Wednesday, July 30, 2008

Bush signs housing bill to provide mortgage relief

By JENNIFER LOVEN - Associated Press Writer

President Bush on Wednesday signed a massive housing bill intended to provide mortgage relief for 400,000 struggling homeowners and stabilize financial markets.

Bush signed the bill without any fanfare or signing ceremony, affixing his signature to the measure he once threatened to veto, in the Oval Office in the early morning hours. He was surrounded by top administration officials, including Treasury Secretary Henry Paulson and Housing Secretary Steve Preston.

"We look forward to put in place new authorities to improve confidence and stability in markets," White House spokesman Tony Fratto said. He said that the Federal Housing Administration would begin right away to implement new policies "intended to keep more deserving American families in their homes."

The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.

It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac and tightens controls over the two government-sponsored businesses.

The House passed the bill a week ago; the Senate voted Saturday to send it to the president.
Bush didn't like the version emerging from Congress, and initially said he would veto it, particularly over a provision containing $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers.

But he withdrew that threat early last week, saying hurting homeowners could not wait - and even blaming the Democratic Congress' delays in action for forcing an imperfect solution.
Meanwhile, many Republicans, particularly those from areas hit hardest by housing woes, were eager to get behind a housing rescue as they looked ahead to tough re-election contests.

Paulson's request for the emergency power to rescue Fannie Mae and Freddie Mac helped push through the measure. So did the creation of a regulator with stronger reins on the government-sponsored companies, as Republicans long have sought.

Democrats won cherished priorities in the bargain: the aid for homeowners, a permanent affordable housing fund financed by Fannie Mae and Freddie Mac, and the neighborhood grants.
The bill takes several approaches to curing the ailing housing market.

It aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration.

The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan. Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure.

The plan also is designed to relieve a broader credit crunch that has taken hold because of rising defaults and falling home values. To free up safer and more affordable mortgage credit, the bill permanently would increase to $625,000 the size of home loans that Fannie Mae and Freddie Mac can buy and the FHA can insure. They also could buy and back mortgages 15 percent higher than the median home price in certain areas.

It goes far beyond addressing the current crisis, however.

The legislation overhauls the Depression-era FHA. It requires lenders to show how high a borrower's payment could get under the terms of his mortgage. It provides $180 million in pre-foreclosure counseling for struggling homeowners.

The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new "consultative" role overseeing the companies.

The measure includes $15 billion in tax cuts, including a significant expansion of the low-income housing tax credit and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009.

Democratic leaders, recognizing that the measure could be one of the last items to become law during what's left of their abbreviated election-year schedule, tacked on an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.

Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.

Friday, July 25, 2008

How the New Housing Law Affects You

The landmark measure has something for struggling homeowners, first-time buyers, and even seniors

By Luke Mullins

That wasn't so hard, was it? It only took the worst real estate slump in a generation, an economy grinding to a department-of-motor-vehicles pace, and a crisis of confidence in the heart of the mortgage finance system to get the gigantic housing bill to the finish line. The legislation, which has been signed into law by President Bush, is hugely ambitious, seeking at once to stem the tide of home foreclosures and restore confidence in mortgage finance giants Fannie Mae and Freddie Mac. To critics, it's a bailout. To supporters, it's a rescue. But no matter what you call it, it is the most sweeping housing measure in decades. Here's how it will affect you:

Struggling homeowners: A key provision of the law would allow homeowners who can't make their mortgage payments to refinance into more affordable, fixed-rate loans insured by the federal government. Under the plan, the Federal Housing Administration can guarantee up to $300 billion of such loans, enough to modify an estimated 400,000 mortgages. To participate, lenders would have to write down the original loan balance, taking a financial hit in the process.

"It's a help, but it's modest in comparison to the number of homeowners who are facing default and foreclosure," says Mark Zandi, chief economist of Moody's Zandi says the nation could face nearly 3 million first-mortgage defaults this year. Of those, as many as 1.5 million mortgage holders could lose their homes. "That 400,000 [of loans that will be modified under the law] is over the life of the program," Zandi says. "So I don't know if that provides much relief in 2008."

First-time home buyers: The housing law would also benefit first-time home buyers through a tax credit worth as much as $7,500. The credit, however, isn't a grant, but essentially an interest-free loan that must be paid back over 15 years. The outstanding balance must be paid back to the government if the property is sold for more than the original purchase price and the tax credit hasn't been fully repaid. James Glassman, a senior economist at JPMorgan Chase, says the tax credit is unlikely to increase demand from first-time home buyers all by itself. But when coupled with other factors—such as falling home prices—"it's just one more thing that helps," Glassman says.

Seniors: Although it has received little fanfare, a provision in the law that increases the limit on certain reverse mortgages stands to benefit senior citizens. A reverse mortgage is a type of loan—collateralized by a house—available to homeowners ages 62 and up. The loan allows homeowners to obtain monthly payments or a lump sum of cash based on the value of the property. The legislation boosts the cap on the Federal Housing Administration reverse mortgage program to as high as $625,000. "That's a benefit because it gives seniors the ability to access more equity out of their homes," says Darryl Hicks, spokesman for the National Reverse Mortgage Lenders Association.

Low-income Americans. The legislation also creates a permanent housing trust fund to benefit low-income housing. "The funds from the trust fund would be allocated to the states, which would use the money to produce and preserve affordable housing focused on the lowest-income households," says Linda Couch of the National Low Income Housing Coalition. "Low-income advocates see that section as a real victory." Couch says the fund could have as much as $600 million by 2011 from its original funding sources, Fannie and Freddie.

Prospective home buyers: The law could affect house hunters in a couple of ways:

Home prices: Although helpful, the legislation is unlikely to reverse the nationwide decline in home prices in the near term. "The impact will be more of stopping or slowing the hemorrhaging in the housing market rather than sparking some type of strong recovery," says Michael Darda, chief economist at MKM Partners. Still, in a real estate market with a glut of unsold homes, every little bit helps.

Saturday, July 19, 2008

New Listing - Beautiful Custom Woodinville Home - Priced to Sell! $675,000

23520 NE 185th Place, Woodinville
Priced $100,000 Below Tax Assessed Value
4 Bed / 2.5 Bath Custom Built Home on .99 Acres

Wednesday, July 16, 2008

Brooklyn's Smallest House

Near the intersection of Ave T and Van Sicklen is Brooklyn 's smallest house.

Occupying what used to be a driveway, it's a one bedroom, one bathroom home that sits on a parcel of land 7.25 feet wide and 113.67 feet long. It's interior area is just under 300 square feet.
The living room, looking towards the front of the house... and in the kitchen despite the small space, they've managed to fit a washer and dryer into the place.
The bedroom comes with a Murphy bed, which is a necessity in such a space.
There is also patio space in the back.
Here are the home's 'Listed Features':
* Completely redone top-to-bottom, front-to-back!
* Tumbled stone entrance walk
* Renovated Bath
* Renovated Kitchen with new stove, new cabinets and new stacked washer/dryer
* Bedroom with Murph y Bed + 'Built-ins' ... (doubles as a den)!
* Walkout to fenced patio
* 100 Amp service
* 2 Satellite Dishes and Receiver
* Window Air Conditioner Available
PRICE: $479,900