Posts Tagged ‘home financing’

Greek Mythology

Lately, there has been a lot of talk about Greece and their debt. It amazes the Troll that Greece, with a similar population of New York City can be so destructive to the global markets. Did you notice the huge rally in stocks last week that coincided with the news that Greece would avoid defaulting on its debt. The Troll is wondering why Greece is getting all the attention and not some others. The real issue is this debt contagion spreading accross other countries that comprise the European Union. We already know that Spain, Ireland, Italy and Portugal  have debt problems similar to Greece. Ireland and Portugal were downgraded by Moody’s last week so the once isolated contagion appears to be spreading. The finance ministers of the 17 Eurozone countries have lowered interest rates and extended maturities for the nations in trouble in an effort to stem the spread of the sovereign debt crisis. The outlook is currently negative which drives more demand into the safe haven of U.S. Treasuries. The result of this  “flight to safety” is lower interest rates on mortgages.

The Troll thinks it’s funny that there has been no mention of default for States like California, Nevada or Florida in the financial markets. California is only the 8th largest economy in the world and for all intents and purposes is bankrupt!

Did you know that Greece is comprised of between 1200 and 1600 islands depending on the definition? Out of those islands 227 are inhabited. It should also be pointed out that Greece was the honeymoon destination of the Trolls back in 2000. The Troll still remembers cruising the backroads of Santorini on a scooter with his bride holding on for dear life. Those were the days.

The Troll

Do you have a Job Sir?

There were only 18,000 total payroll jobs added in June with 57,000 coming from the private sector. This of course means that the government is laying off workers (39,000). To make matters worse, the BLS revised down the jobs added in April and May by 44,000. Basically every number released was ugly. The unemployment rate ticked up to 9.2%, the workforce participation fell to 64.1% (lowest levels since the early 80’s) and the employment population ratio fell to 58.2% matching the lowest level during the current recession. Wow!

Our friend Chuck Butler at Everbank points out that without the BLS Birth/Death model added into the mix we would have had a -113,000 negative job growth number. The “real” unemployment rate which factors for economically forced part-time workers and the exhausted benefit unemployed rose from 15.8% in May to 16.2% in June. So basically, 1 in 6 workers over the age of 16 is either unemployed or underemployed.

And what might be the most hideous statistic of them all is the number of jobless for more than 27 weeks went up 89,000 to 6.29 Million! Jobless recovery indeed.

The silver lining of course is that the Washington State numbers are significantly better than the nation. The weak jobs report is pushing interest rates lower but conversely the Troll also knows that you need a JOB to get a loan. Good luck out there.

The Troll

Grand Opening Wrap Up

Well, even though Mother Nature tried her best to rain on our parade, the brave band of trolls who took to our parking lot could not be stopped. Not even Seattle’s Finest, who were called in by a neighbor could deter a magnificent effort. Really Neighbor, 4:00 in the afternoon? Let’s take this quick opportunity to provide some information. Noise ordinances take affect before 8:00 AM and after 10:00 PM on Monday through Friday and 8:00 AM to 11:00 PM on weekends and holidays. This is directly from the fine officers who were obligated to come by because of the call. “You’re doing nothing wrong so have a great time!” they said, which of course we did. Each officer was rewarded for their temperance with a plate of delicious barbecue. Let’s face it, Trolls are generally loud and they like to be heard but they obey the rule of law, unless they have to eat someone who can’t pay a toll.

I would also like to thank our guest Paul for singlehandedly eliminating the ping pong tournament. It was a dazzling display of inebriation, questionable thinking and lack of coordination. Picture it in slow motion because that is exactly how it happened. Paul decides he needs to take a load off. He scans a parking lot full of tables and chairs but decides his best option is an antique 50’s model ping pong table. Have any of you seen the movie Old School? Remember when Frank the Tank shoots himself in the neck with the tranquilizer gun. It was similar to that but Paul’s fall started with the seemingly inocuous buckling of the first leg of the table and him trying to right himself. Unfortunately the middle of the table caved and another leg collapsed. Cue the spilled beer and the crashing sound which ended with him sprawled out like a wounded pelican flapping on top of a crumpled bed of smashed plywood and bent metal. It was a fantastic effort which culminated when one of our little trolls Liam held up a net post and proudly said “I saved it!” I have to admit, it brought the house down so thank you Paul!

