The Uncanny Market

Call to Action on Extending the Homebuyer Tax Credit

Here's an e-mail I received this morning:

 

"Dear Arizona REALTOR:

The U.S. Senate will be voting on an amendment this week that would extend the first-time homebuyer tax credit. 

NAR is supporting the Dodd-Lieberman-Isakson amendment because this amendment will: 

 

--Provide the $8,000 tax credit to any buyer (not just first time)

--Set income limits at $150,000/$300,000 for single/married buyers

--Make the credit available until June 30, 2010

NAR's Legislative talking points on the Dodd-Lieberman-Isakson Amendment $8,000 Homebuyer Tax Credit also are attached for your use.

 

NAR is asking for your help in generating phone calls from Arizona REALTORS to the offices of Senator McCain and Senator Kyl in Washington, DC.  
 

Please request to speak to each Senator's Tax Legislative Assistant and ask them to support the Dodd-Lieberman-Isakson amendment. We need to generate as many calls as quickly as possible.  Below are the phone numbers for our Senators. 

 

Senator McCain:   202-224-2235

Senator Kyl:    202-224-4521

Thank you for your prompt response on this important issue!"

 

I'm getting on the phone & calling right now! And I hope you do, too! And see the flyer that was attached to the e-mail:

Download Homebuyer_Tax_Credit_1022_1621

 

First-Time Buyers Race to Beat the Clock, Qualify for $8,000 Federal Tax Credit

First-Time Buyers Race to Beat the Clock, Qualify for $8,000 Federal Tax Credit

 Print Article

RISMEDIA, September 15, 2009—First-time home buyers have just 12 weeks to find and close on a home to qualify for the $8,000 Federal tax credit before the November 30th deadline. Those just beginning the process will have to beat the average time it takes to buy a home, a challenge smart buyers can meet even though it’s taking longer today to close most transactions. 

Two significant challenges first-time buyers face today include the potential for a lengthy process related to search and closing if not managed carefully at every step, and intensified competition. On average, first-time buyers search 12 weeks to find a home, while closing can take up to 60 days, depending on individual circumstances and local regulations. Additionally, the tax credit has proved to be extremely popular this year, since taking advantage of the first-time homebuyer’s Federal tax credit and relevant state incentives is the most important reason motivating 10.8% of buyers today. In fact, approximately 1.14 million buyers have already filed for the credit. Many more are expected to file for the credit when income taxes are due April 2010. 

Still, while time is short and competition high, historically high affordability is a major factor driving first-time home buyers today, a growing group accounting for one third of all purchases in July 2009. The National Association of Realtors’ affordability index in July 2009 was 36.0 percentage points higher than July 2008. Under these conditions the typical median-income family can allocate 15.8% of their gross income to mortgage payments, well below the traditional allowance of 25%. Interest rates, which play a major factor in affordability, remain low, at 5.22% in July for a 30-year fixed rate loan. 

Realtor.com President Errol Samuelson explains, “The national median home today costs approximately 174,100. By moving quickly to find and close on a home by November 30, first-time buyers qualifying for the $8,000 tax credit can actually purchase this same home for only $166,100, an almost four and a half percent discount off of the price of a typical new home. Because affordability this year is at its highest level in 28 years, and the market offers an incredible selection of homes within reach of most first-time buyers, we expect their numbers to grow as they pursue today’s once in a generation opportunity to become homeowners.” 

Samuelson suggests that by combining effective use of technology and the greater access to information it delivers with expert advice from local Realtors, today’s first-time home buyers can beat the clock and use the $8,000 Federal tax credit along with any available state-level credits to purchase a home under the November 30 deadline. “By moving quickly, being prepared to make decisions in the face of increased competition, and taking the learnings from others to reduce time without cutting corners, first-time home buyers starting today can close on time and qualify for the $8,000 Federal tax credit,” added Samuelson. “To help this important group trying to enter today’s market, Realtor.com offers tips and expert advice that can help expedite the search, negotiation, finance and closing processes so they can beat the clock.” 

Tips for the first time home buyer starting their search today:

-Searching – Search While You Sleep – Since 87% of all buyers start online, you probably will too. On Realtor.com it’s easy to sign up for email alerts and create personal portfolios for homes of interest. Soon you’ll be searching while you sleep, at the office or even while you’re at an open house. You’ll be the first to know if a home you want comes up for sale or receives a price reduction.

-Negotiating - Freshness counts. You don’t have time to look at unavailable homes. Stale data on prices, time on market, features, or property values puts you at a disadvantage when negotiating.

