XEROX IS DOING SOMETHING COOL
If you go to this web site, www.LetsSayThanks.com you can pick out a thank you card, choose a message and Xerox will print it. It will be sent to a soldier that is currently serving in Iraq . You can't pick out who gets it, but it will go to a member of the armed services.
How AMAZING it would be if we could get everyone we know to send one!!! It is FREE and it only takes a second.
This takes just 10 seconds and it's a wonderful way to say thank you. Please take the time to send one and please take the time to pass it on for others to do. We can never say enough thank you's.
Tuesday, December 15, 2009
Send a thank you and holiday message to our troops if you get the chance
XEROX IS DOING SOMETHING COOL
If you go to this web site, www.LetsSayThanks.com you can pick out a thank you card, choose a message and Xerox will print it. It will be sent to a soldier that is currently serving in Iraq . You can't pick out who gets it, but it will go to a member of the armed services.
How AMAZING it would be if we could get everyone we know to send one!!! It is FREE and it only takes a second.
This takes just 10 seconds and it's a wonderful way to say thank you. Please take the time to send one and please take the time to pass it on for others to do. We can never say enough thank you's.
If you go to this web site, www.LetsSayThanks.com you can pick out a thank you card, choose a message and Xerox will print it. It will be sent to a soldier that is currently serving in Iraq . You can't pick out who gets it, but it will go to a member of the armed services.
How AMAZING it would be if we could get everyone we know to send one!!! It is FREE and it only takes a second.
This takes just 10 seconds and it's a wonderful way to say thank you. Please take the time to send one and please take the time to pass it on for others to do. We can never say enough thank you's.
Wednesday, December 2, 2009
Pending Home Sales Rise for Ninth Consecutive Month
Posted By susanne On December 1, 2009 @ 5:00 pm In Home Buying 101, Real Estate,
home_sales [1]RISMEDIA, December 2, 2009—
Pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001,according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7% to 114.1 from 110.0 in September, and is 31.8% above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.
Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.
The PHSI in the Northeast surged 19.9% to 100.2 in October and is 44.2% above a year ago. In the Midwest the index rose 11.6% to 109.6 and is 36.6% higher than October 2008. Pending home sales in the South increased 5.4% to an index of 115.4, which is 31.6% above a year ago. In the West the index fell 11.2% to 127.7 but is 21.9% above October 2008.
Yun cautioned that home sales could dip in the months ahead. “The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December 2009 until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process.
“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Yun said.
For more information, visit www.realtor.org
home_sales [1]RISMEDIA, December 2, 2009—
Pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001,according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7% to 114.1 from 110.0 in September, and is 31.8% above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.
Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.
The PHSI in the Northeast surged 19.9% to 100.2 in October and is 44.2% above a year ago. In the Midwest the index rose 11.6% to 109.6 and is 36.6% higher than October 2008. Pending home sales in the South increased 5.4% to an index of 115.4, which is 31.6% above a year ago. In the West the index fell 11.2% to 127.7 but is 21.9% above October 2008.
Yun cautioned that home sales could dip in the months ahead. “The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December 2009 until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process.
“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Yun said.
For more information, visit www.realtor.org
Tuesday, December 1, 2009
Friday, November 20, 2009
Thursday, November 5, 2009
Congress Passes Tax Credit Extension/Expansion
I just got this exciting email!
To: All REALTORS®
From: Charles McMillan, 2009 NAR President
Date: November 5, 2009
Re: Congress Passes Tax Credit Extension/Expansion
Dear Fellow REALTOR®,
I am VERY excited to report that Congress has answered our call to extend and expand the homebuyer tax credit!
Both the House and the Senate have passed an unemployment insurance bill, which includes an amendment that expands and extends the tax credit. That bill will be sent to President Obama for his signature in the next day or so.
I have recorded a special edition of my President’s Podcast, with details on the new tax credit and when it takes effect. Please take just a couple of minutes to listen.
We also have posted a comparison chart on Realtor.org. This can be a helpful resource as you work with buyers to take advantage of the credit in the months ahead.
On behalf of NAR, I thank you all for your participation in our advocacy efforts on this issue. Not only did we set a new record on responses to Calls for Action, but we helped move another step closer to a brighter future for America’s families and our economy.
Sincerely,
Charles McMillan, CIPS, GRI
2009 NAR President
r emails, please add NAR@newsletters.realtor.org to your address book now.
Questions or comments? Please send an email to presidentsreport@realtors.org.
National Association of REALTORS®
MandBD
430 N. Michigan Ave.
Chicago, IL 60611
--------------------------------------------------------------------------------
To: All REALTORS®
From: Charles McMillan, 2009 NAR President
Date: November 5, 2009
Re: Congress Passes Tax Credit Extension/Expansion
Dear Fellow REALTOR®,
I am VERY excited to report that Congress has answered our call to extend and expand the homebuyer tax credit!
Both the House and the Senate have passed an unemployment insurance bill, which includes an amendment that expands and extends the tax credit. That bill will be sent to President Obama for his signature in the next day or so.
I have recorded a special edition of my President’s Podcast, with details on the new tax credit and when it takes effect. Please take just a couple of minutes to listen.
We also have posted a comparison chart on Realtor.org. This can be a helpful resource as you work with buyers to take advantage of the credit in the months ahead.
On behalf of NAR, I thank you all for your participation in our advocacy efforts on this issue. Not only did we set a new record on responses to Calls for Action, but we helped move another step closer to a brighter future for America’s families and our economy.
Sincerely,
Charles McMillan, CIPS, GRI
2009 NAR President
r emails, please add NAR@newsletters.realtor.org to your address book now.
Questions or comments? Please send an email to presidentsreport@realtors.org.
National Association of REALTORS®
MandBD
430 N. Michigan Ave.
Chicago, IL 60611
--------------------------------------------------------------------------------
Senate Clears Homebuyer Tax Credit Extension; May Pass as Early as This Week
Posted By susanne On November 4, 2009 @ 5:36 pm In Home Buying 101, Homeowner's Toolkit, Real Estate, Today's Marketplace, Today's Top Story, Today's Top Story - Consumer | Comments Disabled
senate_1105 [1]RISMEDIA, November 5, 2009—After two weeks of delay, the Senate cleared the way to pass a seven month extension and expansion of the tax credit for homebuyers. By an 85 to 2 roll call vote, the Senate voted to cut off debate on a package of measures that includes the homebuyer credit, making it virtually certain that the legislation will reach President Obama for his signature this week.
The homebuyer tax credit, due to expire at the end of November would be extended through April 30 of next year. First-time buyers who are in the process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.
For the first time, the legislation that was recently cleared makes move-up buyers as well as first-time buyers eligible for a credit. The $8,000 maximum first-timer credit will continue and will now be available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years.
For homebuyers across the country, the expanded tax credit would allow more people to qualify for the credit. While two-thirds of American families own their own home, and most earn less than the income limits that have been established within the extension, more buyers may be eligible. Move-up buyers don’t have to sell their current home to qualify for the new credit, but the money cannot be used to buy a vacation home. “It’s only for a primary residence,” said Regan Lachapelle, a spokeswoman for Sen. Harry Redi (D-Nev.), who helped engineer the deal. “In expanding the tax credit, we are helping first-time home buyers, as well as homeowners looking to move up to a new home, but we would exclude from the credit speculators who may have recently purchased a home intending to flip it for a fast profit,” said Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee.
The tax credit has fired-up the housing market, driving existing home sales to the highest level in over two years. The National Association Realtors reported sales jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September and are 9.2% higher than the 5.10 million-unit pace in September 2008.
