Jeff Rainwater, Lake Stevens, WA Real Estate

Strategic Default - Walking Away From Your Mortgage

Record numbers of homeowners are walking away from their mortgage. They are doing what's called "Strategic Default" or better known as "walking away from their mortgage". Being a licensed real estate broker, it's not my place to be offering advice to people telling them to walk away from their mortgages. I'd leave that up to the CPAs and real estate attorneys. However, I can totally see why someone might want to consider this option.

I spoke to a buddy of mine the other day who bought a home in 2006 for $250,000. The house is worth probably $160k-$$165k in this market today. This puts him pretty far underwater. Now his situation is that he can certainly still make his payments just fine, however, he doesn't want to anymore. Last year he got transferred to a different office further south which increased his commute time by an extra 45 minutes each way for a total commute time of over 3 hours per day. Under normal circumstances he would consider just selling and buying something closer to his new job location. Unfortunately, since he is able to make his payments and has no documentable hardship, the bank will not consider a short sale unless he comes to the closing table with the $80,000 deficiency. Well who has a spare $80 grand laying around? Not I.

So what's he thinking of doing? He's considering strategic default. Now in many situations this is a horrible idea because you could have a judicial forclosure and be in deep do-do for way more money than just the deficiency. But in Washington State, with deeds of trust, you're facing a non-judicial forclosure at a trustee sale. If you only have ONE mortgage with no 2nd, then this means that they can't come after him for the deficiency if he simply lets them foreclose!

This is the case for my buddy. He figures he simply will stop making payments, drag the bank along as long as he can while he saves the money he would have spent on it and use it for paying off other debts. In the state of Washington the bank (if they even get the time to get around to it) is required to post the sale notice 90 days before the date of the trustee sale. So at MINIMUM, he gets to save 3 months of payments, walk away from the debt and the deficiency, and become a renter with the worst being that his credit will take a nasty hit for the next 7 years and he will have to rent.

In another scenario, I have a short sale listing in which the names on title are my client and her brother. She had since then gotten married but the husband was never put on title. This one is a bonefied hardship short sale but unfortunately its a middle unit, second floor condo which makes it an insanely difficult one to place with a buyer. What's more is she's more than $100k underwater. We could drop the price but then the bank might not approve and their is always still the chance they could request the seller sign a deficiency note which I know she would never do for that huge amount. If she sells as a short sale, her credit will still be effected, altough not quite as bad. With her unique situation, she could strategic default then still buy a home with a non-government loan and have her husband take title as "married as a separate estate". They could walk away from their mortgage and still be homeowners with a NEW home! Gosh it's almost a no-brainer.

So if the bank made a business decision to give these people loans, do you blame them for considering a strategic default and walking away from their homes as a sound business decision for themselves?

IMPORTANT...Anyone considering walking away from their mortgage payments and doing a strategic default should always consult a real estate attorney and CPA for legal and tax advice, ESPECIALLY if you have more than one loan or live in a state which does judicial forclosures as opposed to trustee sales..

Obama throws a lifejacket to underwater homeowners

It sounds like white house is trying to at least make another attempt to help the current foreclosure crisis. As of today, appairently, the Obama administration is launching an plan of attack to help the over 1.5 million homeowners who are under water down on their mortgages.

Under this new plan, if the lender agrees to forgive at least 10% of the original mortgage amount, the Federal Housing Administration will allow lenders to give these owners refinanced loans.

It would be an understatement to say that previous efforts to help fix our foreclosure crisis by the Obama administration have fallen short of expectations. Will this one be better? I don't know but it certainly can't make it worse I suppose. The plan is expected to help at least half a million people so I guess we'll see.

Tell me what you think.

Everett Hotels - Hotel List for Everett, WA

Need a Hotel in Everett, WA? Here is a list of Everett Hotels including average rates, ratings, locations, and phone numbers.

Please keep in mind that price is not always an indicator of quality. In general, you get what you pay for, but not always.

Hotel ratings are based solely upon customer reviews and do not reflect the blog author's opinion. The author is not responsible for the ratings or any ommitted/incorrect/out dated information.

Everett Hotel: Motel 6 Everett North Average rate per night: $50	10006 Evergreen Way Everett, WA 98204	(425) 347-2060
Everett Hotel: Motel 6 Everett South Average rate per night: $54	224 128th St SW Everett, WA 98204	(425) 353-8120
Everett Hotel: Days Inn Everett Average rate per night: $59	1602 S.E. Everett Mall Way Everett, WA 98208	(425) 355-1570
Everett Hotel: Travelodge Everett Average rate per night: $62	3030 Broadway Ave Everett, WA 98201	(425) 259-6141
Everett Hotel: Travelodge Everett Mall Average rate per night: $66	9602 19th Avenue SE Everett, WA 98208	(425) 337-9090
Everett Hotel: Sunrise Motor Inn Average rate per night: $67	8421 Evergreen Way Everett, WA 98208	(425) 347-1100
Everett Hotel: Days Inn Everett Average rate per night: $69	1122 North Broadway Everett, WA 98201	(425) 252-8000
Everett Hotel: La Quinta Inn Everett Average rate per night: $85	12619 Fourth Ave. West Everett, WA 98204	(425) 347-9099
Everett Hotel: Quality Inn & Suites Average rate per night: $85	101 128th St. SE Everett, WA 98208	(425) 609-4550
Everett Hotel: Extended Stay Deluxe Average rate per night: $90	1431 112th Street S.E. Everett, WA 98208	(425) 337-1341
Everett Hotel: Holiday Inn Express Everett Average rate per night: $105	131 128th Street Southwest Everett, WA 98204	(425) 609-4000
Everett Hotel: Best Western Cascadia Inn Average rate per night: $105	2800 Pacific Avenue Everett, WA 98201	(425) 258-4141
Everett Hotel: Inn at Port Gardner Average rate per night: $114	1700 West Marine View Drive Everett, WA 98201	(425) 252-6779
Everett Hotel: Best Western Navigator Inn & Suites Average rate per night: $121	10210 Evergreen Way Everett, WA 98204	(425) 347-2555
Everett Hotel: Holiday Inn Downtown Everett Average rate per night: $128	3105 Pine Street Everett, WA 98201	(425) 339-2000

Considering moving to the Everett area? Contact Jeff Rainwater to discuss home buying options in the Everett, WA area.

