JPMorgan Chase says it will work with 400,000 homeowners -- distressed and otherwise -- to modify $70 billion in mortgages that have less-than-favorable terms. The financial-services company, which bought WaMu after federal regulators seized the Seattle-based thrift, has already made changes to $40 billion in mortgages.

The loans have terms that include adjustable rates and negative amortization -- where monthly payments don't cover interest, which accrues and is added to the principal balance. Such loans have sent some homeowners scrambling for ways to make payments they can no longer afford. For many who were unable to refinance to more-favorable terms, such so-called exotic loans brought dramatically higher payments and, for those who coudn't afford those higher payments, foreclosure or desperate attempts to sell their homes.

As part of JPMorgan's loan-modification program, it will stop foreclosures for 90 days and hire 300 more mortgage counselors to help distressed homeowners while the company rolls out the program.

Get more information from our story or from the news release on the JPMorgan Chase Web site.

Amid the economic turmoil that surrounds us, Freddie Mac released some interesting tidbits about mortgage refinancing.:

-- The percentage of homeowners who refinanced and took out cash fell to 63 percent in the first three quarters of this year, the lowest level in four years.

-- Conversely, 9 percent refinanced for a smaller amount -- a cash-in refi -- the largest share of the refi pie in three years.

-- The median age of refinanced loans is 4.4 years. (That means half were older; half were newer.)

-- The median appreciation of the refinanced property is 17 percent.

I particularly appreciate the "cash-in" refis, but I'm also glad to see that cash-out refis are a smaller portion of the overall refinancings than they had been last year. When home values are dropping, that's smart.

I love this story. It made me smile -- from ear to ear, in fact -- thinking a woman who quickly went from bystander to hero.

Marilyn Mock, 50, was waiting for her son at a Dallas foreclosure auction when she met Tracy Orr, 38, who was crying because her home was being auctioned. The two women started talking, and Orr told the story of losing her job and then her house to foreclosure. Next thing Orr knew, she had her house back, thanks to Mock, a woman who made a snap decision to bid $30,000 for a house she'd never seen and would never live in.

Mock has been bombarded by the media, attention she doesn't understand.

"Anybody else would have done the same thing,” Mock told the Dallas Morning News.

If only that were true.

Mock is my hero.

So Zillow released a third-quarter homeowner confidence survey today, and what do you know? Homeowners don't get it: 49 percent think their own home values have stayed the same or increased over the past year. That's down from the second quarter, when 62 percent felt that way.

Amid the credit crunch, foreclosures aplenty and too big a home supply for too few buyers, how can homes have retained their value? Zillow says 74 percent of homes in the U.S. have lost value in the past year.

Interestingly, Zip Realty released a report today that addresses expectations of where prices are headed: 61 percent of buyers and 40 percent of sellers anticipate declines over the next six months, the report says, little changed for the past five months.

Hence the delusion I mentioned. Honestly, home values are down. It ain't pretty, but it's true.

If you plan to sell, use your head -- and comps -- to price. And if plan to sell, how did you arrive at your price? How realistic do you think it is? What does your agent say?

Not that I'm biased, but Covington, the city I call home, topped Zip Realty's list of real-estate markets in the Puget Sound area in the third quarter.

Zip, a San Francisco-based online real-estate company, looked at six metropolitan markets around the country and showed, by ZIP code, were areas were hot and which were not -- among other things -- in a report released today.

"Hot" is a relative term, of course. Covington isn't sizzling, but selling prices there averaged 101.3 percent of asking prices from July through September. Average list price was $338,803; average selling price was $343,116. Neighboring Maple Valley is close, with the average selling price ($376,320) at 99.8 percent of the average list price ($377,005).

One of the coolest markets in the area is Mercer Island, with a selling-to-listing price percentage of 91.8. Belfair, in Mason County, is at the bottom of the pack, 87.6 percent.

See the breakdown by ZIP code here.

Other Seattle-area tidbits from the report:

-- We had the second-largest increase in inventory, 8.8 percent, behind only Salt Lake City (13.2 percent).

-- Sixty-three percent of buyers think prices will fall farther.

