Archive of Mortgage Bites Articles
June 25, 2008 at 3:18 pm · Filed under Bites of Buckwheat, Mortgage Bites
Continuing trouble for two of the Country’s largest mortgage lenders
KIRO TV reported that Governor Gregoire is making moves to remove Countrywide Mortgage’s license to do mortgage business in the state of Washington this morning. This is just the most recent problem Countrywide has had to deal with. Countrywide is currently being sued by the State of Illinois (for defrauding borrowers) and being sued by the State of California. I wonder what the Bank of America stock holders think of their purchase now. I guess they wouldn’t be able to call it Countrywide anymore.
Edit 6/26/2008 - Gov. Gregoire announces $1,000,000 fine for Countrywide
Edit 6/26/2008 - The Department of Financial Insitutions has added this banner to the front page on their website.
Washington Mutual is facing difficulties of it’s own. Union members picketed WAMU’s last shareholders meeting in reaction to the news that WAMU has arranged a $7 billion (yes, billion) cash infusion to try to hold back the floodwaters of bad loans on their books. The shareholders question if $7 billion is enough. You can read the details in the Seattle PI.
In a related article, the PI reported the rather stunning numbers involved in Washington Mutual’s move into credit cards for borrowers with “blemished” credit. Although WAMU insists it is a “very prudent, fiscally conservative approach”, the article reports that the bank added 660,000 new credit card customers in the first quarter of 2008. Mr. Dreman, of Dreman Value Management, LLC (whose company owns 28.8 million shares of WAMU stock) stated “They’re up to their necks in everything bad”.
 I’ll ask the obvious question. Does it make sense to use new high risk credit card accounts to offset the losses from high risk mortgages?
May 14, 2008 at 11:27 pm · Filed under Mortgage Bites, Real Estate Bites, Silverdale WA Real Estate, Sparks from Sparky
As an avid blogger, it’s been an interesting ride thus far. Technology has been advancing rather rapidly in the real estate industry, and the early adapters are usually the ones who benefit the most. I’ve always prided myself on embracing the latest and greatest. So when the marketing paradigm shifted to Web 2.0, I jumped in with both feet! Static went dynamic. The need/demand for interactivity made conversational blogging a perfect venue for meaningful exchange with today’s computer-savvy consumer.
But blogging has an established tradition of stimulating somewhat ‘lively’ debate. Access any number of popular political blogs, and you’ll quickly discover what I mean. While viewpoints and opinions are freely shared, so are vicious barbs and slanderous jabs. Personal attack and public humiliation seem commonplace. And unfortunately, many times, it appears that the ones who are the most ’successful,’ or at least generate the greatest amount of traffic/comments, tend to be the ones who are the most caustic, abrasive, and condescending of the bunch.
Things are a bit more sedate in the Realty Blogdom. However, I have noticed here lately, a few similar trends. Some of the blogs that appear to create/attract the most interest, tend to be overly critical and negative. Sensationalist and provocative titles are employed. Targets are chosen and eviscerated before the viewing public, and all for the sake of ranking. Forget about helping to empower and educate the consumer. We’re having way too much fun dragging someone’s character in the mud!
It reminds me of a guy I used to work with in a previous life. I’ll call him ‘Elvis’ because he loved ‘The King,’ even to the point of sporting huge pork chop sideburns. “Elvis’ was God’s gift to the business world. I had the privilege of accompanying him on a week long sales road trip from Hell. As we traveled along, he confided in me that God had blessed him with superior intelligence. But that his penance in life was to put up with everyone else’s ignorance (his exact words!).
There are some blogs/blog authors who are like that. They’re obviously graced with tremendous smarts and a wonderfully endowed vocabulary. But they seem to be lacking somewhat in the humility department.
So I guess my question is this: Can Nice Blogs finish first? Or do I have to be abrasive and demeaning to succeed? Do we pander to the publics obsession with sensational, provocative, and controversial? Do we sacrifice substance for traffic/ranking? Is content still the King, or is it my buddy, Elvis?
February 28, 2008 at 10:29 am · Filed under Business Bites, Buyers, Mortgage Bites, Real Estate Bites, Sellers, Sparks from Sparky
Last month, Reuters announced that online listing aggregators Yahoo! Real Estate, Zillow, and Trulia had all agreed to adopt a standardized format for the distribution of real estate listings data. This allows the flow of critical information from real estate franchisors, brokers, and MLS agencies to move more quickly and efficiently to consumers.
In his 1993 prophetical “Lions over the Hill” speech, then NAR (National Association of Realtors) President, Bill Chee, predicted that one day the predatory ‘lions’ of technology would come along and prey upon the longstanding and rather complacent gatekeepers of residential market information, the Multiple Listing Services.
According to Wikipedia, “A Multiple Listing Service (MLS) (also Multiple Listing System or Multiple Listings Service) is a group of private databases which allows real estate brokers representing sellers under a listing contract to widely share information about properties with real estate brokers who may represent potential buyers or wish to cooperate with a seller’s broker in finding a buyer for the property. There is no single authoritative “MLS”, and no universal data format. The many local and private databases–some of which are controlled by single associations of realtors or groupings of associations (which represent all brokers within a given community or geographical area) or by real estate brokers–are collectively referred to as the MLS because of their reciprocal access agreements.”