Is the economy recovering?

If you're considering buying a home right now, you might wonder if the economy is recovering. Certainly you want to make a wise investment decision and you probably want to know if your home will be worth more or less in a few years. Well, certainly nobody has a crystal ball but we do have different sources of data that can help us answer that question "Is the economy recovering?" .

Well, in looking at the most recent data from the National Association of Realtors index (NEA), it looks like pending home sales were up an amazing 8.2% for the month and up 17.3% from this time last year. That pretty much blew all expectations out of the water!

Additionally, the National Association of Realtors appairently just released a revised long-term forecast. Their projections are that median home prices will be up 2.7% in 2010 and then up 4.3% in 2011 on existing homes. New homes are the same projection for 2010 but an even higher number of a 5.1% projection for 2011.

Fannie Mae recently did a new survey which showed that even in spite of the troubling economy in the last few years, 65% of americans STILL prefer owning a home. WOW!

Home values, at least in Washington state, still continue to remain up from what they were 10 years ago. Sure, if you bought in 2007, you've got a long way to go to gain that equity back but if you bought in 2002, you should still have made money. In fact, if you look at this zillow graph showing 10 year values in Snohomish county, WA, you can pretty much see that if the regular upward trends from 2000-2003 would have continued (shown by the red line), we'd probably be right about where we are now anyway. My take? So we had a big bump, who cares, move on. Pretend it never happened.

BUT WAIT, THERE's MORE! Even investors are helping us answer the question "Is the economy recovering?". They are starting to see signs of a recovering economy because stocks have even finished up for the past SIX WEEKS IN A ROW!

How about unemployment? Certainly that can help us determine if the economy is recovering right? Yep! And it looks pretty good too! The diffusion index showed that 60% of industries ADDED to their March payrolls. Self employment and start-up businesses has grown by 452,000 per month in the last three months. Finally, the labor force grew at a 2.9% annual rate the last 3 months allowing the unemployment rate to stablize. When that drops down to 1%, it's expected that unemployment will actually begin to trend downward.

So is the economy recovering? Well...All I can say is that as of April 2010, the signs are looking positive. Nothing jumps out as any reason to not be optomistic about it, that's for sure.

(Shakes the magic 8 ball and asks "Is the economy recovering?"... "Outlook Good"...hmmm, works for me)

Neighborhood Profile for Valley View & Sylvan Crest in Everett, WA

Valley View neighborhood in Everett, WA has 237 single family homes as well as a few condo/townhome units. Construction on the first phase of Valley View, commonly referred to by the residents as "Valley View 1" began in 1968 and continued into the 1970s. The second phase of developement in Valley View commonly referred to as "Valley View 2" primarily took place between 1981-1985 and includes a total of 49 homes. Valley View 2 is the section beginning from Hamlet Ln and southward. While many of the homes on the eastern side of Valley View have views of Snohomish Valley, ironically, none of the 49 homes in Valley View 2 or on the west side of the neighborhood have the view.

Sylvan Crest includes 53 homes of various sizes many of which arguably boast some of Snohomish County's most spectacular views of the Snohomish valley including the Snohomish River and the Cascade Mountain backdrop. The first homes in Sylvan Crest were built in the mid 1950s with some of the newer homes as recent as the mid 1990s.

Valley View lot sizes are reasonable sized but not excessive ranging from 0.13 acres up to about a quarter acre for some lots. Sylvan Crest lot sizes are generally similar in size although lot sizes there go as high as 1/3rd acre.

Both Sylvan Crest and Valley view are located in Everett, WA over the 75th street I-5 overpass from Broadway which is the only outlet for the neighborhoods. Sylvan Crest is on the north side of 75th street while Valley View is on the south side.

The neighborhood does hold regular meetings for residents although they hold no official HOA and do not charge association fees.

Average House Hold Income: $75,429
Median Mortgage: $1,200
Average Household Size: 2.83 people
Crime: Signifcantly below county and state rates for both violent and non-violent crimes.
Poplation Distribution:
0-11: 14%
12-17: 8%
18-24: 9%
25-64: 59%
65-74: 2%
75+: 3%

Having grown up in Valley View myself, I can tell you that the people in there are some of the nicest people in the area. The neighborhood comes highly recommended!

For more information about Valley View or Sylvan Crest, please contact me!

Everett Information:

The City of Everett, located 25 miles north of Seattle, is the 4th largest city in the Puget Sound area . With a population in 2009 of 103,500, the city of Everett is the 6th Largest city in Washington State, behind Seattle, Spokane, Tacoma, Vancouver, and Bellevue. Everett is located in Snohomish County. The local economy is driven by the aerospace industry as it is the home of Boeing's largest jet assembly plant boasting the world's biggest building. Everett is also home to the west coast's largest marina and hosts a US Navy station with an aircraft carrier.

Just a short commute to Seattle, Redmond, or Bellevue, the Everett neighborhoods provide a suburban feel while still within  reach of the big cities. The metro area is well known for it's Starbucks headquarters as well as home of technology companies such as Microsoft and Nintendo.