The legislation included provisions added to address complaints of fraud as well. The Internal Revenue Service is given greater authority to oversee the process to root out fraud, and provisions are added in response to past abuses of false sales or underage buyers. An investigation by the Treasury Department’s Inspector General for Tax Administration found that more than 580 children, some as young as four years old, had received $627,000 in first-time homebuyer credits. The IRS has identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations of the first-time homebuyer tax credit.
senate_1105 [1]RISMEDIA, November 5, 2009—After two weeks of delay, the Senate cleared the way to pass a seven month extension and expansion of the tax credit for homebuyers. By an 85 to 2 roll call vote, the Senate voted to cut off debate on a package of measures that includes the homebuyer credit, making it virtually certain that the legislation will reach President Obama for his signature this week.
The homebuyer tax credit, due to expire at the end of November would be extended through April 30 of next year. First-time buyers who are in the process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.
For the first time, the legislation that was recently cleared makes move-up buyers as well as first-time buyers eligible for a credit. The $8,000 maximum first-timer credit will continue and will now be available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years.
For homebuyers across the country, the expanded tax credit would allow more people to qualify for the credit. While two-thirds of American families own their own home, and most earn less than the income limits that have been established within the extension, more buyers may be eligible. Move-up buyers don’t have to sell their current home to qualify for the new credit, but the money cannot be used to buy a vacation home. “It’s only for a primary residence,” said Regan Lachapelle, a spokeswoman for Sen. Harry Redi (D-Nev.), who helped engineer the deal. “In expanding the tax credit, we are helping first-time home buyers, as well as homeowners looking to move up to a new home, but we would exclude from the credit speculators who may have recently purchased a home intending to flip it for a fast profit,” said Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee.
The tax credit has fired-up the housing market, driving existing home sales to the highest level in over two years. The National Association Realtors reported sales jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September and are 9.2% higher than the 5.10 million-unit pace in September 2008.
The legislation included provisions added to address complaints of fraud as well. The Internal Revenue Service is given greater authority to oversee the process to root out fraud, and provisions are added in response to past abuses of false sales or underage buyers. An investigation by the Treasury Department’s Inspector General for Tax Administration found that more than 580 children, some as young as four years old, had received $627,000 in first-time homebuyer credits. The IRS has identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations of the first-time homebuyer tax credit.
Sunday, November 1, 2009
Nelson Says Senate to Extend, Reduce Homebuyer Credit
Nelson Says Senate to Extend, Reduce Homebuyer Credit
By Ryan J. Donmoyer and Dawn Kopecki
Oct. 26 (Bloomberg) -- Senate leaders are negotiating to extend and gradually reduce an $8,000 tax credit for first-time homebuyers through 2010, Senator Bill Nelson of Florida said.
“We should be able to extend that later this week,” Nelson, a Democrat, told reporters traveling today with President Barack Obama on Air Force One to a speech in Jacksonville, Florida.
Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus of Montana, both Democrats, may seek to add the homebuyers extension to legislation extending unemployment benefits that may be debated as early as this week, according to Regan Lachapelle, an aide to Reid.
Lawmakers are under pressure from real estate agents, mortgage brokers and homebuilders to extend the $8,000 credit before it expires Nov. 30.
Baucus and Reid made a proposal last week to Senate Republicans that would extend the homebuyer credit through 2010, Lachapelle said. First-time homebuyers who close before April 1 would get the full $8,000, and the credit’s value would be reduced by $2,000 in each successive quarter until expiring at the end of the year.
“Relative to current law, this is better. But it’s worse than people are expecting,” said Tom Gallagher, head of policy research in the Washington offices of International Strategy and Investment Group, an independent research firm. “This is a four-month extension and a nine-month phase-out.”
Homebuilder Index
A gauge of 12 homebuilders in Standard & Poor’s indexes slumped 3.4 percent, led by declines of at least 3.8 percent in Pulte Homes Inc. and D.R. Horton Inc.
The proposal was intended to counter one by Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and Senator Johnny Isakson, a Georgia Republican and former real estate agent, to extend the full $8,000 credit through next June and to expand it to all couples earning $300,000 or less. The Baucus-Reid proposal would continue limiting the benefit to first-time homebuyers, Lachapelle said.
The terms for extending the homebuyer tax credit are still being negotiated, Lachapelle said.
House Speaker Nancy Pelosi, a California Democrat, is waiting to see the final Senate agreement before deciding whether to support it. “Generally, we do support extending it,” Pelosi spokesman Nedeam Elshami said. “But it’s premature to say anything until we see what action the Senate takes.”
Business Tax Break
Baucus and Reid also proposed an extension of a business tax break that allows companies with losses in 2008 and 2009 to amend tax returns for any of the previous four years to get a refund of taxes paid. Without the benefit, companies would have to wait years to apply those losses against future profits.
A version of the benefit was included in last February’s economic stimulus bill, though it was limited to companies with receipts under $15 million. A lobbying effort by business groups, including the Washington-based National Association of Manufacturers, to extend the benefit to all companies failed at the time; the Obama administration has since proposed a broader benefit in its budget.
The Reid-Baucus proposal was drafted to have a neutral effect on budget deficits by delaying until 2017 a tax benefit that would let multinational corporations claim more interest deductions. The break, enacted in 2004, is currently slated to take effect in 2011.
Fraudulent Claims
The first-time homebuyer credit, while popular with lawmakers, came under scrutiny last week when government officials said millions of dollars in benefits were erroneously or fraudulently claimed.
The Internal Revenue Service has identified 73,799 claims totaling almost $504 million that may not be from first-time homebuyers. They also found that 582 taxpayers under 18 years old and ineligible to buy a home claimed almost $4 million in credits. Children as young as 4 years old received the credit, Treasury Inspector General for Tax Administration J. Russell George told a House panel.
Linda Stiff, the IRS’s deputy commissioner for enforcement, told the House Ways and Means Subcommittee on Oversight that her staff has identified 160 potential criminal cases and 115 are now under investigation. In total, 8,000 claims have been flagged for potential criminal fraud, she said. “We are and will continue to vigorously pursue those who filed fraudulent claims for the credit,” Stiff said.
More than 1.2 million borrowers through Oct. 9 have claimed almost $8.5 billion of the $13.6 billion set aside for “first- time” homebuyer tax credits this year, George said. The program is aimed at easing the worst housing slump since the Great Depression.
To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.netDawn Kopecki in Washington at dkopecki@bloomberg.com
Last Updated: October 26, 2009 17:58 EDT
By Ryan J. Donmoyer and Dawn Kopecki
Oct. 26 (Bloomberg) -- Senate leaders are negotiating to extend and gradually reduce an $8,000 tax credit for first-time homebuyers through 2010, Senator Bill Nelson of Florida said.
“We should be able to extend that later this week,” Nelson, a Democrat, told reporters traveling today with President Barack Obama on Air Force One to a speech in Jacksonville, Florida.
Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus of Montana, both Democrats, may seek to add the homebuyers extension to legislation extending unemployment benefits that may be debated as early as this week, according to Regan Lachapelle, an aide to Reid.
Lawmakers are under pressure from real estate agents, mortgage brokers and homebuilders to extend the $8,000 credit before it expires Nov. 30.
Baucus and Reid made a proposal last week to Senate Republicans that would extend the homebuyer credit through 2010, Lachapelle said. First-time homebuyers who close before April 1 would get the full $8,000, and the credit’s value would be reduced by $2,000 in each successive quarter until expiring at the end of the year.
“Relative to current law, this is better. But it’s worse than people are expecting,” said Tom Gallagher, head of policy research in the Washington offices of International Strategy and Investment Group, an independent research firm. “This is a four-month extension and a nine-month phase-out.”
Homebuilder Index
A gauge of 12 homebuilders in Standard & Poor’s indexes slumped 3.4 percent, led by declines of at least 3.8 percent in Pulte Homes Inc. and D.R. Horton Inc.
The proposal was intended to counter one by Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and Senator Johnny Isakson, a Georgia Republican and former real estate agent, to extend the full $8,000 credit through next June and to expand it to all couples earning $300,000 or less. The Baucus-Reid proposal would continue limiting the benefit to first-time homebuyers, Lachapelle said.
The terms for extending the homebuyer tax credit are still being negotiated, Lachapelle said.
House Speaker Nancy Pelosi, a California Democrat, is waiting to see the final Senate agreement before deciding whether to support it. “Generally, we do support extending it,” Pelosi spokesman Nedeam Elshami said. “But it’s premature to say anything until we see what action the Senate takes.”
Business Tax Break
Baucus and Reid also proposed an extension of a business tax break that allows companies with losses in 2008 and 2009 to amend tax returns for any of the previous four years to get a refund of taxes paid. Without the benefit, companies would have to wait years to apply those losses against future profits.
A version of the benefit was included in last February’s economic stimulus bill, though it was limited to companies with receipts under $15 million. A lobbying effort by business groups, including the Washington-based National Association of Manufacturers, to extend the benefit to all companies failed at the time; the Obama administration has since proposed a broader benefit in its budget.
The Reid-Baucus proposal was drafted to have a neutral effect on budget deficits by delaying until 2017 a tax benefit that would let multinational corporations claim more interest deductions. The break, enacted in 2004, is currently slated to take effect in 2011.
Fraudulent Claims
The first-time homebuyer credit, while popular with lawmakers, came under scrutiny last week when government officials said millions of dollars in benefits were erroneously or fraudulently claimed.
The Internal Revenue Service has identified 73,799 claims totaling almost $504 million that may not be from first-time homebuyers. They also found that 582 taxpayers under 18 years old and ineligible to buy a home claimed almost $4 million in credits. Children as young as 4 years old received the credit, Treasury Inspector General for Tax Administration J. Russell George told a House panel.
Linda Stiff, the IRS’s deputy commissioner for enforcement, told the House Ways and Means Subcommittee on Oversight that her staff has identified 160 potential criminal cases and 115 are now under investigation. In total, 8,000 claims have been flagged for potential criminal fraud, she said. “We are and will continue to vigorously pursue those who filed fraudulent claims for the credit,” Stiff said.
More than 1.2 million borrowers through Oct. 9 have claimed almost $8.5 billion of the $13.6 billion set aside for “first- time” homebuyer tax credits this year, George said. The program is aimed at easing the worst housing slump since the Great Depression.
To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.netDawn Kopecki in Washington at dkopecki@bloomberg.com
Last Updated: October 26, 2009 17:58 EDT
Friday, October 30, 2009
Breaking News: Senate Plans to Extend and Expand Tax Credit
[1]RISMEDIA, October 30, 2009—(MCT/The Wall Street Journal)-The Senate has reached a compromise on extending and expanding the $8,000 tax credit for first-time home buyers, a boost the housing industry believes will help it pull out of its two-year-old downturn.
While its passage remains uncertain, the agreement would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000, housing-industry sources said. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House.
Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan are in full support of the Senate’s proposal to both extend and expand the first-time homebuyer tax credit and called on Congress to approve key housing measures that include the tax credit. “We welcome efforts taken by Congress to extend the First-Time Homebuyer Tax Credit for a limited period. This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” said Secretaries Geithner and Donovan. “In extending the credit, we urge Congress to include strict measures to combat tax fraud and protect responsible homeowners.”
The current tax credit did little for the new-home market in September, the Commerce Department recently reported—news that took many industry analysts by surprise. Sales fell 3.6% from August and 7.8% from September 2008. Industry observers had expected a fifth consecutive monthly increase in new-home sales, believing that the tax incentive for qualified first-time buyers—credited with 357,000 sales of previously owned homes so far this year—would do the trick. Instead, sales of typically more expensive newly built houses slipped. “The decline in new-home sales seems to us to be more a function of the attractive pricing available on resales in the current environment than a reflection of weakening demand,” said Michael Feder, president of Radar Logic in New York, which tracks the market.
“Since hitting rock bottom in March, demand is up 20 percent,” said Joel L. Naroff of Naroff Economic Advisers in Holland, Pa. For Naroff, the robust rise in existing-home purchases—9.2% year over year in September—indicated that the housing market was not faltering. “Maybe the issue is supply, which fell to its lowest level in 27 years,” he said. “Builders, at least those left standing, have been making sure they don’t have any houses sitting around, and they have been very successful in controlling inventories.”
IHS Global Insight economist Patrick Newport echoed that, noting new-home inventories “sank for the 29th straight month to their lowest level since November 1982.” Naroff maintained housing has recovered enough to stand without the tax credit, but Newport said that if the credit were not extended and expanded, housing demand would take a hit, and home sales would drop.
The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real estate market a bigger boost while preventing real estate investors from benefitting. While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor.
(c) 2009, The Philadelphia Inquirer.
Distributed by McClatchy-Tribune Information Services.
For more information, visit www.wsj.com [2].
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com [3].
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Seniors Increasingly Realizing Nest Egg in Life Insurance Policies [5]
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While its passage remains uncertain, the agreement would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000, housing-industry sources said. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House.
Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan are in full support of the Senate’s proposal to both extend and expand the first-time homebuyer tax credit and called on Congress to approve key housing measures that include the tax credit. “We welcome efforts taken by Congress to extend the First-Time Homebuyer Tax Credit for a limited period. This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” said Secretaries Geithner and Donovan. “In extending the credit, we urge Congress to include strict measures to combat tax fraud and protect responsible homeowners.”
The current tax credit did little for the new-home market in September, the Commerce Department recently reported—news that took many industry analysts by surprise. Sales fell 3.6% from August and 7.8% from September 2008. Industry observers had expected a fifth consecutive monthly increase in new-home sales, believing that the tax incentive for qualified first-time buyers—credited with 357,000 sales of previously owned homes so far this year—would do the trick. Instead, sales of typically more expensive newly built houses slipped. “The decline in new-home sales seems to us to be more a function of the attractive pricing available on resales in the current environment than a reflection of weakening demand,” said Michael Feder, president of Radar Logic in New York, which tracks the market.
“Since hitting rock bottom in March, demand is up 20 percent,” said Joel L. Naroff of Naroff Economic Advisers in Holland, Pa. For Naroff, the robust rise in existing-home purchases—9.2% year over year in September—indicated that the housing market was not faltering. “Maybe the issue is supply, which fell to its lowest level in 27 years,” he said. “Builders, at least those left standing, have been making sure they don’t have any houses sitting around, and they have been very successful in controlling inventories.”
IHS Global Insight economist Patrick Newport echoed that, noting new-home inventories “sank for the 29th straight month to their lowest level since November 1982.” Naroff maintained housing has recovered enough to stand without the tax credit, but Newport said that if the credit were not extended and expanded, housing demand would take a hit, and home sales would drop.
The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real estate market a bigger boost while preventing real estate investors from benefitting. While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor.
(c) 2009, The Philadelphia Inquirer.
Distributed by McClatchy-Tribune Information Services.
For more information, visit www.wsj.com [2].
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com [3].
For more top headlines on RISMedia.com, be sure to check out:
Credit Card Reform Offers Good News and Bad [4]
Seniors Increasingly Realizing Nest Egg in Life Insurance Policies [5]
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Thursday, October 29, 2009
Stop Paying Your Landlord's Mortgage and Learn How to Own Your Own Home for Pennies Down
Well don't feel trapped any more! A new FREE Special Report entitled "How To Stop Paying Rent and Own Your Own Home" has already helped dozens of local renters get out from under their landlords finger, and move into a wonderful home they can truly call their own. You can make this move too by discovering the important steps detailed in this Free Special Report.
It doesn't matter how long you've been renting, or how insurmountable your financial situation may seem. With the help of this report, it will become suddenly clear to you how you really can save for the down payment and stop wasting thousands of dollars on rent.
To get your FREE copy today visit www.dontpayrentsite.com or call 602-432-9246
Wednesday, October 28, 2009
Tuesday, October 27, 2009
Tuesday, October 6, 2009
TELL CONGRESS TO EXTEND THE HOMEBUYER TAX CREDIT!
