Treasure Valley housing downturn isn't over yet

Nan Holmes, a senior escrow officer at a title insurer, says her insider's view of the Treasure Valley housing market gave her the confidence three years ago to pay $370,000 for a new home in Boise's Collister neighborhood. She got a price she liked from the builder and 100 percent bank financing.
That was before the bottom fell out of the housing market as borrowers with bad credit began defaulting in record numbers, setting off a recession. Holmes, who had earned $150,000 a year when real estate was booming, saw her compensation shrink by half when business cooled, forcing her to dip into savings and sell jewelry. She stopped paying the mortgage in April and has put the house on the market for $145,000 less than she owes the bank.
"How long will it take for the market to turn so I can just break even?" said Holmes, 55.
Home foreclosures are still climbing in Idaho and some other states, according to real estate data firm RealtyTrac Inc. With 14.6 million Americans out of work and consumer spending declining, further weakness in housing could push the economy back into recession, former Federal Reserve Chairman Alan Greenspan said Aug. 1.
Home seizures soared 822 percent in Idaho in the second quarter compared with a year earlier, and the state now has the nation's seventh-highest foreclosure rate, according to RealtyTrac.
Median home prices have tumbled by more than one-third in the Treasure Valley since their 2006 peak. The median price in Canyon County fell to $89,000 last month, according to the Intermountain Multiple Listing Service. In Ada County, it rose slightly to $160,000. The value of residential transactions in Ada County declined 62 percent in June from the peak four years earlier.
"The housing downturn started late in the Northwest and now it's ending late," said Mark Zandi, chief economist at Moody's Analytics. Idaho, Oregon and Washington lagged behind the national cycle and will suffer declines after other areas stabilize, he said.
New defaults are declining and appear to have bottomed in states where the crisis began, falling 43 percent in California, 37 percent in Florida and 27 percent in Nevada in the second quarter from a year earlier, RealtyTrac's data show.
"The worst is over, but it's going to be a long road ahead," said economist Steven Frable at IHS Global Insight Inc.
But the worst may not be over in Idaho. While one in 397 households nationwide received a notice of default, auction or bank repossession last month, one in 240 in Idaho did. Lenders seized 454 homes in Idaho in July.
Initial jobless claims nationwide rose in July, and unemployment stood at 9.5 percent (8.8 percent in Idaho), near a 27-year high, Labor Department figures show. More than 4.5 million people are collecting unemployment benefits, and an additional 3.9 million are getting emergency and extended payments. Fed Chairman Ben S. Bernanke told Congress on July 21 the outlook is "unusually uncertain."
"The numbers are exploding due to unemployment and economic displacement," said Rick Sharga, senior vice president of marketing at RealtyTrac. "We will see them get a lot worse unless we see some job creation."
In Hubble Homes' Charter Pointe subdivision in South Boise, more than half of the homes listed for sale are bank-owned or "underwater," meaning the property is worth less than the mortgage. Dairy cows wander in a nearby pen, and baling machines grind into the night.
"The neighbors aren't used to living next to farming operations with manure and flies," said Richard Murgoitio, who sold 70 acres to Hubble Homes Inc. in 2001 and would like to sell his remaining land to builders. "We're hoping they take us all out, if the economy ever turns around."
Holmes said her employer, TitleOne Corp., is down to 80 employees from a high of 175 in 2007. Her lender, Bank of America, took the first step toward foreclosure in July.
A divorced mother of two, Holmes put her house on the market in June and has applied for a federal program that offers incentives to loan servicers, investors and homeowners to complete short sales, in which the bank accepts less than what it is owed on the mortgage.
She's asking $225,000. She hasn't had an offer.
A third of real estate listings in her area are distressed properties, with seven months of inventory on the market in Boise at her price.
"I was never raised to be in this position," Holmes said. "I've tried everything I can think of."
The Idaho Statesman contributed.Read more: http://www.idahostatesman.com/2010/08/14/1302722/treasure-valley-housing-downturn.html?at_from=becciep@msn.com#ixzz0wcPKFZFH