-Appraisals - Appraisals can be a problem today; make sure the lender can deliver the appraisal on time. Your loan will not be approved if it doesn’t appraise for the agreed price, so don’t delay. If the property doesn’t appraise for the bid price, ask for a desk appraisal; you’ll receive a second look.

-Finance - Don’t let the financing process slow you down; 35% of first-time buyers find the mortgage application and approval process more difficult than what they expected. Start saving pay stubs and bank statements now. Collect your tax returns; anything proving your income qualifies you for the home you want.

-Closing - Get your insurance company and the home owner association, if applicable, to forward a cost estimate to the escrow company early. This will make it easier for them to more accurately estimate your closing costs, which in many states must be paid in cash at closing. 

For more information, visit www.realtor.com. 

Read more: http://rismedia.com/2009-09-14/first-time-buyers-race-to-beat-the-clock-qualify-for-8000-federal-tax-credit/#ixzz0RBlCuaDt

First-Time Buyers Race to Beat the Clock, Qualify for $8,000 Federal Tax Credit

 Print Article

RISMEDIA, September 15, 2009—First-time home buyers have just 12 weeks to find and close on a home to qualify for the $8,000 Federal tax credit before the November 30th deadline. Those just beginning the process will have to beat the average time it takes to buy a home, a challenge smart buyers can meet even though it’s taking longer today to close most transactions. 

Two significant challenges first-time buyers face today include the potential for a lengthy process related to search and closing if not managed carefully at every step, and intensified competition. On average, first-time buyers search 12 weeks to find a home, while closing can take up to 60 days, depending on individual circumstances and local regulations. Additionally, the tax credit has proved to be extremely popular this year, since taking advantage of the first-time homebuyer’s Federal tax credit and relevant state incentives is the most important reason motivating 10.8% of buyers today. In fact, approximately 1.14 million buyers have already filed for the credit. Many more are expected to file for the credit when income taxes are due April 2010. 

Still, while time is short and competition high, historically high affordability is a major factor driving first-time home buyers today, a growing group accounting for one third of all purchases in July 2009. The National Association of Realtors’ affordability index in July 2009 was 36.0 percentage points higher than July 2008. Under these conditions the typical median-income family can allocate 15.8% of their gross income to mortgage payments, well below the traditional allowance of 25%. Interest rates, which play a major factor in affordability, remain low, at 5.22% in July for a 30-year fixed rate loan. 

Realtor.com President Errol Samuelson explains, “The national median home today costs approximately 174,100. By moving quickly to find and close on a home by November 30, first-time buyers qualifying for the $8,000 tax credit can actually purchase this same home for only $166,100, an almost four and a half percent discount off of the price of a typical new home. Because affordability this year is at its highest level in 28 years, and the market offers an incredible selection of homes within reach of most first-time buyers, we expect their numbers to grow as they pursue today’s once in a generation opportunity to become homeowners.” 

Samuelson suggests that by combining effective use of technology and the greater access to information it delivers with expert advice from local Realtors, today’s first-time home buyers can beat the clock and use the $8,000 Federal tax credit along with any available state-level credits to purchase a home under the November 30 deadline. “By moving quickly, being prepared to make decisions in the face of increased competition, and taking the learnings from others to reduce time without cutting corners, first-time home buyers starting today can close on time and qualify for the $8,000 Federal tax credit,” added Samuelson. “To help this important group trying to enter today’s market, Realtor.com offers tips and expert advice that can help expedite the search, negotiation, finance and closing processes so they can beat the clock.” 

Tips for the first time home buyer starting their search today:

-Searching – Search While You Sleep – Since 87% of all buyers start online, you probably will too. On Realtor.com it’s easy to sign up for email alerts and create personal portfolios for homes of interest. Soon you’ll be searching while you sleep, at the office or even while you’re at an open house. You’ll be the first to know if a home you want comes up for sale or receives a price reduction.

-Negotiating - Freshness counts. You don’t have time to look at unavailable homes. Stale data on prices, time on market, features, or property values puts you at a disadvantage when negotiating.

-Appraisals - Appraisals can be a problem today; make sure the lender can deliver the appraisal on time. Your loan will not be approved if it doesn’t appraise for the agreed price, so don’t delay. If the property doesn’t appraise for the bid price, ask for a desk appraisal; you’ll receive a second look.

-Finance - Don’t let the financing process slow you down; 35% of first-time buyers find the mortgage application and approval process more difficult than what they expected. Start saving pay stubs and bank statements now. Collect your tax returns; anything proving your income qualifies you for the home you want.

