The Task Force for Homeowner Security
Last fall, Governor Gregoire took bold measures to set in motion
efforts to educate and protect current homeowners who
are at risk of losing their homes. But her objectives reached
much farther than that. In forming the Task Force for
Homeowner Security, she also sought recommendations on measures,
including legislative reforms in lending practices,
that would protect future homebuyers.
Task Force member Fred Corbit aptly called us a homeownership
security “think tank.” We were people representing the
entire span of the lending, homebuying, and homeownership
advocacy profession—bankers, homeownership counselors,
mortgage brokers, Realtors, finance and legal experts, community
leaders and government officials. We met as a group
some six times, and also deliberated in sub-committees that
focused on specific aspects of the consumer education,
borrowing, lending, loan servicing and loan origination
processes.
Late last year, we presented the Governor with 24
recommendations. These included:
-
Creating a public awareness and outreach campaign.
-
Providing counseling assistance to borrowers at high risk of
forfeiture as well as to first-time homebuyers.
-
Implementing lender and loan servicer best practices that
would ease pressures on borrowers at risk of
foreclosures, including improved notice to consumers.
-
Creating loan origination best practices, including
disclosures—and prohibiting steering towards substandard
mortgage products.
-
Furthering financial literacy and consumer education.
-
Setting standards for borrower protections for nontraditional
mortgage products in sub-prime lending.
-
Defining mortgage fraud as a crime—making it a Class B felony.
-
Creating foreclosure “rescue” scam protections for homeowners.
These recommendations were turned into legislative proposals by
both the Governor and members of the legislature that were
considered during the 2008 legislative session.
The legislature responds
As a long-term participant in the legislative process in
Olympia, I was gratified by how enthusiastically and speedily
the legislature responded to virtually all of our
recommendations. As of this writing, six bills dealing with the
recommendations were passed by the legislature and signed by the
Governor.
But as important as this legislation is, it is our future, not
our present. Over the past decade, sub-prime lending has placed
great hardship on many people, and their stories should be
heard. Some of these are individuals for whom this new
legislation is too late. Happily, many others at risk of
foreclosure, often with the aid of homeownership counselors,
have been able to renegotiate, get back on their feet, and save
their homes.
Foreclosures have many causes
It’s always the one rotten egg in
the dozen that we notice first. Yet most mortgage loans made in
the U.S. are made by reputable lenders, and the majority of
mortgage brokers do have borrowers’ best interests in mind. Our
country’s mortgage turmoil is the result of a long string of
finance and risk management practices that, in retrospect, were
ill advised. As the recent demise of Bear Stearns shows, these
practices have hurt parties at every stage of the borrowing and
financing process, from large financial institutions to the
homebuyers themselves.
Because parts of our state, including the greater Seattle and
Tri-Cities areas, continue to enjoy relatively strong
economies and stable housing markets, their rates of
foreclosures due to the “resetting” of adjustable rate mortgages
(ARMs) have yet to skyrocket. In fact, in most areas of the
state, for a good portion of those homeowners in the process of
losing their homes, inappropriate placement into a sub-prime or
ARM loan is not necessarily the whole story. There are a spate
of other, varying causes, including declines in property values,
inaccurate appraisals, loss of income due to a layoff, family
emergencies or illness, homebuyers’ poor understanding of debt
vs. income ratios—and financial illiteracy in general.
Here at the Commission, we require participation in
homeownership classes or counseling for those homebuyers who are
borrowers from our portfolio. Homebuyers who participate in this
kind of financial education process are far less likely to lose
their homes to foreclosure than the general populace. Not only
are their foreclosure numbers under 1%, but these are typically
borrowers who are at the more vulnerable end of the income
spectrum. We think this kind of education helps people make
better choices about how much of a home loan they can truly
afford, based on their personal situations.
And, of course, what kinds of loan instruments are right for
them.
