Seattle Housing Buzz

Washington State families facing foreclosure, seeking affordable rental housing, or hoping to buy their first home will have a greater opportunity to find housing, or keep the homes they have, because of $297,235 in housing counseling grants announced on Wednesday by the U.S. Department of Housing and Urban Development.

Solid Ground of Seattle will receive $49,402, the Spokane Neighborhood Action Program will receive $49,716, the Community Housing Resource Center of Vancouver will receive $32,236, and the Washington State Housing Finance Commission will receive $166,881 to provide counseling to help Washington families “navigate” the homebuying and homeowning processes. Last year HUD awarded $207,366 to housing counseling agencies in Washington.

“Now, more than ever, it is crucial that Americans understand how to manage their money, navigate the homebuying process, and secure their financial future.” said HUD Secretary Shaun Donovan. “This critical funding will help counseling organizations continue to assist families in making more informed choices before they buy a home and counsel families facing foreclosure.”

Housing counseling grants will assist families in becoming first-time homeowners and remaining homeowners after their purchase. HUD-approved counseling agencies not only provide homeownership counseling, but also offer financial literacy training to renters and homeless individuals and families.

The funding is part of $60 million in housing counseling grants awarded nationwide.

National and regional agencies distribute much of HUD’s housing counseling grant funding to community-based grassroots organizations that provide advice and guidance to low- and moderate-income families seeking to improve their housing conditions. In addition, these larger organizations help improve the quality of housing counseling services and enhance coordination among other counseling providers.

Counseling agencies will use $8 million to help assist senior citizens seeking reverse mortgages or Home Equity Conversion Mortgages (HECM). These agencies will provide counseling for the rapidly growing number of elderly homeowners who seek to convert equity in their homes into income that can be used to pay for home improvements, medical costs, and other living expenses.

The organizations that provide housing counseling services help people become or remain homeowners or find rental housing, and assist homeless persons in finding the transitional housing they need to move toward a permanent place to live. Grant recipients also help homebuyers and homeowners realistically evaluate their readiness for a home purchase, understand their financing and downpayment options, and navigate what can be an extremely confusing and difficult process.

In addition, grantees help combat predatory lending by helping unwary borrowers review their loan documentation, and avoid unreasonably high interest rates, inflated appraisals, unaffordable repayment terms, and other conditions that can result in a loss of equity, increased debt, default, and even foreclosure. Likewise, foreclosure prevention counseling helps homeowners facing delinquency or default employ strategies, including expense reduction, negotiation with lenders and loan servicers, and loss mitigation, to avoid foreclosure. With foreclosures at critical levels nationwide, these services are more important than ever.

HUD awards annual grants under the housing counseling program through a competitive process. Organizations that apply for grants must be HUD-approved and are subject to biennial performance reviews to maintain their HUD-approved status.

Adapted from a HUD press release.

Tags: CHRC, Foreclosure, Housing Counseling, HUD, SNAP, Solid Ground, WSHRC

President Obama’s $75 billion Homeowner Affordability and Stability Plan is intended help struggling homeowners by providing incentives to lenders, servicers, mortgage holders and borrowers to help modify mortgage loans.

More on the plan:

Wall Street Journal Blog: FAQ: Who Qualifies for Housing Bailout?

Washington Post: How the Program Would Work

CNN Money: Mortgage help: Do you qualify?

Bloomberg: Mortgage Plan Effect May Be Limited, Analysts Say

US News: The Obama Housing Fix: 5 Things to Know

ABC News: Obama’s Housing Rescue Plan Will Slow Home Value Slide as Early as March

CBS News: Who’s Eligible For Obama’s Mortgage Plan?

US Today: Millions could get help, but is foreclosure plan fair?

Time: Will President Obama’s New Housing Plan Work?

Tags: Foreclosure plan, Homeowner Affordability and Stability Plan

Recently, the 2009 conforming, jumbo conforming and FHA loan limits were announced.

Effective January 1, 2009 (1-Unit properties in King, Snohomish and Pierce Counties):

• Conforming loan limit: $417,000, unchanged for the 4th consecutive year
• Jumbo conforming loan limit: $506,000, currently $567,500 as part of the economic stimulus package which expires December 31, 2008
• FHA loan limit: $506,000, currently $567,500 as part of the economic stimulus package which expires December 31, 2008

The net result is that this will have, essentially, little impact except for buyers within the $506,000 to $567,500 price range. You’ll have till the end of the year to take advantage of the jumbo conforming loan rates and FHA loan programs.

In respects to FHA, effective January 1, 2009, the down payment amount will increase from 3% to 3.5%. So, there is a little incentive to save on upfront cash by buying before December 31st.

The $7,500 first time home buyer credit (aka interest-free loan) is still available through July 1, 2009.

Tags: conforming loan limit, FHA, FHA loan limit, FHA Loans, First Time home buyers credit

Countrywide Mortgage hasn’t had a particularly good year and now it’s just gotten worse. Today, the states of California and Illinois announced they are suing Countrywide over predatory lending practices. And, Washington state is seeking to revoke Countrywide’s license, impose a $1 million penalty and halt the lender from writing mortgage loans in the state.