7 Tips for Saving Energy in the Laundry

Good laundry room habits, including some occasional minor maintenance, can save energy and shave nearly $300 off your annual utility bills. That’s because you can curb the biggest energy culprit: the cost of heating water.
Washing machine
The bulk of a washing machine’s operating costs—around 90%, says Energy Star—go to replacing the hot water in the home’s hot water tank. Reduce the amount of hot water the appliance uses, and you’ll significantly shrink its associated utility bills. By washing fewer loads and doing those loads in cooler water, you can save around $200 per year.
1. Use cold water. Switching from hot wash to cold, according Michael Bluejay, also known as Mr. Electricity, who specializes in electricity savings, can shave up to $215 per year off your electric bill. If you have a high-efficiency washer or gas-fueled water heater, assume savings of about half that figure. Cold washes are generally as effective in getting clothes clean as hot.
2. Only wash full loads. Discounting the energy required to heat the water, it costs around $60 per year in electricity to run the washer, according to the U.S. Department of Energy. Because it takes just as much electricity to wash a small load as it does a full one, you’ll save money by only washing full loads. By reducing the number of overall loads by one-quarter, you can save $15 a year.
Clothes dryer
Because it’s essentially a “toaster with a fan,” says Amanda Korane of The American Council for an Energy-Efficient Economy, a nonprofit focused on advancing energy efficiency, the clothes dryer is a difficult appliance to make green. But that doesn’t mean there aren’t ways to lessen its impact on your utility bill to the tune of about $80 per year.
3. Spin it faster. Good dryer efficiency starts in the clothes washer. Setting the maximum spin speed in the washer will reduce the amount of time—and energy—it takes to get clothes dry. Many of today’s high-speed washer spin cycles can cut dry times by as much as half compared with older models. If an average electric clothes dryer costs about $80 per year to operate, according to the DOE, savings can approach the $40 mark.
4. Clean lint filter and exhaust. Dryers have to work harder and longer to dry clothes when air doesn’t freely flow. Cleaning the lint filter before every use and doing the same for the exhaust line once a year will help maintain maximum efficiency. Also, check that the duct hose is free from tight bends and obstructions. These small chores not only will save a few bucks per year, they will reduce the risk of fire.
5. Activate energy-saving features. If the dryer has an automated moisture-sensing device, use it. Setting the timer can cause the dryer to run longer than necessary. But a moisture sensor will automatically shut off the machine when it senses clothes are dry. This feature can save $8 to $12 a year.
6. Dry like with like. Lighter items, such as T-shirts and blouses, dry much quicker than heavy items like towels and blankets. Therefore, when these items are combined in the same load, some of the clothes continue to tumble long after they’re dry. This extends the dry time of the bulkier items, in turn wasting a few bucks every month.
7. Skip it. Every load in the dryer costs around $0.35, according to Bluejay. Hanging clothing to dry on a line outside or rack inside costs nothing. Racks run about $25-$90 at online retailers. So, by giving the dryer a break even occasionally, savings can add up. Not only will the practice reduce utility bills, it will help extend the life of both the clothes and the appliance.
Douglas Trattner has covered household appliances and home improvement for HGTV.com, DIYNetworks, and the Cleveland Plain Dealer. During the 10-year stewardship of his 1925 Colonial, he’s upgraded almost every household appliance. After lengthy deliberation, he recently replaced an aging top-load washing machine with an energy-efficient front-load unit.Read more: http://www.houselogic.com/articles/7-tips-saving-energy-laundry-room/#ixzz0vlJJ1VBR

20- Year Mortages Cut Interest Significantly!

