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Value Hunters drive housing market in WA State.

“Value-Hunters” seizing opportunities to buy more affordable homes
around Western and Central Washington

KIRKLAND, Wash. (Sept. 3, 2010) – Value is what’s selling in the current housing market, according to members of Northwest Multiple Listing Service. Commenting on the MLS report summarizing August activity, directors agree conditions continue to favor buyers, although one industry official cautioned a looming change in mortgage insurance premiums could erode purchasing power.

Members reported 6,037 pending sales last month, the highest volume of mutually accepted offers since April when buyers scrambled to beat a tax incentive deadline. Last month’s volume was down nearly 20 percent from the same month a year ago when members reported 7,539 pending sales, but the total was up 8.4 percent from the number of transactions (5,571) notched during July.

“It is solidly a buyer’s market,” observed NWMLS director OB Jacobi, general manager of Windermere Real Estate Company. “The market is good for sellers who price their homes correctly,” he stated. “Homes that are priced right from the start, at every price range, are selling quickly and for very close to asking price. In this market, it's critical to price a home well from day one. If sellers plan to start high and gradually go lower, they'll price themselves out of the market.”

Prices on last month’s closed sales of single family homes and condominiums (combined) were down slightly (2.35 percent) from a year ago. The median sales price for last month’s 4,211 completed transactions across the 21 counties in the MLS system was $269,450. That compares to a year-ago median price of $275,945.

For single family homes (excluding condos) the median price was $275,000, down 3.5 percent from a year ago. Prices increased from 12 months ago in nine counties (Clark, Grays Harbor, King, Kitsap, Kittitas, Mason, San Juan, Skagit, and Thurston), led by San Juan (up 23.8 percent) and Mason (up 20.8 percent).

In King County, which accounted for more than one-third of last month’s closed sales of single family homes, the median price was $380,000, an increase of 1.3 percent from the year-ago figure of $375,000.

Along with lower prices and record low mortgage interest rates, buyers have abundant inventory to consider, further bolstering their bargaining position.

NWMLS members added 9,533 new listings to inventory last month. The mix included 8,172 single family homes and 1,361 condominiums. With these additions, the number of active listings at month end totaled 44,186, an increase of 6.4 percent from a year ago. Sixteen counties reported larger inventories than twelve months ago.

“The active listings inventory and the influx of new listings are still very strong for the buyers,” said NWMLS director Darin Stenvers, managing broker at John L. Scott, Inc. in Bellingham. The extremely low mortgage rates are enabling today’s purchasers to buy more home, but he said he believes buyers are learning from the past and seem to be buying the home they can afford, rather than the home they thought they could afford. Stenvers also noted the relatively flat prices, together with the large number of foreclosed and short sales transactions, are reflective of a buyers’ market.

Jacobi described the current pool of buyers as “value-hunters” with stable income and good credit. They’re taking the opportunity to purchase homes they couldn’t afford a few years ago, according to Jacobi, who noted this pool includes first-time buyers as well as move-up buyers with strong equity in their existing home.

Prospective purchasers may not be aware of a forthcoming change in annual mortgage insurance premiums, a change that can reduce purchasing power, emphasized J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

“Buyers may not be aware of plans by the Federal Housing Association to raise its annual mortgage insurance premiums by 3 percent on October 4. With FHA loans accounting for about half of all home loans, the change will affect a significant number of borrowers, Scott remarked.

“When you do the math on a $300,000 loan, the increase equates to an extra $81 a month or nearly $1,000 annually.” Conversely, he explained, “this effectively represents a 3 percent loss in purchasing power, which for your typical FHA borrower can make a big difference when trying to buy a home.”

Looking ahead, brokers and housing analysts expect a long, slow recovery of the housing market. Commenting on the latest activity report, MLS director Stenvers said, “I believe we are going to see this same type of market through the end of the year and into first quarter 2011.”

In a statement accompanying a National Association of Realtors® report on existing home sales for July, Lawrence Yun, NAR chief economists said the recovery looks to be a long process. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he stated, adding, “Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”

Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes more than 24,000 brokers and agents. The organization, based in Kirkland, currently serves 21 counties in Western and Central Washington.

Mortgage brokers to be fingerprinted and registered

WASHINGTON (Reuters) – Mortgage loan originators will have to be fingerprinted and sign up to a central registry to do business in future, according to final rules issued on Wednesday by the Federal Reserve and other regulators.