Tags: Countrywide

From Realtor Magazine:

For the week ending Oct. 5, the 30-year fixed mortgage rate averaged 6.30 percent, the lowest level since the week of March 2, when it averaged 6.24 percent, Freddie Mac reports.

“Mortgage rates fell to a six-month low this past week, and, not surprisingly, home refinancing rose 18 percent last week, accounting for almost half of all mortgage applications,” say Frank Nothaft, Freddie Mac vice president and chief economist. “This is due both to the recent decline in mortgage rates and to home owners who are refinancing ARMs rather than waiting for them to reset in the future when rates may be higher.”

The 15-year fixed rate this week averaged 5.98 percent with an average 0.4 point, unchanged from last week. A year ago, the 15-year rate averaged 5.54 percent. This is the lowest the 15-year rate has been since the week ending March 23, 2006, when it averaged 5.97 percent.

Even though rates have fallen recently, housing activity continues to slow, Nothaft says. That has led Federal Reserve Chairman Ben Bernanke to forecast the national economic rate of growth to lose up to one full percentage point in the last half of this year.

Last night at the Benaroya Hall was the inaugural Downtown Seattle Realtor Symposium + New Construction Condo Showcase. Sponsored/organized primarily by Urban Condominiums and Realogics, the event featured presentations & panel discussions by representatives the Seattle Times, Windermere Onsite, HomeStone Mortgage, Weber+Thomson, Downtown Seattle Association, The Justen Company, Gardner-Johnson and a few others. The Seattle-PI wrote an article about the event titled Booming development set to change Seattle’s look.

The reception featuring free wine and appetizers by Wolfgang Puck, provided Realtors, investors, developers and media an opportunity to mingle and view models of the various downtown projects including a 3-D model of downtown showing where the new projects will be located (similar to Vulcan’s South Lake Union model).

The Condo Showcase presentation was a bit bland in that very little information about the new projects were provided. Mainly, they just mentioned the expected construction and occupancy dates, location and number of units. Some of the speakers detailed design and building features. Most were tight-lipped or simply stated…”go to our website”. For such a hyped event, it was a bit anti-climactic.

There were bright spots and I found some of the speakers and topics about the future housing market for the downtown area fascinating. Keep in mind, the presenters are from the real estate, building, financing and marketing industries so naturally the view points may be a tad biased.

Where to Build?

A vast majority of the future projects will be constucted in the Midtown and Denny Triangle areas north of the downtown core. Available land and changes to the city’s zoning make the northend attractive to developers. Realogics and Weber+Thomson presented a nifty 3-D animation of the area and the Seattle-PI posted it on their website (note, it’s a large PDF file).

In the Year 2010

One speaker I found to be the most objective and knowledgeable was Matthew Gardner of Gardner-Johnson. Mr. Gardner whose background is economics, discussed the future housing outlook for the downtown areas and interest rates. By 2010 most development experts are asserting nearly 10,000 new housing units will be built in the downtown, Midtown, Belltown and Denny Triangle areas. Gardner provided a more realistic number of approximately 6,500 to 6,800 units will be added, noting there are forces that may constrict construction. These forces include rising labor and land costs, consumption of building materials (post-Katrina rebuilding and China’s rise) and lack of available labor and cranes. Apparently, there is a finite number of cranes and Seattle is in short supply.

Gardner touched on the “bubble” topic as well. He mentioned that Seattle should be able to absorb about 2,000 to 2,400 new units per year, but with the external factors noted above, housing supply will be constrained with only about 1,500 units available per year for the next 4-5 years. This combined with job growth and decrease of short term interest rates that’ll reduce rates on 3 and 5 year ARMS, Gardner predicts the downtown housing market will remain strong.

(On the job market, there are some shifting already going on, that will increase workers in the downtown core. Washington Mutual is completing it’s new office tower (retaining employees in downtown), Starbucks is building a new facility, and Safeco is relocating over 1,000 employees from the U-District & Eastide to downtown. Also, Amgen is adding 550,000 sq ft to it’s Pier 89 site potentially doubling it’s workforce).

Mortgage Rates - Where art thou going?

Another interesting speaker was Keith Tibbles of HomeStone Mortgage. Tibbles mentioned that on June 28th the Federal Reserve Interest Rate is likely to rise another .25% to 5.25%. Which, theoretically doesn’t bode well for housing sales. He did explain that the past 4 Fed cycles lasted 9 months each and at the end of those cycles, mortgage rates were cut. He suggested we are now overdue for a mortgage rate adjustment.

He also spoke about the yield curve inversion, stating that when long-term interest drops below the short-term rate, the economy tends to slow down, thus sparking the Feds to adjust rates to stimulate the economy. This writer doesn’t know very much about yield curve inversion, but a brief tour of Google suggests this is an oft debated topic.