June 30, 2008
By now, you probably know that I am kind of addicted to soccer. So, this month has been heaven on earth with the Euro Cup 2008. I have watched new, quality and highly entertaining games almost everyday this month! Between playing 4 times a week and seeing some of the best matches in years, I think June just became my favorite month.
You have probably heard recently that the Federal Reserve is hinting at raising the Federal Funds rate in the coming months. Since the Prime Rate is tied to the Federal Funds rate, and most Home Equity Lines are tied to Prime, we are very likely to see interest rates on Home Equity Lines start moving up in the near future. If you have a home equity line, I recommend that you contact your lender to evaluate their guidelines for locking the rate on funds you have already drawn. Many will lock at 1% to 2% above your floating rate, which is likely a favorable rate for the long term. If you have any questions about this, please give me a call.
There is an exciting piece of news that will be coming out soon regarding conforming loan limits. Exciting might not be the word you would use, so feel free to replace it with something more befitting your feelings; like trivial. That being said, currently you can borrow up to $417k at the best rates in the marketplace. That cap is going to be moving up in the coming months to between $550k and $730k. This is a very substantial increase and will provide an opportunity for anyone with loans up to this new, higher cap to refinance with much better interest rates. If you know anyone in this category, have them give me a call. ;-)
This month’s mailer is about disaster preparedness. Luckily, there is little threat from Hurricane, Flood, or Tornado here in Portland. However, I think having an emergency plan in place and an emergency food supply, water supply, and emergency preparedness kit is an excellent idea. I have been working on mine ever since I lived in New Orleans and had to evacuate thanks to hurricane Ivan. I have loads of food, cards, books, batteries, candles, matches, a wind up radio, flashlight, everything but water. I know, isn’t that the most important part? Yes, it is. So, I guess this little reminder is going to get me off my duff to go buy water. In the words of my Dad, “It is better to say here it is, than where is it?”
On that note…I hope you are having a great summer so far.
Kelly
June 1, 2008
I found a very interesting article on CNNMONEY about the current real estate market. This article points out many of the things I have been talking about with clients for the past several months. I have made copies and included it this month. As always, please feel free to call with any questions or pass this along to other people who might be interested.
Instead of a teaser week, this year we had a teaser weekend. I put my air conditioner in the window, pulled out my fan and was prepared for summer. In the infamous words of Homer Simpson, “DOH!” Since that wonderful 90 degree weekend, we have barely seen the sun. What is that old joke? “How do you tell it is spring in Portland? The rain is warm!” Well 75 degrees is lovely, but I am over the mist that was falling while running last night. Come on, school gets out in two weeks!
Speaking of school getting out, remember that there are going to be kids all around and at all hours. Make sure you are on the look out for them as the days get longer. My sister and I were driving home from a soccer game the other night and luckily we hit a little bump in the road. Her headlights showed two high school aged girls, walking the wrong way down the middle of the street. When we pulled over to speak with the girls, they had no idea that they were invisible. Just a quick reminder that people, especially kids, think you can see them at dusk or at night because they can see you.
This month’s mailer is about resurfacing room and finishes within your house. My sister and her husband are building a new house and the finish work has just been completed. I was expecting just a little molding here and there, the work was awesome! It is amazing how much difference a little change here and there can make in the overall look and feel of your home. If you are looking to make some changes, we are happy to refer you to some outstanding contractors.
Now that everything is getting more “green”, I wanted to share with you a government sponsored program called an “Energy Efficient Mortgage”. This is a loan that is tacked on the top of your loan to finance the improvements. There are many different variations of this loan program, but they can only be added on during a purchase or a refinance. If you know someone looking to buy a “cool, old, Portland home” let them know about this option. Their utilities will be cut in half, saving money, energy and improving the environment. Just had to add my green plug for the month. :)
Congratulations San Francisco, my old stomping ground, for being ranked as the country’s Fittest City! San Francisco barely edged out Seattle for the win. Ironically, LA is towards the bottom of the list. Now that is something to think about. :)
Don’t forget, PetAid is June 13th at Edgefield!
All my best,
May 3, 2008
I think this global warming thing is starting to affect the weather! 80 degrees one weekend and snowing the next. We were in shorts and T-shirts at my nephew’s baseball game one Saturday, and literally got “snowed out” the next Saturday. I have been snowed on during three soccer games in April! Hopefully, global warming will lend us warm and sunny weather for our trip to Black Butte next weekend!