Here in the US, there are over 800+ MLS systems that are owned, operated, and governed by varying private entities (real estate companies, county or regional Board of Realtors, or trade associations). In the past, each of these MLS systems set their own rules for membership, access, and sharing of information. All, however, are subject to nationwide rules laid down by NAR.
Dating back to the 1960’s, the original purpose of the MLS was to simplify the sharing of information from Sellers to Buyers. It was a system that worked back then, and everyone seemed to benefit. Licensed agents were naturally required to contribute a subscription fee to gain access to this listing information.
But times have changed, dramatically. With nearly 85% of consumers accessing the Internet to begin their home buying process, the drive and need for the free flowing access of listing information is forcing the MLS to relinquish their traditional strongholds and concede to growing consumer demands.
The ‘Lions’ are no longer ‘over the hill,’ but they’re in the camp and halfway through their meal!
New competitors such as Google Base, Craigslist, Oodle, and those listed above, are examples of newer alternatives to the MLS service. Recent traffic statistics clearly show that these sites have gained considerable traction and popularity among consumers and real estate professionals.
So with more and more listing data becoming available to the general public, is the MLS headed for the Endangered Species List? What will their proposition of value be to the hundreds of thousands of real estate professionals across the country who are required to contribute to their coffers?
In his speech back in 1993, Mr. Chee predicted that their organization would lose the MLS in just a few, short years. In fact, he gave them less than a 50% chance of stopping that inevitability from happening. He challenged his listeners to change with the times, to embrace emerging technology, and instead ’become’ the Lion!
And now, the vultures are circling the remains….
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December 7, 2007 at 11:35 am · Filed under Bainbridge Island Real Estate, Bites of Kitsap, Bremerton WA Real Estate, Buyers, Gig Harbor Real Estate, Kitsap Market Reports, Mortgage Bites, Port Orchard Real Estate, Poulsbo Real Estate, Real Estate Bites, Sellers, Silverdale WA Real Estate, Sparks from Sparky
Real Estate Market Report/Conditions in Kitsap County WA for 12/06/2007
The following is a brief analysis of the combined single-family home and condo market within Kitsap County, Washington for December 2007, provided by Rich Jacobson of Windermere Real Estate, in Silverdale, WA (Data for Bainbridge Island WA is included below)
- Properties currently active on the market: 1989
- Properties closed in the last 180 days: 1561
- Average Sales Price: $335,174
- Average List Price: $342,303
- Ratio of List Price to Sales Price: 98%
- Average Days on Market:Â 88
- Sales Pending this Week:Â 35
Current Market Conditions: Area 141 (South Kitsap West of Hwy. 16) still has the highest ratio of List Price vs. Sale Price with 102%. The lowest ratio was 95% for Area 161 (Hansville). Shortest Days on Market (DOM) was Area 166 (Poulsbo) at 63, and Area 150 (E. Central Kitsap) coming in 2nd with 69. Longest DOM goes to Area 163 (Port Gamble) with 133, followed by Area 161 (Hansville) at 106. Inventory levels dropped by nearly 10%, with many Sellers electing to remove their homes from market over the Christmas Holidays. Overall, prices continue to hold fairly steady, as do the days on market.
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Bainbridge Island Stats: (Area 170)
- Properties currently Active on the market: 288
- Properties closed in last 180 days: 235
- Average Sales Price: $ 732,699
- Average List Price: $ 754,554
- Ratio of List Price to Sales Price: 97%
- Average Days on Market: 125
- Sales Pending this week: 6
For Buyers:Â There is no better time than ‘NOW’ to consider purchasing a home here in Kitsap County WA. Be sure to work very closely with your Mortgage Loan Officer throughout all stages of the transaction. Loan programs are changing constantly, and underwriters are imposing more and more conditions. A good Loan Officer will stay on top of these issues, and help to keep your loan process moving along smoothly.
For Sellers: Many Sellers are waiting until the market picks up again in the early Spring to put their home up for sale. You may want to consider an earlier launch date (early January) to give yourself a ‘jump’ on the competition.
For 1st Time Buyers:Â You might want to consider one of my listings, the Gorman Condominiums, near beautiful Kitsap Lake in Bremerton WA. For only $ 129,950 your dream of home ownership can come true!
For more additional information and resources concerning real estate in Kitsap County WAÂ and the Western Puget Sound, access my website, Kitsap Life.
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October 25, 2007 at 5:54 am · Filed under Bites of Buckwheat, Bites of Kitsap, Mortgage Bites
Yesterday I decided not to publish an article about the troubles one of our own is having in Kitsap County. I hate to see a local company struggling. But Westsound Bank’s struggle has just become very public. Both the Kitsap Sun Newspaper and the Seattle Times published articles this morning concerning Westsound Bank’s recent SEC filing.
