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Three senators (Scott Brown from Massachusetts, Sherrod Brown from Ohio and our very own Lisa Murkowski from Alaska) have proposed a bill that will help shorten the time it takes to complete a short sale. This will help prevent more American homeowners, including those here in Anchorage, from losing their homes to foreclosure. In order to sell your Anchorage home in a short sale, you must reach an agreement with your lender where they allow you to sell your home for less than is owed. This happens when the homeowner is struggling to make their monthly mortgage payment, is facing the possibility of foreclosure and owes more on their home than it is worth, making it difficult to sell it via a traditional home sale.
Right now, an Anchorage short sale can take anywhere from four to nine months to complete. The bank has final say in whether to accept an offer on the Anchorage home in question or not. Sellers are finding that buyers get restless waiting for the transaction to move along and decide to walk away from the deal in frustration. This translates into more unnecessary foreclosures. The senators have proposed that a law (aka the Prompt Notification Short Sale Act) require lending institutions to respond in writing within 75 days of the buyer’s initial written request or face financial penalties.
Studies have shown that buyers have no problem buying a home via short sale. They just want it to be done in a more manageable time frame. While foreclosures tend to bring down the home values of the neighborhoods they are located in, short sales do not have this impact. Previous;y proposed legislation required banks to respond within 45 days of the initial written buyer offer, but this never even made it to debate, presumably because this was considered much too short a time frame for lending institutions to conform to. The 75 day time frame seems much more reasonable.
This much is true: short sales are helpful to the Anchorage real estate market. They prevent homeowners from losing their property to foreclosure, the seller gets a good deal and the banks don’t have to deal with the expense of having to get the property back and resell it to someone else. It’s a win-win for everyone if this bill to shorten the short sale timeline can be passed. Let your congressman know how you feel about it today. And, thank you Senator Murkowski for looking out for all us Alaska homeowners.
Pauline Hofseth, your Anchorage real estate specialist
Originally posted on my Anchorage real estate blog here: http://activerain.com/blogsview/3015596/bill-proposed-to-shorten-short-sale-timeline.
A public workshop discussing midtown Anchorage growth will be held in the conference room of the Loussac Public Library from 6-8:30pm on Thursday, November 19, 2009. A special presentation is scheduled for 7pm, with a discussion following. The Midtown District Plan has gone through several incarnations over the last couple of years. The Municipality of Anchorage (MOA) wants to hear any public comments, criticisms or ideas. They are happy to implement anything that makes the Midtown District Plan stronger. The deadline for all Anchorage residents to make public comment on the Public Review Draft are due by December 15, 2009. The final review will be submitted at that time. You can download a copy of the Public Review Draft here. All public comments can be made in person at the public workshop on Thursday, November 19th, via email to Tana Klunder at klundertg@ci.anchorage.ak.us or via snail mail to:
ATTN: Midtown District Plan
4700 Elmore Rd, 2nd Floor
Anchorage, AK 99507
All snail mail must be received well in advance of the December 15, 2009 to be considered to be included in the final review. Please make plans to come to the public workshop for Midtown Anchorage Growth on Thursday, November 19th to make sure to get your thoughts and opinions considered for this important project for the Anchorage economy.
I was looking over my recent blogs and found that not even a month ago I asked “Is it Time for You to Refinance?”. When I posted that blog on May 19th, the interest rate was 4.75%. So, homeowners who did not refinance at that time may have missed the boat.
Interest rates have been rising rapidly for the past three weeks. Many states in the lower 48 have already experienced interest rates of 6% and above. Just yesterday, RealtyTimes.com reported that interest rates were going up and no one was predicting how high they will go. Bernard Baumohl of the Economic Outlook Group says that interest rates could go as high as 6.5% in the near future.
After a sudden and rapid rise in interest rates, the interest rates will sometimes fall back temporarily. That must be where we are today because interest rates fell back. Today’s Anchorage Alaska mortgage interest rate is: 5.625%.