-Closing - Get your insurance company and the home owner association, if applicable, to forward a cost estimate to the escrow company early. This will make it easier for them to more accurately estimate your closing costs, which in many states must be paid in cash at closing. 

For more information, visit www.realtor.com. 

Read more: http://rismedia.com/2009-09-14/first-time-buyers-race-to-beat-the-clock-qualify-for-8000-federal-tax-credit/#ixzz0RBlCuaDt

First-Time Buyers Race to Beat the Clock, Qualify for $8,000 Federal Tax Credit

 Print Article

RISMEDIA, September 15, 2009—First-time home buyers have just 12 weeks to find and close on a home to qualify for the $8,000 Federal tax credit before the November 30th deadline. Those just beginning the process will have to beat the average time it takes to buy a home, a challenge smart buyers can meet even though it’s taking longer today to close most transactions. 

Two significant challenges first-time buyers face today include the potential for a lengthy process related to search and closing if not managed carefully at every step, and intensified competition. On average, first-time buyers search 12 weeks to find a home, while closing can take up to 60 days, depending on individual circumstances and local regulations. Additionally, the tax credit has proved to be extremely popular this year, since taking advantage of the first-time homebuyer’s Federal tax credit and relevant state incentives is the most important reason motivating 10.8% of buyers today. In fact, approximately 1.14 million buyers have already filed for the credit. Many more are expected to file for the credit when income taxes are due April 2010. 

Still, while time is short and competition high, historically high affordability is a major factor driving first-time home buyers today, a growing group accounting for one third of all purchases in July 2009. The National Association of Realtors’ affordability index in July 2009 was 36.0 percentage points higher than July 2008. Under these conditions the typical median-income family can allocate 15.8% of their gross income to mortgage payments, well below the traditional allowance of 25%. Interest rates, which play a major factor in affordability, remain low, at 5.22% in July for a 30-year fixed rate loan. 

Realtor.com President Errol Samuelson explains, “The national median home today costs approximately 174,100. By moving quickly to find and close on a home by November 30, first-time buyers qualifying for the $8,000 tax credit can actually purchase this same home for only $166,100, an almost four and a half percent discount off of the price of a typical new home. Because affordability this year is at its highest level in 28 years, and the market offers an incredible selection of homes within reach of most first-time buyers, we expect their numbers to grow as they pursue today’s once in a generation opportunity to become homeowners.” 

Samuelson suggests that by combining effective use of technology and the greater access to information it delivers with expert advice from local Realtors, today’s first-time home buyers can beat the clock and use the $8,000 Federal tax credit along with any available state-level credits to purchase a home under the November 30 deadline. “By moving quickly, being prepared to make decisions in the face of increased competition, and taking the learnings from others to reduce time without cutting corners, first-time home buyers starting today can close on time and qualify for the $8,000 Federal tax credit,” added Samuelson. “To help this important group trying to enter today’s market, Realtor.com offers tips and expert advice that can help expedite the search, negotiation,

Read more: http://rismedia.com/2009-09-14/first-time-buyers-race-to-beat-the-clock-qualify-for-8000-federal-tax-credit/#ixzz0RBlWVcDt

RISMEDIA, September 15, 2009—First-time home buyers have just 12 weeks to find and close on a home to qualify for the $8,000 Federal tax credit before the November 30th deadline. Those just beginning the process will have to beat the average time it takes to buy a home, a challenge smart buyers can meet even though it’s taking longer today to close most transactions. 

Two significant challenges first-time buyers face today include the potential for a lengthy process related to search and closing if not managed carefully at every step, and intensified competition. On average, first-time buyers search 12 weeks to find a home, while closing can take up to 60 days, depending on individual circumstances and local regulations. Additionally, the tax credit has proved to be extremely popular this year, since taking advantage of the first-time homebuyer’s Federal tax credit and relevant state incentives is the most important reason motivating 10.8% of buyers today. In fact, approximately 1.14 million buyers have already filed for the credit. Many more are expected to file for the credit when income taxes are due April 2010. 

Still, while time is short and competition high, historically high affordability is a major factor driving first-time home buyers today, a growing group accounting for one third of all purchases in July 2009. The National Association of Realtors’ affordability index in July 2009 was 36.0 percentage points higher than July 2008. Under these conditions the typical median-income family can allocate 15.8% of their gross income to mortgage payments, well below the traditional allowance of 25%. Interest rates, which play a major factor in affordability, remain low, at 5.22% in July for a 30-year fixed rate loan. 

