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Friday, November 18, 2011

Congress Restores FHA Loan Limits

NAR Call for Action

Last night Congress restored the loan limits for the Federal Housing Administration (FHA) for two years.

As you know, in late September the FHA, Fannie Mae; and Freddie Mac loan limits were reduced in 42 states pricing potential home buyers out of the American Dream of home ownership and holding back the housing recovery.

NAR immediately went to work with the goal to get the loan limits restored in Congress. For weeks that goal seemed unlikely.

You, and countless other REALTORS® like you along with YOUR leadership and YOUR management team worked to educate Congress that well-qualified buyers didn't need yet another hurdle to access affordable mortgage financing.

They finally listened. Because we were persistent. And because we were right.

The reinstated FHA loan limit formula and cap change will help make mortgages more affordable and accessible for hard-working, middle-class families in 669 counties in 42 states and territories, where the average loan limit reduction after the reset last month was more than $68,000. The provision reinstates the FHA loan limits through 2013 at 125 percent of local area median home prices, up to a maximum of $729,750 in the highest cost markets, the floor will remain at $271,050. However, Congress chose not to apply the loan limits restoration to Fannie Mae and Freddie Mac. Fannie-and-Freddie-backed mortgages will remain at 115 percent of local area median home prices up to $625,500.

The bill also provides for a short-term extension of the National Flood Insurance Program through December 16, 2011. NAR will continue to press Congress to use the additional time to complete their work on a five-year reauthorization of the program, which ensures access to affordable flood insurance for millions of home and business owners across the country.

I know that when we work together we can accomplish anything we set our minds to in order to preserve, protect and defend the American Dream of Home Ownership.

Because of your excellent work, I am continually reminded that “REALTORS® are the Heart of the Deal.”
With much appreciation,

Moe Veissi Signature

Moe Veissi
2012 President

Sunday, November 13, 2011

Adverse Possession: The Real Skinny

Photo courtesy of Roger Tufts, Maine

Q: I move to China for 20 years, leaving behind our 25-acre plot of vacant land in Olympia. During those 20 years, we do not check in on the land, nor does anyone we appoint (family, friends, etc.). Turns out the neighbors have been occupying the land during our time away, unbeknownst to us. Could the neighbors claim legal rights to the land?

A: Adverse possession is the occupation of property for an extended period of time, as defined by law, which is not legally owned by the person occupying the property. This is sometimes called squatting, or squatter’s rights. Clearly the property is unoccupied, and if a person lives at the property for long enough, 10-12 years in many states, they can come to own the property, even if they legally have no claim to it. Adverse possession can thus be said to be a means of acquiring land or homes, without ever having to pay for it.

It can’t be said that adverse possession is legal. In fact, the time of occupation prior to gaining the title of the property is specifically illegal. If the person actually owning the property chooses, he can have people who are squatting removed from the property and charged with trespassing. You really can’t just walk onto someone else’s property and claim it for your own without expecting legal repercussions. Further, in many cases, if you leave the property, you lose any time you have accrued toward adverse possession of the property (they could never leave during the 20years).

To claim adverse possession, an adverse possessor must show that he/she was in actual, open, and notorious possession of the property. The possession must have been exclusive and hostile to the title of the owner of the property. The possession must have been uninterrupted and continuous for at least 10 years. Successive occupation of the property by persons who are in privity with each other (i.e. by contract, will or blood) can be added together or "tacked on" for purposes of fulfilling the time requirements. If the adverse possessor occupies the property under color of title and makes payment of taxes, the period is 7 years. Color of title means that the person holds out that she legally has a possessory interest in the property (i.e. the defective deed includes the property in question). In addition, permissive use can never ripen into adverse possession.

While this explanation is simply my interpretation of a summary to elude to an answer to your question, as always, it is in your best interest to seek legal counsel as my expertise is as a REALTOR as I am not an attorney.

Thursday, November 3, 2011

NWMLS Releases October's 'Mixed Results' Housing Activity

Befitting October and Halloween, last month's housing activity had both tricks and treats. Northwest Multiple Listing Service members reported solid gains in pending sales (up almost 21 percent from a year ago), consistent demand in many price ranges, a shortage of homes in a few categories, and some resurgence of move-up buyers.

Despite those encouraging indicators, prices were down almost 11 percent area-wide compared to a year ago and brokers say there is persistent “hesitancy” in the market.  “All the pieces (for a recovery) exist -- low interest rates, lots of choices, increasing loan availability as well as purchasing programs, yet as a whole the housing market has stalled in many places,” said Northwest MLS director Frank Wilson.

“What is holding back the housing market has little to do with houses,” Wilson stated, pointing to uncertainty in the stock market and volatile global economies, along with a more complicated, prolonged transaction process and lack of job creation.

“We knew the median price would take a hit in October because the temporary‟ loan limit for conventional financing dropped back down from $567,500 to $506,000 after being in place for two years,” said OB Jacobi, president of Windermere Real Estate Co. As of October 1, buyers in need of a mortgage above $506,000 must now qualify for a jumbo loan which is more restrictive and comes at a higher cost than conventional financing, he explained. “With fewer financing options for buyers of higher priced homes in our metro area, it‟s only natural that this would cause downward pressure on October‟s median price,” added Jacobi, a member of the Northwest MLS board of directors.