I was driving through Lake Heights in Bellevue a few days ago and passed a for-sale house I'd passed many times before, but this time, sitting atop the "For sale" sign was one that said, "foreclosure."

Ouch, I thought. What's up with that? I know foreclosures are all over the place, but never had I seen one advertised as such on a sign. The house is vacant, owned by Fannie Mae, but I felt bad seeing the sign, the equivalent of a big scarlet F, in the front yard. The neighbors likely remember the former owners, and I felt like the sign added insult to injury.

The next day, when I drove by the house again, the "foreclosure" sign was gone. That's more like it.

The National Association of Realtors says that sales of existing homes (meaning resales, not brand new ones) rose 5.5 percent last month. The NAR report, released this morning, looks at sales that closed in September. The increase is the first in more than a year.

That's another good sign for the housing market. Now all we have to do to keep the momentum going is weather the global economic crisis.

Read the full story here.

From blog photos

Foreclosure filings fell substantially in King County in September -- down 42 percent from August and down 13 percent from September 2007, RealtyTrac reported today. Snohomish, Pierce and Kitsap counties didn't fare as well, but I'll get to that in a minute.

First I'd like to look at foreclosures from a buyer's perspective. How likely are buyers to find homes for sale at a discount in the central Puget Sound region? To do that, let's compare the number of homes in the months-long foreclosure process -- homes that are likely to be available at a discount to buyers with cash -- with the number of active listings on the market. Let's presume that every home in foreclosure is also for sale because owners are trying to avoid foreclosure.

In King County, that comparison looks like this:

-- In September, 493 homes were in some stage of the foreclosure process, RealtyTrac says, compared with 15,438 active listings as reported by the Northwest Multiple Listing Service. That's 3.2 percent, or one home in foreclosure in every 31 for sale.

-- In August, RealtyTrac showed foreclosure filings for 849 homes, with 15,875 homes actively for sale on the MLS. That's 5.3 percent, or one home in foreclosure in every 19 for sale.

-- In September 2007, 565 homes faced foreclosure, RealtyTrac said, and 14,537 active listings on the MLS. That's 3.9 percent, or one foreclosure in every 26 listed homes.

What does this say? That last month, screaming deals were a bit harder to come by. Let's watch to see whether that's the start of a trend.

Now, let's look at last month in Snohomish, Pierce and Kitsap counties.

When we upgraded to allow comments on all stories on seattletimes.com, comments that had been posted disappeared from public view. But you're again welcome -- encouraged, even -- to comment on items old or new. Anything you say can and will be used against you in the blogosphere. So come on in.

Recent home seller Justin Wilcox offers this advice for people who want to sell their homes: Do it yourself.

Wilcox, 27, sold his two-story Bothell house Oct. 3 after a reverse auction that started in May. He lowered the price every week or so until mid-July. I followed the process, which Wilcox dubbed the "Bothell Countdown," here and let you know when he got an offer, which came over Labor Day weekend. I decided to pick his brain about the process.

Wilcox says he definitely would sell on his own again, but next time, he'd skip the open houses and the reverse auction.

(Alert to agents: Read on if you'd like, but don't expect to like what you read.)

Remember Justin Wilcox, who decided to sell his two-story Bothell house at 19833 95th Ave. N.E. through a reverse auction?

The sale closed Oct. 3 with a recorded selling price of $409,500. Wilcox also agreed to give the buyer $7,000 to pay for closing costs, making the net selling price $402,500, or 19.5 percent less than the original asking price.

In late May, Wilcox listed the house for $499,900 and cut the price by $10,000 after two weeks and $10,000 more each of several weeks until July 31, when he reduced it for the last time. The last cut was $15,000 to $424,900. He got an offer Labor Day weekend, made a counteroffer and said he was negotiating with the buyer on a few points.

If you're looking for a place to rent, you don't need me to tell you that finding your dream place -- or any nice, affordable place -- can be a tough proposition.

Today, Realfacts, an apartment data company, released information about rental markets around the country for the third quarter. Guess what? The average rent in the Seattle-Bellevue-Everett metro area is up 5.5 percent from the third quarter of 2007; up 0.2 percent from the second quarter.

