Saturday, October 2, 2010

OCTOBER 2-3, 2010
10:00a - 6:00p Daily

Thursday, May 20, 2010

Sunday, May 2, 2010

Friday, April 30, 2010

PENDING in Lake Stevens - Congratulations Tamera & John!!

Another client's home just went PENDING!
Just hours a couple hours before the $8000 tax credit expires - WOW!

PENDING in Lynnwood - Congratulations Jaimee!

My client's listing went PENDING
just in time for the buyer to receive the tax credit!
Now time to find her a new home!!

RENTED in Snohomish - Congratulations Gerald!

In the desirable community of Highlands East!!
For more information about rentals that are available visit our website:

PENDING in Burien - Congratulations Sophorn!

This Bank Owned Property was a FANTASTIC deal!

PENDING in Granite Falls - Congratulations Mario & Josefina!

Another Home PENDING just in time
for First Time Home Buyer Tax Credit!

PENDING in Lake Stevens - Congratulations Josh & Tonia!!

Great 2 Bedroom Condo located in the heart of Lake Stevens

and just in time for the First Time Home Buyer Tax Credit!

Sunday, April 25, 2010

CLOSED in Renton - Congratulations Chance!

My client got a GREAT price on this Wonderful Starter 4 Bedroom Home!!
Another SHORT SALE Closed!
I do believe the market is picking up...

Seattle Times - Neighborhood of the Week: Tukwila

Tukwila back on fast track with light-rail link

Tukwila, at the crossroads of rivers, highways and railways, has been a hub of commerce since the 1860s, when boats on the Duwamish River ferried coal from local mines on a two-day journey to Seattle.

That trip now takes 37 minutes from the new Tukwila light-rail station near the airport.

That station (officially known as the Tukwila International Boulevard Station) has increased homebuyer interest in the neighborhood surrounding the towering structure.

"The last two homes I've sold were because of the light-rail station right up the street," says Windermere Real Estate agent Marilyn Ferris.

Housing in the neighborhood around the station is "eclectic and affordable," Ferris says. "There's a lot of diversity and multigenerational households," she says, citing the recent sale of a "really cute" 1,700 square-foot home to an extended family for $245,000.

"They don't drive and can walk to the bus, light-rail station and stores, and they're thrilled to be homeowners," Ferris says.

The neighborhood features some of the most affordable houses in the Seattle area. Recently a three-bedroom, two-bath, 1,768-square-foot house three blocks from the station was listed for $159,999 while a new, custom-looking four-bedroom, 2,590-square-foot house with coffered ceilings sold for $366,000.

Prices across Tukwila are similarly affordable. The median price of 12 single-family houses sold in Tukwila during February was $285,000, according to figures compiled by Seattle-based The median price of 11 condos sold during February in Tukwila was $132,000, according to Zillow. - Click Here to View Entire Article

Friday, April 23, 2010

New-home sales rise fastest in 47 years

NEW YORK ( -- New home sales improved in March at the fastest single-month rate in 47 years, according to a government report released Friday, as buyers snatched up properties ahead of the tax credit that's set to expire.

New-home sales rose 26.9% to a seasonally adjusted annual rate of 411,000 last month, compared to an upwardly revised annual rate of 324,000 in February, the Census Bureau said. The gain snapped a four-month streak of declines.

A consensus of economists surveyed by expected March sales to rise to an annual rate of 330,000.

The March sales were the strongest since last July, and the percentage gain was the biggest on a month-over-month basis since a 31% gain in March 1963.

New-home sales spiked in every region of the United States. The South saw the biggest jump in new home sales, up 43.5%, while the Northeast region saw sales climb 35.7%. The West and Midwest regions both saw single-digit percentage growth, with the West up 6% and the Midwest up 4%.

The Census Bureau data followed a report from the National Association of Realtors on Thursday that showed existing home sales soared nearly 7% in March, as new homebuyers raced to buy up properties before a tax credit expires on April 30.

"It's obvious that homebuyers are rushing in to take advantage of the tax credit that's set to expire," said Robert Dye, senior economist for PNC Financial Services.

In November, the government extended and expanded an $8,000 tax credit, which also allows some repeat buyers to qualify for a $6,500 credit. Buyers have until April 30 to qualify.

Fewer homes to buy
Dye expects to see continued strength in April's data before "tailing off" through the summer as the group of buyers who rushed in are "all spent out."

The Census Bureau estimated that 228,000 new homes hit the market in March. At the current sales rate, it would take 6.7 months to sell through that inventory, down sharply from an estimated 9.2 months of inventory in February.

Although new-home sales in March exceeded analyst expectations, sales are still trending near record lows, and prices are still under pressure due to oversupply.

"It's a very good sign to see [the March inventory] number down," said Dye. "But this needs to tighten up more to see upward pressure on prices."

The average price of a new home was $258,600, according to the Census Bureau. That was virtually flat compared to a year earlier, and 12% below average prices in 2008.

A precarious jobs market continues to threaten the housing market. Dye expects the April unemployment rate to dip to a still-high 9.6% from March's 9.7% when data are announced May 7.

"Firming house prices and an improving jobs market will make recovery felt on Main Street as well as Wall Street," said Dye. "We're headed in the right direction."

Click Here - To view article on CNN

Thursday, April 22, 2010

Today Marks 40th Anniversary of Earth Day!

Earth Day founder, U.S. Senator Gaylord Nelson of Wisconsin, first proposed national
environmental teach-in day to a conservation group in Seattle in September of 1969. Denis Hayes was the principal organizer of the first Earth Day, which took place a few months later in 1970. Over 20 million people participated that first year.

Visit the websites below to find out how to get involved in Earth Day:

Wednesday, April 21, 2010

CLOSED TODAY in Lake Stevens! Congratulations Neal & Rozanne!

Wonderfully Updated Home in Crosswater Community!
Click Here for Complete Property Details

Another Short Sale Sold by The KEY Team

CLOSED TODAY in Edmonds! Congrats to The Raymonds

Best Deal of The Year!
3 Bedrooms in Edmonds for Under $120K

Tuesday, April 20, 2010

CLOSED in Bellevue! Congratulations Zarina & Ramsey!!

Located Just Minutes from Microsoft in the Ardmore Community

I met these clients while looking for a home to rent, through the process I asked

"Why are you not buying?" -- they were told by another real estate agent that

they made too much money to qualify for an FHA loan and after

quickly setting them straight and promptly putting them in touch with

Rob Wolverton of Cobalt Mortgage we were able to

get them into this beautiful home and they are thrilled since their total

mortgage payment is just about $50 more a month than they have been paying for rent

...and this house had EVERYTHING they wanted!

If you thinking owning a home is out of your reach for whatever reason

poor credit, not enough down payment, etc.