20-Year Mortgages Cut Interest Significantly Buyers with the ability to stretch a little might consider a 20-year fixed-rate mortgage instead of the traditional 30-year, suggests CBS Money Matters’ financial adviser Ray Martin.Martin points out that a $200,000 mortgage with a 30-year term and an interest rate of 4.75 would have a monthly payment of $1,043 and the total interest over the life of the loan would be $175,600.The same mortgage with a 20-year term at 4.5 percent would have a monthly payment of $1,265 with total interest over the life of the mortgage of $103,670.Young home buyers planning to have children will have their 20-year mortgage paid off by the time their kids enter college, a big financial advantage, Martin points out.Source: CBS, Ray Martin (08/04/2010)

Spending less money on utility bills doesn’t mean you need to rush out and purchase a whole new suite of Energy Star appliances. With occasional light maintenance and good habits, you can greatly improve the energy efficiency of your large kitchen appliances—up to about $120 annually—without sacrificing convenience.

Refrigerator/freezer
Energy-efficiency experts tell us to focus our efforts on the biggest energy hogs in the house, and that definitely includes the fridge. Because it cycles on and off all day, every day, the refrigerator consumes more electricity than nearly every appliance in the home save for the HVAC systems. The average refrigerator costs about $90 per year to operate, according to the U.S. Department of Energy. The good news is that a few simple adjustments can trim roughly $38 to $45 off those utility bills.
1. Adjust the thermostat. By setting the thermostat colder than it needs to be, you might increase your fridge’s energy consumption by as much as 25% on average. Adjust the refrigerator so that it stays in the 37-40 degrees F range. For the freezer, shoot for between 0-5 degrees F. You could save up to $22 per year. If your model doesn’t display the current temps, invest in two appliance thermometers (one for the fridge, one for the freezer). They cost roughly $3-$20 apiece at online retailers.

2. Clean the coils. As dust accumulates on the condenser coils on the rear or bottom of the fridge, it restricts cool-air flow and forces the unit to work harder and longer than necessary. Every six months, vacuum away the dust that accumulates on the mechanism. Also, check to see that there is at least a 3-inch clearance at the rear of the fridge for proper ventilation. This routine maintenance can trim up to 5% off the unit’s operating cost, says energy savings expert Michael Bluejay, saving you about $4.50 a year.
3. Use an ice tray. Automatic ice makers are a nice convenience, to be sure, but it turns out the mechanisms are energy hogs. An automatic ice maker can increase a refrigerator’s energy consumption by 14% to 20%, according to Energy Star. By switching off the ice maker and using trays, you can save about $12 to $18 off your annual electricity bill. Most units require little more than a lift of the sensor arm to switch them off. To reclaim the space remove the entire unit, a simple DIY job on many models.
4. Unplug the “beer fridge.” Many homes have an extra fridge that runs year round even though it’s used sparingly. Worse, these fridges tend to be older, more inefficient models. By consolidating the contents to the main fridge and unplugging the additional unit, you eliminate the entire operating cost of a fridge. The second-best solution is to make sure the extra fridge remains three-quarters full at all times. The mass helps maintain steady internal temps and lets the fridge recover more quickly after the door is opened and closed, according to the California Energy Commission.
Ovens and ranges
“Green” cooking all comes down to proper time and space management. By using gas and electric stoves more effectively, you can painlessly save a few dollars a year.
5. Cut the power early. As anybody who’s ever bumped a burner on an electric stove can attest, those heating elements stay hot long after they’ve been switched off. Put that residual heat to work by shutting off the burner several minutes before the end of the cook time. The same technique can be applied to the oven. The savings can add up to a couple bucks every month.
6. Match the burner to pan. When a small pan is placed on a big burner you can practically see the money disappearing into thin air. By matching the burner to the pan, electricity won’t be squandered heating the kitchen rather than the food. The reverse is true, too. A small burner will take considerably longer to heat a large pan than would an appropriately sized burner. For gas stoves, don’t let the flames lick the sides of the pot. Follow these tips and watch the utility bills shrink by a few dollars a month.