A New Hot Line is Created 1-877-894-HOME (4663)
On February 11, Governor Gregoire signed into law Senate Bill
6272, Expanding Financial Literacy Through Education and
Counseling to Promote Greater Homeownership Security. The bill
earmarked $1.5 million to help educate Washingtonians about
homeownership issues; much of it will be distributed by the
Commission to qualified counseling agencies across the state.
The Washington Homeownership Information Hotline and Counseling
Program was launched on March 1. The program funds free
homeownership counseling to Washington residents thinking of
buying a home as well as current homeowners who are struggling
with meeting their mortgage payments, or simply have questions
about their loans.
People in Washington can call the toll free number above to
access the program. There is also an informational website:
www.homeownership.wa.gov.
The Washington State Department of Financial Institutions (DFI)
is overseeing implementation of the program. Some of
SB 6272’s funding will be applied to outreach efforts, including
advertising, to urge people to call to get the information
they need to help them make sound financial decisions.
The Tri-Cities: Make the call right away
In the case of foreclosure worries, the key is calling right
away. The sooner a homeowner calls, the more time there is
available to get to the bottom of what’s going on and get
started on working out the best response. People in financial
trouble are typically overwhelmed and, not infrequently, simply
ignore the problem rather than tackling it head-on.
“It’s
great when people come in and it’s not too late.”
LIZA BEAM, Home Ownership Director,
Consumer Credit Counseling Service of the Tri-Cities
“It’s great when people come in and it’s not too late,” says
Liza Beam. Liza is home ownership director at Consumer
Credit Counseling Service of the Tri-Cities (CCCS). Right now,
because the Tri-Cities are experiencing a strong economy,
“we’re probably eight to nine months behind the rest of the
state. But we do see that things are beginning to slow down.”
Many people who secured sub-prime loans were told by their loan
officer that they could re-finance their ARM after two
years—after they improved their credit. “But if the value of
their home goes down in that two years, they’re stuck in that
ARM with the payment going up beyond what they can afford,” she
points out. Since home values are stable in the
Tri-Cities, people there are still frequently able to re-finance
their ARMs to fixed-rate loans.
The bulk of the foreclosures that CCCS is counseling on have
been due to bankruptcies. “We’re starting to see the signs
that a financial crunch is heading our way, but it hasn’t really
gotten bad yet,” Liza says.
Predatory loans are now illegal
Unfortunately, virtually no community is entirely free of the
blight of unprincipled lenders. Here’s a story Liza told me:
A man walked into CCCS’s offices. Because his understanding of
English was relatively poor, he’d had trouble
understanding the terms of his mortgage. A broker had placed him
into a predatory loan. If that weren’t bad enough, a
different lender had just offered to ‘help him out’—by
refinancing his mortgage into a loan that was even worse. “The
fees
were outrageous. We referred him to DFI to file a complaint,”
Liza says. “We’ve seen a number of cases like this.
Non-English speakers seem to be a large target for predatory
loans. And they get taken advantage of.”
Fortunately, predatory loans are the exception to the rule. And,
happily, under recently passed Senate Bill 6381, it is now illegal for mortgage brokers to steer people
into sub-standard loan agreements that clearly present a
conflict of interest.
“It all comes back to the lack of education,” says Liza. “Often
clients don’t realize that they may be able to get a better
deal through a bank than through a broker. No one has ever told
them that. We talk about that at our homebuyer classes,
educating them about the yield spread premium—the client
believes it’s not costing him anything, yet the bank is paying
the broker a commission to put that client into a higher
interest rate loan.”
Seattle: First-line defenses for homeowners
For Linda Taylor, housing director of Urban League of
Metropolitan Seattle (ULMS), homeownership counseling, clear
disclosures from lenders, and financial literacy are all
first-line defenses for homeowners. It’s simply not enough to
wait for
those referrals of homeowners in crisis from HUD, banks,
lenders, and community organizations. Linda and other
representatives of ULMS are continually taking the message of
financial literacy to schools and churches, “and just
generally networking with other nonprofit organizations,” she
says.
