Defaulting HELOCs: A Growing Concern

In 2004, millions of home owners tapped into the equity of their homes through home equity lines of credit. Their 10-year grace periods are now done and they’ve had to start paying. And that’s why HELOC delinquencies are now suddenly soaring.

In March, second-lien HELOC delinquencies – those behind a mortgage on a property — climbed 87 percent compared to a year ago, Black Knight Financial Services’ reports.

Delinquencies may continue to climb too. HELOCs taken out in 2005, 2006, and 2007 comprise 52 percent of all active lines of credit. In 2005, there were about 850,000 home equity lines; 1.25 million in 2006 and 2007. The grand financial total from just those three years: $192 billion.

The increases in HELOC delinquencies are the first annual rises since June 2012, Black Knight notes. An 87 percent spike in delinquencies among 2005 HELOCs over the past 12 months have been attributed to most of the recent spike.

Source: Black Knight Financial Services and “A Decade After the Bubble, Home-Equity Line Delinquencies Jump,” MarketWatch (June 6, 2016)

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Plan a Backyard Retreat in 5 Steps

Don’t leave a patio or backyard as a blank canvas. You can transform any outdoor space – from big or small – into an inviting and usable outdoor living area.

Alec Dakers, lead designer and partner at Rainbow Valley Design and Construction, and landscape designer Lytton Reid in Eugene, Ore., shared some of their tips for creating backyard retreats with Curbed.com. Some of their steps include:

1. Evaluate the backyard. Do an assessment to see what the space has to offer, taking into account the topography, sun exposure, drainage, and even the pros and cons assessing the view into the neighbor’s yard, Reid says. Try to work with the existing elements, such as an old cedar fence might be dressed up with new planter boxes or an old concrete patio may be salvaged into stepping stones for a path.

2. Create public and private spaces. “There are three basic types of spaces: the private, the semi-private, and the public,” says Reid. “I think all three should be represented in a good outdoor room design.” A public space may include the main entertaining area where people can gather comfortably. A semi-private and private space would provide more shelter from the neighbors and offer plenty of privacy. Use of outdoor structures can help define these spaces, such as an open pergola to define a group dining space. A roof overhang and privacy screen can produce a nook against the house for privacy.

3. Consider drainage and utilities. Whatever you do, make sure you don’t create a problem by having water seeping toward your house and its foundation. “Big mistakes are made when people don’t consider drainage,” says Reid. The designers also take note of the location of utilities, such as plumbing for outdoor sinks, gas for a fireplace, and electricity for lighting.

4. Design for the senses. “What are the views and the sounds and possibly even the smells that come into the space from neighboring spaces?” Reid says. “Sometimes there are smells that you really want to enjoy. And sometimes you can mitigate the bad smells with good smells.” For example, fragrant shrubs or perennials may help alleviate bad odors from, say, the neighbor’s nearby trash cans. Or, the use of a water feature may help mitigate the sound from a nearby roadway.

5. Compliment the home’s style. Take into account the home’s existing architecture when planning the outdoor spaces style. For example, don’t take on ornate colonial-style if the home is a low-slung, mid-century modern home. “I think most people think of the backyard as something separate,” says Dakers. “But I think good design requires that you consider it as an extension of the house.”

Source: “How to Design an Outdoor Room,” Curbed.com (June 2, 2016)

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2016 Summer Events

 

rotating(1)Benton Franklin Fair & Rodeo

Aug. 23 – 27, 2016
10:00 AM – 11:59 PM
Benton County Fair Grounds |Kennewick, WA
Website

Join us for the Best Week of Summer, featuring headline entertainment, world class rodeo, exhibits from your friends and neighbors, and food you can only find at the fair!


5783652Tumbleweed Music Festival

Sep. 2-4, 2016
12:00 AM – 12:00 AM
Howard Amon Park | Richland, WA
Website

The 20th annual Tumbleweed Music Festival offers great acoustic music on the banks of the Columbia River. The festival will host over 100 performances by groups from throughout the Northwest. Featured music includes folk music, sea chantey’s, bluegrass, blues, Celtic and more.

The Festival also features an open mic stage, free workshops and a variety of food and craft vendors.  Tumbleweed Music Festival is a family friendly event.

The Friday night concert, Sunday night concert,  and all daytime activities are free!  Admission is charged only for the Saturday evening concert and Sunday evening contra dance.

Friday evening concert, September 2, 6:30 PM – 9:30 PM  Free.  Friday evening concert features local up and coming bands.

