Posts filed under 'Mortgages'
A random collection of recent real estate news notes, articles, and updates:
Bad MLS Photo of the Day
A jaw-droppingly horrifying, actual MLS photo found on a listing in Southern California. You just have to see it.
Sell your house by owner, by auction, or…by writing contest
A $1.25M Florida plantation to be given to the winner of a writing contest. For a $200 entry fee. Oh, and just 6,250 entries needed. (Found by AgentGenius)
Why Did the Mortgage Crisis Happen?
Local economist and writer Bill Conerly starts a 5-part series at his Businomics blog. Interesting reading and brief, so not too overwhelming. His topics:
- The Great Moderation and the benign housing cycle of the 2001 recession, which made real estate appear to be safe
- Securitization, which changed the funders from lenders to investors, while making the products too complex for most anyone to understand.
- With these two factors in place, the mortgage crisis evolved from the last recession.
- What to expect next time round.
He’s a little more bullish on forecasts than many, as written here and here.
CNN/Money highlights real estate slowing in Portland and other ‘bulletproof’ cities
Seattle, Charlotte are not immune, either
The Party’s Over
So says a sobering report by the Oregon Business Magazine.
Finally,
Phone book deliveries must cease
I say AMEN, brother! One copy per year, ok, but does anyone else think eight phone books a year is a waste?
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May 9th, 2008
One test for the health of the Portland metro real estate market is the mix of sub-prime vs. traditional (or prime) mortgages. In a recent National Association of Realtors survey, subprime loans account for only 9% of homeowner mortgages, but they comprise 54% of foreclosures nationally.
The survey, which includes data from the Mortgage Brokers Association, reports that as of early 2008, 32% of homeowners across the U.S. have their homes paid in full, and of those with a home loan, 53% are in a prime mortgage and the balance are in a sub-prime (9%) or FHA/VA loan (6%).
Here’s a look at how Oregon compares to the nation and California by mortgage type:
Mortgage Mix
| Paid in full |
32%
|
24%
|
29%
|
| Prime mortgage |
53%
|
65%
|
60%
|
| Subprime mortgage |
9%
|
10%
|
7%
|
| FHA/VA mortgage |
6%
|
1%
|
4%
|
Foreclosure Mix by Mortgage Type
NAR says the Oregon foreclosure rate is 0.7%, while California foreclosure rate is at 2.2%. Here are the mortgage types that foreclosures are coming from:
| Subprime Mortgages |
54%
|
61%
|
55%
|
| Prime mortgage |
37%
|
38%
|
38%
|
| FHA/VA mortgage |
9%
|
1%
|
7%
|
Does this mean Oregon will continue to outperform national and Californian averages? Maybe, maybe not. But certainly the mix of mortgage products is encouraging.
Source: 2008 State-by-State “Mortgage Market Conditions” Reports, NAR.
Photo by denn, used under Creative Commons license.
April 24th, 2008
To date, excessive foreclosure activity in the Portland metro area has been kept bay, perhaps due to generally stable housing prices and less participation by Oregonians in riskier subprime mortgages than other national housing markets. (Note, I’m not saying we’re immune–just less affected.)
RealtyTrac.com is the default oracle for foreclosure information–showing Oregon at #24 nationally for foreclosure activity with 1,415 in January, up double that of January 2007.
Recently the the Federal Reserve Bank of New York has released an interactive mortgage map for owner-occupied (non-investment) homes, tracking subprime and Alt-A loans.
Users can start with a view of the entire U.S. and drill down to state, county, and zipcode levels to view various risk areas such as percent of low FICO score loans, resetting adjustable rate mortgages, delinquencies, and foreclosures.
These interactive charts show the “regional variation in the condition of securitized, owner-occupied subprime, and alt-A mortgage loans” according to the Mortgage Bankers Association.
You can check out the map here (or click the image). and read more about the Fed’s foreclosure resources for consumers.