Realtor.com President Errol Samuelson explains, “The national median home today costs approximately 174,100. By moving quickly to find and close on a home by November 30, first-time buyers qualifying for the $8,000 tax credit can actually purchase this same home for only $166,100, an almost four and a half percent discount off of the price of a typical new home. Because affordability this year is at its highest level in 28 years, and the market offers an incredible selection of homes within reach of most first-time buyers, we expect their numbers to grow as they pursue today’s once in a generation opportunity to become homeowners.” 

Samuelson suggests that by combining effective use of technology and the greater access to information it delivers with expert advice from local Realtors, today’s first-time home buyers can beat the clock and use the $8,000 Federal tax credit along with any available state-level credits to purchase a home under the November 30 deadline. “By moving quickly, being prepared to make decisions in the face of increased competition, and taking the learnings from others to reduce time without cutting corners, first-time home buyers starting today can close on time and qualify for the $8,000 Federal tax credit,” added Samuelson. “To help this important group trying to enter today’s market, Realtor.com offers tips and expert advice that can help expedite the search, negotiation, finance and closing processes so they can beat the clock.” 

Tips for the first time home buyer starting their search today:

-Searching – Search While You Sleep – Since 87% of all buyers start online, you probably will too. On Realtor.com it’s easy to sign up for email alerts and create personal portfolios for homes of interest. Soon you’ll be searching while you sleep, at the office or even while you’re at an open house. You’ll be the first to know if a home you want comes up for sale or receives a price reduction.

-Negotiating - Freshness counts. You don’t have time to look at unavailable homes. Stale data on prices, time on market, features, or property values puts you at a disadvantage when negotiating.

-Appraisals - Appraisals can be a problem today; make sure the lender can deliver the appraisal on time. Your loan will not be approved if it doesn’t appraise for the agreed price, so don’t delay. If the property doesn’t appraise for the bid price, ask for a desk appraisal; you’ll receive a second look.

-Finance - Don’t let the financing process slow you down; 35% of first-time buyers find the mortgage application and approval process more difficult than what they expected. Start saving pay stubs and bank statements now. Collect your tax returns; anything proving your income qualifies you for the home you want.

-Closing - Get your insurance company and the home owner association, if applicable, to forward a cost estimate to the escrow company early. This will make it easier for them to more accurately estimate your closing costs, which in many states must be paid in cash at closing. 

For more information, visit www.realtor.com. 

Read more: http://rismedia.com/2009-09-14/first-time-buyers-race-to-beat-the-clock-qualify-for-8000-federal-tax-credit/#ixzz0RBlgRJYx

First-Time Buyers Eager to Reap Tax Credit Benefits, But Unsure of Details

It seems fair to ask just how much the Federal Tax Credit is helping real estate markets. The RE/MAX network in northern Illinois did just that, interviewing 40 RE/MAX agents from across the region about how the tax credit is impacting the first-time buyers with whom they work. “The overall conclusions we draw from the survey are twofold,” said Jim Merrion, regional director of the RE/MAX northern Illinois real estate network. “First, buyers are generally aware of the fact that there is a tax credit available. However, a majority of them understand only a few, if any, of the program's details.”

“Second, the tax credit has a stimulative impact, but the effect is primarily psychological. Buyers want to get the benefit of the tax credit, and that encourages them to act, but the tax credit doesn't have much impact on how much first-time buyers can afford to pay for a home,” said Merrion.

The tax credit was a key part of the economic stimulus package approved by Congress and signed by President Obama in February. Designed to encourage home purchases, it can be worth as much as $8,000 in reduced taxes or added income.

The 40 RE/MAX agents interviewed for the survey estimate they worked with 390 first-time buyers through the first half of 2009. Seventy-three percent of those buyers were aware of the tax credit even before meeting with the agent. To date, approximately 18% of the 390 buyers have either purchased a home or have had an offer accepted and are preparing to close the transaction. Most of the remaining buyers are still in the market looking for the right home.

“The fact that the tax credit expires at the end of November should begin to get more and more of them off the fence and into a home in the next few months,” said Merrion. “In responding to our survey, the agents we interviewed said a majority of buyers see the tax credit as a major motivation to buy this year even though they can afford to buy a home without it. For others, it merely reinforces their existing decision that this is the time for them to buy,” he said.

During the first-half of 2009 in the metro Chicago real estate market, the average price of a home was $259,354, according to data from the MRED multiple listing service. The $8,000 credit equals 3.1% of that amount. That helps explain why the survey indicated that the tax credit is having a major impact on affordability for only 17% of buyers.

For the majority of qualified buyers, said the RE/MAX agents interviewed, the tax credit provides a financial boost by replenishing the savings they use for a down payment and closing costs or covering some of the incidental expenses that often come with purchasing a first home, whether that involves buying a lawn mower, putting up wallpaper or acquiring new furniture.