Saturday and Sunday, September 3 and 4,  11:00 AM – 7:00 PM  Free   – continuous music! Five outdoor stages, indoor workshops, and an open mic stage

Saturday evening concert, September 3, 7:00 – 10:30 PM, admission $10.  Saturday evening’s concert will feature three groups – see website for details.

Sunday evening contra dance, September 4, 8:00 PM – 11:00 PM admission $8 for adults, $5 seniors/teens.


 

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The Buyers Are Coming

Mortgage rates may have inched up slightly but that didn’t seem to deter home buyers from shopping for a loan last week. Mortgage application volume rose 2.3 percent week-over-week on a seasonally adjusted basis, driven by an uptick in home purchase applications, the Mortgage Bankers Association reports. Mortgage applications are nearly 24 percent higher than they were a year ago.

After a short dip, mortgage applications for home purchases reversed course last week and rose 5 percent. Purchase applications are 17 percent higher than a year ago.

“Purchase applications got back on track last week, resuming the level of activity observed throughout most of April and May,” says Lynn Fisher, MBA vice president of research and economics. MBA also reported that the average loan size for purchase applications rose to a survey high last week, reaching $307,700.

Meanwhile, applications for refinancings mostly held flat last week, budging just 0.4 percent during the week. MBA reports the average on a 30-year fixed-rate mortgage rose to 3.85 percent last week, up from 3.82 percent the prior week.

Source: “Homebuying, Not Refinancing, Drives Mortgage Applications Up 2.3%,” CNBC (May 25, 2016)

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7 Things You Should Paint Instead of Replace to Save Money

Paint isn’t just for walls. Here’s how to breathe new life into old stuff.

You know a fresh coat of paint can give any room a quick and inexpensive facelift. But did you know that a little paint can also perk up carpets, appliances, and even vinyl floors?

Basically, if it doesn’t move, you can paint it. But only after you’ve paid special attention to prep — cleaning, patching, and sanding (generally) the area.

Painting isn’t brain surgery, but it’s not a breeze, either. Here are some rules of thumb:

  • Prime before painting. Primer will allow the paint to adhere better.
  • Most hard surfaces will take primer better if they’re roughed up a little with fine-grade sandpaper.
  • When using spray paint, multiple, thin layers are better than one, thick coat. Ease up on your trigger finger, and spray in short bursts.
  • Wait for the previous coat of paint or primer to dry completely before adding another coat.

With proper prep, you can paint just about anything. Here are seven of our favorite ideas:

1.  Door, Drawer, and Cabinet Hardware

Spray paint can turn builder-grade brass locks and hinges into fashion-forward hardware with an oil-rubbed bronze, pewter, or stainless look.

Prep:

1. Clean hardware with a fine steel wool to remove grease and grime.
2. Rough up the surface with fine-grain sandpaper.
3. Before you paint, insert a tiny strip of painter’s tape into the keyhole to make sure paint doesn’t gunk it up.
4. Prime with a metallic primer, then paint with metallic spray paint.

Tip:

  • Insert the door lock’s spindle into a square of Styrofoam, which will hold it upright while you spray around the knob.

2.  Brick Fireplace

When you paint your red brick fireplace, you transform the entire room. But beware! Once you paint brick, it’s nearly impossible to return it to the original brick color.

You can paint brick a single color, or achieve some variation — like the variations in real brick — by sponging on slightly lighter and darker hues.

Prep:

1. Lightly sand away any loose bits of brick or mortar with 120-grit sandpaper.
2. Clean dirt and soot with a wire brush and heavy-duty cleanser.
3. Allow to dry completely before applying an oil-based, stain-blocking primer.
4. Paint with a semigloss latex.

Tips:

  • Never paint the firebox.
  • Brick is porous and drinks paint, so buy twice what you think you’ll need.
  • Wear safety glasses and gloves when cleaning anything with a metal brush.

3.  Ceramic Tile

Imagine how sweet it is to update ceramic tile without having to bust up and cart away tons of old tile.

Play it safe and avoid painting tiles in high-traffic and high-moisture areas. Some good places are laundry room floors, backsplashes under cabinets (but not above ranges where pasta sauce splatters), and walls around tubs you rarely use.

Prep:

1. Repair cracked or chipped tile with caulk or grout before painting.
2. Give patching material ample time to dry, then lightly sand before applying an epoxy or urethane bonding primer.
3. Sand after priming and between each coat of quality latex paint.
4. Wait several days for the paint to cure completely, then seal with two or three coats of clear, water-based polyurethane.