The rules are part of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, also called the S.A.F.E. Act.

They were issued by the Fed, Comptroller of the Currency, Federal Deposit Insurance Corp, Office of Thrift Supervision, Farm Credit Administration and National Credit Union Administration.

Mortgage brokers came under tough scrutiny in the wake of the 2007-09 financial crisis, with some lawmakers and regulators sharply critical of underwriting standards and practices that were seen as so loose they helped foster a housing price bubble.

The S.A.F.E. Act specifies that mortgage brokers who are employees of agency-regulated institutions must register with the Nationwide Mortgage Licensing System and Registry,

"As part of this registration process, residential mortgage loan originators must furnish to the registry information and fingerprints for background checks," a joint release from regulators said.

The final rules take effect on October 1 and it is anticipated that the registry could start accepting registrations as early as January 28, 2011.

Industry sources say that thousands of brokers have gone through mandatory education, credit checks and state and federal testing in order to retain the right to handle mortgage originations.

The process has thinned the ranks of brokers, who may be even fewer soon given talk of a 30 percent fail rate on testing, said Bob Moulton, president of Americana Mortgage Group in Manhasset, New York.

"It cleaned up the industry," said Moulton, who nonetheless cautioned that he felt credit availability for mortgage lending has been reduced as a result of uncertainty caused by U.S. financial regulatory reform.

New home sales rebound 24%

By Hibah Yousuf, staff reporterJuly 26, 2010: 3:08 PM ET


NEW YORK (CNNMoney.com) -- New home sales rebounded in June from the record low hit the previous month but remained sluggish.

New home sales increased 23.6% to a seasonally adjusted annual rate of 330,000 last month, up from an downwardly revised 267,000 in May, the Commerce Department reported Monday. Sales year-over-year fell 16.7%.

00
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diggEmail Print CommentThe June sales pace is the second slowest ever on record since the Commerce Department began tracking the data in 1963.

But it was slightly better than the annual rate of 310,000 economists were expecting, according to a consensus survey by Briefing.com.

"While the increased rate was positive, it's a bit of a head fake based on the decline we had with May's lower revision," said Anika Khan, Wells Fargo economist. "And if we look at other indicators, like mortgage application volumes and builder sentiment, we can see that the housing market remains very weak.

Home sales had surged in March and April as homebuyers scrambled to sign contracts ahead of the April 30 deadline for the tax credit. But sales plummeted 40% in May, the first month after the incentive expired.

Khan said the end of the tax credit will likely trigger a couple more months of "payback," but then the housing recovery will pick up, though at a snail's pace.

"We're coming from extremely depressed levels, so it will probably be another two years before we get to a point where we see anything even vaguely close to a normalized rate," she said.

Khan added that the factors that will continue to stall the recovery are added tight lending practices, rising foreclosure and delinquency rates, and a sluggish labor market.

Price and inventory: The government report showed that the median price of new homes sold in June was $213,400, down 1.4% from May and a 0.6% drop from June 2009.

An estimated 210,000 new homes were for sale at the end of June, the lowest inventory level in nearly 42 years.

At the current sales pace, the government expects it will take 7.6 months to sell through that inventory, down from 9.6 months in May. Six months of inventory is considered normal market conditions.

Sales by region: Sales rose the most in the Northwest, where they surged by more than 46%; the South saw sales climb by about a third, while sales in the Midwest increased 21%.

Sales in the West, the only region to suffer a decline during the month, edged down almost 7%.

Million-Dollar Borrowers Defaulting

More than 14 percent — one in seven — borrowers with mortgages greater than $1 million have stopped paying them. Slightly more than 8 percent of mortgages of less than $1 million are delinquent, according to real estate analytics firm CoreLogic.

“The rich are different: They are more ruthless,” says Sam Khater, CoreLogic’s senior economist.

CoreLogic points out that the wealthy don’t seem to be particularly worried about the concerns of lesser earners like being sued by their lender or prevented from getting a mortgage in the future.

Source: The New York Times, David Streitfeld (07/08/2010)

Lenders Use Deeds-in-Lieu to Clear Out Inventory

Thanks to new federal programs that offer cash incentives, some lenders are turning to deeds-in-lieu as the best solution for underwater borrowers, who are willing to turn over their properties.