The survey also revealed that many first-time buyers don't have a firm grasp of the details of the tax credit.

-Most buyers knew there was a date by which they had to act in order to qualify for the tax credit, but many are confused about when that was and what they had to do. A home purchase must be closed no later than Nov. 30, 2009 to qualify for the credit.

-Many buyers do not realize that to qualify as a first-time buyer you can have owned a home previously as long as you have not have owned a home for three years before making a home purchase that qualifies for the tax credit.

-A large percentage of buyers also are unclear about the fact that they will receive the full benefit of the tax credit to which they are entitled even if they don't pay that amount in income taxes for 2009. For example, if an individual or couple qualifies for the full $8,000 credit but owes only $3,000 in income taxes for the year, their entire tax bill would be eliminated, and they would also receive a tax refund check for $5,000.

-Another area of confusion, but one that the RE/MAX agents report as affecting relatively few first-time buyers, involves income limitations. Individuals with an adjusted gross income up to $75,000 can qualify for the full $8,000 credit, as can married couples earning up to $150,000. The available credit amount then declines as income increases and phases out at $95,000 for individuals and $170,000 for couples.

For many buyers, another aspect of the tax credit that is confusing is the possibility of repayment. An earlier version of the first-time buyer tax credit did have to be repaid, meaning that it functioned like an interest-free loan. The updated version of the credit approved this year eliminates the need for repayment unless the home is sold within three years, in which case the credit must be repaid.

“There is talk in Congress about increasing and/or extending the tax credit and making it applicable to all home buyers, not just those purchasing their first home,” reported Merrion. “That would be a great help to the housing market, which continues to face significant headwinds in this soft economy. However, for first-time buyers, we see very limited value in waiting and hoping that Congress will act again. If a home purchase is on their radar today, our advice is to start shopping seriously and close on a great new home before Dec. 1. To do that, they will want to get the house under contract by Sept. 30 so they have ample time to close the transaction.”

For more information, visit www.remax.com

. And you can also view the attached flyer: Download FreeMoney[1]

Reprinted with permission from RISMedia.com, publisher of Real Estate magazine.

China Leading World out of Economic Crisis

There is a growing sense of optimism with regard to a global property market recovery. Unlike in past recessions, however, the U.S. and Europe are unlikely to lead the world out of this one. Rather, Asian countries are leading the way with government stimulus plans largely credited with helping the real estate industry recover from the world economic crisis. Within Asia, there are a number of strengthening markets (including Singapore, India and Vietnam), but China appears to be the region leader, where its government-dominated, top-down economy is surging after Chinese banks doled out more than $1 trillion in loans in the first half of 2009, in addition to a nearly $600 billion government stimulus program. Is this good news or bad new for the rest of the world? You decide. For more information, you can read an article from India's Economic Times:

Global recovery

10 Government Website You May Find Useful

Here are 10 government websites that cover everything about the housing industry:

http://twitter.com/HUDFHA - As of March 20, 2009, HUD is now on Twitter—

not only sharing updates, but also providing links to websites! Subscribe to the RSS feed and get regular updates whenever something new has been posted by HUD.

 

http://www.facebook.com/home.php#/pages/Washington-DC/Federal-Housing-Administration-Department-of-Housing-and-Urban-Development/37437263955?ref=ts - You have to have a Facebook account to read FHA’s posts. I recently used this site to "write on the wall" and asked a question. They answered me. Lots of content with resources for you. 

www.financialstability.gov - Everything you wanted to know about the Financial Stability Plan is accessed here—including Making Home Affordable guidelines, modification program info, etc. Current press releases and web casts can be accessed here as well.

www.Treas.gov - Making Home Affordable website has just been launched, which consumers can fill out a few questions to see if they qualify for a loan modification. More importantly, it contains anything and everything to do with the Treasury Department, including interest rate stats, new income tax changes (including tax forms).

www.Makinghomeaffordable.gov - So, here’s the website mentioned by the Treasury Department. It’s a consumer site where they can answer a few questions to see if they qualify for a Home Affordable refi or modification. However, the MOST IMPORTANT page on this site is where consumers can determine if they have a Fannie or Freddie loan so they can contact their servicing lender for a Fannie Refi Plus or a Freddie Refi Relief loan. http://www.makinghomeaffordable.gov/loan_lookup.html

www.federalhousingtaxcredit.com

- Created by the National Association of Home Builders, it’s a consumer site with detailed info about the $8000 tax credit. It’s translated in both English and Spanish.