Extend the Homebuyer Tax Credit to Assure America’s Economic Recovery
The tax credit is working, homebuyers are using it, sales have increased and it’s helping to move both housing and the economy forward.
But time is running out. Homebuyers have only a few weeks left to put in a contract on a house and benefit from the tax credit—it expires on December 1. Congress should extend the tax credit until December 31, 2010 to allow more homebuyers to take advantage of this incentive and help America’s economy continue to recover.
The first-time homebuyer tax credit is working:
*
Home sales to first-time homebuyers increased by 25% in 2009 and now account for 50% of all sales.
*
The tax credit is reducing the inventory of foreclosures that are sitting on the market, helping our neighborhoods and communities recover.
CLICK HERE TO HAVE YOUR VOICE HEARD
The tax credit is working, homebuyers are using it, sales have increased and it’s helping to move both housing and the economy forward.
But time is running out. Homebuyers have only a few weeks left to put in a contract on a house and benefit from the tax credit—it expires on December 1. Congress should extend the tax credit until December 31, 2010 to allow more homebuyers to take advantage of this incentive and help America’s economy continue to recover.
The first-time homebuyer tax credit is working:
*
Home sales to first-time homebuyers increased by 25% in 2009 and now account for 50% of all sales.
*
The tax credit is reducing the inventory of foreclosures that are sitting on the market, helping our neighborhoods and communities recover.
CLICK HERE TO HAVE YOUR VOICE HEARD
Monday, October 5, 2009
Wednesday, September 23, 2009
Tuesday, September 22, 2009
Mortgage Help For Unemployed Borrowers? - FDIC Has A Plan
The Federal Deposit Insurance Corp has begun to push a plan to help unemployed homeowners at risk of foreclosure to get a temporary break on their mortgage payments.
The FDIC said it is encouraging certain banks to reduce mortgage payments for the unemployed or underemployed for at least six months.
However, initially only a percentage of the unemployed will benefit from this recommended plan because the effort would only apply to a handful of institutions. Specifically, it would affect those that bought failed banks and participate in loss-share agreements with the FDIC. In such deals, the agency covers some of the losses incurred on the assets of the failed banks. Some 53 institutions, mainly regional or community banks have entered into such arrangements since January 2008.
The existing foreclosure-prevention programs, including the president's loan modification plan, generally do not help the jobless because they don't have enough income to sustain even reduced monthly payments. Administration officials have said they are exploring ways to help the unemployed -- including through reduced payments, typically called forbearance plans.
This plan is also in response to the fact that while many servicers have offered forbearance plans in the past, fewer are these days. That's because financial institutions no longer feel that borrowers will be able to land a comparable job within a few months.
Under the FDIC's recommendation, unemployed or underemployed borrowers would have their payments reduced to an affordable level for at least six months. However, unlike a typical forbearance plan, where the arrears would have to be paid back within a year, the FDIC endorses allowing borrowers to catch up over the life of the loan.
Borrowers who cannot afford their payments once they get jobs would be considered for a loan modification program approved by the FDIC, which includes the president's plan. Eligible borrowers could have their monthly payments reduced to 31% of their pre-tax income if doing so would cost less than foreclosing on the home.
In the end the FDIC believes that both modification and forbearance plans could ultimately save the FDIC money if they reduce losses from foreclosure. If and when this plan takes its final shape and moves forward, additional information will be provided.
The FDIC said it is encouraging certain banks to reduce mortgage payments for the unemployed or underemployed for at least six months.
However, initially only a percentage of the unemployed will benefit from this recommended plan because the effort would only apply to a handful of institutions. Specifically, it would affect those that bought failed banks and participate in loss-share agreements with the FDIC. In such deals, the agency covers some of the losses incurred on the assets of the failed banks. Some 53 institutions, mainly regional or community banks have entered into such arrangements since January 2008.
The existing foreclosure-prevention programs, including the president's loan modification plan, generally do not help the jobless because they don't have enough income to sustain even reduced monthly payments. Administration officials have said they are exploring ways to help the unemployed -- including through reduced payments, typically called forbearance plans.
This plan is also in response to the fact that while many servicers have offered forbearance plans in the past, fewer are these days. That's because financial institutions no longer feel that borrowers will be able to land a comparable job within a few months.
Under the FDIC's recommendation, unemployed or underemployed borrowers would have their payments reduced to an affordable level for at least six months. However, unlike a typical forbearance plan, where the arrears would have to be paid back within a year, the FDIC endorses allowing borrowers to catch up over the life of the loan.
Borrowers who cannot afford their payments once they get jobs would be considered for a loan modification program approved by the FDIC, which includes the president's plan. Eligible borrowers could have their monthly payments reduced to 31% of their pre-tax income if doing so would cost less than foreclosing on the home.
In the end the FDIC believes that both modification and forbearance plans could ultimately save the FDIC money if they reduce losses from foreclosure. If and when this plan takes its final shape and moves forward, additional information will be provided.
Sunday, September 6, 2009
Friday, September 4, 2009
Thursday, September 3, 2009
Thursday, August 27, 2009
Wednesday, August 26, 2009
Friday, August 21, 2009
Housing Affordability Continues to Hover Near Highest Level in 18 Years
August 21, 2009-Bolstered by affordable interest rates and low prices, nationwide housing affordability during the second quarter of 2009 continued to hover near its highest level since the series began 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).
The HOI showed that 72.3% of all new and existing homes sold in the second quarter of 2009 were affordable to families earning the national median income of $64,000, down only slightly from the record-high 72.5% during the previous quarter and up from 55.0% during the second quarter of 2008.
“The increase in affordability-along with the $8,000 federal tax credit for home buyers-is stimulating demand, particularly among young, first-time buyers,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “But to keep the recent upturn in home sales going into next year, Congress will need to extend the tax credit for another year and make it available to all buyers in an effort to encourage activity in the trade-up market.”
Robson noted that the tax credit, which expires on Nov. 30, is currently limited to just buyers purchasing their first home.
Indianapolis, once again, was the most affordable major housing market in the country during the second quarter. Almost 95% of all homes sold were affordable to households earning the area’s median family income of $68,100. Indianapolis has now topped the affordability list 16 consecutive quarters.
Also near the top of the list of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa.; Detroit-Livonia-Dearborn, Mich.; Dayton, Ohio; and Grand Rapids-Wyoming, Mich.
Several smaller housing markets posted even higher affordability scores than Indianapolis, with Kokomo, Ind. outscoring all others. There, almost 98% of homes sold during the second quarter of 2009 were affordable to median-income earners. Other small housing markets ahead of Indianapolis on the affordability scale included Lansing-East Lansing, Mich.; Mansfield, Ohio; Elkhart-Goshen, Ind.; Lima, Ohio; and Bay City, Mich.
New York-White Plains-Wayne, N.Y.-N.J., where just over 21% of all homes sold during the period were affordable to those earning the median income of $64,800, was once again the nation’s least affordable major housing market in the second quarter. This was the New York metro area’s fifth consecutive appearance at the bottom of the list. Other major metro areas near the bottom of the affordability chart included San Francisco; Honolulu; Los Angeles-Long Beach-Glendale, Calif.; and Santa Ana-Anaheim-Irvine, Calif.
Among smaller metro areas, San Luis Obispo-Paso Robles, Calif. was the least affordable market, followed by Ocean City, N.J.; Santa Cruz-Watsonville, Calif.; Flagstaff, Ariz.; and Santa Barbara-Santa Maria-Goleta, Calif., respectively.
For more information, visit www.nahb.org.
Read more: http://rismedia.com/2009-08-20/housing-affordability-continues-to-hover-near-highest-level-in-18-years/#ixzz0Opc4GaKk
The HOI showed that 72.3% of all new and existing homes sold in the second quarter of 2009 were affordable to families earning the national median income of $64,000, down only slightly from the record-high 72.5% during the previous quarter and up from 55.0% during the second quarter of 2008.