Tips:

  • To get a smooth look, apply paint in zigzags, then roll down in one, smooth motion.
  • Use 240-grit wet/dry sandpaper for prep and between coats.
  • Don’t forget safety goggles and masks when sanding tiles.

4.  Wood Floors

When wood floors are beyond another refinishing, painting can give them a second life — and give you a chance to add a personal touch to your home.

Prep:

1. Slightly sand the surface so your primer will adhere better. No need to sand down to the wood; even roughing up the seal coat will help the primer adhere better.
2. Vacuum and mop with a damp cloth to remove all the dust — nothing ruins a paint job faster than dust.
3. Tint your primer to reduce the number of coats you’ll need of latex enamel floor paint.

Tips:

  • Before you commit to a paint color, paint a large piece of foam board with a sample of your desired color and put it on the floor to give you a good idea what the finished floor will look like.
  • It takes each coat about 24 hours to dry completely. So don’t jump the gun when applying the next, thin coat.
  • Your painted floor won’t completely cure for almost a month, so hold off on moving back heavy things like pianos and chests of drawers.
  • Protect your painted floor by putting mats down at the sink (wood and paint hate water) and high-traffic entryways.

5.  Carpet

We love the idea of covering stains and reviving a carpet with upholstery paint. It saves hundreds of dollars and the hassle of getting rid of an old carpet.

Kathie Smula of Spray It New upholstery paint says carpets with a short pile are the best candidates for painting; long-pile carpets become hard and matted when painted.

Prep:

1. Thoroughly clean the carpet before painting. You don’t have to steam clean it, but scrub up the worst stains and vacuum so dust and dirt don’t mix with the paint.
2. Skip priming and just spray paint two or three coats, depending on how deep you want the color. Make sure it’s dry to the touch before spraying another coat.

Tips:

  • Don’t confuse upholstery paint, good for carpets, with fabric paint, good for T-shirts.
  • If you get heavy handed and paint clumps, loosen the area with a bristle brush and dab up excess paint.
  • Six cans of spray paint will cover an 8-foot-by-10-foot carpet with at least two coats.



6.  Vinyl Floors

Painting is an inexpensive way to get a few more years out of old vinyl floors in kitchens and laundry rooms.

Prep:

1. Wash the floor with a TSP (tri-sodium phosphate) solution to get rid of built-up dirt and grime.
2. Rough up the shiny surface with 180-grit sandpaper. If some nooks and crannies remain glossy, apply a deglosser (paint stores sell it) to remove shine.
3. Prime with a latex primer.
4. Paint with a porch/floor paint.

Tips:

  • Save your back when sanding floors by using a sanding pole, like the ones drywall installers use.
  • Highly textured vinyl floor may require another sanding and a second coat of primer.



7.  Appliances

Heat-resistant appliance paint will perk up your kitchen. Use an indoor appliance paint to change colors, or a liquid stainless steel application to give your appliance the stainless steel look.

Use a roller for small touchups; two or three thin coats of spray paint is better for total appliance coverage.

Prep:

1. Clean appliance exteriors with a heavy-duty cleaning solution and, if needed, a scrubbing pad.
2. Remove handles and hardware; place painters tape over trim and logos.
3. Sand the exterior.

Tips:

  • Make sure the front of your appliance is metal, not plastic. Plastic exteriors will require priming, while appliance paint will stick more easily to metal exteriors.
  • If you’re spray-painting, haul the appliance outdoors to avoid getting paint on cabinets and floors. If you paint indoors, open windows to assure proper ventilation.
  • For the stainless look, Liquid Stainless Steel is the go-to product. It’s got real flakes of stainless steel. Apply with a brush.

“Visit Houselogic.com for more articles like this. Reprinted from Houselogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.”

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Average Time to Close: 44 Days

For the second consecutive month, the average time to close all loans stayed at 44 days, suggesting that new mortgage rules that took effect this fall are having less of an impact on delaying loans, according to Ellie Mae’s latest Origination Insight Report.

Here’s a breakdown of averages from the report:

  • The average time to close a purchase remained at 45 days in April.
  • The average time to refinance rose to 44 days in April (up from 41 days in March).
  • The average time to close FHA loans rose to 45 days (up from 44 days in March).
  • The average time to close VA loans stayed steady at 48 days.

The closing rates for all loans dropped to 69 percent in April, retreating from the high of 71 percent in March, according to Ellie Mae’s report. More specifically, purchase closing rates dropped to 73 percent in April, down from 75 percent in March.

Credit scores remain high among applicants. Sixty-eight percent of purchases and 69 percent of refinances had FICO credit scores of 700 or above. Thirty-one percent of purchases had a FICO score between 600 to 699.

