Help for Borrowers....Home Loan Rescue?

Help for some homeowners is on the horizon. Six of the United State’s largest mortgage companies have voluntarily agreed to work with the Treasury Dept. on Project Lifeline. It’s a broad reaching precept designed to give borrowers who are at least 90 days behind in payments a 30 day grace period in which the lenders will not foreclose on their homes. It costs the borrower nothing, all they have to do is notify their lender of the desire to work out a solution or otherwise reduce the monthly payment. Note that there may a lot of ways for a bank to reduce payments but that it might not necessarily be in the buyers best interests in the long term. I’m just saying. Lenders have a recent history of not making all the terms of their “products” easily understandable to consumers.

This attempt to negotiate with borrowers in trouble is not mandatory. I am slightly sceptical. I’m not saying borrowers shouldn't try to get this help. The program will be watched carefully by the Feds, or so they say, to make sure the program is working…whatever that means.

So……I'm of mixed emotions on this one. On the one hand why shouldn't borrowers who are already in the jaws of foreclosure get a chance to fight for their home? It's bad enough that so many have already gone down the toilet.....and that makes for a lot of bad credit reports. Remember these are the consumers the banks and credit card co's and store and car credit lenders depend on. Down in flames. No more new earnings from them for the lenders...these folks will be paying cash as they go, and the creditors will have to be satisfied with getting paid from old debts that linger after the borrower implodes. They won't always go away. But dwindling new business for banks is not something shareholders want to hear.

On the other hand will this move to negotiate between banks and borrowers just stretch out the misery? A certain percentage of these folks are buried in other kinds of credit they got sold on by Mad Ave. "why wait for what you want when we will give you 18 different credit cards, and wait for you to fall behind on payments so we can jack your rate up to 29% apr." These borrowers may get help with their home loan, but it probably won't be enough. You'll see creditors putting liens on those very homes. And filing other judgements against the people themselves. Really anyone who can sell and get out from under the increased payments and other debt, should do so and start over, even if that means taking a year to clean up credit and save. (Think about this: so many employers these days do not run drug or background checks....they run a credit check. The thinking there is that if a person cannot manage their finances, they will not dependable in the workplace. So all this bad business with bad credit will also eat into workers’ potential to find a better job, or replace a lost job. Insidious, huh?)


Some people will tell you that Project Lifeline is a bad idea and that it will only help a very few. Many would rather see the quick deep cut instead of waiting for the anesthetic to start working. They just want to see the market moving, even if it means at dropped values. But when I think this matter through I come to the conclusion there are a few more dominoes to consider. If all these ill-fated borrowers don't get a grace period to work out a plan, how many homes will flood the market all at once?

Project Lifeline will help some borrowers and thank God for that. But I foresee s good number going into default regardless of the reprieve...there they will be in a dingy apt. (if they can rent one with bad credit, ever think of that? Families on the street because of a credit score?). They’ll be going to work every day to pay debts that will linger for years. Since the bankruptcy laws have changed.....there will not be much debt relief unless you are also unfortunate or lucky enough to have huge medical debt. Considering that during the early 2000’s “Home ownership for all Americans” was the hue and cry out of DC, mentioned in so many speeches everyone believed it could be real, it is really shameful how so many have been brought to their knees financially.

And this problem is really every American's problem. With a credit crunch and the rising cost of living, a great many people have little or no disposable income. If your job depends on (ultimately) selling a service or product in any way shape or form, your job, and by default, your home could be at risk, too. So all of us should do all we can to encourage our elected officials to make moves to legislate relief and reform, and assist those trying to renegotiate their mortgage AND credit card debt.

Oregon Real Estate Report Dec. 2007

It’s been a changing year for real estate in the Portland metro area. We’ve moved away from wildly speculative asking prices, and appreciation has held a healthy pace of 6.7% (from Oct 31, 2006 to Oct. 31, 2007). Add that to the double digit appreciation of the previous few years, and you can see your home is still a wise investment. AND you have equity that is still growing.

