“The significant problems you face today cannot be solved at the same level of thinking you were at when you created them.” Albert Einstein

The housing market has definitely caused significant problems for some people but is also providing some amazing opportunities for others. Agents aren’t like retailers who wake up one day realizing they have the wrong merchandise on the shelves.

Everyone needs a place to live and whether you rent or buy, you pay for the house you occupy. While the home for sale remains the same, the methods that produce results have to change.

Listing agents are diametrically opposed to the objectives of buyer’s agents. This is not to say that there cannot be a win-win situation but each agent is trying to negotiate the best price and best terms for their client.

Financing can make listings more marketable and structure a transaction to provide the buyer with the cheapest cost of housing. Personal experience is a great teacher but a very expensive way to learn. An expert, like a Residential Finance Consultant can provide information and tools to make better decisions to be able to profit in the current market.

It is the mantra of people who missed a great deal. It’s the theme song of the procrastinator. It’s the refrain that reminds us of the one that got away.

Some people are still beating themselves up because they didn’t recognize the housing bubble was really going to burst. It is impossible to change the past but will they see the signs of the next housing trend?

In the past four years, prices have adjusted with 30% corrections nationally and much more in areas with high percentages of foreclosures. New homes are almost non-existent. Interest rates are slightly above record lows. Consumer goods are skyrocketing; our budget deficit and national debt are staggering and escalating inflation appears certain.

“Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.” states Shawn Tully, Senior Editor at-Large for Fortune magazine in a March 28, 2011 article.

“If I would have known that this was the best buyer’s market ever, I could have taken advantage of the prices and interest rates; I should have fixed my cost of housing for years to come.” Don’t catch yourself saying this. You owe it to yourself and your family to get firsthand information to see what your options really are.

It’s obviously going to be a Herculean task for Congress to balance the budget and reduce the deficit. It’s sort of like the country song lyric that goes “everyone wants to go to Heaven but nobody wants to go now.” It is estimated that the mortgage interest deduction cost the government $100 Billion last year which is why it is a target for cuts.

The Mortgage Interest Deduction has been part of Income Tax laws in this country since 1913. The United States of America is one of the few countries in the world that allow such a deduction. Our goverment has always supported homeownership as is evidenced in the different tax benefits it receives.

• Mortgage interest deuction up to $1,000,000 in acquisition debt on a principal residence and second home
  
• Deduction of interest on Home Equity debt of $100,000 over acquisition debt used for any purpose
  
• Capital gain exclusion on up to $500,000 for married couples filing jointly and $250,000 for single homeowners
  
• Favorable long-term capital gain rates if gain exceeds exclusion limits
  
• Property tax deduction

There are homeowners that would like to have a larger/nicer home but are patiently waiting for the market to improve. A frequently heard objection is that they can’t sell their home for what it is currently worth.

Buying up in a down market is actually advantageous because while you might get less for the home you’re selling, you’re also getting the larger home for less. For instance, if you had to sell a $200,000 home for a 10% discount, you might feel that you left $20,000 on the table. However, buying a $300,000 for the same 10% discount would put you $10,000 ahead on the sale and purchase.

The other obvious matter is that when the mortgage rates increase while you’re waiting for the market to improve, it dramatically increases your cost of housing with higher payments. The cost of housing is affected by price and mortgage rates.

To accurately evaluate your current options, you need facts and assessment tools that will provide you the information to make an informed decision.

A few days ago, I got you started with some tips that, if acted upon now, can go a long way toward helping you and your family avoid the pain and economic damage of a foreclosure on your Pacific Northwest home. We dealt first with what you can do to stay on top of communication with your Pacific NW lender. Now, some things you can do internally to help with finances during this difficult time:

Prioritize Your Spending Habits

With your number priority focused on your health care, maintaining ownership of your Pacific NW home should be your next priority. I strongly recommend you review your finances and see where you can eliminate spending in order to allow you to make your mortgage payment. Identify optional expenses like cable TV, gym memberships, entertainment that you can eliminate. Other options include the delay of payments to your credit cards and other “unsecured” debt at least until you have paid your mortgage.

Leverage Your Assets!

Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income?  Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

Consumer Alert! Avoid Foreclosure Prevention Companies & Organizations!

You shouldn’t pay any fee for foreclosure prevention help! Always apply that money to your mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender on your behalf. While these entities may be legitimate businesses, they will collect a hefty fee from you (often two or three month’s mortgage payment). Know this, a HUD approved housing counselor will provide these services and assistance for FREE, so contact them instead.

Be Aware — Loss Mitigation Scams are in the Pacific NW!