It’s cheaper for lenders to do deeds-in-lieu because it gives them overnight control of the property. With mortgage rates at less than 5 percent, lenders believe that they can resell a property faster and on more favorable terms than they would going through a short sale.

Matt Vernon, an expert in short sales and deed-in-lieu deals for Bank of America, says his company is offering cash incentives that range from $3,000 to $15,000 to persuade trouble borrowers to sign on.

Deeds-in-lieu don’t harm a borrower's credit rating as much as a foreclosure or a bankruptcy, but because they are treated as debts that are “not paid as agreed,” they do leave a mark.

Source: Washington Post, Ken Harney (06/26/2010)

Mortgage Applications at 13 year low

The $8,000 tax credit for first time home buyers has ended. That created a vacuum. Home loans fell off 5.7% in the week ending June 4, the lowest level since 1997. Purchase applications dropped 35% below their level four weeks ago. Let's keep in mind that applications are a good predictor of future sales.

The refinance market is also suffering. The MBA refinance index fell 14.3%, after rising for four straight weeks. This is taking place even when mortgage rates are below 5%. 30 year loans are down to 4.81%.

Analysts cite several reasons for the drop, among them: many homeowners have already refinanced; others are underwater on their mortgages and still others are unsure about their job situations, making it harder to get approval.

Nevertheless, refinancing accounted for 72.2% of all applications last week.

Several analysts had predicted this would happen. Again, with unemployment at such high levels and many people uncertain about their jobs, a big step like home purchase is being postponed.

Goldman Sachs predicts Seattle to fall 20% in 2 years

Seattle home prices to drop another 20 percent

If you're one of those homeowners who is always looking for shreds of optimistic news about the Seattle market, well, you might want to avert your eyes.

Goldman Sachs is predicting that Seattle home prices will fall 20 percent in the next two years. That's twice as much as anywhere else except Portland.

Tim Ellis at Seattle Bubble had the news this morning.

Apparently, the folks at Sachs think the Seattle market is still overpriced.

"For Seattle and Portland, the model projects back-loaded price declines as house prices currently look overvalued," the report says. The report points to "high home vacancy rates and steeply rising delinquencies" as the catalysts for the projected decline.

Ellis, a consistent voice of reason in the Seattle real estate community, has been projecting a significant drop, but even he was surprised by the Goldman Sachs report.

"I don't have a PHD in finance, and I haven't constructed a 6-variable model of home prices, but my estimates have been for only another 10-15% decline in Seattle area home prices, so I was a bit surprised to see such a dramatic call from Goldman,"

Appraisers Coming In Low To Avoid Lawsuits

by Lisa Udy on June 9, 2010

The housing market, no matter where you live, is being effected by powers that we small people have no control over. Unless you’ve been living under a rock for the last 2 years, you’ve probably heard that appraisals have been coming in really low.

These low appraisals are disrupting the housing market. I’m not talking about an appraisal that comes in a little low and has evidence to back it up. I’m talking about appraisals that come in extremely low with the lowest possible comparables to back up the claims.

According to the Appraiser Law Blog, the FDIC, who has taken over more then 200 banks over the last 2 years, is retaining the legal claims of any party involved in the aid of the bank failing. This includes appraisers. If an appraiser did an appraisal for a failed bank, the FDIC has the right to sue them if they feel the need to.

The FDIC has created a new division called PLG, the Professional Liability Group. They have been hiring law firms across the country, and are preparing to sue the pants off of parties involved in “helping” the banks fail.

The article goes on to say that the best way for an appraiser to avoid a lawsuit is to come in low on the appraisal to save their butts. Can you believe that? What effect is this going to have on the housing market and homeowners?

Low Appraisals Effecting American Homeowners Bottomline

We all know the housing bust has caused many people to lose equity on their homes. But this is going to cause more people to lose equity that is righteously theirs.

An appraiser’s job is to determine a homes value and nothing more. They are required to give a value based on comparable recently sold homes. These values are now being effected by large government entities. Instead of going by the data, appraisers are forced to come in low so they aren’t sued!

The effect this has on you, the homeowner, is lost money. As a home seller or homeowner, you should be furious. Even if you’re not selling your home, low appraisals in your neighborhood will effect your homes value.

The FDIC is taking away your homes equity and your local appraisers are getting sued over the bad practices of banks. How does this make you feel as a homeowner? Are you happy to be losing more equity? We would love to see your comments here!