Call me -- maybe we can make home ownership a reality for you too!

I love it when my clients get all they hoped for --

makes my job even more worthwhile!

Friday, April 16, 2010

Talk about affordable!! It just doesn't get any better than this....
2 Bedroom / 1 Bath Condo in the Heart of Downtown Woodinville for ONLY $99,990.
Call Today to Schedule a Showing or Let me know if you know someone who
would like more information about this great property, listed for a great price!

Tuesday, April 13, 2010

Getting a loan will be pricier

By Jennifer Liberto, senior writerApril 13, 2010: 4:06 AM ET

WASHINGTON ( -- As the economy begins to mend, the cost of borrowing money for a big purchase could start to increase.

Mortgages, in particular, have flirted with record lows during the recession. Credit card rates have been bouncing upward and, while auto loan rates are expected to stay low for a little while longer, they can't stay low forever.

The Federal Reserve has played a key role in keeping the cost of borrowing so low, through the so-called fed funds rate, a benchmark that determines the interest paid by consumers and businesses on a wide variety of loans. That has been near 0% since December 2008, as the central bank worked to spur greater lending and economic activity.

But as the economy heals, that rate is sure to come up, as will the cost of a lot of loans - although economists assure that borrowing costs won't rise until the economy is ready for it.

"The important thing to remember the Federal Reserve has a mandate to maximize employment and keep inflation low, so interest rates may be going up, but it will be in the context of better job growth," said Zach Pandl, an economist at Nomura Securities.

Mortgages: Apart from what the Fed does on interest rates, economists and Fed officials have been predicting higher mortgage rates for several months, as the Fed winds down credit programs that artificially spurred cheaper loans.

The Fed had been buying up a lot of mortgage-backed securities, but they recently stopped, which has already started to impact mortgage rates.

The 30-year fixed-rate mortgage reached an 8-month high last week, averaging 5.21%, according to Freddie Mac's weekly survey of conforming mortgage rates. Several times in 2009, mortgage rates dipped below 5%, considered to be record lows, thanks to the Federal Reserve's help.

"Throughout most of the last year we were right below or right above 5%, which really is an extremely low rate, historically," said Michael Fratantoni, Mortgage Bankers' Association vice president of research and economics.

MBA has been predicting mortgage rates would rise, maybe even reaching around 5.8% by the end of this year, Fratantoni said. And experts predict the rates will range around 6% in 2011.

Mortgage rates can really impact consumers by limiting what they can pay for a home.

Take the $165,000 median home price of existing homes sold in February. A buyer with a 20% down payment would pay just over $725 a month in mortgage payments for a 30-year fixed loan at today's rate.

Raise that rate by a half point, and the same buyer would only be able to afford a home worth $156,000 to keep payments near the $725 a month level.

Credit cards: Credit card interest rates have been on an upward march for nearly a year because of the overall increased risk that people can't make their payments in a recession.

The average credit card rate rose to 14.7% last week from 12.55% from six months ago, according to a survey of 95 of the most popular cards by, a comparison site for card offers.

"It's going to keep edging upward a bit, because credit losses aren't going to improve for the banks until unemployment heads down," said Ben Woolsey, an analyst at

While new credit card laws passed by Congress in the past year make it more difficult for banks to raise interest rates in several ways, they won't touch hikes in rates based solely on a financial index. One common index used, the prime rate, is at a 3.25% low and is expected to increase.

The flip side is that if the financial index rises and then later falls, the interest rate on the variable credit card rises and falls, said Scott Talbott, senior lobbyist for the Financial Services Roundtable.

"By tying the interest rate to an index, it largely takes the decision (on changing rates) out of the credit card company's hands," Talbott said.

Auto loans: One borrowing bright spot could be auto loans, which have been at record lows, thanks in large part to a lot of 0% financing deals aimed at wooing customers.

In March, auto loans averaged 4.4%, much lower than the 7.3% average back in March 2007, according to, an automotive Web site that tracks such information.

In the case of auto loans, experts predict the financing deals will last a while longer. For one thing, there's more money available for auto loans than the demand for the loans, according to Nomura's Pandl.

"It can't go on forever, but incentives have always been a part of the auto industry," said senior analyst Jessica Caldwell, who predicts the low rates will last for some time to come. "I don't ever see them turning that off."

Saturday, April 10, 2010

A new Obama administration get-tough policy on home-mortgage discrimination is drawing kudos from consumer advocates

By Kenneth R. Harney

Syndicated columnist

WASHINGTON — A new Obama administration get-tough policy on home-mortgage discrimination is drawing kudos from consumer advocates, along with expressions of serious concern from lawyers who represent lenders and brokers.

In a settlement last month with two subsidiaries of ailing insurance giant American International Group, the Justice Department took aim at one of the most controversial practices of the housing-boom years: National subprime mortgage lenders originated billions of dollars in high-interest-rate loans through local brokers who sometimes hit African-American and other minority applicants with excessive loan charges.

Mortgages extended to African Americans often carried higher fees than those paid by white subprime applicants — even when the borrowers' credit profiles and other factors were roughly the same. But did these disparities in fees open those lenders who purchased the loans from local brokers to legal attack?

Weren't the higher fees solely the result of predatory pricing by individual brokers operating independently of their wholesale lenders? If a broker charged African Americans higher fees than whites, wasn't this violation of fair lending laws on the broker's shoulders?

The Obama administration gave a resounding answer to that question: No. The consent order requires AIG's subsidiaries to pay $6.1 million to roughly 2,500 African-American borrowers, or an average of $2,300 in cash restitution for overcharges per loan.

The companies are also required to spend at least $1 million on consumer financial education programs. None of the firms admitted wrongdoing as part of the settlement. AIG Federal Savings Bank and Wilmington Finance no longer are involved in the wholesale mortgage market. AIG took a $182 billion bailout from the federal government in 2008, and is in the process of reorganizing its business activities. No individual mortgage brokers were cited in the case.

The core message here, according to Justice Department officials: Lenders who use independent brokers to originate mortgages cannot ignore what those brokers are doing to their minority customers. They will be held responsible for civil-rights violations because they should have been monitoring their broker networks for signs of discriminatory pricing — which should be detectable by examining loan packages and performing statistical analyses.

Thomas Perez, an assistant attorney general, said, "Discriminatory practices by lenders, brokers and other players contributed to our nation's housing crisis and economic meltdown. Lenders who looked the other way and ignored the discriminatory practices of brokers must be held accountable."

Perez warned that many other lenders who use broker networks could also be vulnerable to legal actions.

Community groups and civil-rights advocates hailed the settlement as a huge step forward. "It's a new day for borrowers," said David Berenbaum, chief program officer for the National Community Reinvestment Coalition. "Borrowers should see fewer backdoor pricing abuses" — especially the bloated fees, higher interest rates and unequal underwriting standards that were commonplace in the housing-boom years.