To be honest, I did not see a lot of variation within the metro area to note. The data is to be updated monthly, so perhaps we’ll see more activity as ARMs reset and local housing inventory remains high. Perhaps the non-owner occupied properties are the lion’s share of defaults and won’t be reflected on the Fed’s map. A couple disturbing Oregon trends: 35% of subprime loans have had 1 payment late in 12 months, and 41% of subprime ARMS are resetting in 12 months.
(Hat tip to Mike Rohrig and Scott Bridwell.)
April 7th, 2008
The real estate blogosphere is pretty well awash with today’s announcement of Zillow.com’s Mortgage Marketplace, but it may take some time to filter down to the home-shopping consumer. Here’s a quick overview…
You remember Zillow.com, the glossy property valuation site for real estate voyeurs–type in an address, get a Zestimated property value, snoop on neighbor’s houses, and wallow in maps, neighborhood data, etc.
Pretty entertaining, particularly where it came to how Zillow calculated home values (often wildly). They took their early lumps but have gained more market information and improved their methodology to the point now where you can make some broad judgments based on their site’s findings.
But the Mortgage Marketplace potentially offers much more value to the consumer. This service will allow you to anonymously shop for mortgages (for free) from an unlimited number of registered lenders. You can contact the lenders of choice when you’re ready to take your due diligence to the next level.
You can shop for a primary mortgage or home equity line of credit (HELOC). All loan fees will be disclosed upfront. Lenders that don’t perform well get scored as such (ala eBay or Angie’s List). Zillow brings new transparency to what has been a high-pressure, high-stakes part of the home-buying experience.
They’ve done their homework. From the CEO’s blog post:
At Zillow we believe in information transparency. We believe informed consumers are empowered consumers. We believe these informed consumers make better customers for real estate professionals. We believe consumers should be able to shop anonymously, so that they are not approached by a salesperson until they ask for assistance. Finally, we believe in open and free marketplaces.
Borrowers have told us via focus groups and surveys that they spend woefully little time shopping for the mortgage they have – 5 hours. About the same amount of time they spent buying their last computer and nearly half the time they spent shopping for their last car. They also tell us that they want their personal contact information to remain private and that they want to see real rates that are accessible to them, not “teaser” rates that don’t reflect reality. They would also like to shop across their options and be able to do an apples-to-apples comparison of loan quotes from multiple lenders in a standard format. Finally, they’d like to be able to understand the reputation of the broker or lender as seen from the perspective of other borrowers, much like they can judge a seller’s reputation on eBay or a hotel’s reputation on TripAdvisor.
If you’ve tried getting mortgage advice or loan bids through LendingTree and others of their ilk, you probably know what Rich Barton is talking about. And it’s probably why people spend so little time evaluating the financing side of a home purchase. Check it out here.
I’m curious to hear if any of you try the service and what your reactions are. Also, if any loan officers are reading, what is your take? Will you participate?
April 3rd, 2008
A handful of real estate-related (or not) links affecting the Portland market (or not):
Congress Passes Economic Stimulus Package
The President is expected to sign it quickly. Besides tax rebates, the plan also includes higher conforming (i.e. government-insured) loan rates of up to 125% of the area’s median home price. (Current conforming loans are limited to $417,000.)
It’s unknown how much, if any, impact this will have on the local real estate market. Larry Morris of EquiPoint weighs in with his analysis. Perhaps it will have more impact on California buyers, and therefore, free up some California sellers looking to move to Oregon (a traditional source of local real estate activity).
Wall St. Journal covers Portland Teardown
Did you know a Wall Street Journal contributor is writing an ongoing diary of her effort to tear down and build a new home inside the Portland city limits? (I didn’t.) Here’s the latest entry.
Buena Vista Auction - Part Deux
Some of the leftovers from the 1st Buena Vista auction, plus some buildable lots, are going under the gavel again March 8.
Round House
Very cool house in NY, but I would have liked some coverage about the mechanicals that turn the house, and not a shot of the urinal. (Courtesy of the Zillow Blog.)
And, now for something really different…
Frozen in Time
What happens if over 200 people suddenly and instantly freeze in place in the middle of Grand Central Station?