Are interest rates headed back up or will they continue to go down? It seems even the experts don’t know for sure. For the past three weeks. all the mortgage alerts have reported that interest rates were going up and IF they fell back, it would only be slightly. All agree that the days of historically low interest rates (4.5%) are gone, most likely forever.
I am not a mortgage lender nor am I an economist but this is what I would have the Anchorage home buyer remember:
* Interest rates affect your buying power to purchase a home at the same payment.
- The move from 4.75% to the current 5.625% has diminished what you can buy by about $15,000.
* Interest rates affect the income required to qualify for the same loan amount.
- The move from 4.75% to the current 5.625% has increased the required income by over $4,000 (gross annual income).
Now is the time to buy:
* Now is the time to buy to take advantage of the buyer’s market in Anchorage.
* Now is the time to buy to take advantage of today’s interest rates.
* Now is the time to buy to take advantage of the first-time home buyer tax credit (escrow must close by Nov 30).
Interest rates were 6.5% a year ago. For eight years before that, they were at the 7% mark. Before that, interest rates were 9% and, at times, in the double digits. Some economic analysts are predicting an inflationary period on the horizon due to the stimulus spending. If that materializes, not only will interest rates soar, but housing prices will increase as well.
Thinking of buying? Now is the time.
In the past two weeks, interest rates began to inch up slightly. This week, RealtyTimes.com reports that today’s interest rate fell back. The current interest rate is 4.75% for a 30-year mortgage and 4.5% for a 15-year fixed rate. That report led to today’s blog. Depending on your current interest rate, it just may be time for you to consider a refinance. If your loan’s interest rate is around 6.5%, a refinance is definitely something you should check into.
* A reduction from a 6.5% to the current 4.75% interest rate would result in a savings of over $200 a month.
If that statement made you perk up your virtual ears, then I would like to remind you about the Making Home Affordable Refinance program sponsored as part of the recovery plan.
* You do not have to be in a distressed situation to take advantage of the program.
Anchorage is one of the places in the nation that the Making Home Affordable program can be of real benefit since our housing has not suffered the steep decline in values that other areas in the lower 48 have experienced. Both Making Home Affordable program and FHA will refinance the loan balance for homeowners who owe more than the property’s current value.
* The Making Home Affordable program will refinance your loan balance if it is no more than 105% of the value of the home.
* FHA will refinance your loan balance if the first mortgage is less than 97% of the homes current value.
If you have equity in your home and pay PMI (Private Mortgage Insurance – insurance lenders require if the home was financed with less than 20% down), the savings could be even greater.
* PMI may no longer be required.
Most homeowners can take advantage of the government refinance loan programs.
* Making Home Affordable Program applies to Fannie Mae and Freddie Mac loans.
* FHA also offers a refinance program.
If you have a first and second mortgage, a refinance could eliminate your second mortgage.
* Make only one mortgage payment and save thousands of dollars in interest.
Check out all your options on the type of refinance which will best meet your circumstances and goals before you make a decision.
* Making Home Affordable Program
* FHA Refinance (even if your current loan is financed through FHA)
* An FHA Streamline (current loan must be FHA loan)
* Conventional refinancing through a mortgage lender
Taking advantage of today’s refinancing opportunities may be a wise decision, but it does depend on your personal circumstance, finances and goals. I do think it is to the Anchorage homeowner’s advantage to check out the possibility of a refinance. When considering a refinance you need to look at your long time goals.
* A refinance is not free. There are fees and points to consider.
According to the various economists and mortgage lenders, interest rates are not expected to decline any lower than 4.5%. However, they are expected to increase as the housing market improves, loan applications increase and the economy recovers.
Anchorage has one of the best economies in the nation. The State of Alaska announced this week that the Alaskan job rate was up both in terms of new jobs and in the jobless rate. However, no matter how strong the economy may be in Anchorage, Alaska or the nation, if you find yourself on the downside of the economy, you need to take action.
Last week, the Obama administration unveiled the Homeowner Affordability and Stability Plan. The plan is two fold, offering both refinance and loan modification options. The purpose of the plan is to help homeowners prevent foreclosure. You do not have to be behind in payments in order to qualify. HUD’s Hope For Homeowners program was also revised to give more options to homeowners.