Additional highlights from the report:

  • The average 30-year rate for all loans dropped from 4.12 in March to 4.10 in April.
  • Debt-to-Income remained steady at 25/38 and Loan-to-Value stayed at 80.

Source: Ellie Mae

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The Best Pet-Friendly Houseplants

Chances are good that you have prospects and clients who have pets — ownership estimates for the U.S. range from 30 percent to more than 65 percent, depending on the source. Many pet owners are wary of houseplants, not knowing which can be toxic to their four-legged friends; pass along these tips on safe greenery to let your base know you’re thinking about the whole household.

Lifehacker.com writer Kristin Wong researched a list of six low-maintenance houseplants that can brighten up a space without endangering household pets. Topping the list was the spider plant: They “need a fair amount of water, but they also need to dry out between watering,” Wong reports, and “do well in most light conditions and temperatures.” But, while nontoxic to pets, they can upset digestive systems and even cause catnip-like euphoria in cats, so keep them out of reach and take away any fallen or dangling fronds.

Those who have the room can try the areca palm, which can grow as tall as 7 feet. But, Wong explains, you can’t prune them back without risking damage, so make sure you pick a container the tree can grow into. These plants prefer bright indirect light and soil that dries out between waterings. Like spider plants, the areca palm improves indoor air quality, Wong says.

Larger spaces can enjoy the ease and presence of the bamboo palm, which can grow as high as 12 feet and as wide as 3 to 5 feet. They do well in containers in bright or indirect sunlight and only need to be watered when the soil feels dry to the touch.

Remind cat owners to top the dirt in their containers with a safe gravel, to keep the cats from using the containers for other purposes.

Wong recommended a few other low-maintenance plants that owners can relax with. To see the full list, including additional comments and experiences from pet owners, visit Lifehacker’s article.

Source: “The Best Low-Maintenance, Pet-Friendly Houseplants,” Lifehacker.com (April 28, 2016)

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Mortgage Rates Drop to 3-Year Lows

The 30-year fixed-rate mortgage averaged 3.57 percent in the most recent week, the lowest average in three years, Freddie Mac reports in its weekly mortgage market survey.

“Disappointing April employment data once again kept a lid on Treasury yields, which have struggled to stay above 1.8 percent since late March,” says Sean Becketti, Freddie Mac’s chief economist. “As a result, the 30-year mortgage rate fell 4 basis points to 3.57 percent, a new low for 2016 and the lowest mark in 3 years. Prospective home buyers will continue to take advantage of a falling rate environment that has seen mortgage rates drop in 14 of the previous 19 weeks.”

Freddie Mac reports the following national averages with mortgage rates for the week ending May 12:

  • 30-year fixed-rate mortgages: averaged 3.57 percent, with an average 0.5 point, dropping from last week’s 3.61 percent average. Last year at this time, 30-year rates averaged 3.85 percent.
  • 15-year fixed-rate mortgages: averaged 2.81 percent, with an average 0.5 point, falling from last week’s 2.86 percent average. A year ago, 15-year rates averaged 3.07 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.78 percent, with an average 0.5 point, a decrease from last week’s 2.80 percent average. Last year at this time, 5-year ARMs averaged 2.89 percent.

Source: Freddie Mac

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Rental Costs Eat Up 70% of Your Income Here

Soaring rental costs are taking a big dent out of some renters’ paychecks, and creating hardships for entry-level employees in particular.

In New York City, the average entry-level employee earns $47,000 per year. That means affording the rent of an average one-bedroom apartment at $3,000 per month will take up 77 percent of the average employees’ monthly income, according to RadPad, which recently analyzed more than 150,000 apartment listings to judge affordability for entry-level employees. In San Francisco, employees’ have 79 percent of their incomes eaten up by rental costs – the highest percentage in the nation of any metro studied.

Renters in Houston have it easier. Houston renters spend 29 percent of their incomes on rents, which falls under the 30 percent threshold that most financial planners say is healthy for a budget.

Here are 10 popular cities ranked from highest to lowest in terms of the percentage of starting monthly income that goes towards rent:

  1. San Francisco: 79%
  2. New York City: 77%
  3. Los Angeles: 61%
  4. Boston: 56%
  5. Seattle: 51%
  6. Chicago: 47%
  7. Orlando: 44%
  8. Atlanta: 36%
  9. Austin: 36%
  10. Houston: 29%

Source: “An Entry-Level Salary Is Barely Enough to Make Rent in These Cities,” Credit.com (May 11, 2016)

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