The Portland area outshines the nation in real estate values and sales. Due to national stories on the nightly news about other cities, many Portland viewers believe our local market is in bad condition. But that is simply not true. There is great financing available, hovering between 5.5% and 6.1% in the first week of Dec. 2007, for a 30 yr fixed or VA. Call or email me any time….I get daily mortgage rates emailed to me, and I will gladly pass them on to you. Asking prices are competitive, so there are some good buys and room to negotiate on your next home. If you’ve owned your home for a few years, you have plenty of equity, and it’s still growing.

The latest news from Washington DC, is that there will be legislation soon that will freeze those ARM loan teaser interest rates for several years….how long, is being discussed, but they are saying 5-7 years. This will give borrowers with ARMs about to have a higher interest rate go into effect, a chance to build equity and improve credit, refinance or sell and move up.

If you have a need for more space, to downsize, or move closer to work this is as good a time as any. Real estate has always, through history, been a great investment, and with low interest rates, plenty of equity and asking prices in line with true market value, there is no reason to wait for what you really want in a home. In fact it is an ideal time to make a move.

If you have any questions about real estate, current market values, if you’d like to see if there are any “really good deals” for the sort of home you’d like to move up to, contact me and I’ll help you make your real estate work for your future.


Mary A. Tinkler – Real Estate Broker
Shattuck & Co. Real Estate, Inc.
P.O. Box 2261 Gresham, OR 97030
Direct: 503-663-6502 – Office: 503-663-2336
Email: tinklerm@msn.com
http://marytinkler.point2agent.com
http:////marytinkler.blogspot.com


Merry Christmas & Happy New Year

Damascus, Oregon... City's very own Measure 37?

It looks like some of the citizens of the new City of Damascus, Oregon are making moves to create their own Measure 37 for the area....which must be new zoning no later than Novemeber 2008.

I thought you would be interested in the news from Damascus....Citizen Initiative 06-03 will be on the March '08 ballot. In short it is a local version of Measure 37...which would apply to the Damascus /Boring concept Plan area, and require that the city compensate land owners for lost value due to the city's actions or new zoning. It would be retroactive to Jan. 1 2006.

There are a couple of other measures mentioned here. One would give voters the right to control tax hikes, and another would ban the city from condemning private land and reselling it to another private party without first offering it to the original owner.

I think we can expect much discussion on these proposed intitiatives.For questions or assistance with your real estate needs please call me at 503-663-6502.


Mary A. Tinkler - Real Estate Broker
Shattuck & Co. Real Estate, Inc.
http://marytinker.point2agent.com

Mary A. Tinkler - Real Estate Broker, Shattuck & Co. Real Estate Inc. 503-663-6502

 

Portland Oregon Housing Prices

So what about Portland Oregon’s housing market these days? Well the lenders have tightened up their guidelines….none of those zero down loans and poor credit risk borrowers. But for those with decent credit and especially those who’ve owned their home long enough to gain some established (not speculative) equity, these people are looking good.

Asking prices are going down a bit….no more of those sky’s-the-limit speculations on pricing. Wages somewhat set the limits for what the average homebuyer can afford. But compared to other parts of the country, we are looking good in Portland...as recent statistics reported in the national news. Values are still pretty darn good if you’ve been in your house a while…..just think about the equity gained in the past 5 years….would you have imagined that gain 5 years ago?

And the good news is there are some bargains to be had in move-up housing. Many of those country homes are really coming down in price. There will always be some sellers who must sell, job transfers, people downsizing either the house or their debt load. So if you’d really like a bigger (or smaller) home…or a new area….NOW is a great time to make the move.

I’m telling buyers to not hesitate to offer less than asking prices on properties that have been lingering on the market….properties that a Comparative Market Analysis indicate are overpriced for the current market.

AND there are some great investment/starter/rental homes available for well under $200,000….you couldn’t find a home under $200K two years ago.