Denied Federal Mortgage Aid, Homeowners Seek Alternatives

Friday, Jun 18th, 2010
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Denied for Federal Mortgage Aid, Homeowners Seek AlternativesBy Stella M. HopkinsRISMEDIA

June 18, 2010--(MCT)--Allison Rinehart's best hope for saving her home isn't the massive federal effort to stem foreclosures.She's been denied, possibly in error, for that plan so she's banking on an alternative mortgage modification to keep her Charlotte townhouse."This is the only thing my daughter and I have," said Rinehart, who is 45. "I am a single parent, no child support, working as many jobs as I can take on."The taxpayer-funded Home Affordable Modification Program, or HAMP, is the centerpiece of the nation's foreclosure prevention effort. But it doesn't work for many people.For example, Bank of America estimated in April that more than half its 1.44 million delinquent mortgage customers weren't eligible for HAMP. Wells Fargo says about 80 percent of its roughly 500,000 modifications are non-HAMP. Combined, the two banks serve nearly 40 percent of U.S. mortgages.HAMP also has seen a surge in homeowners failing the three-month trial period, and a decline in new trial enrollments. Critics blame servicers for the declines, saying they're doing a poor job and unfairly bouncing people from the program. Servicers acknowledge there were problems, especially early on. They also say homeowners aren't complying with payment agreements or document requirements.Whatever the reason, the problem isn't going away. The number of struggling homeowners nationwide is expected to remain high because job growth remains sluggish and millions of people are out of work. That means alternative modifications are likely to become even more important tools for preventing foreclosure."The goal is just to get to affordability ... whether that happens through a modification through HAMP or outside of HAMP," said Tom Goyda, a Wells Fargo spokesman.There are many reasons property owners can't qualify for the federal program.For example, they might have refinanced or bought after HAMP's Jan. 1, 2009, cutoff. They might not meet income or debt requirements. HAMP modifications, subsidized by taxpayer dollars, also aren't available for investment property, vacation homes and high-end homes.In April, Bank of America finalized more than 23,000 HAMP modifications and had more than 210,000 in the pipeline. The Charlotte bank also has been averaging about 13,000 alternative modifications a month this year, said spokesman Dan Frahm. Most are for customers with mortgages issued after the cutoff or above the HAMP limit or on properties that aren't their principal residence."HAMP is at the center of our modification efforts at Bank of America," Frahm said. "It's also important to recognize that no one solution or program can address the ... issues facing homeowners, who are experiencing hardship as a result of prolonged recessionary impacts."President Barack Obama announced the HAMP program in February 2009, well into the financial crisis. Prior to that, lenders and mortgage servicers were already doing modifications so it's natural there are more of those. Many HAMP applicants also are still working through the slow, cumbersome process.Servicers participating in HAMP must first consider homeowners for loan aid under that program. If that doesn't work for customers, servicers can consider them for their own programs.Goyda said Wells is doing alternative modifications for about 60 percent of customers who reach HAMP's trial phase but don't ultimately qualify. About 10 percent find other solutions, and the balance are probably headed for foreclosure.Of HAMP, he said: "It's only one part of our overall efforts to help customers find affordability."Consumer advocates, while sharply critical of mortgage servicers for poor modification service, generally endorse HAMP's intent and its standardized approach."It's a useful template," said Julia Gordon, senior policy counsel with the Center for Responsible Lending in Washington. "It's by no means some kind of gold standard."For example, a recent HAMP change eliminates unemployment benefits as a qualifying source of income for modifications."That's just crazy," she said.Gordon cautiously welcomes alternative plans because they can potentially help more people. She's concerned homeowners won't have a consistent way to know what's available and how to qualify. She and others have seen instances where payments are actually higher under non-HAMP plans — not a workable solution for a struggling borrower.She also frets about the lack of federal oversight for in-house plans. The U.S. Treasury oversees HAMP, but has been criticized for not penalizing servicers for mistakes.Gordon urges people to review any modification offer carefully. What's the new