Looking at rates in King County by city -- the company looks only at cities with at least five apartment communities -- renters pay the most in Redmond, an average $1,437 a month, and they pay the least in Federal way, $924. In Snohomish County, renters in Mill Creek pay the most, an average $1,183 a month, and those in Everett pay the least, $954 a month.

Detailed looks at rental data for each of the four central Puget Sound counties are available in these multiple-page reports here:

-- King County

-- Snohomish County

-- Kitsap County

-- Pierce County

If you're looking to rent, where are you looking? What are you finding? How much competition do you have?

If the housing market started this recession -- and I think that depends on whether you define "housing market" broadly enough to include lenders -- then should a strong stimulus package be part of ending it?

The National Association of Realtors certainly believes that turning around the real-estate market is key to turning around the economy. The Washington, D.C.-based group said today that it will present a housing-stimulus plan to Congress and encourage lawmakers to pass it before the end of the year. The plan would boost the economy and "help calm jittery potential homebuyers," the group says in its news release about the plan.

"Housing has always lifted the economy out of downturns, and it is imperative to get the housing market moving forward as quickly as possible," NAR President Richard Gaylord said.

Among the group's priorities are these, which would directly benefit consumers:

-- Expand the $7,500 tax credit for first-time homebuyers to include everyone buying a primary residence and forget making them pay it back.

-- Make permanent the higher loan limits approved temporarily in February for FHA, Fannie Mae and Freddie Mac (125 percent of the area median home price, or $567,500 in King and Snohomish counties).

-- Push banks to use part of the $700 billion bailout to extend credit to consumers.

Would such a plan stimulate the market? Would a $7,500 tax credit that wasn't a long-term loan make you buy a house? Is there something the NAR or the government is missing here?

Redfin, the upstart online real-estate company based in Seattle, announced that it laid off about 20 percent of its staff, CEO Glenn Kelman said in a story today.

Kelman told Times residential real-estate reporter Elizabeth Rhodes that the credit crunch hit the company hard in the past month. After a 50 percent jump in revenue as buyers and sellers looked for ways to save money on home deals, the picture quickly changed as loans became harder to get and the stock-market plunge erased money for down payments. Pending deals fell through, and new ones dried up, Kelman said in the Redfin blog post about the layoffs.

Redfin isn't the only real-estate company that has made cuts, though. Some agents -- particularly fairly new ones paid on commission -- are finding the real-estate industry a tough one. This is quite a change from a few years ago, when when people fled other industries to become real-estate agents or mortgage brokers during the housing boom.

So what are all of those former agents, brokers and loan officers doing now?

When I called Donna Dziak, manager of housing counseling programs at the Seattle nonprofit agency Solid Ground, to get more information about tomorrow's mortgage-workout session (scroll down to the third item) in SeaTac, we quickly went off on tangents.

Among them was this gem: Dziak's program at Solid Ground is so swamped with clients who need mortgage counseling that it can't take on any new ones. It doesn't have the money -- and doesn't anticipate getting it -- to hire any more housing counselors. A quarter to a third of the agency's budget is from private sources, including fundraisers and donations, but the rest comes from federal, state and local governments.

The U.S. Department of Housing and Urban Development cut Solid Ground's contract $16,000 from last year, Dziak said, and the agency expects a cut in its funding from King County, which is $90 million in the hole.

From Seattle, the agency will receive what it did last year plus 2.5 percent for a cost-of-living adjustment. It also will get a small amount of money from the state through a program that ends in June.

But that money won't make up the gap, which comes as more and more homeowners are looking for help.

After several months of tracking three homes from listing to sale, I'm happy to report the selling price of the house at 20129 SE 258th Place in Covington: $339,000.

I began tracking the listing May 16, when it was listed for $359,500 and noted the "sold" sign a couple weeks ago. The sale closed Sept. 30 after one price reduction of $14,000.

The other two homes were at 4749 119th Ave. S.E. in Bellevue, which became a rental after two price reductions totaling $120,000, and 20132 S.E. 258th Place in Covington, recorded as sold for $354,950, $5,000 higher than the asking price before any seller incentives.