LINDA TAYLOR, Housing Director, Urban
League of Metropolitan Seattle
One of Linda’s strongest agendas, which she brought to the Task
Force’s Consumer Education and Counseling
Committee, is pushing for greater teaching of financial literacy
in schools at all grade levels. At a recent Rotary Meeting in
Renton, she notes, she spoke with a number of teachers who were
implementing these concepts: One was a
kindergarten teacher.
Financial literacy “truly is a work in progress in our
community,” Linda says. “The Urban League does it now. We have
financial literacy classes that we hold in churches. And of
course we have childcare: We take that childcare and turn it
into some type of financial literacy teaching. Whatever the
topic was the week before, we give the parents cue cards to sit
and talk over with their children at dinner, which is a big
piece of it.”
In her organization’s homeowner counseling capacity, Linda is
seeing an ever-increasing need for people to have a full
understanding of the terms of their mortgage, their budgets, and
how much debt they can realistically take on. Here’s one
example:
A woman came into ULMS’s offices for help. She was defaulting on
her mortgage. “I called her ‘Miss Neat,’” Linda recalls.
“All of her paperwork was in order.” She had written up her
budget, and she was $400 over. As Linda helped her go
through her monthly payments, the woman discovered that, for
many years, she had been unknowingly paying a monthly
bill for one of her children. It was an automatic deduction for
a student loan. “We called up her kid and gave him that bill.
Her budget got in line and she’s now on track. We helped her to
take a look at her budget,” Linda sums up. “She came in
as a default, but it was a budget issue.”
ULMS serves not just residents of Seattle, but the greater King
County area, as well as Snohomish, Pierce, Island, and
Kitsap Counties—and even Spokane. Many individuals are
contacting ULMS’s counseling program about ARMs that are
resetting; the number of calls coming in for help have more than
doubled. “I’m picking up calls off my Blackberry, I’m
calling people over the weekends. People are panicking. We have
five counselors, which is nowhere near enough,” Linda
says.
She points out that, for some low-income Seattle residents, the
City of Seattle’s Foreclosure Prevention Program,
announced in January, is helping ease the pressure on homeowners
at risk of foreclosures. The program is administered
through ULMS and Solid Ground. Stabilization loans of up to
$5,000 are coupled with counseling. Through the program,
homeowners can use the loan to either avoid default by working
through a repayment plan to stay in their home, or gain
enough time to sell their homes on their own terms.
Right now, Linda explains, negotiating for short sales of homes
is a growing trend. A short sale occurs when a home is
sold and the lender agrees to accept less than the total amount
due, and release the lien secured to the property. ULMS
will be offering a class in “short sales” on May 6th; another
class will be “Beware of Looser Loans.” These classes are
geared toward real estate agents and each carries three hours of
continuing education credit. You can contact ULMS at
(206) 461-3792 for more information.
“We can often still sell homes in our area—it might take a
little longer to sell but homeowners are not always selling on
their own terms,” Linda says. “We want to assist individuals in
empowering them to sell on their own terms, and that’s
where, at times, that $5,000 might come in. The funding is there
to help people.”
Spokane: Some egregious practices—but also many upbeat outcomes
Like Seattle and the Tri-Cities, Spokane’s housing market is
enjoying a period of relative stability. “From about 2005 on,
our market grew, with good appreciation,” says Ray Rieckers, who
directs the Housing Opportunities Division at Spokane
Neighborhood Action Programs (SNAP). “It has continued to do so,
particularly at the low end of the market, despite
what’s happening nationally. Correspondingly, we have not seen
those numbers of foreclosures here.” Spokane did
experience a higher rate of foreclosures from about 2002-2005,
when the housing market was fairly stagnant, he adds.
RAY RIECKERS, Director, Housing
Opportunities Division, Spokane Neighborhood Action
Programs
Ray has been an affordable housing advocate for three decades,
and has seen more than his share of housing tragedies.
