Residential Lending

Senate Approves Tax Credit Extension, Expansion

The Senate yesterday passed legislation to extend the $8,000 home buyer tax credit to May 1, 2010, for first-time buyers and add a $6,500 tax credit for repeat buyers if they’ve lived in their home for five of the past eight years. Home prices are capped at $800,000.

The legislation was included in a bill to extend unemployment benefits and is expected to be passed by the House today or tomorrow. President Obama is expected to sign the legislation when it’s sent to his desk.

Under the bill, income limits are expanded to $125,000 for individuals and $225,000 for joint filers. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction. The deadline for members of the military serving out the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010, has been extended one year.

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a check. Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 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

Residential Lending

Facts Getting Lost in FHA Safety Debate

“Nobody has asked to come in and look at our balance sheet, to go through our finances, which I’ve offered to everybody.”—FHA Commissioner David Stevens

News reports raising concerns that FHA might be the next major financial institution requiring a government infusion are based on misinformed comparisons with what happened in the subprime market, FHA Commissioner David Stevens said in an exclusive interview with REALTOR® Magazine this week.

At their peak, subprime lenders commanded 40 percent of the residential mortgage market by making low-downpayment, no-document, interest-only, and other types of exotic loans to high-risk borrowers, investors, and speculators, a market that FHA sat out entirely, says Stevens.

Today, it’s FHA that commands 40 percent of the market, but that’s where the comparison ends. The agency makes 30-year, fixed-rate, fully documented loans only for households buying their primary residence. For each loan, the agency maintains capital reserves for the full 30 years of the loan rather than for the 1-2 years required of banks.

Today, the agency has more than $30 billion in reserves, including a fully funded loan-loss reserve. All the talk in the media about reserves dipping below a 2-percent required threshold is about a secondary account that’s above and beyond the agency’s primary reserve. Those two accounts together represent more than 4 percent of assets, he says.

An actuarial audit of FHA finances due out in a few weeks from a non-governmental auditor is expected to find that FHA has sufficient capital to cover all forecasted losses, even assuming further declines in home prices, says Stevens.

“What concerns me, and I think should concern all REALTORS®, is . . . non-fact-based [criticism] from people who jump to conclusions without looking at data [and] create an environment where we’ll be forced to make corrections where they are not required and can hurt this housing recovery.”

Stevens sat down with the magazine for a 30-minute interview that covered the agency’s new appraisal policy and an upcoming mortgagee letter that’s expected to make condo financing more attractive as well as the agency’s credit health. He also talked about the improvements to the agency’s processing that makes it comparable to conventional lenders in terms of processing speed and paperwork requirements.

Remainder of Article and Aduio from Interview

Robert Freedman ·- Senior Editor, REALTOR® Magazine (October 22, 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

Residential Lending

Mortgage Fraud Keeping FBI Busy

The Federal Bureau of Investigation has more than 2,600 open cases of mortgage fraud, FBI Director Robert Mueller told Congress on Wednesday. Most of the cases involve losses of more than $1 million.

More than 300 special agents are assigned to mortgage fraud, which is up more than 200 percent from what it was three years ago, according to the FBI.

“The schemes have evolved with the changing economy, targeting vulnerable individuals, victimizing them even as they are about to lose their homes,” Mueller said in prepared remarks to the Senate Judiciary Committee.

Source: Reuters News (09/16/2009)

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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
o- (404) 564-5560
Blog – http://elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Residential Lending

Mortgage Demand Down as Summer Ends

Mortgage applications slowed as summer ended and potential first-time buyers wondered whether they would be able to settle in time to receive the federal home ownership tax credit, which expires Dec. 1.

The Mortgage Bankers Association index declined 8.6 percent last week on a seasonally adjusted basis, including an adjustment for the Labor Day holiday. On an unadjusted basis, the index declined 18.3 percent compared with the previous week and fell 18.7 percent compared with the same week a year ago when the Labor Day holiday fell nearly a week earlier.

Mortgage interest rates movements were as follows:

* 30-year fixed-rate mortgages increased to 5.08 percent from 5.02 percent.
* 15-year fixed-rate mortgages decreased to 4.41 percent from 4.45 percent.
* 1-year ARMs decreased to 6.61 percent from 6.69 percent.

Source: Mortgage Bankers Association (09/16/2009)

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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
o- (404) 564-5560
Blog – http://elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Residential Lending

How to Spot Foreclosure-Prevention Scammers

Here’s how the most common foreclosure-prevention scams work:

The desperate home owner gets a letter that says something like, “We know you’re having a hard time. We have a pipeline to your lender and can help you save your home. Call this toll-free number now.”

Home owners call the number and agree to pay $1,200 to $1,500 upfront for help with their mortgage. Nothing happens. Their home still goes into foreclosure.

Harold Kirtz, a lawyer for the Federal Trade Commission who is prosecuting these scammers, says victims are often well educated and financially savvy, but they also are “in a very vulnerable state.”

