Real Estate News

Florida Real Estate Pros pushing for advance on Tax credit

2009-04-01T08:25:04-04:00

A coalition of Real Estate professionals are lobbying with state lawmakers to find a way to advance the new tax credit to new homebuyers so they can use it to make downpayments.

The group, which is made up of home builders, lenders and Realtors, is led by the Consumer Federation of the Southeast. They believe that finding a way to get homeowners the cash upfront, rather than when they file their tax returns, could help spur sales and mend the troubled housing market.

>>>Full Story

Christine Selzler
www.sellingpolkcounty.com

JP Morgan Chase opens Orlando office to help modify loans

2009-03-28T10:15:59-04:00

JP Morgan Chase is offering the personal touch. They are opening an office in Orlando this week so homeowners facing foreclosure can meet in person with loan-modification specialists, instead of the usual route of going through a call center.

It plans to open 24 such offices nationwide, more than half of them in the hardest hit markets of Florida and California. Chase opened offices in Miami, Fort Myers and Tampa earlier this month.

Chase might be the first of the big mortgage players to adopt the personal approach, local mortgage-finance experts said. Encouraged by its new strategy, Chase now expects to provide relief to about 700,000 distressed mortgage customers.

>>> Full Story

Christine Selzler
www.sellingpolkcounty.com

The Facts on Foreclosures

2009-03-27T07:24:52-04:00

Even though Foreclosures have been a part of the Real Estate Market for many years, the popularity of purchasing one has really become mainstream.

To help understand what a foreclosure is and the steps that take place in a foreclosure, I have
included the following link to review 'The Facts on Foreclosures'

Click Here for - 'The Facts on Foreclosures'

Christine Selzler
www.sellingpolkcounty.com

Can you flip a house in this market?

2009-03-26T09:51:42-04:00

The answer is yes, there are still flipping opportunities, but the guidelines have changed.

It seems elementary, but in the recent past many flippers found themselves in trouble because they had not correctly calculated the amount of money it takes to finish a flip and market it. Investors should figure out how much money they'll need right upfront, and not just the purchase price. It translates to being realistic about renovation costs and the hidden expense of carrying costs that gets so many in trouble

Click Here for the Full Story

Christine Selzler
www.sellingpolkcounty.com

Americans Still Eager to Buy

2009-03-24T16:29:21-04:00

WASHINGTON – March 24, 2009 – Nearly 25 percent of adults say they plan to purchase a home in the next five years and half of those (53.5 percent) will be first-time homebuyers, according to a survey commissioned by Move Inc., operator of Realtor.com.

More than 18 percent cite the $8,000 tax credit as a motivating factor. Potential homebuyers with higher incomes are more interested in the tax credit than those in lower income brackets, with 43.4 percent of potential first-time buyers who earn $50,000 or more saying they plan to use the tax credit.

Click here for the full story

Christine Selzler
www.sellingpolkcounty.com

Home Impact Fees Cut in Polk County

2009-03-23T14:36:45-04:00

The Polk County Commission voted Wednesday to reduce impact fees on New Home Construction
$1,091.00.

In addition to adopting a revised road impact fee, the board also decided to cut the impact fees for parks, libraries, fire, police, jails, and ambulance service in half. However, school impact fees remain the same.

The cuts, that go into effect April 1, will reduce the impact fee on a single-family home from $11,595 to $9,664. The new rates are slated to remain in effect until commissioners review consultant studies for the other impact fees. The review process could take a couple of months.

Click Here for the Full Story

Christine Selzler
www.sellingpolkcounty.com

The Positive Side to Florida Real Estate

2009-03-22T15:28:19-04:00

Fo so long now, all we have heard is negative reports and comments about Real Estate everywhere. I found an article that reminds us of all the positive aspects of of Florida Real Estate.

Here's a snippet:

1. Great prices. Statewide, home prices have fallen about 20 percent in the past year. Florida Association of Realtors® statistics show the existing-home median sales price was $185,400 in the third quarter of 2008, compared with $233,200 in third quarter 2007. By the way, those numbers are still significantly higher than in the early years of the decade. In 2003, the third-quarter sales price was $163,700, which reflects an increase of about 13.3 percent over the five-year period. (The median is a typical market price where half the homes sold for more, half for less.)

Click Here for the full article

Christine Selzler
www.sellingpolkcounty.com

Lowest Mortgage Rates in over 40 years

2009-03-20T17:18:31-04:00

Is it time for you to buy or re-finance?

