Economic Recovery in Washington State

With all the bad news today about the bleak jobs report sinking the stock market, I thought it would be good to look at the positive things going on. There is an interesting website called www.recovery.wa.gov and shows how much money the Federal Gov't is pumping into the state and how it is being used in each county. CLICK HERE for the Pierce County report. A lot of jobs are being created though the funding of road improvement , clean water improvement, education and numerous other projects. The only way the economy in Washington State is going to improve is through the stabilization of the real estate market and good jobs lead to a more stable market.

Who Can Negotiate a Short Sale?

With so many people attempting to short sale their home, rather than face foreclosure, I thought it would be good to let you know who is legally able to do the negotiation. There are some opportunists out there who a trying to make a quick buck by charging a fee to do the negotiation. Here are the only people legally able to negotiate a short sale, other than the homeowner, in Washington State:

1. An attorney licensed by the Washington State Bar Association.
2. A real estate agent licensed by the State of Washington, though the agent cannot received any compensation above and beyond the regular real estate commission.
3. A loan originator licensed by the State of Washington and working for a company authorized to do so in Washington.

1 in 10 Homeowners Missed a Payment

An article I found today on msnbc.com states that from January to March 2010 one of every ten homeowners missed a mortgage payment.

http://www.msnbc.msn.com/id/37232151/ns/business-real_estate/

I am not at all surprised by this number. It's a national statistic, but it's probably pretty to close to what we are experiencing in the South Sound area. The scary part is that many of these homeowners have traditional conventional loans, not the subprime loans that started the mortgage mess. Part of it is that even though homeowners could technically afford their home they still extended themselves when they bought it or re-fied. The other problem is, of course, there are a lot of people who are just struggling. I see it so often in this business. Hard working people who's hours have been cut back or their own small businesses are barely making it. They are not unemployed, just under employed.

If you are one of these folks and are curious about possible options/solutions check out this page on my CDPE website. It talks about loan modification, reinstatement, short sales, deed in lieu of foreclosure and other options.

http://hosted.cdpe.com/57868/Foreclosure-Solutions.aspx

Gig Harbor Gets a New Park

http://www.thenewstribune.com/2010/05/14/1185939/sehmel-homestead-park-party-set.html

It's been 8 years in the making, but the new park in Rosedale is set to open this weekend. Can't wait to check it out!

Realtor Association Giving Back

Were you one of the thousands of people who donated food through the US Postal Service's food drive Saturday? I have no idea how much food was collected in Pierce County, but it was definitely a lot because I sorted a bunch of it this morning at the Emergency Food Network distribution center. I was one of about 50 volunteers from the Tacoma Pierce County Association of Realtors helped sort all kinds of donated food and we had a great time. There are literally 10's of thousands of donated food items that will need to be sorted over the next week. It's amazing to see the generosity of Pierce County residents. I learned a few things to about what the best food items are to donate and what might not be the best idea. If you plan on donating again next year, here a few things to keep in mind:

1. The bags of collected food are piled up in large crates, so anything in a glass bottle can break easily. We learned this the hard way when we found a bottle of salad dressing had broken in one of the bags and then drenched a bunch of other items. I still smell like Italian dressing.

2. Boxed items, like cereal and pasta, get crushed easily. Put them in a separate donation bag from the canned items and they seems to survive better.

3. If it expired a few weeks ago it's still okay to donate, unless it's baby food. However, if it expired in 2006 please do not donate it. It has to be thrown away so you might as well do it yourself.

4. The food banks cannot accept food that it not commercially packaged. Several people donated bulk food items, like dried beans, that they scooped into plastic bags at the store and then closed with a twist tie. It's a shame to have to throw good food away, but apparently the food banks can accept that.

5. There are at least 5 different kinds of canned lunch meat. I had no idea there were so many. They all looked kind of gross. (I'm a vegetarian.)

6. Pets need food too! You can donate cat and dog food.

A big "Thank You" to all the Realtors, lenders and title reps who donated their time today! You did a great service to your community!

Short Sale vs. Foreclosure

With one in five active Pierce County listings a short sale there are a tremendous amount of people either actively engaged in a short sale or, at least, thinking about one. Ever wonder how a short sale differs from a foreclosure? Here's how each can affect a seller's credit, among other things. Sourced from the Distressed Property Institute, LLC.

Credit Score
Short Sale: Only late payments will show and after sale mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points, if all other payments are being made. A short sale's affect can be as brief as 12-18 months.
Foreclosure: Score may be lowered anywhere from 250 to over 300 points. Typically will affect score for over 3 years.

Credit History
Short Sale: A short sale is not reported on a credit history.
Foreclosure: Will remain as a public record on a person's credit history for 10 years or more.

Security Clearances
Short Sale: Does not challenge most security clearances.
Foreclosure: Foreclosure is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanor or felony. If a homeowner has a foreclosure and is in a position that requires a security clearance in almost all cases clearance will be revoked and position will be terminated.

Current Employment
Short Sale: A short sale is not reported on a credit report and is therefore not a challenge to employment.
Foreclosure: Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure in many cases is ground for immediate reassignment or termination.

Future Employment
Short Sale: A short sale is not reported on a credit report and is therefore not a challenge to employment.
Foreclosure: Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have.

Future Fannie Mae Backed Loan
Short Sale: Eligible 2 years after short sale.
Foreclosure: Ineligible for at least 5 years.

Now for the obligatory disclaimer: Neither I (Cathy Hodges) or The Distressed Property Institute assumes responsibility nor guarantees the accuracy of the above information and are not engaged in the practice of law or give legal advice. But do feel free to give me a call if you have any questions about this. I can answer some questions and let you know when it's time to speak with an attorney.

WaMu Goes to Washington

http://www.latimes.com/business/la-fi-wamu-inquiry13-2010apr13,0,324316.story

The US Senate is finally exposing what everyone in the real estate industry already knew.

It's easy to pin this all on the mortgage lenders, but I think everyone (lenders, buyers, real estate agents) all need to take some responsibility for this.