Officials have begun evaluating claims under the expanded Homeowners Assistance Program for military homeowners caught in the housing crisis, now that the Defense Department has issued its eligibility rules.

But because of limited funds, officials expect to cut off benefits Dec. 31 for homeowners affected by permanent change-of-station moves, one of the new groups covered under the expanded program. The law had authorized defense officials to run that program through Sept. 30, 2012.

Those who get PCS orders by Dec. 31 will be eligible if they meet other requirements, and they must submit the application by March 31, 2010. The program applies retroactively to those who received PCS orders on or after Feb. 1, 2006.

Mike McCord, Defense Department deputy comptroller said an estimated 10,000 homeowners will be eligible.

The first priority for the $555 million program will be wounded warriors who relocate for medical treatment or medical retirement due to disability, and surviving spouses of those killed in the line of duty. Their benefits will be retroactive to September 11, 2001, and will be permanent for those affected in the future.

According to the Pentagon rules, the government will reimburse eligible homeowners for losses incurred when selling their houses, or will buy houses of those who have been unable to sell.

Officials added one group not included in the law: Coast Guard members who make PCS moves.

• Homeowners must have lost at least 10 percent between the purchase price and sale price of the home, and the home must be in an area that suffered at least a 10 percent decline in housing prices.

• The home’s value must not exceed a cap that ranges between $417,000 and $729,750, depending on location.

• The move must be farther than 50 miles.

• Homeowners under PCS orders or affected by base realignment and closure actions must have purchased the homes before July 1, 2006.

• BRAC homeowners must sell their houses, on the local market or to the government, by Sept. 30, 2012.

How reimbursement will work:

• Wounded warriors, wounded defense or Coast Guard civilians and surviving spouses would receive a cash payment for the difference between their home’s sale price and 95 percent of its prior fair-market value.

• Those in communities where it is proven that the market declined because of a BRAC announcement would receive 95 percent of the home’s prior fair-market value.

• Other BRAC and PCS homeowners would receive up to 90 percent of the home’s prior fair-market value.

Circumstances under which the government will buy the home or pay off the mortgage:

• The government will buy the home only if the homeowner can’t sell it after 120 days on the market at a price deemed appropriate by the Army Corps of Engineers.

• Wounded warriors, wounded defense and Coast Guard civilians and surviving spouses unable to sell their homes will be able to sell to the government for 90 percent of the home’s prior fair-market value.

• For BRAC and PCS homeowners, the government would pay 75 percent of the home’s prior fair-market value.

It is unclear when officials will begin processing payments and buying houses. The regulations are subject to the federal rule-making process, which includes publication in the Federal Register and a comment period.

Kevin J. Lawson

Every homeowner in Clark County should have received their new tax assessment value on their home by now. Many people are in a panic about how much their houses have dropped in assessed value, but this is actually a very good thing. Your home's taxable assessed value should always be about 5-7% below its true market value. For the first time in three years, assessed values are actually in line with market values. Over the next few months, your taxes will be dropping to support that value, which means a savings for all of us in our monthly housing expenditures.

Kerry N. Greenwald, Sr. VA Loan Specialist

In last month's report from the NAR, existing-home sales  jumped 9.4 percent to an annual rate of 5.57 million units in September from a level of 5.10 million in August. Sales activity was at the highest level since hitting 5.73 million annualized units in July 2007.  Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represented an 7.8-month supply.  The national median existing-home price for all housing types was $174,900 in September,

In this month's report, existing-home sales surged 10.1 percent to an annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September. Sales activity is at the highest pace since February 2007 when it hit 6.55 million. Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, less than the revised for the worse 8.0-month supply which was reported in September. The national median existing-home price for all housing types was $173,100 in October, down 7.1 percent from October 2008.

From the National Association of Realtors...

Existing-home sales– including single-family, townhomes, condominiums and co-ops –surged 10.1 percent to a seasonally adjusted annual rate of 6.10 million units in October s from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008.

Sales activity is at the highest pace since February 2007 when it hit 6.55 million.  However we have to remember much of this has do with the current programs that are available to us(the public), and that we the taxpayers are being billed at an astronomical which we will have to pay  back.  Someday.  We need to keep these things in mind as our nation gets back on its feet. 