But some mortgage-industry groups and lawyers who specialize in financial issues disagree. They argue that holding giant wholesale lenders responsible for illegal acts they did not themselves directly commit not only is unfair but will do long-term harm to all borrowers.

Roy DeLoach, CEO of the National Association of Mortgage Brokers, said, "We absolutely oppose discrimination in any form. But we think the government's target should be the persons who actually do the discriminating" — in this case, individual, local brokers — not the lenders who acquired the loans with no knowledge of the discriminatory fees.

DeLoach argues that the administration's approach will discourage some lenders from dealing with brokers in general, thereby reducing competition in the marketplace, especially areas with significant minority populations.

"There will be less choice for borrowers" with fewer brokers active in the market competing for business. "That inevitably means higher rates and worse terms," because just a handful of big banks will dominate the mortgage business, he said.

Paul F. Hancock, a partner with the law firm K&L Gates who served for 20 years in the Justice Department's Civil Rights Division and was a deputy attorney general in Florida, says the AIG settlement "is really stretching the law, maybe even going beyond the law" by holding lenders responsible for the actions of independent brokers.

Hancock, who specializes in advising financial institutions, adds that "there is no case law" supporting the administration's "aggressive" position. But it may prevail because "nobody wants to fight the government."

Bottom line for consumers: Look for more fair-lending settlements, more financial restitution, and much closer supervision of loan officers — whether they're on lenders' staffs or independent brokers — to ensure that every mortgage applicant gets equal treatment.

Click Here to View Article as Published in Seattle Times on 4/10

King County house prices post year-over-year rise for first time in 2 years

The bar couldn't have been lower. Still, an increase is an increase.

House prices in King County rose in March for the first time in more than two years, according to one closely watched measure.

The median price of single-family homes that sold last month was $367,250, up 0.9 percent from March 2009, the Northwest Multiple Listing Service said Monday.

While tiny, the year-over-year countywide increase was the first since January 2008.

The median price in March 2009 - $363,850 - was the lowest in years. And last month's number, while slightly higher, was the lowest since then.

Area home prices have shown signs of stabilizing for several months: The median price in Seattle rose year-over-year in January, then on the Eastside in February.

Sales are up, too: Buyers closed on 1,596 houses in King County in March, 65 percent more than in the same month last year.

House sales were up 73 percent in Snohomish County. King County condo sales rose 47 percent.

While it is a less reliable measure, the listing service reported more pending sales of houses in King County last month than in any month since May 2007.

All this has brokers and other observers of the real-estate scene talking about a resurgence in the local market and wondering how long it might last.

"Are we at the end of this [downturn]? I wish I knew," said Doug Davis, broker at Hallmark Realty in Kirkland.

He and others said some March buyers were motivated partly by record-low interest rates — and concern those rates could start climbing soon.

Others bought at least in part because of federal tax credits scheduled to expire soon: To qualify, buyers must have homes under contract by the end of this month.

The March statistics are "very encouraging," said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.

But the market's future beyond the next few months hinges on several factors, he said, including job growth and the Federal Reserve's success in keeping interest rates low, as it has vowed, in the face of increasing pressure from buyers of government debt.

Crellin said the year-over-year increase in the median King County house price in March probably was due in part to a federal tax credit for repeat buyers that Congress approved late last year. It has brought some buyers into the market, he said, and they are "taking advantage of bargains they're finding in higher-priced properties."

But Omeed Salashoor, manager of MetLife Home Loans' Lake Union office, said he has seen little evidence the credit for repeat buyers is motivating many sales. An older tax credit for first-time buyers still seems to be having more impact, he said.

Loan applications at his branch rose 40 percent between February and March, Salashoor said.

The year-over-year jump in closed house sales in King County in March was the 10th consecutive monthly increase, and the 65 percent rise was second only to November's bump.

Sales were particularly strong on the Eastside, where closings were up 108 percent.

Davis, the Kirkland broker, said his office has a lot of walk-in traffic, and that it has increased significantly.

"I think there's been a lot of people waiting," he said. "Now, in 2010, they're actually saying, 'That's a pretty good buy.' "

Tim Ellis, who edits the real-estate blog, said in an e-mail that he expects Seattle-area sales to continue to rise through May, then plateau and maybe drop in the summer and autumn after the tax credits expire.

Nationally, there also were indications the housing market is coming back from the winter doldrums.

The number of buyers who agreed to purchase previously occupied homes rose sharply in February, far exceeding expectations, a report said Monday.

The National Association of Realtors said its seasonally adjusted index of sales agreements rose 8.2 percent from January to a February reading of 97.6. January's reading was revised slightly downward to 90.2.

The report "may signal the early stages of a second surge of home sales this spring," said Lawrence Yun, the trade group's chief economist.

Meanwhile, the federal government launched a new effort Monday to speed up the time-consuming, often-frustrating process that homeowners face when they want to sell — but owe more on their home than it's worth.

The Obama administration will give $3,000 for moving expenses to homeowners who complete such a sale known as a short sale or agree to turn over the deed to the lender. It's designed for homeowners who are in financial trouble but don't qualify for the administration's $75 billion mortgage-modification program.

Owners still will lose their homes, but a short sale or deed in lieu of foreclosure doesn't hurt a borrower's credit score for as long a time as a foreclosure does.

For lenders, a home usually fetches more money in a short sale than a foreclosure. And the bank avoids expensive legal bills, cleanup fees and maintenance costs that follow a foreclosure.

By Eric Pryne - Published 4/6/10
Seattle Times business reporter
View Complete Article - Click Here

Friday, April 9, 2010

PENDING - After just 11 days on the market!

Great Issaquah 1 Bedroom Condo Listed at $124,990 is Now PENDING
NWMLS#47317 (Short Sale)

Tour Sheet - Queen Anne, Laurelhurst, West Seattle, Madison Park and Leschi

The search is on! New clients from California are seeking that ideal home here that is within close proximity to Downtown Seattle. To always ensure I am showing homes that meet a client's criteria I preview.... I thought you might enjoy checking out what I viewed yesterday:

With one crucial factor I had to keep in mind for them was a great view...I really had an opportunity to be reminded why the Northwest is such a great place to live as I'd stand in a kitchen and look out to the sun resting on the Olympic Moutains or reflecting off Seattle skyline -- Wow!! Did I say I love my job?

In the end, we've ruled out West Seattle and focused on a few stellar properties in Queen Anne, Leschi and one in Laurelhurst. I think there are some great options and excited to take them out today and tomorrow to determine which one it will be.

