Alex? No. Volta? No. Foreclosed? Well…

Suppose you gave an auction and nobody came?  That was about the size of it when, after no bidders came forward to buy the troubled Volta property on March 18th, East West Bank went ahead and foreclosed. 

The saga of 2233 First Avenue began with development of a project called Alex in the fall of 2007, owned by an LLC headed by Saltaire Construction.  Located at the prime Belltown location of First Avenue and Bell, this boutique project was mapped out for eight stories plus a penthouse level.  There would be 20 floorplans to choose from, units from 600 – 1,200 sq ft, upscale features, a rooftop lap pool, priced between $500,000 and $2 million. A loan was made through Washington First International Bank for $12 million.  Alex was scheduled to open in the fall of 2008– when, in its first streak of bad luck, the economic roof caved in.

Fast forward to March 2010. Construction nearly finished, it was decided to give the Alex a second chance at life by  repackaging it under the name of Volta.  Why Volta?  We checked wikipedia.org to see if there was a meaning beyond the name of a river in Ghana.  Sure enough, listed was an Italian physicist named Alessandro Volta, whose claim to fame is inventing the electric battery.  “Alessandro” paid homage to the original building name, and its location on Bell Street was one block away from… Battery Street.  There you go. It was also repriced from $299,950 to $1,095,950 (for a penthouse shell), and amenities changed to a rooftop deck, dog run area and green space. 

Things were looking up when three months later, bad luck struck again!  The project was blindsided with a bank closure on  Washington First International Bank that June.  East West Bank, located in Pasadena, California, became the new lender.  Finally, on January 20th, 2011, East West announced that at $1.48 million in arrears plus interest and fees (on a second WFIB loan of $1.4 million), the Volta was headed for auction.

That brings us to today… where we discover that the luck at this address may finally be changing.  2233 First Avenue was appraised at nearly $5 million by King County, and its location in the heart of Belltown offers amazing views of Elliott Bay, Mt Rainier and downtown.  In reality, this property is pretty hot at the moment– we’ve heard that up to 35 buyers are very interested in it!  East West is most likely biding its time a bit longer before settling on a buyer who will allow them to bleed the least on their balance sheet.  Not so lucky was WF Capital Inc., which provided a $3.75 million loan in late 2008.  There were also a number of construction liens on this still-unfinished project, and some lawsuits are still pending.  It may be some time before the property shakes free from the ashes, and rises once and for all.  However, we’re betting it will do just that.

We’ll be watching this one carefully, and will keep you posted on any developments.

Bankruptcy or Foreclosure? You may now be Loan-Worthy!

We’ve been keeping in touch about the record-low interest rates of late… but if you’ve experienced some bumps in the road with bankruptcy or foreclosure, aka a “derogatory event”, you may not think you can take advantage of loan rates at this time.

What you may not realize is that while there are waiting periods for bankruptcy, foreclosures and such, an extenuating circumstance can cut your waiting periods for a new loan up to less than half the time. A job loss, major medical bills, or an accident serious enough to affect your earning power at the time of your derogatory event are all such instances. You’ll need to bring documentation proving financial difficulties beyond your control, but don’t you think you deserve a GOOD break for a change?

Below is a list of Derogatory Events and their waiting periods. See if these start some rethinking.

 

Bankruptcy – Chapter 7 or 11

Waiting Period:  4 years

with Extenuating Circumstances:  2 years

 

Bankruptcy – Chapter 13

Waiting Period:  2 years from discharge date or 4 years from dismissal date

with Extenuating Circumstances:  2 years from discharge date or 2 years from dismissal date

 

Multiple Bankruptcy Filings

Waiting Period:  5 years if you had more than one filing within the past 7 years

with Extenuating Circumstances:  3 years from the most recent discharge or dismissal date

 

Foreclosure

Waiting Period:  7 years

with Extenuating Circumstances:  3 years but there are additional requirements from 3-7 years.  You’ll need to have a 90% maximum Loan to Value (LTV) ratio; the purchase has to be a principal residence, and there is a limited cash-out refi on any type of occupancy.

 

Deed-in-Lieu of Foreclosure, Pre-Foreclosure or Short Sale

Waiting Period, 2 years – 80% maximum LTV ratios

Waiting Period, 4 years – 90% maximum LTV ratios

Waiting Period, 7 years – LTV ratios per the Eligibility Matrix

with Extenuating Circumstances:  2 years, 90% maximum LTV ratios

 

It’s a buyer’s market out there. Let’s see if we can help you get back into the game. Contact us at this link and let’s get you started!

NOTE:  Please keep in mind that the maximum LTV ratios permitted are the lesser of the LTV ratios presented here, or the maximum LTV ratios for the transaction per the Eligibility Matrix. This information is based on rules and regulations issued by federal agencies, but please check with your bank or loan adviser to ensure you meet all requirements and disclosures.

Foreclosure Buyers Beware: Read that Fine Print!

Watch for this Clause:

Transfer taxes/Tax Stamps – Regardless of local custom or practice, the purchaser shall pay and all real estate transfer taxes due as a result of the conveyance of this property.

An agent informed us that she and her buyer had missed the clause above when the lending bank selling a foreclosed property countered with their purchase and sale agreement paperwork.  With more and more buyers moving towards the purchase of foreclosed properties, we had to make the communication for the record.  It is ultimately YOUR responsibility to read your documents thoroughly and be aware of what you’re signing!  Fortunately, the buyer in mention had a sizeable downpayment (as any foreclosure buyer must have) so they were able to increase their loan amount to cover the extra $6,200 this clause covered.  Still, that’s too much money to overlook.

New Stimulus Package: Part III – Neighborhood Stabilization

The neighborhood stabilization provision includes an additional $2 billion to the $4 billion in grants for states and localities to purchase and redevelop foreclosed properties.  Although our downtown market has not been too affected by foreclosures like the rest of the nation, the intention is to establish financing mechanisms for purchase and redevelopment of foreclosed homes–which does in fact affect the overall stability of our market.

The great thing about this provision is that after purchase, these homes must be used to assist buyers at or below 120 percent of the area’s median income.  25 percent of funds must be used for households with incomes at or below 50 percent of an area’s median income and must be committed within 18 months of receipt.

Essentially, this provision can really make a difference in those neighborhoods where an entire community has been decimated by foreclosures, and restablish an area’s perceived value.