He saw the writing on the wall about sub-prime mortgages years
ago. SNAP commissioned a study in 2002 to examine
the impact of sub-prime mortgages on foreclosures in the Spokane
area. “It was a tedious process. We looked at
foreclosures between 1993 and 2000 and found a huge growth in
sub-prime lending. There seemed to be a correlation—of
course there were a lot of variables at play—but the growth in
sub-prime loans was almost exactly the same as the
growth in foreclosures. We printed an initial summary of the
report ... and no one in the industry paid attention to it.”
For Ray, some of the “real mortgage horror stories” are related
to homebuyers’ stated incomes. “At SNAP, we were being
approached regularly with debt-to-income ratios that made us
very uncomfortable, by brokers or lenders wanting us to
participate in second mortgages. We see things today, people
coming in with an income of $2,000 a month and they have
house payments of $1,500 a month. Those are the most egregious
practices that we were seeing—banks willing to issue
on that kind of situation.”
Most typically, the people who are coming in for counseling at
SNAP today are homeowners who have lost their jobs and
income and are seeking a forbearance from their lender. A
forbearance is a deal cut with the bank that will help them
catch up. “We’re pretty good at negotiating these,” says Ray.
“We saw a little over 200 homeowners last year who
averaged four months behind on their mortgage. 118 of them were
able to save their homes.”
Ray emphasizes that homeownership counseling, particularly for
those facing foreclosure, is much more than just
punching in the numbers. “You can’t divorce the person from the
problem,” he says. “A lot of our work is not just arranging
forbearance agreements, it’s staying with the client and
supporting them, helping to restore a loss of confidence.”
A Spokane-area woman was laid off from work. She’d been at that
particular job for a while—“just barely making it,” Ray
says. The woman was facing losing her home because she wasn’t
making the payments. She was encouraged by her
SNAP counselor to enlist the services of the local employment
security agency and get some job training. In the end, she
was able to secure a better job and hold onto her home.
Ray tells another story with an upbeat outcome. The local
offices of Windermere Real Estate, through a program that
distributes 2% of brokers’ fees to help the community, donated
$10,000 to SNAP. The initial intent was to assist two
families in meeting their mortgage payments. But these families
were able to resume payment on their own, and the
remaining funds were used to assist additional families in need.
More than six families of modest means were given
enough funding to meet one or more back payments and save their
homes.
The Olympic Peninsula: Depressed housing markets hinder re-fi’s
Marvelle Lahmeyer, who is lead housing counselor with Kitsap
County Consolidated Housing Authority (KCCHA), has
already been getting calls coming in on the Washington
Homeownership Information Hotline. “The 800 number is helping
people who just have a lot of questions, like ‘I’m not behind
but my ARM interest is going to adjust.’ Or ‘I have an 80/20
loan and I’m really having trouble making ends meet.’ So the
number is helping a lot of people who have questions before they
get into foreclosure,” she says.
MARVELLE LAHMEYER, Lead Housing Counselor,
Kitsap County Consolidated Housing Authority
All told, Marvelle’s agency counseled some 50-60 people in
default in all of 2007. “And we’re well above triple for that
already—and we’re only into our second quarter.” KCCHA covers
Kitsap, Mason, Jefferson, and Clallam Counties on the Olympic
Peninsula, and housing counselors are working over the phone
with callers from Tacoma and Seattle as well. The housing market
on the Peninsula is depressed. Properties are sitting on the
market for a long time. “A couple who lost their home to
foreclosure called me the other day,” Marvelle says. “Their
house was put up for auction, but no one even put in a bid.”
Marvelle is seeing a lot of people with ARMs that are set to
adjust. Two-year ARMs began adjusting in the latter half of
2007, and “now the three-year ARMs are all coming up this year,”
she says. “All of these loans were done in 2004 to 2006, so I
don’t think we’re going to see our way completely out of it
until 2010, since some are five-year ARMs.”
