As many of you probably know, President Bush addressed the nation on August 31st, speaking mostly about the lending industry, mortgage fall-out, FHA policy changes, and the phantom tax that burdens those who have either negotiated a short sale or have been foreclosed upon. The National Association of Realtors applauded the intent put forth by President Bush to protect consumers now, and in the future. I, too, feel that his proposals to congress deserve positive recognition. No one says it better than our good friend Denise Lones of The Lones Group in Bellingham. Below, read her article following the President's speech.
"The Real Estate market has taken an unfair beating by the media for months. It’s a wonder anyone is buying or selling real estate based on the doom and gloom scenarios the media has painted about the market.
I, however, have stood FIRM the American market is strong and vital and will continue to flourish. I have taken much criticism about my optimism. I can afford to be optimistic because I don’t just speculate, I do my research.
The U.S. economy is strong and the Pacific Northwest economy is booming – yes, booming. Although home sales have been hurt by the latest mortgage meltdown, our employment and economy have stayed strong. People are moving to our area, staying, working and retiring in our area. This hardly makes for a crashing market thank you very much!
The market was further damaged when the mortgage industry’s sub prime market melted. Unscrupulous lenders and over-optimistic homeowners and investors got involved in mortgages that really were too good to be true. This caused a meltdown which then had consumers extremely concerned. Whenever you have concerned consumers you have a slowdown in purchasing, and when you have a slowdown in purchasing you have a shift in the market.
I would like to point out some good news about the market including the price appreciation in the Northwest has seen. The Office of the Federal Housing Enterprise Oversight listed the following appreciation rates for the areas listed below over the past five years. What is most interesting about these numbers is that each of these areas has continued to appreciate even in light of the mortgage meltdown.
CITY 1 year appreciation 5 year appreciation
Seattle/Everett/Bellevue 9.89 66.8
Bellingham 5.14 86.1
Bremerton/Silverdale 0.14 81.9
Kennewich/Richland/Pasco 6.52 23.2
Longview 13.6 59.3
Mount Vernon/Anacortes 8.28 73.8
Spokane 9.30 68.5
Tacoma 9.34 75.6
Wenatchee 23.54 79.2
Yakima 8.28 35.3
The numbers above are hardly signs of a crashing market. What this does show is that people want to live in these areas and there is a demand.
Even better news for our market, President Bush finally spoke out about the critical mortgage situation. In a live broadcast August 31, 2007 President Bush addressed the “mortgage crisis”.
In a nutshell, he said, although the country is facing a mortgage crisis it was caused directly by unscrupulous lenders. The government plans to take action. President Bush stated that overall the mortgage crisis is modest in relation to our overall economy and not to panic. Housing is what drives our economy. Government officials acknowledge this and plan to take action. This is nothing but good news for the real estate industry.
The President said that the government will not do a bailout but will play a “limited” role. A federal bailout would only encourage future unscrupulous activity. While the government promises to help the average homeowner they will not be helping investors or speculators.
President Bush said the top priority in our country is home ownership and helping families stay in their homes. Here is the proposed strategy:
1) MODERNIZE THE FHA - The government will improve and modernize the FHA and help borrowers refinance with the FHA at lower rates. This will help approximately 80,000 families in mortgage crisis.
2) ADD NEW FHA PROGRAM – FHA SECURE – This new program will allow consumers to re-finance their homes into secure mortgages without high penalties.
3) TAX REFORM – There will be a change to the federal tax code that will make it possible, and easier, for families to refinance their mortgage during this unexpected stress in the mortgage market. This new code will allow families to refinance without the tax penalty that currently exists.
4) NEW FORECLOSURE AVOIDANCE INITIATIVE- Fannie Mae and Freddie Mac will be involved in a new initiative to help homeowners refinance rather than foreclose on their homes.
5) MORTGAGE INDUSTRY REFORM- The President promises to bring strong regulations to the mortgage industry which will help prevent predatory lending. Lenders will have to provide complete and accurate disclosure on all loan products. This will also have to be understandable to the consumer. Lenders will also have to clearly disclose all fees and closing costs. The President says that if lenders are cheating consumers the government will find them and punish them.
6) MANDATORY FEE DISCLOSURE- The disclosure of fees will be altered to make it easier for consumers to understand what fees they are paying.
President Bush further stated that it is the federal government’s goal to protect home ownership in this country. He said it is the American Dream and every citizen’s right. When we own homes we have better communities and neighborhoods, according to the President. While the government will not bailout speculators and investors there will be help for homeowners.
DENISE’S BOTTOM LINE
I would first like to say that I was THRILLED with the President’s speech. I have always believed, and still do, the real estate market will survive and thrive through this “media-frenzied” period. The current challenges we have in the market are due to predatory lending and people funding their lifestyle and using their homes as piggybanks. There is good news in this market, but you have to get past all the media mud-slinging first. Real estate is here to stay and real estate agents are needed now more than ever before. I could not think of a more exciting time to be in the real estate industry." -Denise Lones, The Zebra Report
Thanks, Denise!
Live Good. Be Happy.
-Emily
"If anyone you care about needs a Realtor, please share my name with them." -Mimi Heading into my 20th year in real estate, I am a third generation Realtor® serving Bellingham and Whatcom County, Washington. My motto is: Do good work for good people.