Home Sales Decline 44% after April Tax Credit ends.

Home sales adjusting after surge before tax credits expired

KIRKLAND, Wash. (June 4, 2010) – Home sales during May tapered off around Washington state following a surge of activity in April as buyers hustled to meet deadlines for tax credits.

Northwest Multiple Listing Service brokers reported 5,242 pending sales (mutually accepted offers) last month, a decline of more than 44 percent from April’s total of 9,438 pending sales. Compared to twelve months ago when members tallied 7,160 pending sales of single family homes and condominiums, the volume dipped about 27 percent, but year-to-date figures show 2010 sales are well ahead of 2009.

Through five months, NWMLS members in 21 counties have notched 35,398 pending sales, outpacing the same period a year ago by 6,707 transactions for an increase of more than 23 percent.

“Leading up to its expiration, the tax credit caused a surge of home sales, but a surge can only be sustained for so long,” said Lennox Scott, chairman and CEO of John L. Scott Real Estate. “What we’re seeing now is a natural adjustment,” he explained, adding, “As consumer confidence continues to improve in the coming months, we expect to see the buyer pool replenish itself which should be followed by an increase in home sales.”

Listing activity also sagged during May after strong upticks in March and April during the buildup before the incentives lapsed. Brokers added 9,385 new listings to inventory last month, down nearly 17 percent from year-ago totals. The additions included 8,122 single family homes and 1,263 condominiums.

At month end, the area-wide inventory included 41,690 active listings, about the same total as a year ago when there were 41,318 residential properties for sale in the MLS database.

“Inventory is inching up compared to last year as more sellers are becoming optimistic that if they price their home competitively they will find a buyer in this market,” observed NWMLS director Dick Beeson, broker/owner of Windermere Commencement Associates in Tacoma.

Beeson noted the “extremely low interest rate phenomenon” is expected to last through the summer and into fall, which he believes will help give a nudge to buyers that “no longer can look to the tax credit for incentive.” He characterized the long-term effects of low interest rates as “very positive,” saying such rates make homeownership even more of a bargain than the price adjustments that have occurred over the last few years.

Frank Wilson, another MLS director and the managing broker at John L. Scott, Inc. Poulsbo, agreed the slowdown during May was due in part to the end of the incentive program, but noted overall activity so far this year is stronger than a year ago. As the market returns to normal, Wilson expects home values may continue to decline in some parts of Kitsap and within some price ranges.

As an example, Wilson mentioned the waterfront category, noting it “continues to soften with the bottom hopefully in sight later this year.” Conditions still favor buyers, he observed, citing low interest rates and “a lot of choices within the active inventory.”

Prices for home sales that closed last month declined about 3.6 percent compared to a year ago, but increased 3.4 percent from April. The area-wide median price was $269,950, down from twelve months ago when the median price was $280,000. Despite the overall dip in prices, ten of the 21 counties served by Northwest MLS had year-over-year price gains.

The volume of closed sales rose 27.3 percent from a year ago, rising from 4,154 completed transactions to 5,290 closings.

Commenting on the latest numbers, Northwest MLS director Bobbie Petrone Chipman said the statistics support her belief that the real estate industry will experience inverted first and second quarters due to the now expired tax credit. “Whereas traditionally the first quarter of the year reflects a yawn and stretch of the marketplace as it awakens into a more boisterous second quarter, this year was shaken awake during the first quarter by the tax credit,” she remarked. Petrone Chipman, the co-managing broker of Coldwell Banker Bain Tacoma/Puyallup, expects a slight lull for the second quarter.

“As interest rates remain phenomenally low and inventory remains high, first-time buyers will continue to recognize the tremendous opportunity and benefit of owning their own home,” Petrone Chipman commented, adding, “Move up buyers may not see as much equity return on the sale of their homes, but they will benefit from purchasing homes that may have been beyond their means a few short years ago.”

Pointing to closed sales, Petrone Chipman noted year-to-date volumes are up significantly (more than 38 percent) when compared to the same five-month period of 2009. “This is an indicator that the overall 2010 real estate market is moving in a healthy direction,” she declared. She also believes the Seattle area’s high rankings on various “best cities” polls are other reasons for optimism. For example, she cited a recent report by editors of Kiplinger’s Personal Finance Magazine that ranked Seattle second among “10 best cities for the next decade” based on an assessment of vitality and growth potential.