SUBDIVISION LAND PRICES..... WHY VALUE VARIES

Mary A. Tinkler - Real Estate Broker
Shattuck & Co. Real Estate, Inc.
Gresham, Oregon
tinklerm@msn.com

What does sub-dividable land sell for? It’s a question I hear so often I sat down again and looked back in our RMLS data base to search for parcels which are already zoned for some sort of medium to high density residential zoning, which have sold in the past 18 months.

Because of the Urban Growth Boundary, there has not been much subdivision land available. There is a very broad range of already-zoned, sold land prices…..from $223,000 per acre to $465,000 per acre. There are variables that play into valuing land that may be developed. How close is it to existing water and sewer services? Those parcels closest to existing services will sell and be developed first. Others may have to wait for new services to be brought in. What is the topography…will it be difficult to access and grade? How dense is the zoning, what sort of development fees and permits will be required? How much road improvement will be required? What is the demand for the type of dwelling units zoning calls for? Is the parcel in an area perceived to be desirable for schools, shopping, commute time? Are there environmental considerations that will affect the feasibility of a developer’s plan? Insurance coverage for development projects, and all parties involved is also a major expense that must be factored into a business plan.


Keeping track of what has sold, and for how much, is something I do daily, and it was time for a monthly overview, but this time I dug a little deeper and saw evidence of a trend that I found disturbing. Some sellers seem to have sold considerably lower than other comparable properties! Real estate brokers are required by law to keep a written record of the sold and comparable properties they studied in order to recommend a logical and salable asking price for the property of any seller they contract with, or attempt to contract with. We have a fiduciary duty to give our clients, sellers or buyers, the highest standard of care, which includes advising them on a fair listing price. The laws of agency, whereby we legally advocate a client’s best interest, are quite clear. Sellers should always ask their real estate representative to provide written data on similar sold properties.

In Damascus, there are already sellers and buyers speculating on future development. I believe more parcels would have sold within the UGB, were it not for the fact that banks will not lend on land priced with future zoning in mind, no matter how far along the rezoning process is. If new zoning adheres somewhat to the Concept Plan designed by Clackamas County, there are some bargains to be had on land in the UGB right now……parcels that will gain value once the zoning is in place. But, as a rule, even the biggest developer/builders do not use their own money to purchase, and they cannot get bank funding for speculative projects. As soon as the City of Damascus puts some sort of new zoning in place, the banks will show up with money to lend.

And keep in mind, a smaller acre property may not be very desirable as subdivision land unless the developer can acquire the surrounding parcels….enough land to make his or her expenses and fees for development cost effective. Especially if the developer will have to pick up the costs for bringing services to the property, possibly road improvement as well. The developer needs to build enough housing to absorb the cost of infrastructure.


Not all properties will gain value with rezoning. Damascus has a fair share of well-sited and lovely up-scale homes on under 5 acre parcels that due to location and desirability as “gentleman farms”…..are worth as much or more now, as they will be when the new zoning first takes effect. I recently compiled a Comparable Market Analysis for a 2.2 acre parcel with an immaculate and appealing 4 bedroom home and a large shop….all nicely sited. This home is so desirable it has about the same value as a same sized parcel of bare land which is already zoned for development. In my estimation it would be a shame to destroy the existing home and amenities; there will always be a demand for close-in homes with a bit of land.


So if you are planning to market your Damascus land when rezoning take place, do make sure that your real estate broker shows you comparable sales, explains variables and adjustments and gives you information to back up any price he or she recommends for listing your property. You won’t get a sale if you price higher than comparable parcels, BUT you definitely do not want to price too low!

Mary A. Tinkler - Real Estate Broker
Gresham, Oregon
tinklerm@msn.com

Smart Growth.....how other cities do it!

We are not alone!

Much of the country is suffering from ‘growing pains’. There are cities across the nation that have met the challenge, and found the answers.
Have you checked out the http://www.smartgrowthamerica.org/ website?

