Michael Mullin ~ Spokane WA Home Loans | ~ Lake Spokane ~ Suncrest

2009 Conforming And FHA Loan Limits

The Federal Housing Finance Agency (FHFA) announced that the conforming loan limit will remain $417,000 in 2009 for most areas. They have designated some areas as "high-cost" where the limits are equal to 115 percent of local median house prices and cannot exceed 150 percent of the standard limit, which is $625,500 for one-unit homes in the continental U.S.

The only counties in WA that have higher limits than $417,000 are San Juan County at $483,000 and King, Pierce, and Snohomish Counties at $506,000.

In Idaho, only Blaine County and Teton County loans can exceed $417,000.

HUD also announced that the FHA loan limit for the Spokane area will remain at $271,050.  For Kootenai County the limit is $286,250.

Click on the links below for more information

FHFA Press Release
2009 High-Cost Area Loan Limits
2009 Loan Limits for All Counties

Keep in mind, these figures are LOAN limits - for a sales price "limit" you would add in the down payment required.

If you are selling or buying a home that exceeds these amounts you need to get with a lender for a mortgage planning session.  Jumbo interest rates are VERY expensive and the 2nd mortgage market has been dramatically curtailed.  In other words, your options for financing a home in the Jumbo price range are very limited.

During the weekend of October 17th, 18th, and 19th about 30 members of area Search and Rescue teams assembled at the Spokane Mountaineers' Chalet on Mount Spokane.

The Mountaineers have an incredible asset in the Chalet and the 40 acres surrounding it - here's a picture from the deck looking towards Idaho -

Participants started arriving Friday evening and settled into a humongous feast of chicken fajitas with all the fixings accompanied by Apple Pie and Cheesecake for desert. A gigantic THANKS to Karen Coates for putting it all together and allowing your husband Joe to feed us!

Hey! Two hours of studying FEMA's National Incident Management System (NIMS for short) is very hard work - for those of us that managed to stay awake.

Saturday was Map/Compass/GPS training, Litter Carrying, and Knots - both classroom and field sessions. The Navigation classes were taught by Phoebe Duke of Intermountain Search Dogs, Scott Foster of SMSAR taught Knots and Chad Skidmore gave the instruction on proper use of the patient litter.

Sunday was another full day with classes on Crime Scene Investigation and Search and Rescue Techniques, taught with skill by Jackie Bell and Andrea Sawyer

Search and Rescue is a fun and rewarding volunteer activity, and there are specialty groups for all outdoor enthusiasts - there are dog, ATV, horseback, snowmobile, dive, climb and ground teams. You are welcome to participate in one or more! For a list of all the search and rescue teams in Spokane County CLICK HERE.

If you know of someone who might be looking for an opportunity to help the community while enjoying the outdoors at the same time, shoot me an an email. I'd love to send you more information.

I'd like to extend an invitation to come out and help a very special young man this Saturday from 8:30am to 3:00pm.

Boy Scout Connor Coates from Nine Mile Falls' Troop 19 will be coordinating a huge clean up project at John H. Shields Park. For details CLICK HERE.

Part of the work involves sand blasting graffiti that is so far off the ground we will need to access via rope and harness climbing methods. If nothing else, come out to watch the spectacle!

Please note - do NOT confuse this park with the City of Spokane's Minnehaha Park which is about 2 miles away. John H. Shields is located on E. 5625 Upriver Drive: 1 mile east of Havana on Upriver Drive, north at City's Upriver Dam site.

Hope to see you there!

I'm going to share a secret with you - my allowance is $60 per month.  That's right - $60 dollars to spend on dinning out, movies, coffee, and anything else I may want to treat myself to.

I wasn't always this frugal. In fact, my family can overspend with the best of them!  Fortunately my wife and I decided to stop the crazy spending and put ourselves on a financial diet.

Should your allowance be $60?  Well that depends.  If you are putting 10% of  your gross income into savings every month and have no credit card debt I'd say you could probably bump that figure up.  If, on the other hand, you have less than 3 months worth of your income sitting in your regular savings account for emergencies, have any credit card balances, or are saving less than 10% of your gross income I'd suggest your number should be less than $60 until you can achieve those three benchmarks.