Commenting on activity in Pierce County, where his office is located, Beeson said homes in the mid- to lower-price ranges are still the favorites of buyers, leaving many high-end sellers anxiously waiting in the wings for their day. He described the market as “steady” and “edging along” after the torrid pace of activity in late April as the tax credits were ending.

Beeson said research by the National Association of Realtors and the Washington Research Council indicates approximately 58,000 first-time homebuyers in Washington state used the tax credit. These sales generated $640 million in state revenue and $6.5 billion in state economic activity.

Nationally, a report by the Mortgage Bankers Association issued in mid-May reflected adjustments in activity coinciding with the expiring tax incentives. In a statement on May 19, Michael Fratantoni, MBA’s vice president of research and economics, said purchase applications plummeted 27 percent during the previous week and declined almost 20 percent over the past month, despite relatively low interest rates.

“The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season,” Fratantoni stated. “In fact,” he continued, “this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009. However, refinance borrowers did react to these lower rates, with refi applications up almost 15 percent, hitting their highest level in nine weeks.”

Northwest Multiple Listing Service, owned by its member brokers, is the largest full-service MLS in the Northwest. Its membership includes more than 24,000 brokers and agents. The organization, based in Kirkland, currently serves 21 counties in Western and Central Washington.

Undisclosed Short Sale Payments May Lead to Trouble

A recent memorandum from the legal department of the California Association of Realtors® (CAR) warns CAR members as follows: "Undisclosed payments in short sale transactions, especially those paid outside of escrow, may violate the law, including RESPA, laws against loan fraud, and licensing laws."

The cautionary memo goes on to describe as a "common scenario" a situation "when a short sale seller s senior lender authorizes a payment of $3,000 for example, to extinguish a junior lien, but the junior lender demands that the buyer pays an additional $9,000 outside of escrow." Other "outside of escrow" payments that a buyer might make could be for a loan negotiator s fee, past dues owed the homeowners association, or to clear some lien on the property.

Now suppose that a buyer were willing to pay for items such as these. Why would he be willing to do so? Most likely because he or she figures the agreed-upon purchase price is a very good deal, and the price will still be good even if it is necessary to add some money to cover such other costs.

But why outside of escrow (or "closing" or "settlement")? Because, the lender won t allow it. To put it simply, if there s more money on the table, the seller s senior lender wants it; he doesn t want it to go to these other sources. The lender gives approval for a short sale based on certain net proceeds and certain closing costs. For example -- hard as it is to imagine -- a lender might condition his approval on a reduction in the contractual real estate commissions, with the difference going to the lender s payoff.

Before the closing, the lender must approve a tentative HUD-1 (closing statement) that shows where the money is going. He will already have approved a certain amount of closing costs. If the lender, as in the example, had only authorized $3,000 for the junior lien, he will not approve a tentative closing that now has the buyer putting more money in, money which will go to the junior lien but not the senior. If the buyer puts in more money (essentially, pays more) the senior lender wants it.

What is the solution to such a standoff? It is the practice to which the CAR memo is addressed. That is, the practice of payoffs being made outside of the escrow (closing) process. So the senior lender does not know about it.

Many, many people feel that such a practice is justified. "It is the lenders who have caused the problem in the first place. Besides, they are stupid, arrogant, and greedy." All of this, and more, may be true. Nonetheless, as the CAR memo points out, "concealing this additional payment from a federally-insured senior lender may constitute loan fraud, which is a crime punishable by 30 years imprisonment plus a $1 million fine (18 U.S.C. section 1014)"

And that s not all. The practice may also be a RESPA violation. Appendix A to the Real Estate Settlement and Procedures Act (24 C.F.R. Part 3500) says that "The settlement agent shall complete the HUD1 to itemize all charges ... whether to be paid at settlement or outside of settlement ... ." Charges paid outside of settlement "shall be included on the HUD1 but marked P.O.C. for Paid Outside of Closing... ."

There may, indeed, be compelling arguments for trying to help buyers and distressed sellers by having payments made outside of a short sale escrow (settlement). But agents need to remember that this may be considered fraud, and most, if not all, Errors & Omissions policies don t cover fraud. It s something to think about.

Copyright © 2010 Realty Times.

Seattle rental-housing inspections approved

By Emily Heffter
Seattle Times staff reporter

The Seattle City Council voted Tuesday to establish a city inspection program for rental-housing units, but it left many of the program details for a citizens group to figure out over the next two years.