Here are some red flags that should make a home owner run in the opposite direction:

* If the company guarantees success. Nobody can guarantee a lender won’t foreclose or will modify a loan.
* If the company wants money upfront. “We can’t say all advance fees are illegal,” Kirtz says, “But in most cases they’re probably bogus.”
* If the company wants the home owner to send mortgage checks directly to the modification firm. The only certainty there is that the company will cash the checks.

Source: Washington Post Writers Group, Kenneth R. Harney (09/13/2009)

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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
o- (404) 564-5560
Blog – http://elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Residential Lending

Economists: Extend the Housing Tax Credit

More than 40 percent of all home buyers in 2009 will qualify for the federal tax credit, costing the government about $15 billion, twice the original estimate, but most housing experts applaud the policy and favor expanding it.

Now the decision is up to Congress.

Mark Zandi, chief economist for Moody’s Economy.com, believes that the credit should be expanded to all homebuyers, even investors, through summer of 2010. “The risks of not doing something like this are too great,” he said. “I don’t think the coast is clear.”

James Glassman of JPMorgan Chase also favors expanding the credit but continuing to limit it to first-time buyers.

Industry members who are lobbying for the extension are optimistic and say they believe an extension will be approved in some form. “There will be a lot of water under the bridge, a lot of compromise, between now” and a final bill, said Richard A. Smith, chairman of the Business Roundtable’s Housing Working Group.

Source: The New York Times, David Streitfeld (09/15/2009)

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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
o- (404) 564-5560
Blog – http://elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Residential Lending

Congress Urged to Extend Tax Credit

The National Association of REALTORS® is calling upon its 1.2 million members to urge Congress to extend the successful homebuyer tax credit into next year.

Since its inception earlier this year, the $8,000 first-time homebuyer tax credit has brought 1.2 million new buyers into the market—350,000 of whom would not have purchased a home without the credit, according to NAR. The credit is due to expire November 30.

“Now is the time for Congress to keep this recovery going by extending the tax credit through 2010 and making it available to more homebuyers. We have all seen how the credit has been a spur to bring homebuyers into the market, and have seen the beginnings of a real recovery in the housing market. Housing has always led this nation out of economic downturns, and can do so again,” said NAR President Charles McMillan.

Write Congress Now

REALTORS®, the leading advocates for homeownership and housing issues, will be writing to their Senators and Representatives to tell them of the successes with the tax credit thus far, and press them to extend and expand it now.

McMillan added that the market has improved, but it has not yet fully corrected itself. “The credit needs to be available for an additional period of time in order to sustain the progress that’s been made so we can continue to see our markets fully recover. Uncertainty about the future of the credit will dampen consumer demand. The only way we can assure that the progress we’ve made can continue is to extend the credit and to do that now,” he said.

As the current deadline for the credit looms, potential homebuyers need to complete a contract, satisfy any contingencies, secure financing, and go to closing by November 30. In today’s market, NAR estimates that it generally is taking between 45 and 60 days from contract to closing.

“That means potential homebuyers who qualify must act now, and so must Congress,” McMillan said.

Source: NAR

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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
o- (404) 564-5560
Blog – http://elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Residential Lending

Study: Americans Still Want to Be Home Owners

Despite all of the bad news in the media about homeownership and mortgages, most Americans still believe buying a home is a great investment, according to a new study commissioned by Bankrate.com.

Among the findings from the study:

* 92 percent say that a home is a good investment for the future.
* 48 percent worry about losing or being unable to afford their homes.

“These results provide an interesting illustration of the public’s mindset in a difficult economy,” says Julie Bandy, editor in chief at Bankrate. “While nine out of 10 still believe in the American dream of homeownership, nearly half worry about losing their homes.”

Source: Bankrate.com

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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
o- (404) 564-5560
Blog – http://elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Residential Lending

Florida Panel Urges Mediation on Foreclosures

A panel chaired by the Florida judiciary is recommending strategies to clear out the backlog of foreclosed properties in the state, including mediation for primary homes and a fast-track plan for vacant and abandoned properties.

The 15-member panel chaired by Circuit Judge Jennifer Bailey of Miami agreed that managed mediation should be required for primary homes in foreclosure unless both the borrower and the bank agree to opt out.

Opponents to the plan said mandatory mediation would slow the process.

Source: The Associated Press

Residential Lending

10 Cities Leading the Market Recovery

Here’s more evidence that housing is turning around. Forbes magazine identified 161 of the country’s largest metro areas where sales activity has increased compared to 2008, and where foreclosure sales as a percentage of total sales, are low.

The magazine considers these markets as on the road to recovery.
1. Miami-Ft. Lauderdale, Fla.
2. Lincoln, Neb.
3. Colorado Springs, Colo.
4. Salem, Ore.
5. San Luis Obispo, Calif.
6. Bremerton, Wash.
7. Denver, Colo.
8. Redding, Calif.
9. Santa Barbara, Calif.
10. San Jose, Calif.

Source: Forbes, Matt Woolsey

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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

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