If you see yourself on the downside of the economy, please contact your lender immediately. Here are links that may help you as an Anchorage homeowner:
Homeowner Affordability and Stability Plan: FinancialStability.gov (http://financialstability.gov)
HUD Hope For Homeowners: Basic Consumer Facts (http://www.hud.gov/hopeforhomeowners/consumerfactsheet.cfm)
Related Article:
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Just a brief update on the Anchorage economy. Anchorage and Alaska are still in a better economic place than most of the lower 48, but no state will escape its repercussions altogether.
* The Alaska legislature is currently considering raising the minimum wage from $7.15 per hour to $8.75. There is also a bill under consideration that would keep Alaska’s minimum wage at least a $1.00 more per hour than what is federally mandated.
* The budget shortfall for the State of Alaska is much more than what was reported two months ago. The estimate now stands at $1.65 billion. Lower gas and oil prices are the culprits for the increase in the estimated deficit. Governor Palin has put forward a proposal to tap into the state’s savings account as well as implementing budget cuts.
* Acting Mayor Claman has begun his reductions in spending, which is estimated to save Anchorage $7.3 million. There is an estimated shortfall of $17 million in the city’s budget.
* The Assembly has approved $100 million in bonds for Anchorage residents to vote on in the April ballot. The bonds would affect schools, infrastructure and public safety.
* As California, Nevada and Florida have learned, double-digit increases in value may be “heaven” for awhile. But, it does not take long for those inflationary prices to go south, bringing all kinds of problems along with it. Slow and steady wins the race.
The new Eagle River Town Center has broken ground and construction has begun. The new town center will include a library, shops and city offices.
The Town Center has been designed to revitalize the area and bring city services to one location. The project is anticipated to bring new revitalized growth and economic strength to Eagle River.
The Eagle River Parks and Recreation service area contributed one million dollars to the project. Another million dollars for the project was granted by the Rasmuson Foundation. The State of Alaska ‘s legislature granted $1.9 million in funds. The citizens of Anchorage voted for a bond measure that will add another $500,000 in funds for the cost of the project. The total cost is expected to be $6.7 million at the time of completion.
The Eagle River Town Center will be a 43,000 square foot mall that will accommodate a police substation, emergency operations center, Eagle River Parks and Recreation, community meeting rooms and an expanded library. Other municipal services will also be housed there.
The Eagle River Town Center will also have a new 40,000 square foot health club. The building for the health club is currently owned by the Alaska Club, currently being renovated.
The Eagle River Town Center has been a community priority for many years. The community has worked hard to make this dream a reality. The City of Anchorage and the residents of Eagle River are happy that dreams do come true.
The Hillside area of Anchorage is growing rapidly; faster than any other Anchorage community and plans are underway to plan its future.
Currently there are approximately 8,500 homes in the Hillside area. The projected growth (10,000 – 15,000) calls for another 5,000 homes to be added to the area.
The Hillside area has much of the undeveloped space in the Anchorage Bowl. Much of this space is steep and hard to develop. Construction higher up the hillside can cause major problems for the homeowners located down the hill.
A district plan is entering its final stages after being developed by Hillside residents, city planners and
Hillside Alaska
consultants. The plan will guide development, population growth, open space, trails, roads, water and sewer service.
The new plan is in drafting stages, it will replace the Hillside Wastewater Management Plan and address issues more specifically than what has been outlined in the Anchorage 2020 Comprehensive Plan.
Some of the major proposals in the drafted plan are:
- Development requirements for building on the steeper slopes and the higher elevations of Hillside . Requirements for buffer zones, open spaces, trails, and roads will be established as well as drainage plans to deal with runoff.
- Building permit regulations and requirements to be expanded to include the southeastern portion of Hillside which falls outside of Anchorage ‘s Building Safety Service. This proposal will need to be approved by Hillside residents.