A big portion of the people she’s counseling are under 35,
first-time homebuyers who got ARMs or 80/20 loans. “They weren’t
able to pay from day one, and have hung in for a year, or a year
and a half. They’re upside down on their equity.
Most of them are doing what’s called a sale in lieu of
foreclosure. And they’re the lucky ones, because they get to
sell their homes—the lender doesn’t necessarily agree to take
less, but I haven’t seen any of them sue the homeowner for the
difference. The homeowners are basically walking away from the
home and moving into a rental.”
One bright spot, says Marvelle, has been the FHA loans made
available by the federal government. “The FHA loans are working,
and people are able to refinance. These loans are at a very good
interest rate right now. They will take care of people who are
not in default—but you can’t be in default and refinance with an
FHA loan.” Like all the experts I spoke with, she’s urging
people to call before they’re in trouble. Currently the FHA is
not looking at credit scores, so as long as homeowners don’t
have lopsided debt ratios and are not in default, ARM holders
can refinance to a conventional loan if their timing is right.
A lot of ARMs, explains Marvelle, carry significant prepayment
penalties. Six months’ interest on a loan can be
$12,000-15,000. “If you come to get refinancing 30 to 45 days
before the ARM is going to adjust, that gives the lender enough
time, and they’ll close the new loan on the day their prepayment
penalty expires.”
The news from the Peninsula and KCCHA isn’t all bad. “I had a
success just today,” Marvelle says:
A couple living in Tahuya, on the Hood Canal, were six months
behind on their mortgage payment. They held an ARM, and the
interest was going to adjust up to 11%. The lender didn’t
refinance, but they did a loan modification—when you’re behind,
the whole structure of the loan can’t be modified, but the
finance portion can. The lender took the six months’ past due,
which was almost $18,000, tacked it onto the end of the loan,
and lowered the interest rate to 8% term fixed. “That was a
great success story,” says Marvelle. “It only took about three
weeks from start to finish. The loan company was great
throughout the transaction.”
Sometimes, if clients aren’t too deep in the hole, Marvelle
says, they’ve been able to draw on funding from the counties
through the state’s Homeless Housing and Assistance Act (HB
2163). Up to $1,000 can be made available to help qualifying
families get back on their feet and save their homes to prevent
homelessness. This is a stopgap measure, however, that covers
only one month’s worth of mortgage payments at best. “If you’re
going to do a loan modification or forbearance agreement, the
lender wants a downpayment. You have to come in with
something—especially if you haven’t made a payment for six
months. Sometimes that $1,000 can be a downpayment to get an
agreement, to help a family keep their home.
“It is going to get better,” she concludes. “Two more years and
I think we’ll be through this.”
Defending people in foreclosure against scams
As a Seattle-based attorney with Northwest Justice Project, Fred Corbit frequently represents homeowners of limited means who
have been defrauded while facing foreclosure. Before taking on
his current role last year, he was a partner for 20 years at the
international law firm of Heller Ehrman, and chaired the WSBA
Creditor/Debtor Section. Fred has seen just about every dirty
trick in the scammers’ handbook. “If I could have just two
minutes to speak with people in foreclosure,” he says, “I can
help prevent them from making a lot of bad decisions.”
“If I could have just two minutes to speak with
people in foreclosure, I can help prevent them from
making a lot of bad decisions.”
FRED CORBIT, attorney, Northwest Justice
Project
Unfortunately for many, those two minutes have come too late. By
law, 90 days before a foreclosure, the executing trustee has to
file public notice. Anyone can read these published notices,
check out the homes in question, and cook up a plan to defraud
vulnerable homeowners of their homes and savings. Frequently, a
homeowner under this kind of foreclosure pressure doesn’t
understand the process and “thinks they’re going to lose
everything,” says Fred.
Here’s the case of one of his clients:
A single mom with two young twin daughters moved in with her ill
grandmother in West Seattle to take care of her. The grandmother
eventually passed away, and the woman inherited her house, which
was small and needed work, but was in a nice area on a quiet
street in the Admiral neighborhood. The mom had a bad back from
an injury at work, was not making a lot of money at the time,
and got behind on the $50,000 mortgage on the home.