“As the supply continues to decrease, we expect shorter market time, with home prices stabilizing and even beginning to appreciate again,” Wilson predicts.

Pending sales (mutually accepted offers) increased nearly 21 percent from a year ago, rising from 5,653 transactions to 6,817.

In the past four months, the combination of shrinking inventory and more sales (both pending and closed) have led to a swift change in the supply of homes, remarked NWMLS director Darin Stenvers.  Demand is remaining consistent in many price ranges and move-up buyers are returning to the market because of a shortage of homes that are not distressed, Stenvers noted. This move-up segment can list and sell their homes, then buy a better home with essentially the same payments, he explained. “Buyers know interest rates will not be at these historically low levels forever so they may pass up a short sale/fixer bank owned home for a more conventional transaction,” he remarked.

“Interest rates are at historic lows, and here in the Puget Sound we are fortunate to have a stable employment base,” he observed.

“Not every home has dropped 15 percent in value,” Spencer insists. He attributes much of the decline to a combination of factors, including shifting demographics and the influence of distressed properties, which he said may be as high as 40 percent in some areas. More investors and first-time buyers are purchasing in the more affordable price ranges, which results in a downward shift of median prices, Spencer explained. Also, he noted, distortions caused by REO (bank- or other lender-owned) and foreclosed properties contribute to price depressions. “When you adjust for these conditions and compare standard resale homes‟ the change in home values is much less drastic,” Spencer emphasizes. He believes a more accurate reflection of price declines for the Seattle area is around 6 percent, citing research by CoreLogic, Wells Fargo Securities and other analysts.

Not always apparent in the raw numbers are the hurdles faced by “real live buyers and sellers who are having a harder time than in the past,” lamented Wilson. “Transactions are more complicated and have a higher chance to fail. Lenders who are involved with short sales and bank owned homes further complicate and lengthen the transaction process due to their policies and practices.” Consequently, Wilson emphasized, buyers and sellers need to be explicit about what they want to accomplish. “They also need lots of patience and should choose their team wisely, making sure to select real estate professionals who can walk them through the process.”

Comparing last year with this, Mike Grady, president and COO of Coldwell Banker Bain, noted inventory was plentiful and competition was relatively light last year. Now, he said the market “ingredients” appear to be changed: the number of buyers is increasing and there are fewer homes for sale. “While that's a typical recipe for stable or increasing prices and quicker decisions, today's market has some less palatable ingredients, such as foreclosed properties and shaky consumer confidence. Knowing whether these new inventory dynamics will be slow-baked or microwaved into the housing market is still anyone's guess,” Grady suggested, adding, “It looks like more people are coming off their home buying diets only to find a reduced supply of homes for sale. That could create some welcome momentum in local markets heading into the new year.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership includes more than 22,000 real estate brokers. The organization, based in Kirkland, Wash., currently serves 21 counties in Washington state.

Tuesday, November 1, 2011

Change Clocks, Change Batteries; Dead Batteries Can Lead to Deaths

WASHINGTON, D. C. - The U.S. Consumer Product Safety Commission (CPSC) is reminding consumers when changing clocks this weekend to change the batteries in smoke alarms and carbon monoxide (CO) alarms, too. Daylight Saving Time ends on Sunday, November 6 this year.

"Smoke and carbon monoxide alarms save lives by alerting you to a fire or CO buildup. They can't do their job if the batteries aren't working," said CPSC Chairman Inez Tenenbaum. "Protect your family by replacing smoke and CO alarm batteries at least once each year."

In addition to changing batteries every year, CPSC recommends consumers test their alarms monthly. Place smoke alarms on every level of the home, outside sleeping areas, and inside each bedroom. About two-thirds of fire deaths occur in homes with either no smoke alarms or smoke alarms that don't work.

Fire departments responded to more than 386,000 residential fires nationwide that resulted in nearly 2,400 deaths, more than 12,500 injuries, and $6.92 billion in property losses annually, on average, from 2006 through 2008.

In addition to changing batteries in smoke alarms, CPSC urges consumers to stay in the kitchen while cooking to help prevent fires. Cooking fires accounted for the largest percentage of home fires, an annual average of nearly 150,000 or 38.7 percent, from 2006 through 2008.

CO alarms should be installed on each level of the home and outside sleeping areas. CO alarms should not be installed in attics or basements unless they include a sleeping area. Combination smoke and CO alarms are available to consumers.

Carbon monoxide is an odorless, colorless, poisonous gas that consumers cannot see or smell. An average of 184 unintentional non-fire CO poisoning deaths associated with consumer products, including portable generators, occurred annually from 2005 through 2007.

To protect against CO poisoning, schedule an annual professional inspection of all fuel-burning appliances, including furnaces and chimneys. Home heating systems were associated with 70 deaths, or 38 percent of CO poisoning deaths, in 2007, the largest percentage of non-fire CO poisoning deaths.

To see this press release on CPSC's web site, please go to: