There are other stories too, namely the stories from an economic perspective, that are lacking.  Most people I talk to don’t understand what exactly happened, mostly because there has been so little coverage explaining the issues around foreclosures and the secondary mortgage market.  I want to highlight a small, very specific part of this foreclosure crisis: MERS.

MERS is an acronym for the Mortgage Electronic Registration System.  It’s a company, built and funded by  banks interested in trading mortgages.  The purpose of this company was to streamline the buying and selling of mortgages.  For example, if Sally obtained a mortgage from Bank 1, and that mortgage was sold to Bank 2, both banks would have to facilitate a new note and trust deed against Sally’s property.  This means official, notarized signatures from both banks, and recording of that paperwork in the locale where Sally’s house (and mortgage) are located.  This is not cost-effective, simple nor quick, especially for national and international banking corporations.  It makes mortgages difficult to trade, making them less liquid, resulting in fewer profits for banks from their mortgage division.

Enter MERS- Bank 1 could register Sally’s loan with MERS, and MERS would handle the multiple transfers of that loan.  In essence, MERS was a tracking system.  MERS kept track of who owned that mortgage, whether it had been sold twice or thirty times.  No more pesky paperwork, no more recording new trust deeds with each transfer.

When the real estate market started to bomb, MERS also started handling foreclosures, processing paperwork for bank  #30, since they were left holding Sally’s mortgage.  At face value, it doesn’t seem that nefarious to create a company to handle paperwork for you.  But MERS has been sued in almost every state it does business in, because they don’t OWN your mortgage.  They aren’t listed as a trustee on your note and trust deed.  And in America, where home ownership is very strictly protected, only the actual owner of the loan can foreclose on your property.  So MERS, being a third-party, has no right to foreclose.

Currently, in Oregon, MERS has lost a least one lawsuit.  The judge sided with homeowners saying MERS had no right to foreclose.  MERS, and the banking industry, has appealed this decision.  If this decision is upheld,  it could transform the way the secondary mortgage market works.

Very interesting stuff, indeed.

Radon is a cancer-causing radioactive gas.  It is odorless and colorless, and is mostly concentrated in the lowest point in a home-the basement or crawl space.  It comes from the natural (radioactive) breakdown of uranium in soil, rock and water. A family whose home has radon levels of 4 pCi/l is exposed to approximately 35 times as much radiation as the Nuclear Regulatory Commission would allow if that family was standing next to the fence of a radioactive waste site. (25 mrem limit, 800 mrem exposure).

Many national and world health organizations recommend testing your home for radon because testing is the only way to know your home’s radon levels. There are no immediate symptoms to alert you to the presence of radon. It typically takes years of exposure before any problems surface.

Are you at risk?  Here’s a map of the high risk radon levels in Portland: Radon Risk Map

Testing is easy-ironically the most accurate test for radon is the cheapest!  Just grab a self-test at your local home improvement store- it’s usually around $50, but it takes several months to accurately test.

If you have elevated levels of radon, a mitigation system can be easily installed, with little disturbance to your residence.  The cost ranges between $1200-3500 depending on the particular construction of your house.  (If the basement is finished, it can be more complicated to install a mitigation system.)   Call or email me today.  I’d be happy to provide you with a list of trusted providers.

This inspection usually costs $100.  It consists of a technician fishing flexible tubing with a camera on the end, through the entirety of the sewer line.  A computer creates a DVD while the line is being scoped.  At this particular property, the sewer line had several bellies in it and roots penetrating it. (When watching the video, a belly appears as the camera being at least partially or totally submerged in water).  Because of these issues, the line was to be failed, which typically means it must be replaced.

After the technician scopes the line, he goes outside to locate the sewer (the camera also has a radio device for locating).  During this customary locate, that’s when everything (dare I say it?) went to crap.

Through the locate, we learned this line crossed onto the neighbor’s property and connected to their sewer line (the dreaded “party-sewer”- the City of Portland no longer allows this).  Additionally, we found there was no sewer main in front of the house.  The merged sewer went into the street, made a hard 90 degree turn and ran down this street to the next intersection, finally connecting with the city main in the perpendicular street.

Once a technician discovers a party sewer, they are obligated to notify the city, and the property without their own sewer must build a new one.  In this case, the inspector had to notify the city of the party sewer and that there was no main on that street.

Once notified, the city  typically  requires every owner on that street to pay to have the sewer main extended.  Additionally, those homeowners also have to pay to have their personal sewer line connected to the new main.  They are only  given 180 days to complete this complicated project.  The projected bill for each individual homeowner?  Upwards of $15,600.

If you’re thinking about buying or selling real estate in Portland, the sewer can become a real mess. (I’m resisting the urge to make puns about poop.  This is a serious issue, people!)

Make sure you have a Realtor who’ll help you sort out all these possible issues before you buy or sell.

The tragic story of a family that died in a vacation rental in Colorado was the impetus for this legislation.  The Lofgren’s, and their two children, rented a vacation home in Aspen and all of them perished one snowy Thanksgiving weekend in 2008, from carbon monoxide inhalation.  It is still currently the subject of much debate and a lawsuit is pending as to the fault of this tragedy.