In the past few years we’ve had studies and panels and commissions that have researched what, where, and how to develop the land inside the various Urban Growth Boundaries. We have spent a small fortune trying to figure out how to get started, as the clock ticks on. Meeting all the goals and targets set forth by the various entities involved begins to seem like an insurmountable task. How can we mesh residential, economic, transportation and ecological objectives so that the fine quality of environmentally friendly life we aspire to can be achieved? It can and has been done!

The fact is that communities all over the country…all over the world, are wrestling with the same challenges we face in attempting to build and develop in an entirely new way.
The result is that some cities have already addressed the issues we now face, made their starts, learned a few things along the way, and become part of a blossoming organization called Smart Growth America. Their conglomerate bundle of affiliated groups, and a few government agencies, form the Smart Growth Network (SGN), and Smart Growth America’s website is filled with ideas, case studies, resources, and information on design competitions, and grant programs.

There are numerous competitions, grants, and awards programs available for all aspects of achieving sustainable, balanced, and environmentally kind growth and development…. out there for the taking…and the knowledge. Can’t our UGB planners jump on this bandwagon?

I recommend you read through their list of Smart Growth Principals, and Issues. You’ll find they sound exactly like what citizens of our UGB’s are worried about. SmartGrowth.org keeps track of projects, programs and methods…. and assists in propelling the multi-layered concepts of sustainable, non-destructive development practices.

Santa Fe, NM held a Design Idea Competition, awarding $8,000 in prizes (plus the esteem and recognition!) for winning entries who sumitted innovative earth friendly ideas for urban renewal and expansion. Santa Fe intends to use some of these fresh insights from the competition results. (Seems like an inexpensive way to go, when compared with the cost of some of the prolonged studies, and salaries we’ve paid for in the past few years, doesn’t it?) If Metro really wants a “New Look”, maybe they should try something like this!

The American Institute of Architects has given numerous awards for outstanding green building developments to a number of completed projects & their designers, and are deeply vested in the future of green building & development.

I really like this one: “Aging in Place”…..a deep re-thinking of how to cope with, and give consideration to the rich resource of our aging population…Boomers if you will. The goal is to preserve quality of life and find cost effective ways to meet the needs of seniors, so that they may stay in their communities as they age…retaining the social, civic, and economic contributions of older adults. Imagine knowing that you will be able remain in your community as a contributing and respected member, residing in a fully legal accessory dwelling or apartment on a family member’s property, or affordable specially designed semi-assisted living units, where you can choose the level of support and independence you desire!

Santa Cruz, CA has made steps to allow accessory dwellings on land owners’ properties….and not just for seniors, but for service workers, police, civil workers and teachers who have been priced out of the housing market in recent years. Though some residents in our area would like the new UGB’s to be as elite as Santa Cruz became, you can see, in the long run, the whole community suffers. Balance and diversity is a must. Bend is a prime example of how escalating values can price service and support workers out of the area, forcing vital skilled employees to relocate when they can’t afford to live in the town they work in.

And the EPA is seeking those with “green building knowledge” to help set up model courses of study for communities, colleges and universities. The aim is to fast-track the incorporation of accredited classes dealing with green practices and smart growth…a hands-on, applied college course of study, with a forward looking view on how we can be responsible stewards of the earth.

For an impressive collection of ideas and resources regarding urban growth go to www.smartgrowthamerica.org , and while you are there download their free booklet called “This is Smart Growth”.

“The Smart Growth Network (SGN) and the International City/County Management Association (ICMA) are pleased to announce the availability of This Is Smart Growth. This new publication illustrates how communities can turn their visions, values, and aspirations into reality, using smart growth techniques to improve the quality of development. Thirty-two national organizations, representing the diverse interests of the SGN, have approved This Is Smart Growth.” Direct link to booklet: http://www.smartgrowthonlineaudio.org/pdf/TISG_2006_8-5x14.pdf

This just might help put your mind at ease about how future development in our area will go forward. It still seems however, that for us the hardest part is getting started.

Mary A. Tinkler - Real Estate Broker
Shattuck & Co. Real Estate, Inc.
Gresham, Oregon 503-663-6502
www,marytinkler.com