payment? Has the principal been reduced if the loan balance exceeds the value of the house? How long does the modification last?"It is conceivable you could have a proprietary product that's better," she said.Under HAMP, the government pays servicers and homeowners for successful modifications. For homeowners who make all their payments on time, that can amount to $5,000 paid toward their loans.Those incentives aren't available under alternative plans.Al Ripley, with the nonprofit N.C. Justice Center, has been critical of HAMP's cumbersome nature. He's also concerned about the lack of consistency and transparency in alternative plans. He says all servicers should be required to disclose their guidelines and processes for all modifications."It would be very helpful for homeowners to have more predictability when applying for a modification," Ripley said.Allison Rinehart's budget was tight in late 2004 when she paid about $136,000 for her Charlotte townhome.She put $4,000 down on the home and took a 30-year mortgage at nearly 9 percent. Her monthly payments were $1,111. Rinehart and her daughter, Sydnea, now 15, got by on the roughly $30,000 a year Rinehart made as a longtime, self-employed hairdresser and middle-school coach.Last spring, she noticed business dropping off more sharply as her clientele struggled in the downturn. In July, she asked for a modification from Select Portfolio Servicing, the Utah firm handling her mortgage. She received an unusually speedy offer of a trial plan, which is supposed to last three months.Rinehart was told to make the first payment on Sept. 1 at her original amount. Subsequent trial payments were cut to $685. She made those payments through March, when she received a letter saying she was denied a HAMP modification. Soon after, she contacted McClatchy Newspapers."This has caused me sleepless nights, depression and anxiety," said Rinehart, who also works in her church's office and has been a nanny. "My 15-year-old doesn't know whether or not she will have her home the next day or not because of this."SPS offered another trial, with monthly payments at an even lower $456. Rinehart started the payments in April but worried it was a delaying tactic and she'd be denied again. Meanwhile, she received notices from SPS saying that to keep her house she had to repay the thousands of dollars that hadn't been paid during the trials."It really scared me," she said. And angered her. If she had the money, she wouldn't have asked for help."It was a slap in the face."In May, McClatchy Newspapers began contacting SPS, asking about Rinehart's case. After several weeks of messages and e-mails, the company said it would send Rinehart a response.In that letter, SPS said Rinehart didn't qualify for HAMP because she failed to send documents by a certain date. Rinehart said that's not true, that she has copies and certified mail receipts proving she sent everything requested, on time.The May 27 letter, which Rinehart provided the newspaper, confirmed Rinehart made the first two trial payments. The letter said once she made the third payment, due last week, "SPS will complete the modification process and you will receive the final modification agreement which requires your signature."Once this is received, SPS will permanently modify the terms of your note and bring your account current."Her June payment cleared her bank shortly after the 1st of the month. On June 10, she arrived home to find the promised paperwork. She believes that happened only because she went public.Last week, she was reviewing the papers and reflecting on what sustained her."I relied on my faith."(c) 2010, The Charlotte Observer (Charlotte, N.C.).Distributed by McClatchy-Tribune Information Services.

NEW IHFA Loan Program

Idaho Housing and Finance Association launches new lending option
by Jennifer Gonzalez
Published: June 7th, 2010
There’s a new mortgage option for first time homebuyers in Idaho. The Idaho Housing and Finance Association (IHFA) has just launched the Affordable Advantage Loan, through its IdaMortgage program.
According to IHFA’s President and Executive Director Gerald Hunter, “It offers another affordable lending option for low to moderate income homebuyers across the state.”
Some of the features of the Affordable Advantage Loan include a low cost, 30-year fixed interest rate, as little as $1,000 needed from the borrower to close, and no mortgage insurance required.
“This IHFA exclusive financing option is a great tool for homebuyers as the housing market in Idaho continues its recovery,” Hunter said.
Interested homeowners are able to check their eligibility status for an IdaMortgage loan by checking out www.IdaMortgage.com. If they qualify, they can be referred to a local lender who will assist with the loan process.

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