“The increase in affordability-along with the $8,000 federal tax credit for home buyers-is stimulating demand, particularly among young, first-time buyers,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “But to keep the recent upturn in home sales going into next year, Congress will need to extend the tax credit for another year and make it available to all buyers in an effort to encourage activity in the trade-up market.”
Robson noted that the tax credit, which expires on Nov. 30, is currently limited to just buyers purchasing their first home.
Indianapolis, once again, was the most affordable major housing market in the country during the second quarter. Almost 95% of all homes sold were affordable to households earning the area’s median family income of $68,100. Indianapolis has now topped the affordability list 16 consecutive quarters.
Also near the top of the list of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa.; Detroit-Livonia-Dearborn, Mich.; Dayton, Ohio; and Grand Rapids-Wyoming, Mich.
Several smaller housing markets posted even higher affordability scores than Indianapolis, with Kokomo, Ind. outscoring all others. There, almost 98% of homes sold during the second quarter of 2009 were affordable to median-income earners. Other small housing markets ahead of Indianapolis on the affordability scale included Lansing-East Lansing, Mich.; Mansfield, Ohio; Elkhart-Goshen, Ind.; Lima, Ohio; and Bay City, Mich.
New York-White Plains-Wayne, N.Y.-N.J., where just over 21% of all homes sold during the period were affordable to those earning the median income of $64,800, was once again the nation’s least affordable major housing market in the second quarter. This was the New York metro area’s fifth consecutive appearance at the bottom of the list. Other major metro areas near the bottom of the affordability chart included San Francisco; Honolulu; Los Angeles-Long Beach-Glendale, Calif.; and Santa Ana-Anaheim-Irvine, Calif.
Among smaller metro areas, San Luis Obispo-Paso Robles, Calif. was the least affordable market, followed by Ocean City, N.J.; Santa Cruz-Watsonville, Calif.; Flagstaff, Ariz.; and Santa Barbara-Santa Maria-Goleta, Calif., respectively.
For more information, visit www.nahb.org.
Read more: http://rismedia.com/2009-08-20/housing-affordability-continues-to-hover-near-highest-level-in-18-years/#ixzz0Opc4GaKk
Wednesday, August 19, 2009
$8,000 Home Buyer Tax Credit
$8,000 Home Buyer Tax Credit
The law states that to qualify, the purchase must be complete prior to December 1, 2009. This means that you must have a Final HUD-1 settlement statement for a funded/recorded transaction by November 30, 2009.
The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
The tax credit does not have to be repaid.
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
Frequently Asked Questions About the Home Buyer Tax Credit
The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.
The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.
Who is eligible to claim the tax credit?
What is the definition of a first-time home buyer?
How is the amount of the tax credit determined?
Are there any income limits for claiming the tax credit?
What is "modified adjusted gross income"?
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Can you give me an example of how the partial tax credit is determined?
How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
How do I claim the tax credit? Do I need to complete a form or application?
What types of homes will qualify for the tax credit?
I read that the tax credit is "refundable." What does that mean?
I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
I am not a U.S. citizen. Can I claim the tax credit?
Is a tax credit the same as a tax deduction?
I bought a home in 2008. Do I qualify for this credit?
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
The Secretary of Housing and Urban Development has announced that HUD will allow "monetization" of the tax credit. What does that mean?
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
Are there any income limits for claiming the tax credit?
Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.
To determine modified adjusted gross income (MAGI), add to AGI certain amounts of foreign-earned income. See IRS Form 5405 for more details.
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phase-out limits.
Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by the phase-out range of $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by the phase-out range of $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.
Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns). No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.
What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
It is important to note that you cannot purchase a home from your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse. Please consult with your tax advisor for more information. Also see IRS Form 5405.
I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).
I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.
Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.
In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.
I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
No. You can claim only one.
I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.
A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.
I bought a home in 2008. Do I qualify for this credit?
No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit. Please consult with your tax advisor for more information.
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down payment.
Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
In addition, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. As a result, some state housing finance agencies have introduced programs that provide short-term second mortgage loans that may be used to fund a down payment. Prospective home buyers should check with their state housing finance agency to see if such a program is available in their community. To date, 14 state agencies have announced tax credit assistance programs, and more are expected to follow suit. The National Council of State Housing Agencies (NCSHA) has compiled a list of such programs, which can be found here.
The Secretary of Housing and Urban Development has announced that HUD will allow "monetization" of the tax credit. What does that mean?
It means that HUD will allow buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 income taxes to receive a refund. These funds may be used for certain down payment and closing cost expenses.
Under the guidelines announced by HUD, non-profits and FHA-approved lenders will be allowed to give home buyers short-term loans of up to $8,000.
The guidelines also allow government agencies, such as state housing finance agencies, to facilitate home sales by providing longer term loans secured by second mortgages.
Housing finance agencies and other government entities may also issue tax credit loans, which home buyers may use to satisfy the FHA 3.5 percent down payment requirement.
In addition, approved FHA lenders will also be able to purchase a home buyer’s anticipated tax credit to pay closing costs and down payment costs above the 3.5 percent down payment that is required for FHA-insured homes.
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phase-out would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.
The law states that to qualify, the purchase must be complete prior to December 1, 2009. This means that you must have a Final HUD-1 settlement statement for a funded/recorded transaction by November 30, 2009.
The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
The tax credit does not have to be repaid.
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
Frequently Asked Questions About the Home Buyer Tax Credit
The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.
The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.
Who is eligible to claim the tax credit?
What is the definition of a first-time home buyer?
How is the amount of the tax credit determined?
Are there any income limits for claiming the tax credit?
What is "modified adjusted gross income"?
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Can you give me an example of how the partial tax credit is determined?
How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
How do I claim the tax credit? Do I need to complete a form or application?
What types of homes will qualify for the tax credit?
I read that the tax credit is "refundable." What does that mean?
I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
I am not a U.S. citizen. Can I claim the tax credit?
Is a tax credit the same as a tax deduction?
I bought a home in 2008. Do I qualify for this credit?
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
The Secretary of Housing and Urban Development has announced that HUD will allow "monetization" of the tax credit. What does that mean?
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
Are there any income limits for claiming the tax credit?
Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.
To determine modified adjusted gross income (MAGI), add to AGI certain amounts of foreign-earned income. See IRS Form 5405 for more details.
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phase-out limits.
Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by the phase-out range of $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by the phase-out range of $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.
Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns). No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.
What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
It is important to note that you cannot purchase a home from your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse. Please consult with your tax advisor for more information. Also see IRS Form 5405.
I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).
I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.
Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.
In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.
I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
No. You can claim only one.
I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.
A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.
I bought a home in 2008. Do I qualify for this credit?
No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit. Please consult with your tax advisor for more information.
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down payment.
Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
In addition, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. As a result, some state housing finance agencies have introduced programs that provide short-term second mortgage loans that may be used to fund a down payment. Prospective home buyers should check with their state housing finance agency to see if such a program is available in their community. To date, 14 state agencies have announced tax credit assistance programs, and more are expected to follow suit. The National Council of State Housing Agencies (NCSHA) has compiled a list of such programs, which can be found here.
The Secretary of Housing and Urban Development has announced that HUD will allow "monetization" of the tax credit. What does that mean?
It means that HUD will allow buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 income taxes to receive a refund. These funds may be used for certain down payment and closing cost expenses.
Under the guidelines announced by HUD, non-profits and FHA-approved lenders will be allowed to give home buyers short-term loans of up to $8,000.
The guidelines also allow government agencies, such as state housing finance agencies, to facilitate home sales by providing longer term loans secured by second mortgages.
Housing finance agencies and other government entities may also issue tax credit loans, which home buyers may use to satisfy the FHA 3.5 percent down payment requirement.
In addition, approved FHA lenders will also be able to purchase a home buyer’s anticipated tax credit to pay closing costs and down payment costs above the 3.5 percent down payment that is required for FHA-insured homes.
