HUD

Could the Tax Credit Be Extended Again?

The pressure is increasing on Congress to renew the homebuyer tax credits for a third time.

The first $7,500 tax credit was passed in 2008 and required first-time buyers to repay the credit over 15 years. A few months later in 2009, Congress expanded the credit to a maximum of $8,000 that didn’t have to be paid back.

At the end of last year, Congress extended the benefit again until April 30 with an extra two months on top of that to close. A new credit of $6,500 was added for move-up buyers, too.

Now representatives of the housing industry are lobbying for another extension. Some experts, including Mark Zandi, chief economist at Moody’s Economy.com, who supported the earlier credits, think the time has come to let it go.

“It’s worn out its benefit,” he says. “If you extend it again, it isn’t going to do much, and what you’re doing is providing a tax break to folks who bought anyway.”

Source: The Wall Street Journal, Nick Timiraos (02/22/2010)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

HUD

Some Lenders Skirt GFE Requirements

Some lenders are avoiding the requirement that they lock in the good faith estimate by providing something loan officers are calling “worksheets” or “loan scenario forms” that don’t have to meet a government accuracy standard.

The worksheets contain some of the information provided by a good faith estimate. They are typically provided to shoppers who don’t provide – and often aren’t asked to provide – key information, such as the address of the property to be financed.

Loan officers defend the worksheets, saying that it is impossible to provide completely accurate estimates. But Vicki Bott, a deputy assistant secretary for the Department of Housing and Urban Development, says if these worksheets turn out to be a way for lenders to avoid meeting their obligations, the department will respond by tightening the guidelines.

Meanwhile, buyers should ask for the good-faith estimate by name, so they get an accurate estimate of costs.

Source: Washington Post Writers Group, Kenneth Harney (01/15/2010)

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Elliott Robinson, JD – Associate Broker

Keller Williams Realty Metro Atlanta

315 West Ponce de Leon Ave., Ste. 100

Decatur, GA 30030

(404) 431-2117

Web: www.elliottyouragent.com

Blog – www.elliottonrealestate.com

Twitter – http://twitter.com/elliottrob

HUD

FHA Delays Implementing Rules for Condo Loans

The Federal Housing Administration says it will implement a new approval process for condo financing on Dec. 7 – the second time the deadlines have been pushed back. The delay also brings a relaxation of new rules, according to the Mortgage Bankers Association, which has been negotiating with FHA.

Under the latest iteration of the rules, 50 percent of units in a condo project will be eligible for FHA funding and up to 100 percent will be eligible in “well-established” projects with a minimum of 10 percent reserves. Half of the units will have to be sold to owner-occupants before FHA will back any loans.

In an important move, FHA said it wouldn’t require the recertification of some 40,000 projects that have already been certified for FHA financing.

“If what the MBA says is the deal, it’s essentially a nonevent,” said mortgage banker Faramarz Moeen-Ziai.

The U.S. Department of Housing and Urban Development confirmed a delay in implementation but wouldn’t comment on the changes the MBA says FHA has agreed to.

Source: Inman News, Matt Carter (11/05/2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
(404) 431-2117
Web: www.elliottyouragent.com
Blog – www.elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

HUD

Mortgage Brokers Try to Change Appraisal Rules

The National Association of Mortgage Brokers spent nearly $1.1 million in the second quarter to persuade legislators that the new rules for home appraisals discourage sales and push down prices.

The new rules, which took effect May 1, prevent mortgage brokers from ordering appraisals. Only a mortgage lender can order an appraisal, and they must do it in a hands-off way.

The association lobbied Congress, the Federal Reserve, the Federal Trade Commission, and the Department of Housing and Urban Development, according to a filing with the House clerk’s office. In all, the mortgage brokers have spent $1.5 million lobbying in 2009.

Source: The Associated Press

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

HUD

FHA Program Offers Purchase, Renovation Aid

The Federal Housing Administration is encouraging use of its little-known 203(k) loan program.

The 203(k) lets an owner-occupant borrow money for both the purchase and renovation in one loan, and put down only 3.5 percent.