Both houses on 258th Place were the same model: 4 bedrooms, 2.5-baths, 2,050 square feet.

The Bellevue house, first listed at $719,000 then reduced to $649,000 and $599,000 before the owner took it off the market and decided to rent it out, has 2 bedrooms,.1.75 baths and 1,840 square feet.

Lisa Poole/The Associated Press

A reader called me today, asking whether I knew whom to contact to get more information about the Countrywide settlement approved Sunday. Yes, I do -- since I called spokesman Dan Sytman at the state Attorney General's Office.

And for future reference: I know everything. (Just kidding.)

The state AG's Office is updating its Web site as new information is available, Sytman said. The information is embedded in the news release about the settlement.

Here are the highlights, however, straight from the AG's Office Web site:

On Friday, Coldwell Banker will begin a national real-estate sale Oct. 10-19, but local Coldwell Banker Bain brokers and agents in the Puget Sound area have chosen not to participate.

Brokers in some other cities also have elected not to participate in the sale, which encourages sellers to lower their prices up to 10 percent for the 10-day promotion.

Ron Sparks, managing vice president of CB Bain in Bellevue, said that the idea for a real-estate sale, (as in discount) is "well-intentioned but misplaced in our marketplace."

The past several weeks have been nuts for lenders. Just to show you what I mean, take a look at this Sept. 30 post to the Rain City Guide from mortgage broker Rhonda Porter.

Porter posts rates every Friday on Rain City Guide. She also writes the Mortgage Porter and posts regular live rate quotes on Twitter.

Last Friday's rates post-bailout rate sheet wasn't nearly as much fun to read, but it gives you an idea of the difference.

Check it out.

Why does major remodeling always start with a minor fix?

I've mentioned the recent projects at my house that gave us two remodeled bathrooms.

From blog photos

From blog photos

They started with the need for new fixtures to replace the peeling, corroded brass-colored ones that came with the house. But why put gleaming new fixtures on crappy old sinks? And why keep the nasty light green formica countertop and hideous green and white tile? And the 6-foot-long mirror and ugly Hollywood lighting?

You get the idea.

Today I chuckled at the Oct. 2 Cheapskate column by Wall Street Journal personal-finance columnist Neal Templin. He's getting a whole new kitchen because his wife wanted to move the stove 2 feet and their current floor plan won't accommodate it.

Have you been down that road? What was the impetus for your remodeling project? How much did you spend when all was said and done? What lessons did you learn?

If you missed the story today about three sellers who can't unload homes fast enough, you're missing out. Check it out here.

In a poll for online home-search company Trulia, Harris Interactive asked 2,507 U.S. adults for their opinions about homebuying.

The results have lots of tidbits, but the one I glommed onto was this: 92 percent of those who owned homes and 70 percent of those who didn't said they had no plans to move. Only 12 percent of nonowners said they expect to buy a home in the next year.

That's a lot of would-be buyers who won't be buying -- which should tell a lot of would-be sellers to sit tight. This isn't a market in which to test drive selling your home. If you don't need to sell, wait. It'll save you the stress of trying to sell in a buyers' market and the frustration of trying to get what you think you deserve for your place.

But let's take our own survey. Are you thinking about buying a house? When do you expect to buy?

When the widely watched Case-Shiller/Standard & Poor's home-price indexes for July were released yesterday, few industry watchers, if any at all, likely were surprised to see that home prices, once again, had fallen from a year ago. (See the story here.)

In the 20-city composite index, the median price fell 16.3 percent, making the Seattle area's 8.2 percent drop look pretty good -- to buyers, anyway. The drop brings the price for Seattle to the same level as May 2006. The price peaked in July 2007, which means we're down 8.2 percent from the market peak.

OK. Let's think about that. Down 8 percent from the peak. How high was the peak, you ask? Well, according to the index, the price was 92.3 percent higher than it had been in January 2000, when the index was created. That's nearly double in seven and a half years, which I know I don't have to tell you is incredible.

When the August numbers are released Oct. 28, they will be compared with prices slightly off the peak. Predictions, anyone?