Monday, April 5, 2010

NEW LISTING - 2452 SF Bothell Home on 2.52 Acres - Listed at $399,990

Don't Miss this Great Opportunity!
For More Information - Click Here

25 Days Remaining to Qualify for Home Buyer Tax Credit!!

For those of you hoping to qualify for the $8000 First Time Home Buyer Tax Credit or the Repeat Home Buyer Tax Credit -- You Must Be in Contract by April 30, 2010.
To View a FACT SHEET on the Tax Credit - Click Here

Thursday, April 1, 2010

2010 Tulip Festival - Starts Today!

Skagit Valley Tulip Festival - April 1-30

Event Happenings:
25th Annual Tulip Run
4/10, 9:30am

29th Annual Tulip Pedal
4/17, 7am-4pm

Art in the Pickle Barn 360-757-2109
RoozenGaarde 360-424-8531

Skagit Valley Gardens

Tulip Country Bike Tours
Tulip Town 360-424-8152
Making tulips last!
Choose tulips that are tightly closed, this means they are fresher.
Re-cut and re-water them daily.
Keep them away from direct sunlight and heat.
At night, store them in the coolest room in house.
Place a penny in the bottom of the vase... it’s been said to work!

Sunday, March 28, 2010

SOLD - After 12 Days on the Market in Highlands East

Another Home Sold Quickly...
SOLD after Just 12 Days on the Market!!
Highlands East Home in Snohomish
Click Here for More Information
MLS#29167675 - Short Sale
Closed on 3/26/10

Thursday, March 25, 2010

PENDING - Our Clients Purchased a 3 Bed Home in Edmonds for Under $120K -- WOW!

What an amazing deal!!
Our clients scooped up this great little 3 bedroom home
in Edmonds for under $120,000

Lots of other deals like this and if you are first time home buyer
you can STILL qualify for the first time home buyer tax credit!

Wednesday, March 24, 2010

PENDING - Congratulations Ramsey & Zarina!!

Gorgeous Remodeled Home in Bellevue
literally mins to Microsoft
List Price $485,000 - MLS#19841
PENDING on 3/24/2010
Virtual Media

Tuesday, March 23, 2010

PENDING - Congratulations Carole!

Trail Walk Condo in Kenmore
Wonderful 2 Bed/2 Bath Condo
PENDING on 3/23/2010

Monday, March 22, 2010

Going Green - Tips to Help the Environment

Going green has never been easier! Here’s how you can help the environment while cutting back your bills!

Reduce, Reuse, Recycle
Buy products with less packaging.
Buy reusable canvas bags for your grocery shopping.
Buy a reusable water bottle and drink filtered tap water rather than buying bottled water.
Recycle your food waste in the yard waste bin.
Start your own compost bin.
Buy locally and support shops and restaurants that do the same.
Pay bills online.

Saving Gas
Walk, bike, carpool or take public transportation whenever possible.
Telecommute... even one day a week makes a difference.
Avoid waiting in long drive-thru lines. Park your car and go in.
Buy a SmartWay Certified vehicle.
There are lending institutions that discount loans for buying them.

Saving Water
Turn off the faucet when brushing teeth and shaving.
Take showers instead of baths.
When buying new appliances look for the WaterSense label.

Saving Energy
Turn off appliances when not in use and unplug them from outlets.
Replace light bulbs with CFLs.
Install a programmable thermostat.
When buying new appliances make sure they are Energy Star.
Purchase a portable spin dryer (for use by itself or paired with a conventional dryer).
Conduct a home energy audit.

A Home Energy Audit
This can help you pinpoint where your home is losing energy and will determine the efficiency of your heating and cooling systems.

Find local energy audit companies: Add Image

Before contacting a company make sure to check references and find out if they were satisfied with the work. Also, make sure the auditor uses a calibrated blower door.

Find info on doing your own audit:

Sunday, March 21, 2010

Congratulations Tanner and Osveldo!!

RENTED in Mill Creek
Great River's Crossing Home

Saturday, March 20, 2010

Did You Know...

March is a great time to do some spring maintenance around your home?
Below are a few tips to get you started!

• Replace your furnace filters. They will be especially filthy after the winter months.
• Clean your kitchen exhaust hood and filter. You probably cooked a lot more hot food on the stop top during the cold winter.
• As the weather warms, spend a day and check your roof for winter damage. You should also check fences and sheds.
• Check all smoke and carbon dioxide detectors.
• Clean out the gutters.
• Aerate, thatch and fertilize your yard.

Tuesday, March 16, 2010

CLOSED - Congratulations Terry & Kevin!!!

After many months of negotiating with 2 leinholders we were able
to successfully close this exceptional Storm Lake Heights property.
Are you experiencing an economic hardship?
If want to learn more about how a short sale would affect your credit and
find out how I can assist you (or at the very least share with you what your options are)

Monday, March 15, 2010

FHA offers little-known financing for fixer-uppers

The word "as-is" can indeed be one scary phrase. Especially when buying a home in today's market where foreclosures and short sales that need fix-up work are plentiful.

Last year, Tom Meyer found a classic Oakland, Calif., home built in 1925. As a short sale it was priced right and about half the original asking price. Trouble was, the place needed fix-up work — foundation improvements, dry-rot work, a new roof over the garage and other improvements.

With the help of the Federal Housing Administration's 203(k) renovation-financing loan program, Meyer folded about $100,000 worth of repairs and improvements into his $422,000 mortgage. He had bought the home for $320,000.

"I would not be able to pay a contractor $100,000 and buy a house at the same time," said Meyer, who works in corporate media. "It had been essentially allowed to start falling apart over the last 20 years."

He had rented in San Francisco for 25 years before moving into his new digs in September with his girlfriend.

"We like old houses, and a great benefit of this program is that it helped us keep a beautiful but deteriorating house from deteriorating further. With the work we did, we expect it to still be standing and beautiful 80 years from now," he said.

Renovation financing through the 203(k) program allows the costs of needed repairs and improvements to be included in the FHA federally insured loan amount instead of having the buyer come up with cash or a separate loan to do the work.

"This is a perfect loan for an as-is situation," said Kristine Marr, a loan officer with Prospect Mortgage in Lafayette, Calif. "It's not a new loan program, although I think it's going to have a lot more use today because we have so many foreclosures and bank-owned properties. You go into lots of homes and see people have yanked out stoves and ovens and fixtures and sinks."

The work has to be done within six months after escrow closes. Borrowers have the option of putting up to six months of mortgage payments on the end of the loan if they don't want to live in the house while the work is being done.

"Renovation financing is a program that allows you to not only finance the purchase of a home but finance any repairs and/or improvements. It provides (buyers) with a responsible way to purchase a fixer-upper property," said Luis Munoz, who helped Meyer with the loan and is a renovation-loan specialist.

Munoz gives presentations about the program at monthly home-ownership workshops sponsored by the Unity Council, an Oakland-based nonprofit.