www.Hud.gov - As a lender, this is where you can find the latest HUD Mortgagee letters BUT the "At Your Service" pages contain a wealth of information for you and consumers-- How to buy a HUD home; how to avoid foreclosure; Does HUD own you an MIP refund; Find a Housing Counselor

www.VA.gov -- Everything about VA benefits, including VA field offices can be found here! However, if you offer (or want to become a VA-approved Lender) VA loans here’s the housing link http://www.homeloans.va.gov/

www.Efanniemae.com- As a conforming-loan lender, you can subscribe to Fannie Announcements but beware—you’ll get notices about EVERYTHING, including servicing, multifamily, LLPA’s etc. Check out the FAQ’s related to DO/DU Notes—

good info!

www.Freddiemac.com - Same as Fannie but Freddie calls their updated "Bulletins". Their site is easier to navigate. Both sites have "advanced" key word search functions and you can subscribe to get updates emailed to you.

The Valley's foreclosure scene in March

 

Here's a rundown of foreclosure activity in metropolitan

Phoenix

last month, thanks to real estate analyst Tom Ruff of the Information Market.

"March’s Numbers are 'who we thought they were,'” said Ruff.

Notice of trustee sales or pre foreclosures = 10,689

Trustee’s Deeds or foreclosures = 3,377 

Foreclosure cancellations = 3,168

Active foreclosures notices = 39,744

"March’s numbers came in as anticipated, existing home sales were up and foreclosures were down. Now mind you, when we refer to foreclosures, we are referring to trustee’s deeds, not notices.  You’re going to see a lot of confusion among people reporting foreclosure numbers as new notices hit all time highs and the number of active notices continue to rise. If an analyst is only watching new notices and not viewing the entire process, they are going to make some very dire predictions. Up and until October 2008, the numbers of notices were a perfect indicator as to what could be expected in 90 days, then the rules changed, baseball became cricket.

Washington

D.C.

became the banks’ bank, and followed their capital infusion with close scrutiny and motherly advice. What’s this mean? I know one thing is certain, banking conventions are canceling their Vegas reservations and moving them to

Washington

," write Ruff in his latest report.

 

 

From Azcentral.com, April 15, 2009

Excellent resources for struggling borrowers

Attached are 2 documents which may be very valuable resoources to homeowners who may be struggling with their mortgage.

The government is pushing lenders to work with responsible homeowners who, for justified reasons are unable to meet their mortgage obligations due to change in circumstance, such as loss of income, illness or divorce, or a rise in their interest rate.

The sooner we can ease the foreclosure/short sale problem, the better our housing market will be as inventory levels continue to decrease.

The following is a statement by the National Association of Realtors' President Charles McMillan:

"The National Association of Realtors applauds the Federal Reserve announcement today that it would purchase an additional $750 billion in Fannie Mae & Freddie Mac mortgage-backed securities, and up to $300 billion in longer term Treasury securities. This is great news for American home buyers and homeowners because mortgage interest rates will continue to remain at historic lows."

"NAR has been advocating since last fall that the Fed be more active in buying mortgage-backed securities. We are excited that the Fed acted on this provision of the stimulus plan that we offered to the government in November."

"Greater numbers of home buyers will be able to purchase a home, and homeowners facing challenges will be able to refinance into better terms. We already are experiencing a great improvement in housing affordability due to historically low interest rates, and the Fed's move will push affordability conditions to the best in 40 years. In addition, continued low rates will lessen foreclosure pressure and help stabilize home prices sooner, as more Americans buy homes and draw down inventory."

Download Government_affairs_homeb_tax_cred_qa[1]

Download Modification_program_guidelines[1]

President Obama Announces Homeowner Affordability & Stability

On February 18, President Obama announced his Homeowner Affordability and Stability Plan designed to help 7 to 9 million families avoid foreclosure by refinancing or modifying their mortgages.  The plan also strengthens the federal commitment to Fannie Mae and Freddie Mac (the government sponsored enterprises, or GSEs).

Here are the key elements of the Obama plan:

Refinancing by the GSEs of loans that they own or guarantee.  The GSEs will work with their loan servicers to develop a streamlined refinancing program for borrowers with loan-to-value ratios (LTVs) above 80 percent who now face difficulty refinancing.
A $75 billion Homeowner Stability Initiative—with lender, servicer, investor, and borrower incentives to make it work.  The program is limited to loans at or below the GSE conforming loan limits.
More support for the GSEs, including doubling of potential Treasury investment from $100 billion to $200 billion for each GSE, to maintain their positive net worth.  The plan also raises the cap on mortgages that the GSEs may hold in their portfolios by $50 billion to $900 billion.

