Ur1stHouseBlog

WASHINGTON — Federal regulators have banned eight individuals and companies from selling mortgage-relief services, settling charges that they used false advertising to deceive homeowners facing foreclosure.

If you listen to news reports it really sounds great – wait until May 1 to close escrow and quality for $18,000 in tax credits. WOW could it really be that simple. Maybe not, if you read the fine print in the California State bill, but don’t let that stop you. Just be an informed consumer.

The California homebuyer tax credit, signed into law on March 25, 2010, allocated $100,000 million towards first time buyers purchasing resale or existing homes and another $100,00 million for purchasers of new or previously unoccupied homes. The two main differences between the federal tax credit and California’s is that: 1) California’s is for the lesser of $10,000 or 5% of the purchase price and 2) it only provides an offset to state income taxes owed with some limitation. In other words, if you do not owe any taxes, you do not receive a check in the amount of the credit. OH…

AND the California Association of Realtors® (CAR) deputy economist, Robert Kleinhenz, is predicting that the $100,000 million set aside for existing home sales for first time buyers will only last until May 20, 2010. So 20 days into the first month, poof, tax credit gone. He (Kleinhenz) makes a good argument; $100 mil at $10 grand a pop helps 10,000 folks. CAR predicts about 64,000 closed sales in May, a little bit of a drop from last year but a reasonable expectation, and based again on last year about 47% of buyers were new to the marketplace. So half of 64,000 is 3 times the allocation. And if you account for buyers’,  scheduled to close in late April, who will delay closing until after May 1 to capture both the Federal Tax Credit as well as California’s, well then the number goes up even more.

What should you do? Work with a Realtor® you trust and respect, a lender who doesn’t pull any punches and buy a house you like and can live in comfortably for the long term. If you get a tax credit too – BONUS.

http://www.car.org/tools/smart/clients/taxcreditca/

http://www.nctimes.com/business/article_5fb80b8a-7e42-500f-ad3d-bc3851850f15.htm

Late this afternoon, Gov. Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law.  AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence between May 1, 2010, and Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).

The positive impact of the federal home buyer tax credit is clear. Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to C.A.R. research conducted last year.

The extra lag time provides an opportunity for home-buyers to purchase ‘dirt’ in a new subdivision and allow time for the property to be built.  Which will be an employment stimulus as well as one for home purchases.

The state’s previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009, eight months before it was set to expire and just as housing markets appeared to be turning a corner.  Unlike last year’s legislation, AB 183 adds a tax credit for the purchase of an existing home by a first-time home buyer.

So now, there’s another reason to seriously think about taking the plunge into home ownership. Call me if you have any questions.

As a great new incentive for buyers who plan to be owner-occupants, Fannie Mae will now give you up to 3.5% of the final sales price to use towards the buyers’ closing costs, the purchase of new Whirlpool® appliances or a combination of the closing cost assistance and appliances.  To be eligible for this incentive [...]

It really is free money! The Mortgage Credit Certificate (MCC) program – administrated in Sacramento County by the Sacramento Housing and Redevelopment Agency (SHRA) – allows you to subtract 20% of your mortgage interest from your Federal Income Tax bill. Here’s how it works: If you borrow $200,000 at 5% for 30 years, your payment [...]

In a recent article in the NY Times (01/09/10); by Darlin, Damon, Sacramento was mentioned as ‘walkable’ city. Now that the green movement is gaining steam, homes that allow occupants to walk, rather than drive, to grocery stores, restaurants and other commerce are increasing in value.
Real estate agents often chant the mantra “location, location, location,” [...]

The U.S. Dept. of the Treasury recently announced the Home Affordable Foreclosure Alternatives Program (HAFA), which provides instructions for lenders and servicers participating in the Making Home Affordable Program and Home Affordable Modification Program (HAMP).  The purpose of HAFA is to create an alternative to foreclosures for homeowners unable to successfully modify their troubled mortgage [...]

More good news for consumers and the housing market recovery. Following the Senate’s favorable vote yesterday, the U.S. House of Representatives just voted 403 to 12 to extend the home buyer tax credit, expanding the parameters to include existing homeowners and not just first-time buyers. As you may know, C.A.R. and our partners at NAR [...]

        Declines in inventory and sales are normal for fall; what is not normal is the increase in pending sales in all price brackets. “Pending sales are up 9%; largely driven by bargain pricing and low interest rates”, said Michael Lyon – CEO Lyon Real Estate. “Conversely, closed sales are lagging three to six months [...]

This is a very interesting question – especially in light of how important everybody from idiotic politicians to equally uninformed journalists seem to think it is.  Personally I’ve never met ANYONE who actually knows what it is outside the lending industry, and surprisingly most people IN the lending industry don’t really understand it.
 
So what [...]