NHF Platinum™: Down Payment Assistance Program

The NHF Platinum™ homebuyer assistance program provides eligible families and individuals with a grant that does not need to be repaid. The grant can be used towards down payment or closing costs—an assistance that allows people to purchase a home much sooner than they thought possible. Mortgage Trust, Inc. is an NHF Platinum™ participating lender. Contact us today for assistance with qualification.

The National Homebuyers Fund® (NHF) is a non-profit public benefit corporation that supports affordable, responsible homeownership. NHF manages several Down Payment Assistant programs that help people purchase a home with less out-of-pocket costs. DPA programs adhere to standard mortgage loan underwriting guidelines to ensure borrowers have the ability to afford their mortgage.

The NHF Platinum™ program is designed to provide down payment assistance on the purchase of a primary residence in various states including Oregon, Washington, and Idaho.

NHF Platinum™ Program Highlights

• Non-repayable grant, up to 5% of Loan* • No first-time homebuyer requirement • Conventional, FHA, VA and USDA Mortgages • Fico scores as low as 640

*Certain restrictions apply on all programs. Contact Mike Popnoe NMLS 116627 to learn more about Borrower Eligibility, Rates, Terms, and Guidelines.

2014 National Foreclosure Report Cites Decline in Foreclosure and Shadow Inventory

Foreclosure is a multi-stage legal process whereby a borrower’s rights to a property are forfeited because of failure to make mortgage payments. Consequentially, the lender initiates attempts to recover the balance of the loan via short sale or foreclosure auction. If the asset does not sell, it becomes the property of the lending institution or what is known as bank-owned property or REO (real estate owned). Each state follows its own judicial and non-judicial foreclosure laws and procedures. Approximately 4.9 million foreclosures have been completed since the financial crisis began in 2008. Foreclosures have increasingly declined in the past 28 months as the housing market continues to heal. As of last quarter, U.S. foreclosure inventory is down 35% nationally from a year ago; the number of completed foreclosures declined by 15%; and less than 5% of mortgages are in serious delinquency.

“Although there is good news that completed foreclosures are trending lower, the bigger news is the impressive decline in the foreclosure and shadow inventories.” – Dr. Mark Fleming, chief economist for Corelogic.

Image courtesy of Corelogic National Foreclosure Report Shadow Inventory refers to real estate properties that are either in the process of foreclosure and have not yet been sold or homes that owners are delaying putting on the market until prices improve. Shadow Inventory can create uncertainty about market recovery and fears for home owners. As banks keep properties off the market for fear that over-saturation will cause house prices to plummet, sellers are unsure about the best time to sell.

Shadow Inventory has decreased 22% nationally since last year and are at the lowest levels seen since 2008 according to Corelogic. From 2.2 million homes in January 2013 to 1.7 million in January 2014, shadow inventory has been decreasing at an average monthly rate of 41,000 units. With the lack of looming shadow inventory, home owners and buyers alike can feel more confident in a stable, healthy real estate market moving forward.

Portland Housing Market “Healthier”: Fewer Homeowners Underwater Compared To Many Cities

The number of homeowners who are ‘underwater’ on their mortgage is substantially lower in Portland than the rest of the country. Out of 100 national metro areas, Portland has the 24th lowest percentage of homeowners in negative equity—that is, people whose homes have a loan balance that is higher than the free-market value of the home. The recent global recession and housing crisis saw home prices plummet, resulting in negative equity for many homeowners. Negative equity significantly increases the risk of foreclosure. That trend is now reversing with rising home prices resulting in more homeowners with positive equity.

This is according to RealtyTrac, the nation’s leading source for comprehensive housing data, whose first quarter report for 2014 shows 17% of U.S. properties seriously underwater compared to 26% a year ago.

The Portland market is even healthier than that, says RealtyTrac spokesman, Daren Blomquist, with only 9% of homes underwater.

“The majority of that nine percent is people who bought near the top of the market in Portland, which is around August 2007,” he said to OPB in April. “Either bought or refinanced their homes and are still sticking it out because they now see the light at the end of the tunnel.”

Is home affordability still at an all-time high?

As I talk to prospective home buyers; ranging from those looking at buying their very first home to move-up buyers, the question posed revolves around “is it still a great time to buy, as rates and home prices have both increased?” What a great question to be asking. In the Portland market, we have experienced a 13% appreciation rate (13-15% depending on whether median or average prices were used) in 2013. In addition, mortgage rates have increased by about 1% from their low point in 2013. Considering those two factors, does buying make as much sense as it did 12+ months ago? Well, what do you think about it? My humble opinion is to always lean into the data, not my emotions, to answer that. The best measure I know for determining this is the Affordability Index. The short explanation to this index is that we are measuring the cost of various things relative to a person’s household income.Affordability Image courtesy of Gary Keller vision speach.

The historical housing expense has revolved around 21-22% of a family’s income. When we look at 2012, we find that this housing cost came in far lower, falling just under 13%! That is a significant savings and yes, this was sparked by 1) low home prices and 2) low interest rates. How does 2013 and early 2014 look? As you can see, affordability has lost some ground and now the housing expense is 1.5% more at 14.2% of household income. This tells me that, yes, the cost of home ownership has increased – but is still FAR below historic levels. As home prices and rates increase over time, the affordability will slowly diminish and return closer to the historic levels.

Is buying a home as affordable as it was in 2012? No. Is real estate still very affordable, yes.

rate graph

Tax time has cometh! Quick tip for those with mortgage insurance

taxesMortgage insurance is deductible as qualified interest. This tax provision which has been given a 2nd chance after expiring after 2011, allows taxpayers to deduct mortgage insurance premiums as qualified residence interest. If you have paid or accrued mortgage insurance before January 1st of this year, make sure you are taking this deduction. There is a phase-out provision based on your AGI, or Adjusted Gross Income – so be sure to contact your accounting professional for advice. I believe this deduction was made retroactive to 2012 as well.