From the same people that brought you the No Pants Subway Ride of 2008.
Technorati Tags: economy, stimulus, real estate, round, house, Portland, Oregon
February 8th, 2008
Another installment of Week Links, an occasional link list of items germane to the Portland real estate market.
Bank of America acquires Countrywide for $4B.
Good or bad? Coverage and analysis by Diana Olick of CNBC at Realty Check, Brian Brady at Bloodhound Blog, and Jillayne Schlicke at Rain City Guide.
Portland Spaces, all about Portland homes and architecture, debuts
Brian Libby at Portland Architecture gets us an inside the velvet ropes at the kickoff party. Secret sauce indeed! I look forward to finding a copy of this publication by Portland Monthly.
Coyotes, peacocks, and poop, oh my!
Construction defects aren’t the only issues confronting condo owners.
Jeff Manning at the Oregonian explains.
And one non real estate-related note:
1st Annual No Pants! on MAX
Yup, in true Keep Portland Weird fashion, don’t be surprised to see mass-transit riders dropping trou’ at 4:30pm this Saturday. Coverage and information for those inclined to de-pants on Metroblogging Portland. Underwear required.
Technorati Tags: Portland, Oregon, real estate, links, stories, mortgage, Countrywide, Bank of America, pants, MAX, magazine
January 11th, 2008
With qualifying guidelines tightening for mortgages, it should be clear by now that safeguarding your credit rating is a top priority if you want to receive the best rates and terms.
Credit protection scams, er, plans abound, offering all manners of credit monitoring at prices as high as $15+ per month. I have no experience with these programs, but have always been a little suspect of their fear-mongering and pricing policies.
Here’s an alternate monitoring method for the more frugal among you:
By federal law, you are entitled to one free credit report each 12 months from each of the three credit reporting bureaus, Experian, TransUnion, and Equifax. However, rather than requesting and reviewing them all at the same time, space your requests to one report from just one bureau per quarter. If you alternate bureaus each time, then voila, you’ve got year-round monitoring for free.
Please note:
The OFFICIAL site for the FREE credit report is www.annualcreditreport.com. Don’t let other derivative URLs that include FREE, ANNUAL, CREDIT and REPORT fool you.
Be aware, that your credit score is NOT a part of your credit report, but it can be obtained for as little as $8 using www.annualcreditreport.com.
New protections are on the way for Oregonians.
In Oregon, a new ID Theft Protection Act (Senate Bill 583) law goes into effect October 1, 2007, whereby you can ‘freeze’ your credit information. This is a common practice in 37 other states, but new for Oregon.
Under a credit freeze, only a very limited group of organizations (existing creditors, property managers, and law enforcement officials to name a few) will have access to your credit report. So, in theory, bad guys won’t be able to get new credit cards or open store accounts using your stolen identity. Note, the freeze can take up to 5 days to go into effect after you request it.
And here’s the hitch: It’ll cost you $10* to set up the freeze with each credit bureau, and then $10 each time you want to temporarily unfreeze your credit to buy a new car, furniture, etc. with a new creditor. Considering that Oregon is the 13th worst state for identity theft, the peace of mind might just be worth the expense and inconvenience.
For more information on the ID Theft Protection Act, visit http://www.dfcs.oregon.gov/id_theft.html or call (503) 947-7492.
Technorati Tags: credit, report, score, identity, theft, FICO, protection, FTC, freeze, Equifax, Experian, TransUnion, mortgage, underwriting, Oregon
* Unless you are a victim of identity theft or have reported the theft of your personal identifying information to a law enforcement agency. Check here for details.
Image by Lazy_Lightening. Used under Creative Commons license.
October 1st, 2007
At least those that are still employed. This new candy bar, featuring ‘Zero carbs. Zero fat. Zero interest in any subprime loans.’ showed up at my office meeting this week:
Courtesy of Naida Paris and Stuart Brown of Valley Mortgage in Newberg, Oregon. Highly recommended mortgage consultants and a steady voice of reason and calm amidst the tempest.