Yes, unscrupulous individuals are on the prowl looking for innocent people to victimize! Please don’t lose your Pacific NW home to a foreclosure recovery scam! If any firm claims they can stop foreclosure on your Pacific NW home immediately, don’t sign anything appointing them to act on your behalf. Unfortunately, many unsuspecting Pacific NW homeowners have signed over the title to their property and making them a renter in their own home! Never sign any legal document without first reading and understanding all the terms and conditions. Securing professional advice first from an attorney, a trusted Pacific NW real estate professional like myself, or a HUD approved housing counselor is a must!

Contact me, Susan Stecher to schedule a discreet conversation how you can possibly avoid foreclosure today! And don’t forget, we’ve compiled a Foreclosure Resource section just for you filled with helpful information on what foreclosure is, and what your options are.

Photo Credit: TheTruthAbout...

This past year has been incredibly challenging for many families, not only for Pacific Northwest homeowners, but for owners throughout the United States. I’m sure you’ve heard the term “Short-Sale” often in recent months, but you may not know the guidelines or implications. Let me walk you through some of the basics.

Short-Sales Defined

In short sales, the lender agrees to let homeowners facing financial difficulties sell their home for less than the mortgage owed on the home. For those facing potential foreclosure, this is often a better alternative, though it does have consequences both for the homeowner’s credit score and their taxes. After other efforts to keep homeowners in the home have been exhausted, this is often a last effort to avoid foreclosure on their Northwest home.

Short-Sale vs. Foreclosure

A short sale, though it does seriously ding the owner’s credit, is usually far less damaging to their score. The owner can qualify for a mortgage from Fannie Mae or Freddie Mac for another home within two years, which is far sooner than if the home had been foreclosed on. Short sales also help protect property values for the rest of the community by keeping the house from falling into disrepair.

Standardization for Short-Sales

With many families struggling during the after-effects of the economic downturn, there was a need for standardization in the process, and the US Treasury has now issued guidelines to streamline the process for homeowners. 75% of American mortgages are now governed by the new rules.

Under the US Treasury’s Foreclosure Alternatives Program, mortgage lenders have 10 business days to respond to a short-sale offer. Usually, a lack of timely response has been one of the reasons short-sales haven’t gone through. Paperwork and documentation are now also standardized, as are deadlines.

Benefits for Homeowners, Benefits for Lenders

Successful short-sales releases the borrower fully from their primary mortgage obligation, and the lender will not pursue a judgment against them. Homeowners can also qualify for $1,500 to offset moving expenses.

Lenders, on the other hand, are able to determine a minimum acceptable offer for the property under US Treasury guidelines. Though the lender still faces a loss on the loan, the loss is usually not as bad as if the property had gone into foreclosure. Through the program, mortgage servicers receive $1,000 for every short-sale they close.

I know it can be easy to feel completely overwhelmed if you’re behind on your payments and you know foreclosure may be looming —  but don’t let yourself become paralyzed.  Usually the worst thing you can do in this situation is nothing.

There is help available! I am a Certified Short-Sale Professional, and I’ve walked other Northwest homeowners through this challenging process. If you have any questions about what a short-sale on your Pacific Northwest home could mean for you and your family, please don’t hesitate to call me!

—Susan

New Whatcom County Rates Reflecting National Foreclosure Trend

According to a new report from RealtyTrac, there was a decrease in Whatcom County home foreclosures last month — a trend that parallels what seems to be happening throughout the nation.

November saw 71 foreclosure filings in Whatcom County, a significant drop from earlier in 2009. Earlier this year, especially during spring and summer, foreclosures averaged 120 homes a month or more.

What’s leading to the decrease in foreclosures?

Several factors are helping to lower the number of families facing foreclosure. RealtyTrac CEO James Saccacio named loan modifications and other foreclosure prevention measures, as well as the extension and expansion of the homebuyer tax credit, as key players in keeping foreclosure numbers down. Still, he cautioned that the real estate industry is not out of the woods yet — until unemployment rates decrease and mortgage lending practices stabilize, foreclosures will remain a reality.

Whatcom County remains resilient

Despite challenges that we’ve seen in the housing market, we remain very fortunate in to live and work in Whatcom County — here’s how our foreclosure rates stack up against the rest of the country:

• Whatcom County: 1 household for every 1,219 received a foreclosure notice.
• Washington State: 1 household in foreclosure for every 835 homes.
• Nationwide: 1 household in foreclosure for every 417 homes.

If your home is at risk of foreclosure, don’t wait to get help!

If you’re at risk of foreclosure on your Bellingham, Fairhaven, Ferndale, Sudden Valley, Blaine, Birch Bay, Anacortes, or Mt. Vernon home, you need the expertise of a Pacific Northwest realtor you can trust.

My team and I can help you find the solution that’s right for you and your family. Don’t walk through this tough situation alone . . . there is assistance available! Go to my website for helpful foreclosure prevention resources, or simply give me a call at (360) 319-4939.

(photo credit: respres)