Tuesday's vote sent a clear message that the council wants the city to be more aggressive about making sure the city's 100,000-plus rental units are safe and landlords adhere to city building codes.

The city will charge landlords a license fee, but it hasn't determined how much. The city could inspect every unit in the city, or just a sampling, or just in certain neighborhoods. The new program likely won't be in place until 2012.

Supporters of the new law said the city's complaint-based system, which has been in place since the 1990s, doesn't work.

"A lot of the tenants who are living in substandard housing don't have the resources to seek alternative living situations," said Laura O'Connell, a housing counselor with Solid Ground, which assists low-income tenants. "They are really worried about retaliation from their landlords."

But landlords who testified at the meeting said it's not fair to charge fees to good landlords in an effort to find the bad ones.

"Why penalize every landlord for a few dogs who do have this difficult problem?" said Gene Slagle, who owns a nine-unit apartment building in Wallingford.

The city hurried to establish a program specific to Seattle codes before a state law takes effect June 10. Having a separate program allows the city to tailor inspections to its building codes. A mandatory inspection program goes against the recommendations of the Cedar River Group in a broad, council-funded study released last February. That study recommended the city improve its current system before requiring inspections.

Bart Flora, a vice president at Cornell & Associates, a large rental firm, said violations on rental housing are extremely rare in Seattle. The council is going to cause expenses that will be passed on to renters — all to solve a problem that may not even exist, he said.

"I really don't understand what the problem is," he told the council before Tuesday's vote. "I think it all works fine."

The new law passed 7-0. Councilmembers Sally Bagshaw and Bruce Harrell said they were reluctant to support a program that could burden property owners. The data show most rental property in Seattle is in good condition, Harrell said.

Two members — Tom Rasmussen and Mike O'Brien — did not vote, because they own rental property.

Good news for home buyers! Seattle Voted #2 BEST City

10 best cities for the next decade
Though slowed by the recession, these US cities have flourished by fostering innovations that put Americans to work and keep the nation ahead of the competition.

"New ideas generate new businesses," explains Kevin Stolarick, the research director at Martin Prosperity Institute and our numbers guru, who evaluated U.S. cities for growth and growth potential. "In the places where innovation works, it really works," he says.

In researching our 2010 Best Cities, it became clear that there are three elements to the innovation factor. Mark Emmert, president of the University of Washington, put his finger on two of them: Smart people and great ideas. But we'd argue that it's the third element -- collaboration -- that really supercharges a city's economic engine.

When governments, universities and business communities work together, the economic vitality is impressive.

And it's no coincidence that economic vitality and livability go hand in hand. Creativity in music, arts and culture -- plus neighborhoods and recreational facilities that rank high for "coolness" -- attract like-minded professionals who go on to cultivate a region's business scene.

The 10 cities on our 2010 Best Cities are not just great places to live, they're also great places to start a business or find a job.

Here's a closer look at the cities:

1. Austin, Texas

Austin is arguably the country's best crucible for small business. The city offers a dozen community programs to help entrepreneurs. Overlay that network with a dozen venture capital funds, about 20 business associations, incubators, educational opportunities and networking events. Mix these elements in what many call a classless society -- where hippie communalism coexists with no-nonsense capitalism --and you've got a breeding ground for start-ups.

Don't discount the fun factor: In the self-proclaimed live-music capital of the world, music and business creativity riff off of one another. The city's famous South by Southwest festival, where concerts, independent film screenings and emerging technology overlap, is a prime example.

2. Seattle

Rain City? We say Brain City. It's home to a well-educated work force, a world-class research university and such über-innovators as Microsoft (MSFT, news, msgs), Amazon.com (AMZN, news, msgs) and Boeing's (BA, news, msgs) main aircraft production facility. (Microsoft owns MSN Money.)

Seattle boasts a host of risk-taking, garage-tinkering entrepreneurs, and the city crackles with creative energy. "We only have two products here: smart people and great ideas," says Emmert.

3. Washington, D.C.

Every tourist knows postcard D.C., home to the White House, the U.S. Capitol and all those free Smithsonian museums. But those who live in D.C. know better.

The region is chock full of job prospects, entertainment venues and great neighborhoods, and it is booming. Eleven of the 25 richest counties in the U.S. are located in the region, which also boasts a low unemployment rate.

