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27 » VISIT US ONLINE @ DSNEWS.COM REPORT: NATIONWIDE HOUSING RECOVERY MOST PROMINENT IN HIGH-INCOME AREAS While at a national level the housing market continues to recover, a look at local markets reveals a recovery that is most prominent in high-income areas, while lower-income neighborhoods continue to struggle. ProTeck Valuation Services delves into this phenomenon in its latest Home Value Forecast, with a spotlight on the Seattle metro area. "Seattle shows us how income and access to credit drives home values and why across the country we are seeing strong appreciation in wealthy areas but slower recovery in areas of lower income," said Tom O'Grady, CEO of ProTeck Valuation Services. Seattle—and Washington in general—made a strong showing on the Home Value Forecast's list of top 10 core-based statistical areas (CBSAs) in October. Five of the top 10 CBSAs for the month are located in Washington, with Seattle ranked No. 4. Factors considered in rankings include sales and listing activity, prices, inventory, number of days on market, the ratio of sold-to-list prices, and foreclosure and REO activity. ProTeck noted a census report that revealed a $5,000 increase in median household income in 2013 in Seattle as well as a Forbes magazine article that listed Seattle as one of the best places for business. Amazon, Costco, Boeing, Microsoft, and Nordstrom all have a presence in Seattle, making for a strong job market. However, the Seattle metro is not homogenous, and the good fortune revealed in these studies is not evenly distributed. In fact, the Seattle Times found the $5,000 increase in household income is highly concentrated in the highest-income households. e top 20 percent of households gained about $15,000 in 2013. Meanwhile, the bottom 20 percent experienced no gain at all, while bringing in an average $12,974 annually. e housing market follows a similar trend, according to ProTeck's research. In Bellevue, one of Seattle's high-income neighborhoods, homes have already regained most of the value lost during the housing crash. Homes are valued at just 1.29 percent below their pre-crash high, according to ProTeck. However, in Auburn, a less wealthy neighborhood, home values continue to wallow about 20.6 percent below their pre-crash highs, according to ProTeck. ProTeck attributes part of this discrepancy in recovery to the Consumer Financial Protection Bureau's Qualified Mortgage rule, saying the rule "has greatly restricted access to credit for those with limited money to put down and need to take on a greater ratio of debt relative to their income." "Auburn is feeling the credit crunch, limiting demand to those few who can qualify and therefore, limiting home price appreciation," according to ProTeck. However, there is hope on the horizon for neighborhoods like Auburn, according to O'Grady. "e good news is that federal housing regulators have signaled that change is on the way to loosen some lending standards making mortgages more accessible for individuals with less than stellar credit," he said. Fannie Mae and Freddie Mac will begin accepting loans with 3-percent down payments instead of the current requirement of 5 percent. ProTeck also pointed out that while markets in its top 10 list for the month have fewer than four months of inventory, markets at the bottom of the list have much higher inventory. Madison, Wisconsin, for example, has 24 months of inventory. Lower ranked markets also tend to have a much higher percentage of foreclosure sales. REPORT: 40,000 HOMEOWNERS RECEIVED PERMANENT LOAN MODS IN AUGUST About 40,000 homeowners nationwide received permanent mortgage loan modifications from servicers in August, which includes loans completed through proprietary programs and under the government's Home Affordable Modification Program (HAMP), according to data released by the HOPE NOW Alliance. e number of total mortgage solutions, which include loan modifications, short sales, and deeds-in-lieu of foreclosure, outnumbered foreclosure sales by a 5-to-1 ratio, according to HOPE NOW. Mortgage solutions totaled 163,000 for the month of August, compared to 34,000 foreclosure sales. Year-to-date, the ratio of mortgage solutions to foreclosure sales is 4-to-1 (1.28 million to 314,000). "Efforts to offer homeowners the most sustainable mortgage solutions continue to be a top priority for HOPE NOW's industry members," said Eric Selk, executive director of HOPE NOW. "ose at risk of foreclosure now have more options than ever before for home retention or graceful exit. Our members have worked hard to ensure that homeowners are well versed on these options and can complete the necessary course of action in a timely manner. Each month we see the positive results of these efforts. As completed foreclosure sales continue decrease, it is interesting to note that many new tools have been implemented by servicers and counselors in assisting families. We expect this trend to continue through 2014." e 34,000 foreclosure sales for August is the lowest reported total for any month since HOPE NOW began tracking foreclosure data in 2007. e August number of foreclosure sales was a decline of 11 percent from July, when 38,000 foreclosure sales were completed, and a decline of 41 percent from August 2013, when 58,000 foreclosure sales were reported. Foreclosure starts also declined from 70,000 in July to 65,000 in August. August was the sixth straight month that delinquencies of 60 days or more were reported at less than 2 million, totaling 1.89 million for the month, according to HOPE NOW, which extrapolates delinquency data from data received by the Mortgage Bankers Association (MBA) for Q2 2014. e August delinquency total marked an increase of 1.6 percent from July. e 40,000 loan modifications completed in August marked an increase of 12 percent from the 35,000 mods completed in July. Of the August loan modifications, about 30,000 of them were completed through proprietary programs, while approximately 9,600 of them were completed through HAMP. Short sales and deeds-in-lieu saw month- over-month declines, according to HOPE NOW. August short sales totaled 9,300, a decrease of 16 percent from July when 11,000 short sales were completed. e number of deeds-in-lieu fell by 7 percent month-over-month, with 2,400 reported in August compared to 2,500 in July.

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