- Creating a new and larger service area to build and manage roads and drainage improvement. The possible creation of a separate entity to manage drainage and watershed problems. Fees would be charged to landowners for the financing of the “entity”.
- Expand Anchorage ‘s tax-supported service area to include all of Hillside and would include also extend (about a mile) into Chugach State Park . The expansion would allow for community parks, park access, park maintenance and parking areas. The City of Anchorage would market bonds to finance the projects.
City planners have listened to the residents of the Hillside area. They are listening and responding all comments and suggestions concerning Hillside ‘s future. Although the official deadline for comments was yesterday, your input will still be considered if you make them in the next couple of days according to Chris Beck of Agnew Beck Consulting.
The Hillside plan will now go to the Planning and Zoning Commission and then will be redrafted. In a few months public hearings will be held, once again. Begin checking the Hillside District Plan website for hearing dates around February.
The Hillside District plan is expected to be finalized and sent to the Anchorage Assembly by next summer.
Hillside District Plan Links:
Hillside District Plan website (www.hillsidedistrictplan.com) offers information on all the issues, who to contact and an online comment form
Live Hillside WebCam – see what’s happening on the Hillside
Sign up for our Hillside District Plan newsletter, and receive periodic email updates.
The economy is not so scary here in Anchorage, Alaska .
This Halloween season there are more than scary costumes to put our nerves on edge. For all of us, the national and global economy reports have become scary in themselves. I am happy to report that here in Anchorage and the State of Alaska things seem to be not so scary after all.
A recent news release by our Mayor Begich’s office states that Anchorage has been named one of the Top cities in the nation to weather the current economic storm. As cited by the article, both Business Week and the Wall Street Journal have reported on the strength of Anchorage ‘s economy. Reasons cited were energy demands, tourism, and military presence. The Mayor’s office added Anchorage ‘s fiscal responsility to the list.
While other cities have reported loss of jobs and higher unemployment statistics, Anchorage ‘s unemployment rate has decreased in the past year.
While other cities have struggled with the housing recession and the deflation of home prices, the real estate values in Anchorage have not only maintained their value, but have also increased in value as well. Anchorage , Alaska ‘s real estate is being considered as a wise investment even for those in the lower 48.
While other cities and states have experienced further turmoil with loss of property taxes due to the high rate of foreclosures and decrease in property values, our city has been able to lower property taxes for its property owners without sacrifice and while maintaining growth.
While other cities and states’ budgets reach crisis levels with lots of “red ink”, the Anchorage budget has remained balanced and in the “black”.
While other cities are cutting back on services and implementing city government layoffs, Anchorage is still servicing its citizens with quality services and its employees are secure, knowing they have a job in the morning.
I am not saying that there will be no economic repercussions here in the state of Alaska or in Anchorage . I am saying that we are positioned well to weather the storm and that the economy is not quite as scary in Anchorage as elsewhere.
No one will be totally immune to our economic crisis, but so far, Alaska is still holding steady. Because of conservative lending practices and high oil prices, Alaska’s economy has softened this past year, but not broke under the pressure of the global credit crunch or Wall Street’s failures.
Here are some of Alaska’s great perks:
~ This year, Alaska has seen its 21st consecutive year of job growth, although it is a little slower than last year.
~ Even though home foreclosures are up, they are still well below other states across the nation.
~ While many local banks are tightening on their lending practices, you can still get great loans in Alaska .
~ Though oil prices have fallen over recent weeks, they are still very high. These high oil prices help fund the states economy.
~ The states finances are in great shape, too. There is $200 million in an investment savings account for emergency use.
The state of Alaska may eventually see some of these hard times that other states are experiencing, but we will be prepared. Each year, many of the state’s cities like Anchorage, sell bonds to maintain city roads, to improve schools, and for drainage projects.
Steady employment is coming from expensive oil and expensive pipeline fixes. One of the biggest employment growths, over the last two years, has come from the oil patch.
So, if you’re looking to relocate, it looks to me like Alaska , specifically Anchorage , Alaska is the best place to be for steady employment and a steady economy.
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