So how exactly do you get yourself on such a financial diet and then maintain? It's called "CASH ONLY." 

For all your personal expenditures you must pay with cash from your wallet or pocket book.  The amount of your allowance is not the critical part of this diet, it is the use of cash that is key.  Having a finite amount of paper in your pocketbook that you can see every time you reach for some more is the only way to reign in the spending.  

Pay yourself the allowance on the first of every month and then have fun!  Of course, when the cash runs out you are done for that month.  No reaching for the debit or credit card when you run out mid-month.  No cash, no play!

We implemented this for our entire family, including our 13 year old and 10 year old.  It's amazing the choices each individual will make when it is THEIR allowance on the line. There will be times that we drive through McDonalds' because one person wants to waste their money on some fries and the rest of us will not order anything and wait to get home to snack.

For each of the last 6 months I've managed to spend $20 or LESS of my allowance.  

My passion is my involvement with Spokane County Search and Rescue, so I put away $40 per month to buy my SAR toys (er...equipment!).  I never realized I could be THIS frugal until I  had a finite amount of cash in my pocket.

 

 

 

How low do you think you could get your allowance to?

Seems every day brings to light another bizarre angle to this incredible mess - today I was made aware of the web site You Walk Away.

Are they legit and can they help distressed homeowners? I have no idea!

I can tell you that if you are considering "walking away" from your home you had better consult both an attorney and a CPA. There are gigantic legal considerations and potentially expensive IRS implications as well when you abandon your home and mortgage.

I'm sure most of our brethren East of the great state of Arizona are wondering "why in the heck are these funny Californians and Nevadans walking away from their homes?!" And why are the foreclosure rates exceeding even the most pessimistic lender's estimates?

I'll tell you why - the erosion of value and long term loss of cash and equity are beyond comprehension and even borrowers with 700+ FICO scores are starting to abandon their homes.

Here's a quick example - In the summer of 2005, Ms. First Time Move Up Buyer purchases a home for $385,000 in Sacramento California and puts $100,000 cash down from the sale of her first home. Yesterday she niavely calls her friendly lender (me) to ask about refinancing. OOPS!! Current value of her home is only $170,000.

In case you like pictures better than words - here's some data I found on Zillow for a randomly selected property in Northern California. Just for fun, go to Zillow yourself and type in a random address and look at all the "hills" created by tanking values.

Last sale and tax info

Sold 03/29/2007: $465,000

Above data from Zillow web site - CLICK HERE to see full property details

What do you think went through my client's mind when I told her the news? First, the shock as she realizes her $100,000 CASH is gone.

Forever.

She's got a loan for $280,000 so she is also at least $125,000 upside down. There is no loan modification or rate reduction that is going to erase the loss and put the cash back in her pocket.

If she decides to stay and do the honorable thing and pay back her lender she has at least 10 years before she can hope that values will come back enough so she can sell and pay off her mortgage. Maybe. It might be 15 years.

Or, she can stop making payments now and take the hits to her credit report for a foreclosure. Then she can go out and lease/option a home that is twice the size of the one she is currently in, and in a better neighborhood for less than the payment she is making now. In about 3-4 years she'll be eligible for mortgage financing again and can pay off her landlord/lessor.

Why do I think she'll do this - because she asked me if it was possible.

This is just one person and it is a real story. I spoke to this person Monday. Now let's multiply her problem ($200,000 plus loss of equity in three years) by EVERY home purchase in California, Nevada, and Arizona from about 2003 to end of 2006. In California alone they sell about 50,000 homes per MONTH. So not counting any state but California and ignoring the fact that people who bought in 2001 and 2002 are probably underwater as well - you have almost 2 million families making the same decision my client is, in California.

If Nevadans, Arizonans, Floridians(?) are similar in thought, they'll be "walking" too.

What would (will) you do?

P.S. No comments on how I'm advocating people walking away from their mortgages - I'm just pointing out the obvious.

P.P.S The reporters at the Wall Street Journal agree with me - seems they just published a similar article today. There stats are even more sobering - almost 30% of people who bought homes in the last 5 years are underwater. You need to read this - the foreclosure problem is going to get worse before it gets better.