At a time when equity loans are hard to get, the program can also be used as a refinancing vehicle for borrowers who want to do repairs and improvements, provided the value of the home is greater than the value of the loan. "At the same time as you refinance, you pop in the extra dollars you need for whatever you want to do," Marr said.

FHA home loans require certain health and safety standards be met and that needed repairs identified during the inspection process be completed before escrow closes. However, minor repairs and improvements costing between $5,000 and $15,000 can be done after escrow closes for borrowers who opt for a streamlined repair program.

A 203(k) loan can help buyers finance both minor and major repairs and improvements. It can also help buyers compete with investors when bidding for short sales and foreclosures, said Sheri Powers, director of the Homeownership Center at Unity Council.

The loans can also be used, for example, to pay for improvements such as new appliances, second-story additions, remodeled kitchens and bathrooms, and skylights.

"Property repairs cost money and they want to make sure people using their loan program are going to be in the home in long run and not just the short run," Powers said.

The loans have become more popular since home prices started falling and FHA lending limits were raised a couple years ago, but are still a tiny sliver of overall FHA loan volume.

Marr said that 203(k) financing is not for everyone. A buyer will have to work with contractors and may have to wait several months before moving in, she said. And there is no guarantee they won't be outbid by an investor for the property.

"A lot of listing agents are preferring the investors, because the investors tend to be all cash or 50 percent cash. That's always hard to compete with," she said.

By Eve Mitchell

Contra Costa Times


If you want information on how to obtain this terrific FHA loan -- just let me know!

Sunday, March 14, 2010

Mortgage write-downs come with tax issues

WASHINGTON ” With the Obama administration and private lenders now actively considering mortgage principal-reduction programs to help financially distressed homeowners, the Internal Revenue Service has issued a new advisory to taxpayers who receive or seek to receive such assistance if it's offered.

The IRS gets involved in mortgage principal write-downs because the federal tax code generally treats any forgiveness of debt by a creditor in excess of $600 as ordinary taxable income to the recipient.

However, under legislation that took effect in 2007, certain home mortgage debt cancellations — such as through loan modifications, short sales or foreclosures — may be exempted from tax treatment as income.

Sheila Bair, chairman of the Federal Deposit Insurance Corp., recently confirmed that her agency is working on a new program to expand the use of principal mortgage reductions to keep underwater borrowers out of foreclosure.

Major banks and mortgage companies have preferred monthly payment reductions and other loan-modification techniques over cuts of principal balances, but a handful have made limited use of the concept.

One of the largest servicers of subprime home loans, Ocwen Financial of West Palm Beach, Fla., has strongly advocated principal reductions to keep people out of foreclosure, and claimed broad success with them.

Ron Faris, president of Ocwen, testified recently to a congressional subcommittee that borrowers with negative equity are as much as twice as likely to re-default after a standard, payment-reduction loan modification than those who receive partial forgiveness on their principal debt.

But what are the tax implications when your lender essentially says: OK, we recognize you're underwater, maybe you're thinking about walking away, and we're going to write off some of what you owe to keep you in the house?

IRS guidance issued March 4 spelled out, step by step, how financially troubled and underwater borrowers can qualify for tax relief when a lender agrees to lower their debt.

Here are the basics, should you be considering a short sale or loan modification involving principal reduction.

To begin with, be aware that the federal tax exclusion only applies to mortgage balances on your principal residence — your main home — and not on second homes, rental real estate or business property.

The maximum amount of forgiven debt eligible under the law is $2 million for married taxpayers filing jointly and $1 million for single filers.

But there are some potential snares: Your debt reduction can only be for loan amounts that you've used to "buy, build or substantially improve your principal residence." This includes refinancings that increased your total mortgage debt attributable to renovations and capital improvements of your house.

But if you used the proceeds for other personal purposes, such as to pay off credit-card bills, buy cars or invest in stocks, the mortgage debt attributable to those expenditures is not eligible for tax exclusion.

Say you refinanced and used some of the proceeds to purchase a boat and pay off business debts. Those expenditures would not qualify for the tax-relief provisions because they were not intended to substantially improve your house or build a residence.

In all refinancings, make sure you can document where the money flowed.

When your lender formally forgives all or part of your mortgage balance, the lender is required by law to issue you an IRS Form 1099-C, a "Cancellation of Debt" notice, which is also sent to the IRS.

The form shows not only the amount of debt discharged but the estimated fair-market value of the house securing the debt as well.

A few other noteworthy features of the IRS rules: If you've been foreclosed upon or you do a short sale and you lose money in the process, don't claim a tax loss on your federal filing. The IRS will turn you down.

However, if you go to foreclosure and your lender agrees to cancel all or part of the unpaid mortgage balance as part of the deal, then you can file for an exemption from the IRS.

What if your lender reduces the debt on your house but you continue to own the property and live in it? There's a tax wrinkle in the fine print: The IRS will require you to reduce your "basis" in the house your "cost" for tax purposes by the amount of the forgiven debt.

But that's not likely a big concern for most homeowners digging their way out of the bust.

Finally, if you want to claim the debt forgiveness exemption, download IRS Form 982 (available at and attach it to your return for the year in which the debt was forgiven. And don't assume this tax-code benefit to homeowners will be around forever. It expires at the end of 2012.

Tuesday, March 9, 2010

America's Most Wired Cities - Seattle at #3

Elizabeth Woyke, 03.02.10, 06:00 PM EST
Forbes Magazine

Raleigh is the kind of tech-forward city that, innovative as it is, often gets overlooked in favor of San Francisco, San Jose or Seattle. But this year the North Carolina capital passed its flashier rivals to grab the No. 1 spot on Forbes' Most Wired Cities list.

Raleigh's win means it ranks higher overall than any other U.S. city in three measures: broadband penetration, broadband access and plentiful wi-fi hot spots. Taken together, the factors point to a populace that readily uses high-speed Internet inside and outside the home.

At stake is more than just bragging rights. As the U.S. formulates a national broadband plan designed to connect the entire country to fast, affordable Internet, Raleigh and other top-ranking Wired Cities could serve as models for change.

Though a surprise winner, Raleigh boasts plenty of technology assets, including a high concentration of info-tech companies, research universities and state government offices.

Several tech powerhouses, such as IBM, Cisco and Lenovo, maintain large offices in North Carolina's nearby Research Triangle Park. Raleigh and its surrounding cities are also home to North Carolina State University, Duke and the University of North Carolina at Chapel Hill.