Yesterday’s information came as no surprise to those of us in Kitsap County mortgage lending. The abrupt departure of a key employee last month and the almost immediate closing of the mortgage lending department at West Sound Bank caused quite a stir, raised numerous questions from locals and created considerable concern among area builders and property developers.
The NASDAQ has Westsound Bank as the worst performing stock for the day. Share values fell almost 43%.
Westsound Bank is under investigation by both the FDIC and Washington State’s DFI (Department of Financial Institutions). There is more speculation and rumor, than facts available right now. But there is no doubt, the next few months will be difficult ones for the Bank.
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October 24, 2007 at 4:44 pm · Filed under Bites of Buckwheat, Bites of Washington, Credit Bites, Mortgage Bites
Life can be overwhelming at times. It happens to us all. There’s information overload, the mounting costs of everything from gasoline to college educations, the internet explosion, health care cost increases, international strife, the whole political tennis match, FHA reform, rising foreclosure estimates in America and the day-to-day business of living while raising families. Have you tried to help your children with their homework lately? It’s no wonder many Americans consider “letting the house go back to the bank” as a viable solution to the ever-present stress of living life.
As a solution to debt problems, Foreclosure may not provide the financial relief some homeowners are seeking. Rather than ending up with a more managable budget after foreclosure, many consumers are horrified to find they must still make payments to a lender on a home they no longer own. The problem didn’t get better, it got worse.
Homeowners with significant equity in their homes tend to fight vigorously to save them. Homeowners who believe they have little to lose in equity, are more apt to “throw in the towel” when financial times get tough. These homeowners often get hurt the worst. And its not uncommon.
A deficiency balance occurs when the proceeds of the sale are insufficient to cover all the costs associated with the property being sold. First, there is the mortgage (sometimes there are more than one). Then there are late fees, attorney fees, court cost and any penalties that were assessed during the Foreclosure process. Sometimes there are back taxes that must be paid and unpaid utility bills. Once all these amounts are added up, they often exceed the amount of money generated by the sale of the property by tens of thousands of dollars. Now the homeowner is a renter with a huge liability owed on a home they no longer own as well as the cost of rental housing.
One of the hardest things for any of us to do is to keep a clear head while under financial pressure. It is the one time we can ill afford to make a poor decision. A decision to allow a home to be foreclosed that results in this scenario, does nothing to alleviate the stress a homeowner with financial trouble is under. It just prolongs the misery. Think twice before “throwing in the towel”. Is there ANY other way to work your way out of this tight spot?
To make matters even worse, if the Lender decides to “Forgive” the deficiency balance, don’t be surprised if the IRS labels this as Income and demands taxes on the money. They have done it many times in the past.
October 23, 2007 at 10:02 am · Filed under Bites of Buckwheat, Bites of Washington, Mortgage Bites
Just a few weeks ago SoundBiteBlog posted an article about VA Loan Limits and Ginnie Mae. In short the article stated that, beginning September 1st 2007, Â Ginnie Mae has lifted the maximum loan limit cap on VA Mortgages. This seemed like big news to me at the time, yet there still has not been much media coverage on the subject.
Yesterday, the first lender in Washington (that I know of) sent out a memo to Mortgage Brokers announcing they have raised the VA Loan limit to $1,000,000! It was bound to happen. Someone had to be the first to jump on this opportunity. The previous VA Loan Limit was $417,000. This is a huge jump. In case you are wondering, the lender is Network Mortgage Services, Inc. of Lynwood, WA.
This increase applies to 2, 3 and 4 unit properties as well as Single Family dwellings.
Other VA guidelines remain the same. VA only makes loans on Owner Occupied Properties. So, a VA Borrower wishing to purchase a 4-plex, must live in one of the units. Regardless of that fact, what a terrific way for a local buyer to get into the real estate investment game!
In speaking with a number of Real Estate Professionals I have noticed there is quite a bit of misunderstanding about VA Loans and how the VA Funding Fee works. Here’s a brief explanation.
The maximum guarantee that VA will make on a property has not changed. What this means is if a buyer wants to exceed the $417,000 conforming limitation, VA will guarantee the larger loan, but the borrower must have some down payment. Now before you shake your head and say “there had to be a catch”, consider how it works.
VA will guarantee up to $417,000. The buyer must come up with 25% of the amount above $417,000. As an example, on a $517,000 purchase, the buyer will need to raise $25,000 for down payment. That is 4.8% down! It sounds like a great deal to me! Especially if the buyer is purchasing a 2, 3 or 4 unit property. Very few multi-family loan programs are in the same ballpark. 4.8% down, no mortgage insurance, attractive fixed rates and reasonable credit guidelines. Just try to find a better loan package than that.
I would imagine now that Network has raised the bar, other VA lenders will soon announce they have raised their limit too. The one question I still have is whether or not this increase applies to Refinance Transactions. At this time, refinances have not been addressed at all.
All in all, this is great news for Washington Real Estate buyers, Realtors® and Loan Originators.