The house went into foreclosure, and the woman was too
embarrassed to tell her family that she was in peril of losing
her grandmother’s home. 90 days before the foreclosure, the
notice was publicly filed. At the time, no house in the Admiral
district was worth less than $200,000, and this home was going
to go into foreclosure for less than $50,000.
Several young, well-dressed men began showing up at the
homeowner’s door, asking her what she was going to do. They were
polite men who came repeatedly, runners for a man who bought
properties. They gave her a brochure that read, ‘We don’t want
to buy your house—we want to make sure you can keep your lights
on. We’ve got options for you, we’re affiliated with nonprofits,
we’re here to help.’ She wanted to keep her home, and she wanted
it to be true. “She was sold a bill of goods,” says Fred. They
took title to the property, which allowed them to pay off the
mortgage and keep the rest.
She got an option to repurchase the property, along with a used
Ford, a laptop computer, and the promise of being taught the
business of currency trading from her home.
They were good salesmen. Maybe this was too good to believe, but
they told her it could happen .... and she believed them.
The silver lining to this story is that, although she lost her
home, at least this young mother was able to secure the
representation of an attorney of the caliber of Fred Corbit—and
have her day in court. “This was fraud,” he says.
“Representations were made that were false, including ‘We don’t
want to buy your property,’ and ‘We’re affiliated with
nonprofits.’” Through the legal process, Fred was able to get
her the ability to live in the home a little longer, and get
settlements—of about $90,000 along with unsatisfied judgments
for the remainder of her equity in her former home.
Recently passed SHB 2770 “will make it easier to prove these
cases in the future,” says Fred. “There are now provisions that
would have allowed her to rescind the transaction right after it
took place. More disclosures will have to be made. And there are
more penalties.”
One of the many good things about SHB 2770 is that now, when
residential property owners get their notice of default 120 days
before a foreclosure sale (and 30 days before the public
notice), clearer language about their rights and options will be
required to be stated prominently at the beginning. This
includes information about legal rights, the potential to sell
the property to preserve equity, warnings about scammers, and
the possibility of free counseling and legal services for those
who qualify.
Hopefully, we’ll see fewer mortgage rescue scams with the advent
of this bill, but here are a few other scams Fred has seen—and
advises people to be on the lookout for:
“We’ll preserve your home and you can buy it back later”:
Scammers tout this service, even though, to Fred’s knowledge
(and the Attorney General’s) this option has never actually been
exercised. Scammers have been known to take title to the home
and then refinance the property, loading it up with a greater
amount of debt than it originally had.
“We’ll give you cash right now before foreclosure”:
If
homeowners don’t realize they have access to equity in the
property, they’ll take $5,000 or $10,000 from the scammer for
the title, thinking it’s better than nothing. The scammer keeps
all the equity in the home.
“Let me cure your credit”: Sweet-talking scammers have been
known to take advantage of desperate, defaulting
homeowners—leading them to believe that if they cough up their
last $1,000, the scammer will fix their credit for them.
Another valuable piece of advice from Fred: Sometimes when the
homeowner has no equity in the home and no ability to make the
payments, he or she can at least try to regroup. From the date
of a notice of first default, a foreclosure sale can’t take
place for at least 120 days. And after foreclosure, there’s a
20-day grace period to vacate the property. During that time,
Fred says, “You don’t have to make mortgage payments or pay real
estate taxes.” This can buy time to save up the first and last
months’ rent for a place to move to. “Not everyone is going to
save their house. There’s not equity for everybody. People
should know what their options are.”
Fiduciary standards for mortgage brokers
On the Task Force, Fred pushed hard alongside all of us for
creating higher standards for mortgage brokers. This ultimately
resulted in the passage of Senate Bill 6381, which created a
higher fiduciary standard. Brokers now must act in the best
interests of the borrower, and meet a considerable amount of
disclosure requirements, including no undisclosed compensation.