Kevin J. Lawson

Right now, companies all over the US are talking about next Friday: Black Friday! Either companies are closed, and the employees have the day off to go spur the economy, or companies are open. Those that are open may have low seniority people at the desks, or people who don't care about taking the day off and would rather "bite the bullet" and come in for the day after Thanksgiving. US Postal service is in effect, and therefore it counts as a rescission day. But lock desks, and loan sales, will slow down next week with the holiday coming up.

Maybe folks are out there thinking about their upcoming holiday parties, assuming lay-offs have not been too dramatic and they're actually going to have one.  If your in a position, employed, with holiday party to look forward to consider yourself lucky and blessed.  As we approach these holidays, there is a percentage of the country that is not so well off.  If we have the capacity to help or assist others we should take advantage of that, and make that happen.  For it is time to take action; help those in NEED and realize that there is no better feeling, its the right thing to do.  Simply help when possible.

Like most of America I've gained a little weight lately, so I decided that I needed to figure out an exercise routine. I happened upon this one:

"Begin by standing on a comfortable surface, where you have plenty of room at each side. With a 5-LB potato sack in each hand, extend your arms straight out from your sides and hold them there as long as you can.

Try to reach a full minute, and then relax. Each day you'll find that you can hold this position for just a bit longer.After a couple of weeks, move up to 10-LB potato sacks. Then try0 50-LB potato sacks and then eventually try to get to where you can lift a 100-LB potato sack in each hand and hold your arms straight for more than a full minute.

After you feel confident at that level, put a potato in each sack.

Kevin J. Lawson

In conversations with Donna Henry, a highly regarded Spokane realtor, she enforces the fact that foreclosures and short sales continue to be a key part of the housing activityin their area. Many analysts feel that the pace of short sales is likely to increase, especially given market conditions and the opinion that short sales are an alternative to foreclosure that can benefit the borrower and the lender. The lender sees potentially lower losses on the loan, and the borrower avoids the stigma of having a foreclosure on their credit history. The government continues to use various tools, such as modifications or foreclosure moratoria (moratoriums?) to prevent more loans from entering the REO market.

The short sale option is mostly offered to borrowers who are ineligible for or have failed to succeed in loan modifications, or just choose not to be modified and are certain to enter foreclosure (or are already there). The program can be economically beneficial to both parties involved.

For the servicer, the four main costs involved in selling the house are:

  • Possible further depreciation in a declining market
  • A discount to the overall market when sold
  • The cost of principal and interest advanced to the trust until the house is sold
  • Repair and maintenance costs.

Foreclosures, which turn into REO situations, typically take longer than a short sale, exposing the parties to more possible depreciation, and few banks & institutions are in the business of owning real estate. In a foreclosure, servicers find that the expenses associated with the liquidation and repair costs are significant, given that foreclosed upon borrowers are unlikely to maintain the property. Most of the benefits of a short sale are due to the shortened timeline and cooperation from the resident. The house would also potentially attract better bids, as it is being actively maintained and lived in.

From the troubled borrower's viewpoint, they have to decide among a foreclosure or short sale, staying in the house for free until evicted, staying in the house until it is sold in a short sale. A short sale will have a lesser hit on their credit history, and probably be able, if they really want, to buy a house after a few years. Of course there are emotional differences between a foreclosure and a short sale, potential deficiency judgment issues, the stigma of having been foreclosed upon, and tax implications of forgiven debt. The lender typically reports a successful short sale differently from a foreclosure to the credit bureaus although if the loan had gone deeply delinquent prior to completion of a short sale, the hit to credit history would already be significant and, thus, not much different from foreclosure. The biggest advantage to a borrower when opting for a short sale is the timeframe within which a new mortgage loan can be taken out: two years versus (I believe) five for a foreclosure.

Kevin J. Lawson

In a rather volatile session, mortgage rates ended yesterday's session unchanged as a small rally in benchmark Treasuries helped support the MBS market.  Following weaker than expected economic data in the morning, rates rallied. However as profit taking took place later in the day, early session strength was lost and MBS prices returned to opening levels.  Overall, even though prices moved about a relatively wide range, rates remained unchanged on the day.

The Mortgage Bankers’ Association this morning released their weekly applications index. This data tracks the weekly change in the amount of mortgage applications at major lenders.   An increasing trend is positive for the economy in two ways.  First, more home purchases leads to more home construction and consumer spending as the home buyer buys items to fill the new home.  Second, higher amounts of refinancing  should also lead to higher consumer spending as homeowners refinance to lower rates and lower payments giving them more money to spend into the economy.   The report shows that purchase applications have fallen again down 4.7% following last week’s plunge of 11.7%.  The refinance activity posted a modest 1.4% increase following the prior week’s 11.3% increase as homeowners rush to lock in such low mortgage interest rates. 

