based upon the latest information I have acquired while consulting with homeowners on their foreclosure avoidance options. ~ PCQ Continue reading “2013 Short Sale FAQs [Part One]”

Background.  The Big Banks, their excesses, and the stories of their rapacious greed, are slowly receding into the rearview mirror of memory, like an Elm Street nightmare. We all know how it ended; the federal government bailed them all out to the tune of $445 billion.  Some accepted the money begrudgingly, saying they were forced to take the medicine although they weren’t really sick.[1]

Clearly, the Big Banks have suffered huge reputational damage over the last few years – and rightfully so.  But there was another player during these years that – except for those who have followed the story of the Financial Crisis – seems to have gone relatively unnoticed in the public eye; probably because the word “bank” is not found in its name.  The company is American International Group, or “AIG”.  Interestingly, the name and acronym give no hint of its core business.  It is an insurance company!  That’s right, insurance; quite possibly the world’s most boring, dry, unsexy and uninteresting profession, second only to statisticians.[2] Continue reading “AIG – Hapless Victim or Reckless Ingrate? (Part One)”

“To be forewarned is to be forearmed.”

The term “deficiency” arises in the context of a borrower’s default to their lender.  It refers to the difference between what the lender/servicer recovers, e.g. through short sale, deed-in-lieu-of-foreclosure (“DIL”), or foreclosure, and the total debt owing.  Let’s go through each one, and see how and when the issue is likely to arise:

1.     Short Sales. This is a sale of the distressed property where the net sale proceeds [after deducting costs of sale, such as real estate commissions, escrow, title insurance and recording fees] are insufficient to pay the total indebtedness due, i.e. principal, interest, late fees, and lender advances, such as property taxes and insurance. The difference between the amount recovered and the amount due is the “deficiency.” Continue reading “Borrower Exposure to Deficiency Risk”

As I was reading Kelly Harpster’s excellent article on The Housekeeping Report, summarizing the January 9, 2013 oral arguments on the Niday case[1] before the Oregon Supreme Court, I felt I was ringside with Howard Cosell covering an old Ali-Frazier title bout:

“Frazier hits Ali with a short left jab, followed by a quick right – Ali feints, dances, bobs, weaves – he laughs, drops his hands and mugs at Frazier, taunting him, then fires back with a flurry of punches to Frazier’s midsection.  Oh, there’s the bell!  That was the round 15[2]!  The ref jumps in to separate the two gladiators, who are exchanging angry words and gestures.  Their corner-men separate the pugilists, each side claiming victory.  Ladies and gentlemen, this is why they call it the “Sweet Science.”  Have you ever seen such a magnificent exhibition of the sport?  It truly was a “Thrilla in Manila!”  Now let’s go to the judges’ scorecards….” Continue reading “MERS, Niday, and Occam’s Razor”