4. Boulder, Colo.

Boulder is a wealthy, intellectual hot spot where environmental and scientific ideas blossom into businesses.

Three economic drivers power Boulder: the University of Colorado, federal research laboratories and more than 6,600 small businesses and corporations. The city is also a mecca for those seeking healthy, active lifestyles.

5. Salt Lake City

You can't beat the cost of living and doing business in Salt Lake City. Utah has relatively low wages, taxes and operating costs. Plus, it doesn't hurt that, in the words of one local employer, "our offices are 15 minutes away from four ski resorts."

6. Rochester, Minn.

Rochester is built on the rock-solid foundation of the world-renowned Mayo Clinic. The community plays host to 2.7 million visitors each year (many of them Mayo patients). Synergy among the city's resources has been well-cultivated and is paying dividends.

The Minnesota BioBusiness Center opened in Rochester in 2009, providing high-tech start-ups with room to grow. The center, located a block from both the Mayo Clinic and the Rochester branch of the University of Minnesota, represents the city's aspiration to build an even stronger bioscience and medical-research community.

7. Des Moines, Iowa

There's more to Des Moines than agricultural jobs. A pending worker shortage sparked by retiring baby boomers has lit a fire under Des Moines' civic leaders. The city is working to lure back young Iowans and attract global talent by developing its downtown and promoting the jobs already available in the many industries that flourish there.

8. Burlington, Vt.

Burlington's local-food movement perhaps best tells the story of how environmentalism drives much of the city's economic growth.

Many shops and restaurants along Burlington's Church Street Marketplace, the famous pedestrian mall, serve up local goodies. A couple blocks over, the City Market/Onion River Co-Op, a community-owned grocery store, offers more than 1,000 Vermont products. (And atop the supermarket, generating 3% of the co-op's energy needs -- enough electricity to power six Burlington homes -- are 136 solar panels from groSolar, a Vermont company.)

Top cities for new grads
And the crown jewel for locavores: the Intervale Center, a nonprofit organization that has managed 350 acres of family-owned farmland in Burlington since 1988 and provides 10% of the town's food.

9. West Hartford, Conn.

Community is key in West Hartford, a place where you actually know your neighbors. But this once-sleepy suburb of Connecticut's capital city is not content to be merely an idyllic place to live and raise a family. West Hartford made our list because it is transforming itself from a suburb into a destination -- in this case, a regional destination for shopping and dining.

Small business is the new game in town, and everyone is playing.

10. Topeka, Kan.

In its reserved, Midwestern way, Topeka has engineered a prosperity that most cities of similar size would envy.

As the capital city of Kansas, Topeka enjoys a stable job market, with nearly 25% of the city’s work force is employed by the government. The city boasts quality schools, friendly people, good hospitals, a university and -- one of its biggest selling points -- low housing costs.

USDA Funds availability

USDA Home Loan Summary
•Available for Purchase of Pre Existing or New Homes
•Refinances are only allowed if your current Mortgage is a USDA Home Loan
•Available in Rural Areas only
•Borrowers occupy the property, no investment properties
•Borrowers must meet USDA’s Credit Eligibility Guidelines
•Borrowers must meet the USDA’s Income Eligibility Guidelines.
•30 Year Fixed Interest Rates are available
•No Mortgage Insurance Premiums

Following recent legislative actions to address the funding shortfall in the USDA Section 502 Guaranteed Rural Housing Program, USDA Rural Development announced on May 11, 2010 that the Agency would continue to accept and process application packages. As had been done similarly when program funds were not available, USDA Rural Development advised loan approvals (Conditional Commitment: RD Form 1980-18) issued during this time would be “subject to the availability of funds and Congressional authority to charge a 3.5 percent guarantee fee for purchase loans and a 2.25 percent guarantee fee for refinance loans”.

On May 12, 2010 USDA Rural Development issued an announcement with the purpose of recalling and voiding this earlier guidance that was released on May 11, 2010. This second announcement dated May 12th also stated that additional guidance would be released by USDA Rural Development within the next 24 to 48 hours.

As of today, no such guidance or revision has been issued by USDA Rural Development.

At this time, we are only able to confirm that all general funds have been exhausted in the USDA Section 502 Guaranteed Rural Housing Program.

There has been no direction given by USDA Rural Development regarding loans in process that were not obligated by USDA Rural Development prior to the exhaustion of funding, or USDA Rural Development’s ability to accept new files.