This is the time of the year to help all of the pet related charities. Doggie Dash is May 10th, Pug Crawl is May 18th and just announced PetAid is June 13th. Now in case you haven’t heard, PetAid is being held at Edgefield and Presidents of the United States, Spoon and Nada Surf will all be playing. I saw “The Presidents” or “POTUS” in November and they were a blast live.
I am not normally highly political, but I’ve got two things to share that I truly enjoyed. A friend, Beth, got us tickets to see Hillary Clinton speak when she was in town earlier this month. My brother, his wife, my nephew and I were all able to go. We got VIP seats right next to the stage and Drake and I even got to shake hands with Hillary. It was very exciting to see the first female candidate for president and it was a great experience for all of us.
An advertising agency here in Portland did an ad/short film for Sam Adams that is really unique and provides a different sort of view of a political candidate. You can view it at: www.samforpdx.com. The video is at the bottom of the page. Whatever your political views, it is a pleasure to see something political with such a personal influence woven into the piece. I also reviewed a number of the 30 second spots for Obama through MoveOn.org. They were inspiring, thoughtful and positive. What a concept! J
This month’s mailer is about road trips and travel. This may be a good summer to travel by car, despite the high cost of fuel. With so many airlines closing down or limiting schedules, it makes sense to consider hopping in the car for some localized fun. Oregon is filled with unique places and fun destinations. www.go-oregon.net is a great website with lots of fun ideas for vacations and day trips throughout the state. Our family is vacationing in Sunriver this summer. It is close and warm!
For my real estate investment seminar, I’ve been doing some research recently on compounding interest over time. Something very interesting is that by simply saving $5 per day beginning when you graduate from high school, you will have $800,000 when you reach retirement age! Also, if a teen saved $2000/year for the first six years after high school, they would retire with $1,000,000 without ever saving again! Both these examples suggest that we start our kids on the path to long term wealth by teaching them the benefits of saving while they are still young.
April 1, 2008
Spring is here, yeah, right, as long as you ignore the snow, rain and hail we have been having. Still it is almost time for Doggie Dash and Pug Crawl, two of the most fun fundraisers in Portland. I wanted to give you plenty of time to make plans to be there. May 10th is Doggie Dash, the fun run with your pup. It is the only race I know of where your dog gets a chance to win too. Pug Crawl is the country’s largest get-together for pug owners. This year is “Pugstock” celebrating Peace, Pugs and Happiness! It is a great fun seeing all of the pugs in costume parading down NW 31st to MacTarnahan’s Taproom. Check out the website at www.oregonhumane.org for more info.
I have the pleasure of recommending an outstanding photographer, John Pederson. He has been doing our family photos for about 6 years. His sittings are free and take place on local school grounds. He has an uncanny knack for capturing special moments and bringing kid’s personalities to life on film. I have included some of his pictures of my niece and nephew. I also have a new picture on my outgoing emails, thanks to John! If you are interested in booking a time at one of his sittings visit his website at www.pedersonphotography.net or give John a call at 503-351-7407. I guarantee you will be pleased with his results!
This month’s mailer is about negotiating and bargain hunting. Some of these techniques are things I rarely think about but make sense, such as buying last year’s models or out of season merchandise. The travel info was eye-opening. Obviously, booking package deals does not always make a lot of sense.
Since this is tax season, I thought this might be interesting to include. If you are interested in seeing where your taxes are being spent, you can go to the following links to see where the federal government’s discretional spending is being allocated.
http://www.nationalpriorities.org/costofwar_home
http://www.nationalpriorities.org/Proposed+Discretionary+Budget+Request
I am going to be hosting two seminars in April, one for First Time Home Buyers and one for people interested in finding out more about Investment Real Estate. If you or someone you know are interested in either one, please let me know. The seminars are best with about 8-10 people, so we are limiting the size so everyone will get their questions answered.
All my best!
March 4, 2008
Was this actually February or did we skip the winter and jump directly into the summer? I know, we always get that “teaser” week sometime in early spring, but wow we have had some beautiful weather! The idea of spring, summer and not being bundled inside of sweaters leads me to thoughts of getting back into shape for the spring…and my soccer playing summers. This year I am limiting myself…to four teams. Five teams was simply too many. I can’t wait!
The Berkeley Center for Law and Technology analyzed corporate America to see which companies have the highest incidence of identity theft. The No. 1 company is the nation's second largest bank, Bank of America. AT&T occupies the second slot, followed by Sprint (No. 3), JPMorgan Chase (No. 4) and Capital One (No. 5). Think about it: 3 of the first 5 are banks, which is understandable. But why are two phone companies so high on this list? The reason is because they do a credit check when you apply for phone service, and open yourself up as a potential target. In the No. 6 spot, we have Citibank. As the nation's largest bank, Citibank has one-third less incidences of ID theft than the smaller BofA! Interestingly, ING has the lowest incidence of ID theft of any bank.
