Tag Archives: Seattle real estate

State of Washington Fines Countrywide for $1 Million for Discriminatory Lending — Will Seek to Revoke Countrywide’s License to Do Business in State

Washington Governor Christine Gregoire today announced plans by her state to fine Countrywide Home Loans $1 million for discriminatory lending.

In addition, the company will be required to pay more than $5 million in back assessments the company failed to pay.

Gregoire also announced the state is seeking to revoke Countrywide’s license to do business in Washington for its alleged illegal activity.

Joining Gregoire at today’s announcement was Deb Bortner, director of consumer services at the Washington state Department of Financial Institutions (DFI), and James Kelly, president of the Urban League of Metropolitan Seattle.

“The allegation that Countrywide preyed on minority borrowers is extremely troubling to me,” Gregoire said. “And I hope to learn eventually just how much this may have contributed to foreclosures in our state. The allegation offers evidence that Countrywide engaged in a pattern to target minority groups and engage in predatory practices.”

“That’s why we intend to bring the full weight of the state on Countrywide to rewrite home loans for minority borrowers who may have been misled into signing predatory mortgages,” the governor noted. “My job is to protect hard-working Washingtonians, and protect them we will.”

DFI is required to examine every home-lender licensed in the state of Washington. The agency conducted its fair lending examination of Countrywide last year. At that time, DFI looked at roughly 600 individual loan files and uncovered evidence that Countrywide engaged in discriminatory lending that targeted Washington’s minority communities. The agency also found significant underreporting of loans during its investigation.

“The Urban League is seeing far too many families caught up in the mortgage crisis who are being steered into bad loans,” stated James Kelly. “Today’s announcement from the governor is consistent with her message of protecting Washingtonians from national mortgage instability.”

DFI sent Countrywide a statement of charges on June 23, notifying the company of the fine and the back assessments the state plans to pursue.  Washington says that the investigation continues.

We have written on the disproportionate impact that the mortgage meltdown and housing crisis has had on minorities.

Washington’s action against Countrywide comes on the heels of lawsuits for fraud, deception, and unfair trade practices filed against Countrywide by the states of Illinois, California, and Florida.



Commercial Real Estate Still Resisting Slump — But Caution Advised

Standard & Poor’s announced the results of it’s January S&P/GRA Commercial Real Estate Indices (SPCREX) yesterday, showing that commercial real estate prices across most sectors are either holding steady or still rising despite the subprime crisis and the free fall in the residential housing market.

According to David Blitzer, Managing Director and Chairman of the Index Committee at Standard & Poor’s, “The National Index was relatively flat for this month and all sectors and regions are losing momentum compared to a year or two ago. At the same time, there were some big moves in the individual components.”

More specifically, the report found a national composite annual price appreciation of 7% from January of 2007, up from the 6.7% price increase reported in December’s data but still far below the 14.5%, peak price increase reported in June of 2006.

In the property sector, Warehouses reported the biggest gain for the month with a 1.9% increase and a 12 month increase of 10.1%. Office reported the only monthly decline of 0.2%, but has still returned 9.9% over the past 12 months. Apartments and Retail reported annual gains of 5.8% and 4.3%, respectively, from January of last year.

Among the regions, the Northeast had the highest return over the previous month at 1.4%, as well as the highest annual return over the past 12 months at 9.4%. The Desert Mountain West reported the largest price declines in the January/December period at -1%, but still remained marginally positive (up 0.9%) on an annual basis. The Mid Atlantic South and Midwest regions also reported slight declines.

Blitzer cautioned against reading too much that was positive into the data.

“Compared to residential property price trends, the impact of financial market developments remains unclear for commercial property,” he said.  “We do need a few more months of data to see if this market is going to remain relatively healthy or follow in the path of the U.S. housing market.”

We think that apartments will increase or hold their value as more homeowners are forced back into renting.  We also think that slower retail sales will eventually have a negative impact on retail real estate, at least in certain regions, and that the office sector, particularly in areas hit hard by the residential meltdown, will also suffer. 

We think too that, even more than residential real estate, the value of commercial real estate will depend on the health of the local economy.  In areas where the local economy is still strong, such as Austin, Denver, Seattle, and New York, commercial real estate prices will continue to increase.

On the other hand, where we work — Irvine, California, the epicenter of the subprime mortgage meltdown — we expect sharp decreases in value, partcularly in the office sector.