We ask that you share this information with your loan origination and processing staff.

Please know that we share your concern for this situation, and we will send an announcement once information is made available by USDA Rural Development.

We do recommend that you continue to submit loans and get them in line with hopes that funding will come through soon.

Frank W.Hinkley

Lic. 510-LO-32270
Senior Mortgage Consultant
Guild Mortgage Company
150 120th Ave. NE Ste. 200
Bellevue, WA. 98005
Dir. 425-945-8069/ Cell. 206-979-4670
E-Fax. 425-945-8169
visit me @ http://guildmortgage.net/frankhinkley

Seattle: Housing Recovery Trend

Median home price: $371,000
Value lost since 2006: 15.2%
Forecast gain by 2012*: 3.8%

Seattle has become a world-class city with a diverse, vibrant economy. As a home to manufacturers such as Boeing and software providers such as Microsoft, the job market has held up better than average, with a current unemployment rate of 8.8%.

Home prices had a softer landing as well, dropping just 15.2% over the past three years, about half the national average. However, prices do tend to be volatile, according to Mark Fleming, chief economist for First American CoreLogic. The lack of available land for development is one reason for that volatility, as are political restrictions on growth.

After another modest price decline of 2.3% in the next eight months, the market should begin to turn up. Between January 2011 and January 2012, the city should see a gain of 6.2%. Averaged out, that means a 3.8% gain over the next two years*.

And while that may not sound all that robust for those jaded by the annual double-digit returns recorded during the boom, that performance will be one of the best of any large city during that period.

Bank of America/Countrywide Settlement and Relief

Washington and 39 other states announced a landmark agreement in October 2008 in which Bank of America agreed to modify loan terms for Countrywide borrowers. The settlement also provided money for borrowers who lost their homes and to fund local foreclosure prevention programs.

In short, Bank of America, the nations largest holder of distressed and pre-foreclosure mortgages have been instructed to offer more expeditious "short sale" processes to consumers, among several other loan modification programs designed to keep the consumer from losing their homes.

We currently have one of these "short sales" in our office to close next month, and have completed paperwork, provided HUD`s, and are ready for documents. Bank of America has instructed the "short sale" negotiators that escrow must complete this transaction for 300.00 dollars, and not a penny more. In our attempt to explain that our fee was 675.00 dollars, which is the lowest fee charged by any escrow company in the state, we were met with a decisive dictation that our fee cannot be more than 300.00 dollars period. In looking deeper into the file, we see that title was able to charge their full and accepted fee, and the agents were allowed their full and accepted fees as well.

In the interest of the customer, we have agreed to close this file, accepting the fee cap as imposed by Bank of America. We do this solely because we do not wish to jeopardize closing for this customer who is in distress. I spoke with a Bank of America representative about this fee reduction, and was met with a very typical "if you do not like it, tough" response. But why does this matter to you?

If Bank of America is allowed to dictate escrow fees today, then they will cut your fees tomorrow. According to my sources, they have cut agent fees already in Arizona from 3 percent to 2.5 percent. And where does it end? By the way, Bank of America receives TAXPAYER DOLLARS for every "short sale" they close as well as other
TAXPAYER supported incentives from the US Government under the current bailout and recovery initiatives. It is estimated that Bank of America could have as many as one million mortgages set for short sale acceptance, and stand to gain some 300 million dollars alone if they are allowed to steal from escrow companies a fee we earned, and worked very hard for. Angry yet? You should be.

I have filed a formal complaint against Countrywide dba Bank of America on the grounds that their actions violate State and Federal Anti Trust Law, by prohibiting free and fair trade, price fixing, and unfair business practices. I urge all of you to do the same, and have included a pre written letter to Rob Mckenna Washington States Attorney General. It is time for us in the industry to speak loud and clear that we will not accept penalties form taxpayer subsidized banks because they have failed in so many ways. Make your voices heard, as this is clearly a cut to the throat of our livelihood, and a clear message that greed is still the modus operandi of some lending institutions.

Thank you in advance for joining this cause. It does affect all of us, not only as Real Estate Professionals, but as consumers as well. It is time to fight! If you do not wish to send the attached letter, you may also file your concerns with the Attorney Generals office online at: https://fortress.wa.gov/atg/formhandler/ago/ContactForm.aspx . But please...say something.