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phase-out would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.
Friday, July 24, 2009
City of Phoenix Neighborhood Stabilization Program (NSP) Information
Neighborhood Stabilization Program (NSP) InformationOn July 30, 2008, President Bush signed into law the Housing and Economic Recovery Act of 2008 (HERA) to address the severe housing crisis. Title III of the Act appropriates $3.92 billion of grant funds under the Neighborhood Stabilization Program (NSP) for states and local governments to purchase and redevelop abandoned or foreclosed properties. The HERA directed the United States Department of Housing and Urban Development (HUD) and the city of Phoenix to target funding to areas with the greatest needs based on the extent of foreclosures, subprime mortgages, and mortgage delinquencies and defaults.
As funding recepients, city, county and state agencies must develop their own programs and funding priorities. However, they must use at least 25 percent of the funds appropriated for the purchase and redevelopment of abandoned or foreclosed homes or residential properties that will be used to house individuals or families whose incomes do not exceed 50 percent of the area median income. In addition, all activities funded by NSP must benefit low- and moderate-income persons whose income does not exceed 120 percent of area median income.
The city of Phoenix has kicked off their first program, "Homeownership Assistance" assisting buyers of foreclosed homes, townhouses or condominiums with $15,000 in downpayment and closing cost assistance. If you are interested in finding out how to purchase a foreclosed property using this program please see the information links below
"Buying a Foreclosed Property". If you are a a real estate professional or a lender or a mortgage broker representing a foreclosed property, please see the information links in the box below "Information for Real Estate Professionals and Lenders".
Saturday, June 13, 2009
NFSTI Certified REO Specialist
I just attended an extremely helpful seminar hosted by NFSTI National Foreclosure Sales Training Institute. In my quest for knowledge I feel the need to learn the most I can about how the inner workings of REO (Real Estate Owned) business is done. Many of the baffling questions about how the banks do business were answered. I had several AH-HA's. The REO business is going strong and will continue to dominate out market for quite some time. I met an asset manager, that was very enlightening. I now have a much clearer picture of what an asset manager does and how it is done. There is nothing like having someone who does it daily explain how it works. I will have NFSTI Certified Foreclosure Specialist designation with the vast experience of their instructors at my finger tips. Instructors with real life experience. I'm sure you must have some questions about what i learned. Please give me a call 602-432-9246, I'd be happy to share what I learned at this excellent seminar.
Visit my website and search the MLS FREE anytime! www.sylviahoward.com
Click here for FREE Real Estate Reports
Until next time!
Follow me on twitter
Have a Great weekend!
Visit my website and search the MLS FREE anytime! www.sylviahoward.com
Click here for FREE Real Estate Reports
Until next time!
Follow me on twitter
Have a Great weekend!
Sunday, June 7, 2009
Making Home Affordable Program
On February 18, 2009, President Obama announced his Making Home Affordable Program (MHA), designed to help up to 7-9 million families avoid foreclosure by restructuring or refinancing their mortgages. In doing so, the plan not only helps responsible homeowners behind on their payments or at risk of defaulting, but prevents neighborhoods and communities from being pulled over the edge too, as defaults and foreclosures contribute to falling home values, failing local businesses, and lost jobs.
For more detailed information, visit MakingHomeAffordable.gov.
Making Home Affordable Program (MHA):
Guidelines and Latest News
The Plan
On March 4, 2009, the Obama Administration announced new U.S. Department of the Treasury guidelines to enable servicers to begin modifications of eligible mortgages under the Administration's Making Home Affordable Program (MHA) – announced by President Barack Obama on February 28, 2009.
NAR's Detailed Summary of the Obama Housing Plan> (PDF: 112K)
Key Components of the Plan>
Modification of Second Mortgages
On April 28, 2009, the Treasury Department announced an expansion of the Making Home Affordable Program (MHA) to help reduce payments on second mortgages.
Modification of Second Mortgages under the Making Home Affordable Program> (Treasury Dept.)
Financial Incentives and Uniform Process for Short Sales - The Foreclosure Alternatives Program (FAP)
On May 14, 2009, Treasury Secretary Geithner and HUD Secretary Donovan announced new details on the Making Home Affordable Program to help homeowners facing foreclosure.
Treasury Department press release> (Treasury Dept.)
Realtors® Help Buyers, Sellers Navigate Short Sales>
Uniform Process for Short Sales Will Help Struggling Home Owners>
View detailed guidelines> (PDF: 316K)
Treasury's FAP factsheet> (PDF: 44K)
Visit the Treasury Department links below for the latest guidelines and information:
Making Home Affordable - Summary of Guidelines> (PDF: 53K)
Borrower Information: Making Home Affordable Refinance and Modification Options
Borrower Q&As> (PDF: 82K)
Housing Counselor Q&As> (PDF: 72K)
Modification Program Guidelines> (PDF: 90K)
Fact Sheet - Updated Detailed Program Description> (PDF: 73K)
Modification of Second Mortgages under the Making Home Affordable Program>
New Details of the Program to Help Homeowners Facing Foreclosure>
Fact Sheet - The Foreclosure Alternative Program (FAP)> (PDF: 44K)
Making Home Affordable Progress Report, May 14, 2009> (PDF: 20K)
Fannie Mae and Freddie Mac Guidelines
Fannie Mae and Freddie Mac released guidelines on refinancing and loan modification options that implement President Obama's Making Home Affordable Program.
GSEs Home Affordable Refinancing Programs>
GSEs Home Affordable Modification Programs>
Determining if a borrower's loan is owned or securitized by Fannie Mae or Freddie Mac:
For Fannie Mae, 1-800-7FANNIE (8am to 8pm EST).
www.fanniemae.com/loanlookup
Freddie Mac, 1-800-FREDDIE (8am to 8pm EST)
www.freddiemac.com/avoidforeclosure
For more detailed information, visit MakingHomeAffordable.gov.
Making Home Affordable Program (MHA):
Guidelines and Latest News
The Plan
On March 4, 2009, the Obama Administration announced new U.S. Department of the Treasury guidelines to enable servicers to begin modifications of eligible mortgages under the Administration's Making Home Affordable Program (MHA) – announced by President Barack Obama on February 28, 2009.
NAR's Detailed Summary of the Obama Housing Plan> (PDF: 112K)
Key Components of the Plan>
Modification of Second Mortgages
On April 28, 2009, the Treasury Department announced an expansion of the Making Home Affordable Program (MHA) to help reduce payments on second mortgages.
Modification of Second Mortgages under the Making Home Affordable Program> (Treasury Dept.)
Financial Incentives and Uniform Process for Short Sales - The Foreclosure Alternatives Program (FAP)
On May 14, 2009, Treasury Secretary Geithner and HUD Secretary Donovan announced new details on the Making Home Affordable Program to help homeowners facing foreclosure.
Treasury Department press release> (Treasury Dept.)
Realtors® Help Buyers, Sellers Navigate Short Sales>
Uniform Process for Short Sales Will Help Struggling Home Owners>
View detailed guidelines> (PDF: 316K)
Treasury's FAP factsheet> (PDF: 44K)
Visit the Treasury Department links below for the latest guidelines and information:
Making Home Affordable - Summary of Guidelines> (PDF: 53K)
Borrower Information: Making Home Affordable Refinance and Modification Options
Borrower Q&As> (PDF: 82K)
Housing Counselor Q&As> (PDF: 72K)
Modification Program Guidelines> (PDF: 90K)
Fact Sheet - Updated Detailed Program Description> (PDF: 73K)
Modification of Second Mortgages under the Making Home Affordable Program>
New Details of the Program to Help Homeowners Facing Foreclosure>
Fact Sheet - The Foreclosure Alternative Program (FAP)> (PDF: 44K)
Making Home Affordable Progress Report, May 14, 2009> (PDF: 20K)
Fannie Mae and Freddie Mac Guidelines
Fannie Mae and Freddie Mac released guidelines on refinancing and loan modification options that implement President Obama's Making Home Affordable Program.