Make no mistake—our work with Congress and the Treasury Department is not yet done, and as the leading advocate for homeowners and the real estate industry, NAR will continue to address the issues facing Americans who are trying to purchase a new home, protect their current home or preserve investment opportunities in residential and commercial properties.

Thank you for your support and the impressive participation of our Grassroots activists over the past few months. As new developments occur will be keep you informed and ask your help again as needed.

Urgent Message from Dave Liniger, Chairman & Co-Founder of Re/Max

If you have been watching the news this week, you may have noticed that the debate in Washington

has finally turned toward real stimulus for the housing industry. As a result, I believe that we could be on the brink of a substantial turn around in the real estate market. Now, it’s critical that we all join together and deliver a powerful message to our legislators that we support this stimulus.

Last night, the Lieberman/Isakson Amendment was included in the senate version of the Economic Stimulus Bill by a unanimous voice vote. This amendment would provide a Tax Credit to all home buyers at the rate of 10% of the sales price up to a limit of $15,000. The credit would be available for a one year period to all purchasers of primary residences.

Today, the senate expects to debate Amendment 353, a proposal by Senator John Ensign (R-NV) that would provide 30 year fixed financing at a rate of about 4%, for anyone purchasing a primary residence.

If these two provisions survive in the final passage of a stimulus bill they could have a tremendous impact on our industry. If they are coupled together with provisions to ease the flow of credit and reduce foreclosures, we could see an immediate and dramatic turn-around in real estate.

I feel that these provisions represent real economic stimulus. They will put money in the hands of millions of homeowners, increase sales, stabilize home values and add more revenues to local communities in the form of property taxes.

I urge each of you to contact your senators and representatives to let them know that you believe these provisions are essential components of any stimulus bill. You can go to the official Senate and House web sites to locate the email and phone number of your legislators.

This may be one of the most critical moments for the real estate industry in our time. Please pass this information on to anyone you might do business with. The outcome of this legislation will have a lasting impact on us all. I appreciate your assistance on this urgent matter.

Thank you.

FNMA halts Foreclosures, New Appraisal Requirements and the VA Jumbo

Good News for those facing foreclosure…

In connection with the streamlined modification program announced jointly by the Federal Housing Finance Agency (FHFA), Freddie Mac, and Fannie Mae on

November 11, 2008, Fannie Mae and Freddie Mac is instituting a halt to all foreclosure sales on occupied single-family properties as well as to the completion of evictions from occupied single-family properties scheduled to occur from November 26, 2008 through January 9, 2009.

 The temporary halt on foreclosures is designed to allow affected borrowers facing foreclosure to retain their homes while Fannie Mae and Freddie Mac work with FHFA to implement the streamlined modification program scheduled to launch December 15, 2008. The foreclosure halt will apply to all portfolio mortgages and all MBS pool mortgages owned or guaranteed by Fannie Mae and to foreclosures of homes that are already in process with foreclosure sale dates scheduled during the halt period. Servicers and foreclosure attorneys (or trustees) must institute the halt on foreclosures for eligible homeowners no later than November 26, 2008.

 FNMA to Require New Appraisal Addendum to Further Document Current Market Conditions

The current appraisal report forms require the appraiser to report on the primary indicators of market condition for properties in the subject neighborhood by noting…

1.                   Trend of property values (increasing, stable, or declining)

2.                   The supply of properties in the subject neighborhood (shortage, in-balance, or over-supply)

3.                   The marketing time for properties (under three months, three to six months, or over six months) as of the effective date of the appraisal.

4.                   Fannie Mae also expects the appraiser to provide their conclusions for the reasons a market is experiencing declining market values, an over-supply of properties, or marketing times over six months.

 To further enhance the transparency of the conclusions made by the appraiser related to market trends and conditions, the Form 1004MC will be required for all mortgage loans delivered to Fannie Mae with appraisals of one- to four-unit properties with an effective date on or after April 1, 2009.

 Areas of Additional Information Now Required on Form 1004MC

Inventory Analysis Section (Absorption Rate)

The “Inventory Analysis” section assists the appraiser in analyzing important supply and demand factors in order to reach a conclusion regarding housing trends and market conditions. When completing this section, the appraiser must include the comparable data that reflects the total pool of comparable properties from which a buyer may select a property in order to analyze the sales activity and the local housing supply. One of the tools used to monitor these trends is the absorption rate which is the rate at which properties for sale have been or can be sold (marketed) within a given area. To determine the absorption rate, the appraiser divides the total number of settled sales by the time frame being analyzed. The months of housing supply is based on the total listings for the applicable period divided by the absorption rate.