Kevin J. Lawson

FHA originators are expecting FHA mortgage insurance premiums to rise. (Would anyone expect them to decline, given the rising delinquencies and government officials continuing to claim that they will not need taxpayer money to support the program?)  The insurance fund's capital ratio is at an all-time low, with reserves depleted to the point where they've fallen below the 2 percent level required by Congress. That being said, the FHA's annual independent "actuarial study" shows that the FHA has sustained "significant" losses from loans made prior to 2009, and the capital reserve ratio has fallen below the congressionally mandated threshold. However, the report concludes that, under most economic scenarios, the reserves should stay above zero.  

This should come as no surprise, as our economy may be gaining traction in some sectors, however as long as the unemployment hovers right around 10% for the nation.......we may have another year of increased or sustained home losses and foreclosures.  Thus resulting in higher MI coverages for all of the FHA sponsored loans. 

Kevin J. Lawson

Social media marketing is here to stay" could very well be chalked up as the understatement of the year. Social media marketing has been on the rise for the past several years. Unfortunately, many small businesses, corporations, and independent freelancers have been slow to get on board the social networking train.

Saying "thanks, but no thank you" to social marketing opportunities reminds me of the new commercial out for PS3. The advertisement begins with a disgruntled girlfriend who can't wrap her mind around the fact that her boyfriend has indeed purchased PS3, but will not (for whatever reason) proceed to the next logical step: connecting to the Internet. The girlfriend is speaking to a technical advisor with PlayStation who brings to her attention the fact that without connecting, he can't possibly make use of all the wonder that PS3 offers, such as movie downloads, online gaming, and so much more. The final line of the commercial says it all, "What is wrong with him?"

The same goes for social networking. In a virtual world where products and services are now sold more through the "virtual word of mouth social networking" than high dollar corporate advertisements, why wouldn't you want to engage with online communities? The answer to that is most likely, because you just don't know where to begin. 

Facebook is the boy wonder of social marketing.  A site that started as a side project/hobby for a couple of Harvard guys now has over 200 million users and ranks as the number one visited site in the world.

Everyone from the small business owner to corporate giants is realizing the viral power of Facebook to drive traffic to their websites and connect with new clients.

Facebook has a friendly and welcoming atmosphere where most individuals won't ask why you've sent them a "friend request." Most are all too happy to have the attention and will gladly "friend" you right back. On Facebook, friends have access to each other's walls, pages, photos, videos, blog streams, and any other posted content.  Its really a matter of do I get involved and get on the Media Frenzy Free Ride bus.....or do you sit on the sidelines wondering where to put the emphasis on marketing.....   Linked-In is another outstanding tool that businesses and professionals  can use to their benefit as well. Its carries on to the beat of a different type however it is very successful in it's own right.  If your not already using these tools you may just missing the bus.  These sites are  not tools for merely social interaction; these are tools when used correctly that enable a business/professional to capture a market previously not being tapped. 

Kevin J. Lawson

Creekside Mortgage, Inc., is now partnering with Nan Wimmers and Becky Schertenleib, at Colubia Gorge Real Estate. They  are a family-owned and operated real estate agency working  in the Columbia Gorge communities, including The Dalles, Dallesport, Dufur, Rowena, and surrounding areas. They love helping veterans with the home buying process. They work hard for their clients by establishing great partnerships in the industry, fostering a high level of communication to ensure every transaction is smooth and worry-free. Their high level of service is personalized for every client; they are always available by phone, and their office is open 7 days a week! Check out their website at

We at Creekside are happy to be working with Nan and Becky in the Gorge. As Veterans ourselves, we go out of the way to help Service veterans recognize their dream of homeownership, and we recognize the service excellence of Nan and Becky, for Veterans and others who purchase real estate in the beautiful Columbia River Gorge.

Rates have now fallen back to an all-time low, right around 5%, in some cases lower on government VA 30 year fix loans.

Once again, it is a great opportunity to buy a house. A lot of people are predicting this is the last run on rates going down, due to the inflationary factors  that will be coming in the future due to governement spending at such a high rate. The government will soon have to start raising the cost of borrowing short term money to be able to pay for debt that is currently being incurred.

Kerry Greenwald  Sr. VA Loan Specialist