The program requires the use of credentialed contractors and can include cosmetic improvements as well as major renovations like replacing plumbing or electrical.

But in this lending environment, more homebuyers are finding 203(k)s worth the hassle. In fiscal 2008, the government insured about 6,700 of the 203(k) loans. This year, more than 11,000 loans have already been insured, according to the Office of the Comptroller of the Currency.

Source: Chicago Tribune, Mary Ellen Podmolik
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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

HUD

Troubled Jumbo Loans Hurt Broader Market

Houses that cost more than $730,000 – the cap for conforming jumbo loans – can be extremely tough to buy, sell, or refinance these days, freezing the high-end market and holding down activity in lower-priced markets, real estate practitioners say.

The slowdown results from lenders’ reluctance to offer mortgages above the amount Fannie Mae and Freddie Mac will insure.

“What you’re seeing are those properties sitting on the market for a lot longer because people can’t get loans,” says David Kerr, an associate with ZipRealty in Marin County, Calif. ” All of what we’re showing is in the $200,000 to $300,000 price range.”

States that are most affected are those where jumbos account for more than 10 percent of all mortgages, including Hawaii, California and New York, as well as Washington, D.C., New Jersey, Maryland, Massachusetts, Virginia, Connecticut, Washington, Nevada, and Florida.

The Obama administration program to refinance underwater mortgages doesn’t offer help to holders of jumbo mortgages, so borrowers who can’t refinance are defaulting in increasing numbers. According to First American CoreLogic, jumbos that are 90 days or more delinquent reached 4.83 percent in March 2009, up from 1.68 percent in March 2008.

“We need to have a market recovery in all segments,” says Lawrence Yun, chief economist for the National Association of REALTORS®. “If the high-end market weakens, those in the middle have to reduce prices . . . All of Middle America is undoubtedly impacted.”

Source: USAToday, Stephanie Armour (07/15/2009)
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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

HUD

Freddie Mac Calls for Appropriate Comparables

A July 10 lender bulletin from Freddie Mac says appraisers “must be familiar with the local market,” select “appropriate comparable sales,” and certify them as “most similar” to the property in question.

The bulletin also says appraisers are not required to use distressed properties in their comparable sales analyses unless they represent a good number of the properties on the market.

The bulletin is in response to the new Home Valuation Code of Conduct, which is being criticized for causing a shift among lenders to appraisal management firms outside the local market and for weakening home sales.

Source: Inman News, Matt Carter (07/14/09)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222 ext. 26
Blog: elliottonrealestate.com
Twitter: elliottrob@twitter.com

HUD

Federal Home Buyer Tax Credit Could Be Expanded

A first-time home buyer tax credit of up to $8,000 has helped to move housing inventory during an otherwise sluggish real estate cycle. Now both legislators and the business community are hoping to build on the incentive’s success by expanding it.

A number of bills have been introduced in the House and the Senate that lobby for an expansion of the measure. Among the proposed changes:

* Setting a new cap of $15,000.

* Extending the tax break into mid-2010.

* Making the benefit available to all home buyers, not just first-timers.

* Offering a separate tax credit to $3,000 for borrowers who refinance.

USA Today, Stephanie Armour (06/22/09)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222

HUD

Fed Gov’t Tax Credit Can Be Used for Housing Down Payment

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn’t receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

“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 down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at “The Real Estate Summit: Advancing the U.S. Economy,” at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says 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.

Other Solutions for Today’s Market

During his address at the summit, Donovan went on to say that the Obama administration plans to further stabilize the housing market. “I do think we have some early signs that the market overall is stabilizing,” Donovan says. “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.”

The morning session included a panel discussion that was moderated by CNBC’s Ron Insana. Panelists 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.

“Right now the Federal Reserve is the market,” said panelist 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 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,” said NAR President Charles McMillan. “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 2009 REALTORS® Midyear Legislative Meetings & Trade Expo. During the week ending May 16, more than 8,500 REALTORS® will attend meetings, visit lawmakers and inspire action on Capitol Hill.

Source: NAR

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222