All gas appliances, when natural gas is combusted, create carbon monoxide, which is noxious.  The gas that is created is odorless, tasteless and if the concentration is high enough, deadly.  Common sources of carbon monoxide are water heaters, furnaces, gas fireplaces, gas ranges and ovens, to name a few.  Each of these appliances must be properly vented, or you risk carbon monoxide poisoning.

For landlords in Oregon, all residential units must currently have CO detectors.  If you are currently renting property in Oregon, please contact me and I’d be happy to forward the requirements for you.

Most of the houses in the metro Portland area were built before 1950.  Which means every system in most of our housing stock is over 60 years old (if it hasn’t been replaced).  One of these systems is the water supply pipes.

I know you’re probably like everyone else… you wake up, and stumble into the shower, and magically, water comes out of the spigot.  Did you ever wonder how that works?   All those pipes in your basement have water sitting in them, under pressure, just waiting for you to release it.  The handle to the sink, or the shower, or any other myriad of fixtures, has a value that opens, and water runs.

There are a number of different piping systems used in construction over the years. In Portland, most of the original water supply pipes are galvanized. And galvanized plumbing itself is a bit magical. What would you say if I told you galvanized pipes are known for their “self-healing” properties? (to a certain extent) Curious, are you? Let me explain.

Let’s start with the water itself: there are minerals in the water supply coming into your house. These minerals chemically react with the galvanized steel pipes.  Initially, the reaction is rust, causing deterioration of the interior of the pipes. This causes the very typical loss in water pressure.  If you opened up your pipes, they would look like a web of clogged arteries.

The same chemical reaction between the pipe and water can also “heal” the pipe. Because of the contact with water and the constant pressure in the pipe, when a pin size hole in the pipe appears, it will usually rust over and continue to be serviceable.

Don’t get me wrong-you will still need to budget an eventual replacement of those galvanized pipes.  But they’re going to last a lot longer than they were supposed to because of a “magical” chemical reaction.

Most liens are recorded with the county, so they’re relatively easy to discover. To further complicated matters, though, all liens DON’T have to be recorded to be valid. So instead of finding a carpenter’s ants’ nest, you might get a nasty letter in the mail about the paying that contractor that remodeled the bathroom for the previous owner.

Title insurance guarantees when you buy the house there are no other liens (besides the ones you agreed to pay) against the house. If a lien surfaces after you’ve closed on the house, the title company has to deal with this.
I’ve only seen it happen once, but it was worth several thousand dollars.

So while were all really hoping against any earthquakes, you’ll at least be insured for any title disasters. (Be aware, not all states require title insurance for transfers of property.)

So although fir is most often a soft wood, there are always exceptions to the rule.

An annual meeting with your Realtor? Even if you aren’t planning on selling or buying? The short answer is yes.

I’ll come to your home and do a quick walk through. At that time, I’ll point out what maintenance you may not have noticed, or items you’ve forgotten from the inspection report. We’ll work together to create a list of projects that should be done to maintain your investment and the comfort of your home. I’ll help you prioritize these projects to make the most of your money and time.

I’ll also give you an overview of your neighborhood and specific market value – which way is real estate in general, trending? And your specific neighborhood? We can discuss the projections for the future, as well.

I’ll update you on any law changes that pertain to real estate, such as updates in tax codes, disclosure and inspection trends, and new landlord/tenant laws, to give a few examples. This will help you be better prepared when you do eventually decide to sell.

Of course, if you are considering selling or buying, I will guide you step by step through that process.

Regardless of whether you are buying or selling, or planning on staying put another ten years, take the proactive step of keeping updated about your home now—it will pay off in the future. I’ll make sure you have the information you need so you can meet and exceed your real estate goals.

It’s like living in the doll house you had as a kid!

Besides the ghost that you may inherit from a 115 year old house, there’s likely a bigger fright lurking in the basement-a brick foundation. Victorians were most often built with below-grade brick foundations.

A brick foundation consists of a brick wall, built with mortar and clay fired bricks, against the dirt underneath a house. Bricks themselves are actually made out of dirt-clay to be exact-and fired at high temperatures to make them strong.
Burying a brick wall and exposing it to the constant moisture contained in our Pacific NW soil slowly degrades the brick. Brick and mortar cannot withstand high levels of moisture for over a hundred years.

And so the foundation of nearly all Victorians need to be re-built. Jacking up the house and re-pouring an entire foundation is not the typical weekend warrior project.

So, buyers, watch out for this frightful sight!

Have you noticed that how much you earn relates to every hour you spend working? Every minute of your work life measured out in pennies? How can you get a head if you have to spend more of your precious time to make more money? You can’t. That’s why you must invest-so you can enjoy your weekend, and your investments can continue working. Real estate is one of those important investments.

Here’s my example…I’m going to give you $10,000. What are you going to do with it? (OK, in this scenario humor me. You’re going to buy a house.)

In the alternative example, you’re going to go buy $10,000 worth of stock. Something moderately safe. When you go buy that stock (for the sake of simplicity) you get $10,000 worth of stock. That’s it. When the stock goes up, you make 3% on your $10,000 ($300). Not bad-better than investing in your friends’ bar tab.

If you go buy a house (with a mortgage), you get $200,000 worth of stock for $10,000. Did you get that? You get $190,000 more “stock” when you buy real estate. So when housing prices go up (let’s say 3%, to make it comparable to the stocks) you make 3% on $200,000. That’s $6000 in gain!

All that, before you even got dressed for work.