Example

Step 1: Calculate the absorption rate. If there were 60 sales during a 6 month period (e.g., “Prior 7 – 12 Months” column), the absorption rate is 10 sales per month (60/6).

Step 2: Calculate the months of housing supply. If there are 240 active listings, there is a 24-month supply of homes on the market (240 active sales/10 sales per month). This may support the appraiser’s conclusion that there is an over-supply of homes on the market. Anomalies in the data such as seasonal markets, new construction, or other factors must be addressed in the form.

 Median Sale & List Price, DOM, List/Sale Ratio Section

The appraiser must analyze additional trends, including the changes in median prices and days on the market (DOM) for both sales and listings as well as a change in list-to-sales price ratios.

Example

If the median comparable sale prices are $300,000, $295,000, and $305,000 for their respective time periods, the overall trend for the prior 12 months is relatively “stable.”

 Overall Trend Section

The “Overall Trend” section is designed to reflect potential positive trends, neutral trends, or negative trends in inventory, median sale and list price, days on market, list-to- sale price ratio, and seller concessions.

Example

An increase in the absorption rate is generally viewed as a positive trend, whereas a decrease in the absorption rate may be viewed as a negative trend. Furthermore, a decrease in the number of days on the market, either sales or listings, more than likely represents an overall positive trend.

 

Seller Concessions

There is a section for comments on the prevalence of seller concessions and the trend in seller concessions for the past 12 months. The change in seller concessions within the market provides the lender with additional insight into current market conditions. The appraiser should consider and report on seller-paid (or third-party) costs. Examples of these items include, but are not limited to mortgage payments, points and fees, and in condominium or cooperative projects, items such as homeowners’ association fees and guaranteed rental programs. Seller concessions must be carefully analyzed by the appraiser since excessive concessions often lead to inflated property values.

 

There are a number of markets across the country where, due to current conditions, there has been an increase in the prevalence of seller concessions. The following provides guidance for these circumstances:

“The need to make negative dollar adjustments for sales and financing concessions and the amount of the adjustments to the comparable sales are not based on how typical the concessions might be for a segment of the market area—large sales concessions can be relatively typical in a particular segment of the market and still result in sale prices that reflect more than the value of the real estate. Adjustments based on dollar-for-dollar deductions that are equal to the cost of the concessions to the seller (as a strict cash equivalency approach would dictate) are not appropriate. We recognize that the effect of the sales concessions on sales prices can vary with the amount of the concessions and differences in various markets. The adjustments must reflect the difference between what the comparables actually sold for with the sales concessions and what they would have sold for without the concessions so that the dollar amount of the adjustments will approximate the reaction of the market to the concessions.”

 

Foreclosure Sales and Summary/Analysis of Data

The presence and extent of foreclosure/REO sales is worthy of comment when analyzing market data and must be reported on the form. The form also allows for the appraiser to summarize the data and provide other data analysis or additional information, such as analysis of pending sales, which over time can show a market trend.

 

Have a Jumbo Loan Need? Don’t Overlook Your Veterans!

Did you know that the VA will guarantee loans up to $1 million! The myth is that VA loans are only available up to a $417,000 loan amount.  The fact is that the VA will guarantee loans up to $417,000 with no money down, but if the borrower puts additional monies down, they will guarantee up to $1 million.  The amount of money required for down payment is the dependent upon the Veteran’s eligibility.  If the Veteran has full eligibility, the down payment required will be the difference between 25% of the sales price and $104,250.  For example, if the purchase price were $500,000, then 25% of 500,000 would be 125,000 which you would then subtract 104,250 which equals a down payment amount of $20,750.  The loan amount would be $479,250 plus the funding fee.  You would then have VA rates on a Jumbo loan amount with less than 5% down and no mortgage insurance…not a bad solution.

 

The funding fee rates are fairly inexpensive when you put down as little as 5%.

 

Type of Veteran	Down Payment	Percentage for First Time Use	Percentage for Subsequent Use
Regular Military	None 5% or more (up to 10%) 10% or more	2.15% 1.50% 1.25%	3.3% * 1.50% 1.25%
Reserves/ National Guard	None 5% or more (up to 10%) 10% or more	2.4%      1.75%      1.5%	3.3% * 1.75%         1.5%

 

 

 

 

 

 

 

 

So don’t forget to find out if you have VA eligibility for those Jumbo transactions!

 Two Peanuts walked into a bar. One was a salted.

Happy Thanksgiving!