Design by Angeleen Umfleet of Riveting Design & Advertising. Used by permission.
Technorati Tags: credit, crunch, mortgage, financing, homes, houses, candy, parody
September 28th, 2007
This Sunday, The Oregonian published a timely article by Julie Tripp entitled, To buy or to rent?.
Over the past few years, the answer to the rent vs. buy question has unequivocally been BUY. Easy financing, scorching year-over-year appreciation, and a high in-migration rate has meant that most home buyers could bail out or turn their property quickly–often at a profit after just one year.
But the recent sluggish market calls that strategy into question, even in the healthier-than-the-national-average Portland area.
Call me conservative, but even at the peak of the housing boom in Portland, I cautioned buyers that their minimum window of occupancy needed to be at least two years. Capital gains tax could chew into their proceeds, and secondly, the closing costs associated with both the original purchase and the impending sale would devour much of the equity appreciation.
Now, the discussion tends to be more about waiting for deeper price reductions in the market (so as not to catch the falling knife, as one reader put it) or simply renting to avoid all the uncertainty. So, is it better to rent and invest (assuming you’re disciplined!) the down payment plus the monthly difference in payment in say, the stock market?
The New York Times has an elegant calculator that you can use to evaluate the rent vs. buy decision for yourself.
The calculator starts with some basic defaults (monthly rent, % down payment, property taxes, etc.) that you can update as you see fit. Additional factors can be tweaked with the Advanced Settings links. Sliders control the amount of sales appreciation and/or rent increases. For some perspective, Portland’s housing market has appreciated around 8 percent annually since 1973. (You can contact me with questions about other variables specific to Oregon.)
In the Oregonian’s real world example, the break-even was 2.7 years in purely financial terms, which sounds about right to me (in most cases).
In most cases, the decision isn’t purely financially-driven. But the numbers can help ‘justify’ the intangible factors of pride of ownership and creating a sense of community and permanence.
Technorati Tags: Portland, Oregon, rent, rentals, homes, appreciation, investment, purchase, calculator, Oregonian
September 24th, 2007
Lost in the wailing and gnashing of teeth in the national media over foreclosures, mortgage liquidity woes, and slow housing starts is the fact that mortgage rates are low, low, low and Portland’s listing inventories are high, high, high (not sky-high, though).
A recipe for a buyers’ perfect storm? A run on housing inventory? Wellllll, maybe not. But conditions are certainly upbeat in Portland despite mortgage meltdowns and the national real estate picture as a whole.
Buyers with a long-term outlook should be encouraged at the prospects of locking in at wicked-low rates (~6.0% as of today!) and having a wealth of properties to sift through. Sellers, on the other hand, still hearing of the metro area’s average appreciation holding at around 7 or 8 percent are making price reductions, but not in fire-sale mode.
Even if sellers aren’t falling over themselves to unload their property at any cost, the market is as robust as ever and as balanced as it has been in some time.
The most recent Portland State University Center for Real Estate quarterly report comments on the health of the local market:
To summarize, Portland defies the national trend with continued modest appreciation. Although appreciation is much slower then the double digits experienced last year, Portland remains healthy compared to the national housing market. While there were some warning signs during the first quarter of 2007, including increasing days on market and declining number of transactions, the area rebounded in the second quarter. The median price of existing homes increased, the number of transactions increased, and days on market fell—all indicating a recovery. But, how long will it last?
Local homeowners have been relatively shielded from defaults, too. In fact, Oregon is reported to have the nation’s 2nd lowest foreclosure rate (of 0.5 percent) in the 2nd quarter of 2007.
With the good news locally, I expect a bump in activity through the early fall, siphoning off some inventory and perhaps alleviating some fear brought on by national housing anxieties. If there is a segment of the market that will on the sidelines, it will be first-time buyers with less-than-adequate credit.
P.S. By the way, if you haven’t already, lock your mortgage rate today, according to the pros.
Technorati Tags: Portland, Oregon, homes, housing, mortgage, rates, buyers, PSU
Photo by woooooo, used under Creative Commons license.
September 7th, 2007
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