This combination of a highly educated and relatively higher-income population is "fertile ground" for high broadband demand and usage, says Brooks Raiford, head of the North Carolina Technology Association trade group. Regular folks can exploit Raleigh's IT resources too. The city's downtown is covered by a wi-fi network that is free to users. Operator Sprint Nextel recently launched its "4G" next-generation mobile broadband in Raleigh and the rest of the "Triangle"--months before larger cities like Boston, New York and Washington, D.C., will get the service. "We're very lucky to be at the epicenter of a lot of market strengths for these different companies," say Raiford.

Interactive: America's Most Wired Cities

Past winning cities haven't lost their wired factor. Last year's No. 1, Seattle, ranks No. 3 this year, while Atlanta, the most wired city from 2008, is No. 2. Each city has its strengths. Of the three, Seattle claims the most wi-fi hot spots per capita, while Atlanta enjoys the highest broadband usage and Raleigh ranks consistently high across categories.


Raleigh's elevation from No. 15 last year to No. 1 represented the greatest year-over-year improvement in the list. Miami, which dropped from No. 6 to No. 17, accounted for the steepest drop, mostly due to a lower rate of broadband usage this year.

The biggest losers, of course, are the cities that didn't make the list at all. Drop-offs include some of the country's largest metropolises, like New York and Los Angeles, as well as Cincinnati, Cleveland, Honolulu, Milwaukee, Minneapolis, Nashville, Philadelphia, Phoenix, Pittsburgh, Sacramento and Tampa. The falloff list is longer than usual this year because we trimmed the number of finalists from 30 cities to 20.

The changes didn't stymie new entrants. Colorado Springs and Salt Lake City joined the list for the first time, propelled by higher broadband usage figures than in previous years.

As in the past, we compiled the list by computing the percentage of Internet users with high-speed connections in a particular city and the number of companies providing high-speed Internet in that area. Since many urban residents access the Internet by wi-fi, we also measure the number of public wireless Internet hot spots. In previous years, we relied on Nielsen for broadband usage data. This year, we used data from market researcher Scarborough Research. Information about broadband providers came from the U.S. Federal Communications Commission. JiWire, a San Francisco-based wi-fi advertising network, calculated the hot spot data.

As broadband data improves, the Wired Cities formula will evolve. JiWire, which maintains a sprawling directory of public wi-fi hot spots worldwide, is considering expanding its catalog to include newer wireless technologies, such as WiMax, says David Staas, the company's senior vice president of marketing. The fast, fourth-generation technology--essentially the same thing as Sprint's "4G"--is currently available in 27 markets across the U.S.

Improved data collection from the FCC will also make it possible to add factors like broadband speed and cost to the mix. The FCC doesn't currently collect broadband pricing data, but has already begun tweaking its surveys to measure Internet use by census tract--rather than county--and divide broadband into different "speed tiers." The new research is the "first iteration of the commission's plan to collect more detailed broadband data," says FCC spokesman Mark Wigfield. The FCC is due to present its national broadband plan to Congress on Mar. 17.

By next year, we may be able to gauge broadband availability simply by eying a map. The U.S. Commerce Department is compiling "broadband maps" for each state and says the project will be completed by February 2011. The data should pave the way to get a lot more cities wired and connected.

Monday, March 8, 2010

Are you delaying your decision to buy because you fear prices will drop? Think again...

Here it is in black and white. If you are one of those individuals who has been sitting on the fence waiting for prices to drop even more, I think you will find this information very informative and enlightening to help justify NOW is the time to buy!

During a meeting with Robert Wolverton at Cobalt Mortgage earlier today, he shared this spread sheet with me. Basically, he shows here is you buy a home today at a point when interests rates are really low versus waiting a year or two or five down the road when rates will most likely increase. Many people fear home values could potentially drop (although all indicators see the market as leveling out) but Rob breaks it down so you can see even if they did when compared to an increase in the rise in interest rate you would have a very minor difference in mortgage payments -- just goes to show it is a wise choice to buy now!

Call Rob for any questions relative to financing, including a great new program to buy Fannie Mae owned properties! His number is 425.418.3233

Congratulations Allison & Andy! - SOLD in Kenmore/Finn Hill

March 8, 2010
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Saturday, March 6, 2010

Nab a real estate deal - while you still can

By Beth Braverman, staff reporter
March 2, 2010: 10:30 AM ET

(Money Magazine) -- If you've been holding off on a real estate purchase, glimmers of a turnaround in the housing market may have you wondering if it's finally time to make your move.

While home prices remain low, they're no longer free-falling in most markets. Mortgages are historically cheap. And the sweet tax credit that was offered to new buyers last year has been extended to April 30 and expanded to include current homeowners too.

But for all the motivation to act quickly, buying right now is not a no-brainer. In some areas home prices may fall further. If you own a house now, it may take longer than you expect to sell it, and you may walk away with less cash than you thought.

"It's a good time to buy, but it's still a really difficult market," says Patrick Newport of IHS Global Insight. As the clock ticks toward the tax-credit deadline, answer these questions to decide whether it's time to get off the sidelines.

Can you really nab that tax credit?

Current homeowners who sign a contract to buy a home on or before April 30 get a dollar-for-dollar reduction on their taxes of 10% of the purchase price of the home, up to a maximum of $6,500 (first-time buyers can get up to $8,000).

But according to the National Association of Realtors, buyers spend about 12 weeks home shopping before making an offer, so if you haven't already started looking, you may be pressed to meet the deadline.

Plus, to qualify for the full credit, your household income must be under $225,000 if you're married and less than $125,000 if you're single; repeat buyers must have lived in the home they are selling for five of the past eight years. The good news: Once you've signed the contract, you have until June 30 to close the deal.

How much could you lose by waiting?

Besides the loss of the tax credit, the biggest game-changer facing buyers is a potential jump in mortgage rates. If the Fed moves ahead with its plan to stop buying mortgage-backed securities at the end of March, the rate on a 30-year fixed mortgage is expected to increase nearly a percentage point from today's 5.18% to 6.1% by the end of 2010, according to the Mortgage Bankers Association. On a $300,000 fixed-rate mortgage, that's an extra $174 per month.

But if home values are falling in your area, you don't have much to lose by waiting. If the house you want costs $375,000 today and you put down 20%, you'd pay $1,644 a month for a fixed-rate mortgage at 5.18%. Buy that same home for 5% less later on with rates at 6% and you'd only pay an extra $65 a month. If prices plunge 10% or more this year (as they are expected to in 12% of markets, according to Fiserv), you'll come out even or ahead.

To get a handle on the direction of your market, check to see whether inventory levels are increasing, and visit to find out whether foreclosure filings are still rising. A glut of properties and bank-owned homes means a recovery may not be in sight.

How quickly can you sell the home you now own?

Even in markets that are recovering, sellers must price aggressively to make a fast deal.

"Everybody thinks their house is worth more than it is," says Dallas realtor Bruce Lynn. Before you sign a contract for a new place, ask a few agents to give you a realistic figure that will generate a quick sale. Can't bear to part with your home at that price? Waiting may be your only option.