I would like to also thank Court who provided a magical mix of hip hop funky soul reggae.  He is available for parties so if you are interested please “Ask the Troll….Anything!”

Thanks to everyone involved, the Troll had so much fun that he may have to make the Grand Opening an annual event.

The Troll

Wallingford Realty Grand Opening and the Solstice Parade

Well, the day has finally arrived. After nearly a year’s worth of planning and preparing we are finally ready to officially launch Wallingford Realty Inc.

We will officially open our doors on June 18th which conveniently coincides with the always entertaining Fremont Fair and Solstice Parade.  So get your asses down to Fremont for some interesting people watching and an epic barbecue style party. We will be serving food and adult beverages all day. It will be a kid friendly environment so bring the rugrats too.

The Solstice Parade starts at 12:00 so be sure to get down there early so you can check out the naked bicyclists! We will not encourage public nudity at our event but please come by anyway. 🙂  After the parade the party will kick into overdrive with our DJ spinning at 4:00. We will be sponsoring a ping pong tournament for some awesome prizes. Don’t miss out on this once in a generation event! Some day you will be able to tell people that you were there and you met a real live Troll. See you there!

The Troll

The Mariners, Trolling and a Party

The Troll’s busy week has hampered his postings but with M’s tickets in hand for today’s game he is ready to post about a new topic. The Mariners. They are rolling right now which is a welcome sight after a horrible season last year. Yes, the Troll is pumped to get out from under the bridge and into the sunshine at Safeco Field. His white legs may be glaring, translucent even but he is determined to flip flop his way downtown. He will be joined by his son and future Mariner Trevor Troll who was last seen tearing up the coaches pitch Little League under the Ballard Bridge. It’s a family business you see and we have divided up the Seattle bridges. I have the Fremont Bridge, my lovely wife Trina has the University Bridge and my daughter Trisha has just set up shop under the Montlake Bridge. Some people say she is too cute to troll but I say it’s in the blood.

So with the smell of beer and suntan lotion in the air it can only mean one thing, baseball season. Or I guess it could mean other things like the Fremont Fair and Solstice Parade. Which coincidently will be the setting for Wallingford Realty’s Grand Opening. If you are planning to go to the parade this year please stop by and have an adult beverage at our new digs. I will post more info about the Grand Opening as we get closer to it so stay tuned.  Until then, Go M’s!

The Troll

Foreclosure Numbers

LPS Applied Analytics recently released their mortgage performance data. Delinquencies increased slightly in April but are down almost 10% on the year and over 25% from the delinquency peak in January 2010. Improvement continues in the pipeline for early stage or newly delinquent loans. The inventory for those loans has dropped to 3 year lows. Even as the overall foreclosure pipeline remains bloated, these are positive signs for the housing recovery. According to LPS, 12.11% of owner occupied mortgages are delinquent or in foreclosure. The numbers break down like this:

2.24 million loans less than 90 days delinquent

1.96 million loans 90+ days delinquent

2.18 million loans in the foreclosure process

6.39 million total loans are delinquent or currently in foreclosure as of April

When will these properties come available you might ask? The answer isn’t clear at the moment. Lenders have, through a variety of ways, slowed the supply of available foreclosures. There have been moratoriums on foreclosures due to lender ineptitude with many overwhelmed by the sheer volume of properties now on their books. Lenders are also trying to avoid dumping too much supply on the market as it would devalue their inventory and create even steeper losses. It looks to this Troll that the supply will be brought to the market evenly over a long period of time.

The good news locally is the overall foreclosure inventory is not nearly as severe in the Pacific Northwest. Great deals are out there with short sales and the chances of them seriously tanking our market are increasingly slim.

The Troll

Why do Short Sales take Longer to Close?