Random identity theft trivia; Napa, California is the city with the highest incidence of identity theft in the country. Ironically, Arizona edges out California as the state with this highest incidence of ID theft. Albany, Oregon tops the list for general fraud. Nice! Finally, from the "No they didn't!" category, the New York City Department of Finance mailed thousands of tax forms that showed people's Social Security numbers through the envelope. What were they thinking?
This month’s mailer is about energy efficiency and some of the small things you can do around your home to dramatically increase your home’s energy efficiency. In the short term, better insulation and compact fluorescent bulbs are relatively easy solutions that are very cost effective. Longer term, be sure to purchase high efficiency appliances. PGE also has some very good information on their website at www.portlandgeneral.com. The Energy Trust of Oregon will perform a free in home Energy Review. Call them at 1-866-ENTRUST, or fill out the form on their website at www.energytrust.org.
And now for my new favorite bumper sticker: Wag More, Bark Less!
As many of you know, I am a softy for the critters. I used to volunteer with the San Francisco SPCA training dogs and monitoring dog “play group” with the pups (and yes, that is as fun as it sounds!) Now that the Oregon Humane Society has a new building, they are offering classes to the public to help people and their pets get along better and lead happier more fulfilled lives. OHS offers many varied classes for dogs from puppy class to dealing with “reactive” dogs (you know these, the ones that bark at every other dog they see). They also offer classes for “finicky felines” and Tellington Touch or T-Touch, which is a kind of animal massage which is supposed to calm animals, help with the healing of injuries and generally improve the bond with your pet. SFSPCA offers many classes for the public as well. If you are having any pet issues or just want to understand what is going on in your critter’s mind, check out some of these courses. Your “best friend” will thank you.
The mortgage market, as I am sure you have heard, has been a roller-coaster ride. The beginning of this year has continued the streak. Attached to the federal government’s economic stimulus plan is a provision to increase conforming loan limits (currently $417,000) to 125%-150% of the median home price with a cap between $625,000 and $730,000, depending on which version becomes law.
Although 30 year fixed rates have fallen recently, jumbo rates have been stuck at around 7%. Secondary market interest evaporated with the subprime meltdown and only a few large banks have offered jumbo loans, but at higher rates. By allowing more homeowners to qualify for “conforming” loans, this should allow people to refinance and avoid the costly adjustable rate mortgage resets that have perpetuated the issues in the marketplace.
This month’s mailer is about taxes and using your home as your largest tax deduction. It also has reminders for all of the data and paperwork that you will need to complete your taxes. I highly suggest, for most people, that you have a specialist prepare your taxes. One person I just spoke to received an extra $2800 for the past two years because her tax person itemized her deductions. She had not itemized because it hadn’t made a difference on her federal taxes, but it made a huge difference on her state taxes. Another friend of mine was working with a preparer who charged her $1700 for her personal taxes. Now THAT is ridiculous! Unless you are filing an EZ form, a professional will likely save you more than their fee. If you don’t know a great tax preparer, I would be happy to recommend one.
January 2, 2008
I cannot believe another year has come and gone! Each seems to go faster than the last. This holiday season was a wonderful blur filled with family, friends and lots of wonderful food. Now I am ready for those New Year’s resolutions. J Well, I have the opportunity to go to Bikini Boot camp towards the end of this month with one of my closest girlfriends (and a favorite travel partner). I am looking forward to a week of playing in the sun, eating healthy food and generally reenergizing. What a way to start the year!
This month’s mailer is on the subject of the economy and real estate in particular. It dovetails well with what I believe about our current markets. Several areas in the country are suffering substantial losses in home values, but because housing prices in Portland didn’t spike as severely as in many other areas, our market shouldn’t see substantial losses in value. I think 2008 is going to be a good year for both the real estate and mortgage markets. We should continue to see softness in the real estate market, but we should see moderate appreciation in housing prices for 2008 in Portland. On the mortgage side, lenders have tightened up lending guidelines considerably which should help to alleviate the fears of mortgage backed securities on Wall Street. This good news will likely result in some very low mortgage rates in early 2008, as banks fight to regain lost market share within the mortgage sector.
In the final quarter of 2007, we began conducting seminars on investing in real estate. The focus of the class is to teach average income people how they can purchase investment real estate. If you or someone you know would be interested in attending, please give me a call and let me know. We are limiting each class to 14 people and the spaces fill up quickly, so you must reserve a spot in advance. I think anyone that wants to grow their wealth should seriously consider attending.
I am back on one of my favorite pastimes, removing junk mail from my mailbox! In addition to www.Greendimes.com , I was just turned onto www.catalogchoice.com. Did you know that 8 million trees are cut down a year to produce paper catalogs? Catalog Choice allows you to remove yourself from the mailing lists of catalogs you do not want, while still receiving the ones you do. The companies get to send catalogs to clients who might actually order from them. Sounds like a win-win-win to me.
Don’t forget that Valentine’s Day is just over a month away, and reservations at great restaurants go quickly. I have a few recommendations for restaurants to try for a fun Valentine’s Day. First, I would recommend Toro Bravo. I went recently and was very impressed. It was written up in Bon Appetit magazine last month, along with Caffe Mingo, which happens to be one of my favorite restaurants in Portland. A friend of mine from high school just opened an Italian restaurant in Beaverton named DeCarli to rave reviews. It might be the perfect “new thing” to try this year for Valentine’s Day.
BTW, I am now posting my newsletters on our website in “Kelly’s Blog”. Let me know if you have ideas about how I can better meet your needs.
December 1, 2007
Ahhh, I am still reveling in the Thanksgiving leftovers. It was a wonderful day full of family, food, football and frivolity. The “Donate Dinner” program was a huge success. We raised over $100,000 throughout Portland to insure that homebound seniors are able to receive hot, nutritious lunches delivered to their door. It was bitterly cold, but we kept moving around & chatting with people coming through the door. When we got too cold, we would stand under the heat blower at the front door to defrost. All in all, it was a great weekend.
Tis the season of giving, and heard through the air was the ringing of bells and not from reindeer. Okay, it doesn’t really rhyme, but it is close! As I was standing outside of Haggen, a man approached me to tell me that he spends his time and money supporting abused children, so wasn’t going to donate to Meals on Wheels. My thought was, “Great!” I know that everyone has something special that tugs at their heartstrings. My favorite charities are; www.BestFriends.org (a no-kill animal sanctuary in Nevada for all kinds of critters, they even helped during Katrina!), www.handstohearts.org (helping at risk children during early childhood development around the world) and www.loavesandfishesonline.org (Meals on Wheels for Portland area seniors).
I believe in giving back and my choices are animals, children and seniors as my charities to support. Generally, I like to support beings who, through little or no fault of their own, are in less than ideal circumstances. If you are looking for something to do locally, try www.HandsonPortland.org. They have lots of different kinds of volunteer opportunities and whether you have a lazy Sunday and feel like helping for one day or you are looking for a longer commitment, but just don’t know where to look, Hands on Portland is a great place to start. The "Hands On" program is available in many cities across the country. Look for it in your city, if you are interested in finding a local place to volunteer.
In spite of all the changes and bad press mortgage and real estate has received in recent months I see some positives that may allow us, here in the Northwest & San Francisco Bay Area, to remain optimistic. As we all know, real estate trends and prices vary from state to state and city to city…location, location, location!!! Portland area homes continue to appreciate, averaging 7% from Oct 2006 to Oct 2007, thanks to stringent growth restrictions. For similar reasons, albeit geographic barriers instead of governmental, the 9 counties of the San Francisco bay area are averaging 16% appreciation this year. From time to time we need to be reminded that the sky is NOT falling- in spite of what we seem to read on a daily basis. We are fortunate to live where we do.
This month’s mailer is about changing habits to become the best you that you can. There are tips to help define your goals to be more effective, stay motivated, and even some samples of strategies that work. For me, as soon as my feet are on the floor, I am up. It is the 30 minutes of hitting snooze that is my problem. :)
A quick reminder, if you want to make dinner reservations for Valentine’s Day, start now. Restaurants fill up very early for such a big night, and who wants dinner at 4:30pm? :)
Happy Holidays!
This morning, the U.S. House of Representatives Financial Services Committee voted on H.R.3915, The Mortgage Reform and Anti-Predatory Lending Act of 2007.
While legislators attempt to erect a defense shield against mortgage lending abuse, this current law strikes wide of the target and is sure to inflict collateral damage upon the very group it seeks to protect.
YSP
One of the primary thrusts of the Act is to outlaw Yield Spread Premium (YSP). This is the mechanism by which consumers are able to obtain zero point and no cost loans. Borrowers elect a slightly higher interest rate in exchange for eliminating points and other closing costs. YSP is a rebate (the Premium) paid by the lender to the broker for the higher interest rate (the Yield) on the loan. The amount of that premium is determined by difference or the Spread between current interest rates (at par or no rebate) and the rate elected by the consumer. Mortgage brokers must disclose YSP.
It’s a simple trade-off and a valuable tool for consumers. Without YSP, buyers with limited cash may have to postpone purchasing a home. Existing homeowners might be unable to refinance to a better loan if they had to pay all their fees and points out of pocket.
I do a number of loans for retiring folks relocating to Portland. Frequently, their plan is to sell their old homes once they are settled in to their new home in Portland. Then they pay off the new mortgage completely, with the proceeds from the sale of the old home. It makes infinitely more sense to accept a higher interest rate over the short term to save thousands in upfront costs. The math isn't that hard.
A Rigged Game
If this legislation passes, consumers will be forced to work directly with a bank like a Countrywide, B of A, or Wells Fargo in order to obtain a no points/no fees loan. However the banks are exempt from the disclosure requirements placed upon mortgage brokers. That’s right, the banks don’t have to tell you how much they are making at the expense of your higher interest rate.
That is a long standing inequity, born of bribery and the lobbying efforts of the big banks. They claim that until they actually sell the loans, they don’t know exactly how much that premium is worth. Therefore they can’t disclose. Last time I checked, that hadn’t kept them from paying my mortgage banker friends a very specific commission at the close of the loan.Hmmm...
What Happens if Congress Makes YSP Illegal?
Here’s how the game plays out if YSP is outlawed. Mortgage brokers won’t go away, nor will lending abuse. In fact, it will get worse. Mortgage brokers will morph into banks or go to work for banks. Competition will shrink (never good for the consumer), and we’ll all be free, under the banking exemption, from disclosing to the consumer how much they are really paying for their loans.
Other Issues
Press Release, Kurt Pfotenhauer, Senior VP of Government Affairs and Public Policy for the Mortgage Bankers Association underscored the risks of HR 3915 when he stated that:
some people will be locked out of the mortgage market, many of whom would have been successful homeowners.”
He went on to say that,
85% of sub-prime borrowers are paying their mortgages on time. It’s an open question, how many would even qualify for a loan under the proposed regulatory construct.”
Lending abuse is certainly a problem and the consumer needs protection. Stronger licensing and supervision are required. But outlawing YSP and reducing competition takes us down the wrong path.
Happy Halloween! We have one kitty cat and one ninja that are heading out this evening for some well deserved frivolity. I always think of Halloween as the beginning of the holiday season. I know that seems crazy, but from here through New Years, it seems like our lives get more and more chaotic. This month’s mailer has some good ideas that could help make the holi-daze a bit less stressful. I am going to try and adopt a few of these ideas and create some “fun days” with Drake and Quincey on some of the many days they are out of school over the next few months.
I have a good friend whose mother recently passed away. Due to a lack of ongoing estate planning, the family went through a very scary time when they couldn’t find her will and trust paperwork, which created a great deal of stress for her and her siblings. Her mother’s attorney had passed away since these documents had been drafted, and the family wasn’t sure how to get all the estate details worked out.
Things have settled down and everything has worked out fine. However, it got me to thinking of all the people I deal with each year that lack any sort of long term plans for their estates. My friend Scott Nielson, an attorney here in Portland, has been kind enough to put together a summary of how estate planning works and give some advice on getting an estate plan put together. If you don’t have an estate plan, a Will, and a Medical Advanced Directive, you should consider getting these items in place. In my mind, the most critical is a Will, especially if you have children. If you don’t have a Will, a judge will decide who will raise your children, which is a scary thought. Call Scott at 503-329-0229 if you have any questions.
In case you haven’t been watching any TV, I want to let you know that the Dunlap’s are celebrities! We are in an ad supporting Measure 50. We ended up in the commercial when a film crew came to the neighborhood to film kids!? They asked for one shot of us sitting on our front porch after around 3 hours of filming nothing but kids. It is funny how things turn out sometimes. If you haven’t caught it on TV, it’s on You Tube. Search for ("50 kids" Measure 50) to see the ad. I also saw a hilarious You Tube video for anyone with kids or who was a kid themselves. I think that covers most of the people I know. Search for “William Tell mom” to find this one. Let me know what you think.
If you are unsure which presidential candidate matches up with your stance on various issues, there is a good website for both Democratic and Republican candidates. http://minnesota.publicradio.org/projects/ongoing/select_a_candidate This site has a questionnaire that will show which candidates answered most similarly to you. I found it very interesting.
Take care,
Eric
Kelly's Blog
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