GSEs Home Affordable Refinancing Programs>
GSEs Home Affordable Modification Programs>
Determining if a borrower's loan is owned or securitized by Fannie Mae or Freddie Mac:
For Fannie Mae, 1-800-7FANNIE (8am to 8pm EST).
www.fanniemae.com/loanlookup
Freddie Mac, 1-800-FREDDIE (8am to 8pm EST)
www.freddiemac.com/avoidforeclosure
Thursday, June 4, 2009
HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
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DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
FHA plan will stimulate new home sales and help stabilize housing market
WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.
According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.
Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.
For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.
source www.hud.gov
DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
FHA plan will stimulate new home sales and help stabilize housing market
WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.
According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.
Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.
For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.
source www.hud.gov
Monday, May 18, 2009
HUD Secretary Announces Monetization of Tax Credit at NAR Real Estate Summit
WASHINGTON, May 12, 2009
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the
Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment.
Donovan’s remarks came in an address to several thousand Realtors® gathered this morning at The Real Estate Summit: Advancing the U.S. Economy, a special daylong session at the Realtors® Midyear Legislative Meetings & Trade Expo here.
Secretary Donovan said that important changes, which the National Association of Realtors® has been calling for, will help consumers purchase a home. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment,” Donovan said. According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
Donovan said the Obama administration plans to further stabilize the housing market. “I do think we have some early signs hat the market overall is stabilizing,” said Donovan. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said, “As the leading advocate for housing issues and homeownership, NAR continues to take a leadership role in promoting ideas for improving our economy by stabilizing the housing and real estate markets. Today we have the best of the best to begin a dialogue, develop solutions and initiate action toward real estate and economic recovery.”
The morning session included a panel discussion that was moderated by CNBC’s Ron Insana. The 13 panelists and Realtors® in attendance examined cutting-edge solutions necessary to promote and preserve homeownership and real estate development, stimulate the economy, and protect the nation’s taxpayers. They also shared their ideas on what the role and responsibility of the federal government is in the revitalization effort.
The list of distinguished panelists include Dr. Martin Feldstein, professor of Economics from Harvard University; Dr. Barry Bluestone, professor of Political Economy from Northeastern University; John Taylor, CEO of the National Community Reinvestment Coalition; Maria Kong, president of the National Association of Real Estate Brokers; and Sarah Rosen Wartell, executive vice president for the Center for American Progress.
“Right now the Federal Reserve is the market,” said Jay Brinkman, chief economist for the Mortgage Bankers Association. “What will be the effect when the Fed stops buying?” Brinkman explained that an exit strategy must be planned for the long-term; the federal government cannot continue to support the mortgage markets indefinitely.
“We must make sure FHA and the GSEs are supported,” added the Wharton School’s Susan Wachter.
“We are thrilled that so many high-caliber individuals were able to join us today at this important meeting to promote stability in the housing market and the U.S. economy,” McMillan said. “We look forward to an ongoing dialogue and action toward this goal, during our midyear meetings this week and beyond.”
The real estate summit is part of the Realtors® Midyear Legislative Meetings & Trade Expo here through Saturday. During the week, more than 8,500 Realtors® will attend meetings, visit lawmakers and inspire action on Capitol Hill.
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the
Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment.
Donovan’s remarks came in an address to several thousand Realtors® gathered this morning at The Real Estate Summit: Advancing the U.S. Economy, a special daylong session at the Realtors® Midyear Legislative Meetings & Trade Expo here.
Secretary Donovan said that important changes, which the National Association of Realtors® has been calling for, will help consumers purchase a home. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment,” Donovan said. According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
Donovan said the Obama administration plans to further stabilize the housing market. “I do think we have some early signs hat the market overall is stabilizing,” said Donovan. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said, “As the leading advocate for housing issues and homeownership, NAR continues to take a leadership role in promoting ideas for improving our economy by stabilizing the housing and real estate markets. Today we have the best of the best to begin a dialogue, develop solutions and initiate action toward real estate and economic recovery.”
The morning session included a panel discussion that was moderated by CNBC’s Ron Insana. The 13 panelists and Realtors® in attendance examined cutting-edge solutions necessary to promote and preserve homeownership and real estate development, stimulate the economy, and protect the nation’s taxpayers. They also shared their ideas on what the role and responsibility of the federal government is in the revitalization effort.
The list of distinguished panelists include Dr. Martin Feldstein, professor of Economics from Harvard University; Dr. Barry Bluestone, professor of Political Economy from Northeastern University; John Taylor, CEO of the National Community Reinvestment Coalition; Maria Kong, president of the National Association of Real Estate Brokers; and Sarah Rosen Wartell, executive vice president for the Center for American Progress.
“Right now the Federal Reserve is the market,” said Jay Brinkman, chief economist for the Mortgage Bankers Association. “What will be the effect when the Fed stops buying?” Brinkman explained that an exit strategy must be planned for the long-term; the federal government cannot continue to support the mortgage markets indefinitely.
“We must make sure FHA and the GSEs are supported,” added the Wharton School’s Susan Wachter.
“We are thrilled that so many high-caliber individuals were able to join us today at this important meeting to promote stability in the housing market and the U.S. economy,” McMillan said. “We look forward to an ongoing dialogue and action toward this goal, during our midyear meetings this week and beyond.”
The real estate summit is part of the Realtors® Midyear Legislative Meetings & Trade Expo here through Saturday. During the week, more than 8,500 Realtors® will attend meetings, visit lawmakers and inspire action on Capitol Hill.
Sunday, May 17, 2009
Economy: Federal Efforts May Be Taking Hold
The housing stimulus package passed by the federal government earlier this year is working its way through the system.
By Lawrence Yun | May 2009
Are housing markets finally turning around? Existing-home sales increased 5.1 percent in February to a seasonally adjusted annual rate of 4.72 million units. The rise seems sharp but comes off exceptionally soft activity in January, so we’re far from declaring victory. Yet several developments give us reason to hope for a sustainable upturn.
First, the housing stimulus package passed by the federal government earlier this year is working its way through the system. Among other things, it provides a first-time home buyer tax credit of up to $8,000. From this incentive we estimate an additional 300,000 sales this year, plus additional sales as trade-up and trade-down buyers jump into the market. The package also restores high-cost conforming loan limits to $729,750, giving more people access to low mortgage rates.
When you combine these stimulus efforts with recent action by the Federal Reserve to increase its use of economic recovery funds to buy mortgage-backed securities, mortgage rates could stay at historically favorable levels for some time.
Affordability also is working for us. Housing affordability levels are at their most favorable mark since the NATIONAL ASSOCIATION OF REALTORS® first started tracking the data in 1971.
To be sure, some hurdles still exist. Underwriting standards are tough, creating a snag for many households that would like to buy. But those who qualify can lock in low rates and enjoy the upper hand in price negotiations.
It’s too soon to tell whether the upturn will last. The homebuying process takes several months, so we’ll need to wait until early summer before we know whether everything the federal government is doing is taking hold. But for now we have reason to hope for the best.
By Lawrence Yun | May 2009
Are housing markets finally turning around? Existing-home sales increased 5.1 percent in February to a seasonally adjusted annual rate of 4.72 million units. The rise seems sharp but comes off exceptionally soft activity in January, so we’re far from declaring victory. Yet several developments give us reason to hope for a sustainable upturn.
First, the housing stimulus package passed by the federal government earlier this year is working its way through the system. Among other things, it provides a first-time home buyer tax credit of up to $8,000. From this incentive we estimate an additional 300,000 sales this year, plus additional sales as trade-up and trade-down buyers jump into the market. The package also restores high-cost conforming loan limits to $729,750, giving more people access to low mortgage rates.