Our debate was about what kind of duties the broker should have.
Fred describes it like this: “Everyone agreed that there should
be no steering and full disclosure and a duty of good faith. The
question was whether it should go as far as a fiduciary
duty—like that of a lawyer or doctor. This means the person
owing the duty must put the interests of the other person ahead
of his own. But that doesn’t mean if you’re a Ford dealer you
also have to sell Chevys. What was passed in the legislature is
described as a fiduciary duty, but what the broker actually has
to do is specified by the statute. I think it’s a fair
compromise; the good brokers won’t have any problem living by
it—and it will prevent harm.”
Pressure on housing at every level—but in good shape to survive
The Task Force frequently drew on the wisdom and financial
experience of Scott Jarvis, who heads the Washington State
Department of Financial Institutions (DFI). Scott has been
working in financial regulation in the state for more than 30
years, with the insurance department, as counsel with the state
Treasurer, and in two tours at DFI. “I’ve been around for a
while, and I’ve seen a lot of business cycles,” Scott says. “The
nature of our business economy is that we have excesses that we
wring out of the system. But this time, the excesses seem rather
extraordinary. There’s no instant solution, but the pressure on
housing at every level is extraordinary.”
"As a state, we need to come up with systems that do
the job of protecting the public without over
constraining the ability of lenders to operate and
investors to invest.”
SCOTT JARVIS, Executive Director,
Washington State Department of Financial
Institutions (DFI)
Scott happens to be extraordinarily articulate, so in
conclusion, rather than paraphrasing him, I’m going to share a
few of his on-target observations:
The global economy. The world has money to lend. It’s not a
question of whether or not the money is out there. The
question is whether the investors who lend the money trust the
systems we have in place to give them a return.
Consumer protections vs. free markets. As a state, we need to
come up with systems that do the job of protecting the
public without over constraining the ability of lenders to
operate and investors to invest. That’s a very difficult
challenge
when you consider all the regulators involved at the federal and
state levels, the various interests, and different product
lines. People around the world want to invest in the American
market but won’t do so until they have confidence that their
investments are going to be reasonably safe.
Our state economy. It’s important to emphasize that a sound
economy drives the housing market. That’s why
Seattle-area house prices, for example, are stable. Keeping that
in mind, our housing market relative to the rest of the
country is in good shape. We’re obviously not immune. We will be
impacted. But we’re in much better shape to survive this. That’s
the framework in which we talk. Having said that, the fact
remains that there are people who are struggling in our state
who need help.
Financial literacy. Financial literacy and consumer education is
an issue that we’ve tried to push for years. It’s been
under the radar, but now people are finally paying attention to
it, realizing that ‘if you just knew a little more ..... you
might
not have done this.’ The next Task Force will give us a lot of
suggestions as to how to best do it, but it has to be almost a
cradle-to-grave issue.
Federal interventions. Overriding all of our state efforts is
the question of what Congress is going to do. And what the U.S.
Treasury is going to do. They can pre-empt us or go beyond us.
But it’s on the national radar, and lending as we know it
will be dramatically different—it’s already different from this
time last year. It will be different a year from now.
Act now. I’d like to say, this too shall pass, but it’s going be
a painful year or so. The first thing you do is arm yourself
with financial education: Before you sign anything on the dotted
line, make sure you know what you’re purchasing, that you can
afford it, and it’s what you want. And if you’re already in a
difficult situation, get help, and get it now. Don’t wait.
Every day that ticks by puts you in greater jeopardy.
We can’t give an answer or a solution for every person’s
situation. There are some people who will simply not be able to
afford their homes, but for others there are opportunities to
adjust their contract, look at alternatives, or even leave more
gracefully than a foreclosure action, and come back someday for
homeownership. Act now. Get informed.
Act now. Get informed: Four crucial words for homeowners.
And keep this number handy for someone you know in Washington
State who might benefit from it: 1-877-894-HOME (4663)
|