After closing a few short sales the Troll wanted to pass along his 2 cents on why the process takes so long. Obviously the lender holding the note is the primary obstacle. They are either inundated with inventory and cannot keep up or they are inexperienced in this arena and have trouble with the decision making process. In either case it can prolong a closing. Something else to consider is the potential unwillingness of the occupant to help facilitate the process. Underwater home owners typically do not have much incentive to contribute their effort to the cause. They have in many cases stopped making their payments and are living “rent free”. The damage has already been done to their credit rating and in some cases they can save up money while the process draws out. The appraisal process can also be an area for delays especially in FHA loan transactions. FHA appraisals are more extensive and if there are repairs called out or required prior to closing, the process can bog down with contractors and scheduling them.

The Troll is not discouraging anyone from attempting to purchase a short sale. He is merely trying to provide some tips to avoid the dreaded nightmare closing. There are some fantastic buying opportunities out there with short sales but you have to choose wisely and finance them appropriately. Sweat equity is and always has been a great ingredient for a successful real estate opportunity. If that is your goal and a large down payment is not an option there are lenders out there that will allow you to finance less than 20% down that contain no mortgage insurance. The rate is typically a little higher (maybe .25%) but you are not throwing away money on mortgage insurance. Depending on your credit, you can put down as little as 5% which is not far from the 3.5% FHA offers. If you are fixing the property to potentially sell in the near term you will not be affected by a slightly higher rate. Additionally, if you choose to stay in the house refinancing may be the best path forward while rates are low and the equity position has improved via sweating.

The Troll

Rates are Great

It appears the steady climb to higher interest rates is waning. We have recently moved through the 200 day moving average for Mortgage Backed Securities. The FNMA 4.00% Coupon stands at 99.72 improving 22 basis points today. The 10 year bond market has continued its rally and stands at 3.25 today as well. Remember that an increase in demand for bonds (lower economic forecasts) translates to lower long term interest rates.  This recent movement has occurred in the past 30-45 days and appears to coincide with the lowering of growth estimates. Let’s face it, much of the growth in the past year or so has to do directly with government stimulus spending. With the technical explanations out of the way let’s look at what it all means.

With interest rates still at all time lows and our local region faring better economically than the nation as a whole has created opportunity. As I have recently posted, there continues to be better employment opportunities in Seattle (see Spring Break Fun and Local News).  Keeping in mind that we have seen a substantial decrease in values since the credit crisis took hold it looks to this Troll that we have the makings of a recovery. If rates are down and rents are up (see Rents on the Rise?) people will start to choose home ownership and its tax benefits rather than staying put and paying someone else’s mortgage.  We are seeing now that houses that are appropriately priced in solid neighborhoods are garnering multiple offers. These conditions should collectively foster additional demand for entry level housing, which of course is our Specialty! For more information feel free to give me a call.

The Troll

Spring Break Fun and Local News

The Troll has been able to keep up his torrid work schedule by enlisting the help of an old ally, Grandpa Troll. With the kids out of school for the week the Troll had the foresight to fly in a ringer. Yes, Grandpa Troll to the rescue. Items on the schedule this week include the Star Wars exhibit at the Pacific Science Center (really cool), the newly released Hop, a Mariners day game and some well timed outdoor activities (is that the sun?). And since the Troll has a quiet office he can relay some news.

I drove by the Bill and Melinda Gates Foundation yesterday and saw that it was nearly completed. It appears that it will be ready for operations this summer. The Gates Foundation is currently hiring for numerous positions in global health and will employ in the neighborhood of 2,000 in its new Seattle Headquarters.

Vulcan Inc. (Paul Allen) is also in the final stages of completing the new Amazon Headquarters. The estimates on that project (11 buildings and 1.6 million SqFt) reveal that approximately 6,000 Amazon employees will be working in South Lake Union.  The new jobs are a welcome sight and should provide a boost in demand for our local housing market.

In other news, Mercer St was closed this past weekend and will be closed an additional 20 weekends.

The Troll

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