Also keep in mind that, with the credit crunch not far in the past, lenders may not approve your purchase until you've sold your home. A delay in sale could also stick you with two mortgages, far outstripping any savings from the tax credit.

See if the sellers will let you put a contingency in the contract that negates the sale if you don't find a buyer -- it's a long shot but worth a try. If they won't, propose adding a kick-out clause that allows the sellers to keep their home on the market, but lets you either pull out or quickly move ahead with the deal if they get another offer.

While extra contract negotiations may be a hassle, the past few years have proved that a purchase decision shouldn't be taken lightly. "This may be the best time in history to buy a home," says Denver realtor Jeff Fogler, "but only if you can really afford it."

Are you underwater on your mortgage? Money Magazine can help. Send your name, age, hometown and photo to and you could be profiled in an upcoming story.

Friday, March 5, 2010

Home prices inch up on Eastside, in Seattle year-over-year

February house prices nudged up in February in Seattle and on the Eastside while falling by double digits in South King County.

By Eric Pryne

Seattle Times business reporter

After a two-year slide, home prices may be starting to inch up in big chunks of King County, February home-sale statistics suggest.

The median price of a house that sold on the Eastside last month was $490,000, up 1 percent from February 2009, the Northwest Multiple Listing Service reported Thursday. While minuscule, it was that area's first year-over-year increase since December 2007.

Seattle's median price also rose slightly for the second month in a row after nearly two years of declines.

Countywide, however, the median single-family home price, $373,010, was down 0.5 percent from a year ago. The chief reasons: Southwest and Southeast King County, the county's most affordable areas, where median prices fell by double digits.

Sales volumes were up strongly throughout the county, 51 percent overall from February 2009. It was the ninth straight month of year-over-year gains, fueled by low interest rates, federal tax credits and mild winter weather.

But brokers say prices in South King County are continuing to fall because houses repossessed by banks and short sales — those for less than the seller owes on the home — make up a bigger share of that market.

Those sellers are more likely to settle for less. "It's putting a lot of downward [price] pressure on sellers who are not in trouble," said Tony Hettler, broker-owner of the John L. Scott office in Des Moines.

In Seattle and on the Eastside, in contrast, brokers say move-up buyers are returning to the market.

In Seattle's Capitol Hill and Madison Park areas, 39 houses sold in February with a median price of $596,000, according to the listing service. That's up from just 17 houses that sold in February 2009, with a median price of $409,000.

"We are starting to see high-end sales in bigger numbers," said Dave Hale, broker at Windermere Real Estate's Madison Park office.

Prices have dropped, he said. Jumbo loans — more than $567,500 — are easier to get. And the stock market has come back from the depths of a year ago.

"For a lot of these folks, their portfolios have probably come up 30 or 40 percent," Hale said. "They're feeling more confident."

He said he sees few short sales or sales of bank-owned homes in the central-city neighborhoods he serves.

In Southwest King County, in comparison, foreclosed homes and short sales make up 26 percent of active listings, Hettler said.

He said he recently completed an analysis for an owner who wondered why condos in his building weren't selling. The answer: Prospective buyers were gravitating toward single-family homes in the same relatively low price range.

"Two or three years ago [condos and houses] wouldn't have been competing for the same buyer," Hettler said.

Overall, King County condo sales rose 26 percent last month from February 2009, the listing service said. The median condo price was down 3 percent but, again, it varied significantly by area.

The median price rose 6 percent in Seattle and 19 percent in Southeast King County, but fell 13 percent in Southwest King County and 12 percent on the Eastside.

The median price of single-family homes sold in Snohomish County in February was $280,000, down 10 percent from the same month last year. Sales were up 53 percent.

Sunday, February 28, 2010

Jumbo mortgage market is beginning to thaw

By E. Scott Reckard

Los Angeles Times

LOS ANGELES — Phil Kelly had 18 more months to go before the fixed rate on his $2.5 million mortgage became adjustable.

But when Kelly, a former computer executive living in Rancho Santa Fe, Calif., learned he could knock his interest rate down by a full percentage point by refinancing, he went for it.

"It's always tough to pick the exact bottom or top of anything," Kelly said. "But I think this rate is about as low as you're going to get."

Rates on jumbo mortgages — loans of more than $729,750 in Southern California counties with the highest-cost housing (and $567,500 in King, Snohomish and Pierce counties) — shot up during the financial crisis as lenders and loan investors shunned anything tainted with even a whiff of higher risk. Rates on big mortgages were especially high relative to those on smaller loans.

But in a boon for borrowers in California's expensive housing markets, the jumbo-loan market is starting to return to normal.

Two weeks ago, the average interest rate on 30-year fixed-rate jumbos dropped to 5.79 percent, a nearly five-year low, according to rate tracker Informa Research Services of Calabasas. It edged up to 5.88 percent this past week, still very attractive by historical standards. The average is down from well above 7 percent in late 2008.

Rates are even lower on so-called hybrid adjustable mortgages, on which the rate is fixed for, say, five years and then adjusts annually. Kelly's new loan is a five-year hybrid adjustable identical to his old one, except that he's paying about 5 percent, down from 6 percent.

Banks are also relaxing slightly some of their requirements for jumbo loans. That's an encouraging sign because the market for jumbos, in contrast with the rest of the mortgage business, isn't being propped up by Uncle Sam.

The lower rates and somewhat easier terms reflect newfound confidence among banks in the housing market.

That's because, by definition, jumbos are too big to be bought by Freddie Mac and Fannie Mae or to be insured by the Federal Housing Administration.

Plus, the private market for mortgage-backed bonds dried up when the meltdown hit. So lenders making jumbo loans these days must be willing to take the risk of keeping them in their portfolios.

The maximum amounts for Freddie Mac and Fannie Mae "conforming" mortgages, and for FHA mortgages, are set by Congress.

The cutoff for single-family homes was $417,000 from 2006 until February 2008, when lawmakers increased it temporarily in certain high-cost areas, including the Seattle area and parts of Southern California.

The increased upper limits, which have been extended until the end of this year, have created a three-tier system in expensive areas, mortgage professionals say: loans of up to $417,000, which are the easiest to obtain and carry the lowest rates; "conforming jumbos" from $417,000 to $729,750, which are somewhat harder to get and have slightly higher rates; and true jumbos, with the toughest standards and highest rates.

In the boom years of 2005 and 2006, interest rates were typically no more than a quarter of a percentage point higher on jumbo loans than on conforming loans, according to Informa Research.

That widened as the mortgage meltdown intensified and home prices dropped in late 2007. The spread ballooned to nearly 1.7 percentage points in early 2009 after the entire credit system froze.

But this year the rate spread has narrowed to less than a percentage point. It could shrink more if conforming-loan rates rise as expected after the Federal Reserve wraps up a $1 trillion-plus program to support the market for conforming loans next month.

In addition to lower rates, down-payment requirements are being relaxed in some cases.

For example, to write a jumbo loan in coastal areas of Los Angeles and Orange counties, Wells Fargo Home Mortgage looks for a 20 percent down payment or that percentage of equity, down from 25 percent last year, said Brad Blackwell, a national mortgage sales manager at the lender.

Jumbo loans remain much harder to get than before the credit crunch and recession. Borrowers typically must have a credit score of at least 700, compared with boom-era minimums in the 600s, though Laguna Niguel mortgage broker Jeff Lazerson said at least one lender was again making sub-700 jumbos available.

What's more, unless their down payments are very large, borrowers must provide evidence of high income, have sizable bank accounts as a cushion against the unforeseen and occupy the houses themselves.

But there are clear signs that the jumbo market has loosened.

One is an increasing availability of "stated income" loans — those that don't require proof of income — of as much as $2 million to borrowers with at least a 40 percent down payment, said mortgage broker Gary Bluman, owner of Real Estate Resources in Brentwood.

Also, instead of a true jumbo loan, some "piggyback" second loans are available again to help certain borrowers with 25 percent down payments pay for high-priced homes, Lazerson said.

Of course, adjustable, stated-income and piggyback loans were big contributors to the mortgage meltdown.

But such provisions are less risky if a borrower has 25 to 40 percent equity.

Despite the confidence in the market that such terms imply, lenders and mortgage investors are still dealing with piles of bad jumbos made during the boom.

Delinquencies of 60 days or more on prime jumbo loans that were packaged into securities jumped to 9.6 percent in January, up from 3.7 percent a year earlier, Fitch Ratings reported recently.

For now, the jumbo market remains limited to the volume of loans that banks are willing and able to keep on their books. But there is hope for a return to private outside funding.

Although no jumbos have been turned into securities for at least two years, packages of delinquent jumbos have begun to be sold again to "vulture" investors, a sign that the secondary market for the loans may revive, said Michael Fratantoni, a vice president of the Mortgage Bankers Association.

"The ice sheet," he said, "is starting to crack here and there."

Congratulations Adriane & Kyle - Great House RENTED in Madison Park!

How can you not simply fall in love with the great community of Madison Park? With quaint shops & restaurants and not too mention, some of the most gorgeous homes in Seattle -- it is simply delightful! Congrats to Adriane and Kyle who just rented this great home in Madison Park and will be moving in at the end of March.

Click Here to Learn More About Madison Park

Thursday, February 25, 2010

Housing: Best Recovery Bets - SEATTLE

As written in

Median home price: $371,000
Value lost since 2006: 15.2%
Forecast gain by 2011*: 3.8%

Seattle has become a world-class city with a diverse, vibrant economy. As a home to manufacturers such as Boeing and software providers such as Microsoft, the job market has held up better than average, with a current unemployment rate of 8.8%.

Home prices had a softer landing as well, dropping just 15.2% over the past three years, about half the national average. However, prices do tend to be volatile, according to Mark Fleming, chief economist for First American CoreLogic. The lack of available land for development is one reason for that volatility, as are political restrictions on growth.

After another modest price decline of 2.3% in the next eight months, the market should begin to turn up. Between June 2010 and June 2011, the city should see a gain of 6.2%. Averaged out, that means a 3.8% gain over the next two years*.

And while that may not sound all that robust for those jaded by the annual double-digit returns recorded during the boom, that performance will be one of the best of any large city during that period.

For complete article visit:

Tuesday, February 23, 2010

Is the mortgage market starting to heal?

By Les Christie, staff writerFebruary 19, 2010: 11:51 AM ET

NEW YORK ( -- The mortgage market may have begun to turn: Fewer borrowers fell behind on their payments during the last three months of 2009.

A seasonally adjusted 9.47% of all mortgage loans were late during the fourth quarter, down from 9.64% at the end of September, according to the National Delinquency Survey, which is produced by the Mortgage Bankers Association and is considered the bible of the industry.

This figure is significant because it shows a reduction -- even if just slight -- in the volume of loans heading toward the foreclosure process. This has not happened since 2006.

"We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007, continued with the meltdown of the California and Florida housing markets due to overbuilding and the weak loan underwriting that supported that overbuilding, and culminated with a recession that saw 8.5 million people lose their jobs," said Jay Brinkmann, the MBA's chief economist.

Of course, delinquency rates were still 1.59% higher than they were in the last quarter of 2008.

Foreclosures: Where does your state rank?
Brinkmann's main reason for optimism was a drop in the percentage of borrowers who had missed one mortgage payment. That rate fell quarter-over-quarter to 3.63% from 3.79%.

"The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight," he said. "We normally see a large spike in short-term mortgage delinquencies at the end of the year due to heating bills, Christmas expenditures and other seasonal factors."

Another positive sign is a drop in the percentage of borrowers whose lenders had initiated foreclosures, the first step in the process of taking homes away from borrowers. That may be only temporary, though: Lenders have been holding back and the number of seriously delinquent loans not in foreclosure has ballooned.

As a result, loans 90-days late or more now account for half of all delinquencies calculated by the MBA, a record high and twice the category's share of delinquencies two years ago.

Landlord foreclosed. Do you have to go?
"The build-up in the 90-day bucket of loans that could end up in foreclosure should keep foreclosure rates elevated," said Brinkmann.

But the high number of borrowers in that category is also somewhat of a statistical glitch. Loans are remaining there much longer than they did in past years because of government and lender attempts at mortgage modifications.

Of all the delinquency hot spots, Florida is the worst hit with 26% of all mortgages in some kind of trouble.

The worst performing category of loans was subprime adjustable rate mortgages, with more than 42% being 90 days late or in foreclosure. That is nearly four times the rate of default during early 2007, when the mortgage meltdown was heating up.

The MBA report, according to Mike Larson, a real estate analyst for Weiss Research, is a further sign that the housing market is truly stabilizing.

"We're now seeing the next piece of the puzzle fall into place," he said. "Specifically, early stage delinquencies are stabilizing. This is a key sign that housing market conditions are slowly, grudgingly, getting slightly better."

One key trend is that home price declines, a key influence on delinquency rates and, especially, on foreclosures, halted their free-fall in 2009. The average home price in 20 major markets dropped only about 5% during the 12 months ended Nov. 30, according to the S&P/Case-Shiller home price index.

As prices stabilize, fewer mortgage borrowers will plunge underwater, owing more on their mortgage balances than their homes are worth. Homeowners with positive equity in their homes have an asset they can tap during temporary financial strains and are much less likely to fall behind on their mortgages.