When you combine these stimulus efforts with recent action by the Federal Reserve to increase its use of economic recovery funds to buy mortgage-backed securities, mortgage rates could stay at historically favorable levels for some time.
Affordability also is working for us. Housing affordability levels are at their most favorable mark since the NATIONAL ASSOCIATION OF REALTORS® first started tracking the data in 1971.
To be sure, some hurdles still exist. Underwriting standards are tough, creating a snag for many households that would like to buy. But those who qualify can lock in low rates and enjoy the upper hand in price negotiations.
It’s too soon to tell whether the upturn will last. The homebuying process takes several months, so we’ll need to wait until early summer before we know whether everything the federal government is doing is taking hold. But for now we have reason to hope for the best.
Saturday, May 9, 2009
Realtors® Push Mortgage Reform
WASHINGTON, May 05, 2009
Home buyers must be protected against mortgage lending abuses while being assured of access to affordable mortgages. Toward this end, the National Association of Realtors® today expressed its support of H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act of 2009.
“Realtors® have a strong stake in preventing abusive lending for many reasons. Beyond the devastating impact on individuals and families, abusive lending erodes confidence in the nation’s housing system, and entire communities are harmed whenever abusive lending strips equity from homeowners,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.
As consumer abuse in mortgage lending increased in the earlier part of this decade, Realtors® established a set of “Responsible Lending Principles” in 2005 with the goal of protecting consumers in the housing market. “After years of sharing our Responsible Lending Principles with Congress, NAR is extremely pleased that H.R. 1728, which embodies these principles, is set to be voted on this week,” McMillan said.
In a letter to Congress, NAR expressed strong support for H.R. 1728, including measures to ensure that all mortgage originators act in good faith and that all parties in a real estate transaction are treated honestly. “We ask members of Congress to indicate their support of consumers and the housing market by voting in favor of this important legislation,” said McMillan.
“On behalf of our members and consumers nationwide, NAR is committed to ending abusive and predatory lending practices and will continue to advocate sound, responsible legislation. We urge quick passage of this bill and swift implementation of penalties to those who dare to act dishonestly,” McMillan said.
Home buyers must be protected against mortgage lending abuses while being assured of access to affordable mortgages. Toward this end, the National Association of Realtors® today expressed its support of H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act of 2009.
“Realtors® have a strong stake in preventing abusive lending for many reasons. Beyond the devastating impact on individuals and families, abusive lending erodes confidence in the nation’s housing system, and entire communities are harmed whenever abusive lending strips equity from homeowners,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.
As consumer abuse in mortgage lending increased in the earlier part of this decade, Realtors® established a set of “Responsible Lending Principles” in 2005 with the goal of protecting consumers in the housing market. “After years of sharing our Responsible Lending Principles with Congress, NAR is extremely pleased that H.R. 1728, which embodies these principles, is set to be voted on this week,” McMillan said.
In a letter to Congress, NAR expressed strong support for H.R. 1728, including measures to ensure that all mortgage originators act in good faith and that all parties in a real estate transaction are treated honestly. “We ask members of Congress to indicate their support of consumers and the housing market by voting in favor of this important legislation,” said McMillan.
“On behalf of our members and consumers nationwide, NAR is committed to ending abusive and predatory lending practices and will continue to advocate sound, responsible legislation. We urge quick passage of this bill and swift implementation of penalties to those who dare to act dishonestly,” McMillan said.
Tuesday, May 5, 2009
NAR: Pending Home Sales, Affordability Rise
Daily Real Estate News | May 4, 2009 |
SharePending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the latest report by the NATIONAL ASSOCIATION OF REALTORS ®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82 in February. It is 1.1 percent higher than March 2008 when it was 83.7.
Lawrence Yun, NAR chief economist, says it should take a few months for the market to gain momentum.
“This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a down payment,” he says. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”
By Region
Here is a breakdown of pending home sales by region:
- South: rose 8.5 percent to 93.2 in March and is 7.7 percent above a year ago.
- West: increased 3.9 percent to 93.1 and is 1.7 percent higher than March 2008.
- Northeast: fell 5.7 percent to 59.5 in March and is 24.1 percent below a year ago.
- Midwest: slipped 1 percent to 82.3 but is 8.2 percent higher than March 2008.
NAR: Affordability Remains High
Meanwhile, NAR’s Housing Affordability Index remained near record highs.
The affordability index was 166.7 in March – down from an upwardly revised record of 174.4 in February due to higher home prices in March. The index remains 30.8 percentage points higher than a year ago.
The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tracking began in 1970.
NAR President Charles McMillan says the increase in buying power is quite remarkable.
“Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” he says. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable. Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique.”
A median-income family, earning $61,100, could afford a home costing $291,600 in March with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest.
Affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of that amount. The affordable price was notably higher than the median existing single-family home price in March, which was $174,900.
Source: NAR
Learn more about the 2009 first-time home buyer tax credit >
Saturday, March 28, 2009
Rental Properties to Lead Recovery, Experts Say
Housing experts predict that multi-family rental properties and apartments will recover fastest from the current downturn, followed by housing in cities that didn’t overbuild.
The market is likely to hit bottom in the next few months, says Bernard Markstein, senior economist and director of forecasting for the National Association of Home Builders.
"Next year will see slow but steady improvement, as home builders are controlling their inventory," Markstein says.
Apartments and other multi-family residences will snap back quickly once businesses start hiring again, predicts Victor Calanog, director of research at Reis.
Baby boomers looking for retirement homes and first-time home buyers also will lead the way out of the decline, predicts Bill Singer, a securities attorney and trader who is a member of Forbes.com’s panel of financial gurus.
Source: Forbes.com, Madalina Iacob (03/18/2009)
Tuesday, March 3, 2009
Homeowner Affordability and Stability Plan
The following is taken directly from the U.S. Treasury in regard to the Homeowner Affordability and Stability Plan. It provides answers to many common questions about the new program announced by President Obama to help current homeowners. Full guidelines for the new program are set to be released on Wednesday March 4, 2009.
Also remember, the first time buyer is eligible for a direct tax credit of the greater of 10% of purchase price or $8,000 on either the '08 or '09 tax return.
Borrowers Who Are Current on Their Mortgage Are Asking:
1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?
Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.
2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
3. How do I know if I am eligible?
Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.
4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.
5. Will refinancing lower my payments?
The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable
payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a "Good Faith Estimate" that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
6. What are the interest rate and other terms of this refinance offer?
The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.
7. Will refinancing reduce the amount that I owe on my loan?
No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.
8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?
To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.
9. When can I apply?
Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.
10. What should I do in the meantime?
You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:
information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
-your most recent income tax return
-information about any second mortgage on the house
-payments on each of your credit cards if you are carrying balances from month to month, ----and payments on other loans such as student loans and car loans.
Borrowers Who Are at Risk of Foreclosure Are Asking:
1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?
The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.
2. Do I need to be behind on my mortgage payments to be eligible for a modification?
No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.
3. How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?
In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.
4. I do not live in the house that secures the mortgage I'd like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?
No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.
5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?
Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.
6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?
Only the first mortgage is eligible for a modification.
7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?
The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender's discretion modifications may include upfront reductions of loan principal.
8. I heard the government was providing a financial incentive to borrowers. Is that true?
Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.
9. How much will a modification cost me?
There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.
10. Is my lender required to modify my loan?
No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.
11. I'm already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?
Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.
12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?
You may not need to do anything at this time. Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks. If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or a HUD-approved housing counselor. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.
13. What should I do in the meantime?
You should gather the information that you will need to provide to your lender on or after March 4, when the modification program becomes available. This includes information about the monthly gross income of your household including recent pay stubs if you receive them or documentation of income you receive from other sources
-your most recent income tax return
-information about any second mortgage on the house
-payments on each of your credit cards if you are carrying balances from month to month, and payments on other loans such as student loans and car loans.
14. My loan is scheduled for foreclosure soon. What should I do?
Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower's eligibility. We support this effort.
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