A check of local lenders' Web sites show rates ranging from 4.625 percent to 4.75 percent, not including points. The last time mortgage lenders offered rates this low was for a day or so in December. The rates are the lowest since at least 1965, according to Freddie Mac.

The rate drop is likely to encourage more borrowers to see whether they can qualify for the monthly savings. Don't be surprised, though, by busy signals at your local lender. They have been deluged with applications from homeowners trying to refinance their mortgages.

Click Here for the full Story

Christine Selzler
www.sellingpolkcounty.com

As Foreclosures grow, communities are springing into action

2009-03-19T11:48:35-04:00

In communities across Florida and the U.S., the foreclosure crisis is hitting neighborhoods with problems such as vandalism of vacant homes, unkempt lawns, and other maintenance and security issues. Many cities are stepping in to protect property values and prevent block after block of unchecked blight.

The foreclosure crisis has been particularly acute in moderate-to-lower income communities like Homestead, Hialeah and Miami Gardens, which is allowing a nonprofit Neighborhood Housing Services to operate out of City Hall.

But affluent cities have not been immune.

"We are seeing more properties run down and abandoned," said Coral Gables Building and Zoning Director Ed Weller.

Click Here for the Full Story

Christine Selzler
http://www.sellingpolkcounty.com

Home Sales are Up in the Orlando Area

2009-03-14T08:28:25-04:00

The Orlando Regional Realtor Association reported Tuesday that its members sold 1,219 homes, condos and town houses in February, up more than 28 percent from the same month last year.

Pending contracts in February were double last year's total, an indication that the momentum in existing-home sales continues to build locally even as the nationwide downturn in housing persists.

Pending sales by Orlando Realtors rose to 4,348 in February, compared with 2,175 a year earlier, when the local market was still pulling back sharply from its mid-2005 peak. The Realtors also noted that sales so far this month in the core Orlando market are off to a strong start.

Click Here for the Full Story

Christine Selzler
www.sellingpolkcounty.com

Florida leads the nation in mortgage delinquencies

2009-03-12T00:00:00-04:00

Florida is leading the Nation in Mortgage deliquencies.

In order to control the amount of foreclosures pouring into the state's underfunded court system, the Florida Supreme Court announced the formation of a statewide task force on Monday that will look for solutions to the docket backlog while ensuring borrowers and lenders are treated fairly.

Some circuit districts, for instance, require lenders to provide homeowners with contact numbers for nonprofit legal help when filing foreclosure. Others refuse to hear cases when representatives for the parties are not physically present in court. Still others require mediation.

Statewide, the time needed to complete a foreclosure has increased from roughly 150 days to around 300, leaving homes vacant longer and condo associations hurting from unpaid maintenance fees.

Click Here for the full article

Christine Selzler
www.sellingpolkcounty.com

Tips for homeowners who turn into landlords

2009-03-11T18:11:04-04:00

Tips for homeowners who turn into landlords

Homeowners who decide to rent out their properties have to stop thinking of themselves as homeowners and instead consider themselves as running a small business, experts say.

Thinking like a businessperson means focusing on the monthly cost of maintenance, mortgage and taxes, as well as being aware of landlord-tenant regulations and avoiding liabilities.

Here are key issues to consider:

• Set a fair rent. Setting the right price will make it more likely that a landlord will be able to keep the place rented.

• Understand landlord-tenant rules. Running afoul of landlord-tenant regulations and rules regarding security deposits can be costly.

• Screen applicants. Eliminating potential tenants who can’t pay or who won’t take care of the property is very important.

• Lay out the rules in a lease. Widely available sample leases can help. If you have questions, ask an attorney.

• Consider a property manager. Despite the expense, turning the job over to experts can help a landlord come out ahead.

• Talk to the condo association. If the property is a condominium, be prepared to deal with a host of regulations.

Source: The Washington Post, Renae Merle (02/28/2009)

Christine Selzler
www.sellingpolkcounty.com

FHA mortgage ‘instant defaults’ mounting

2009-03-09T17:27:55-04:00

WASHINGTON – March 9, 2009 – A rash of “instant defaults” in recently issued Federal Housing Administration mortgages is due to foul play among unscrupulous lenders, officials say.

An analysis of available data by The Washington Post Sunday indicated in the past year, the number of borrowers who were unable to make more than a single payment before defaulting on their FHA-backed mortgages has nearly tripled, a rate that far outpaces the agency’s overall growth in new loans.

Industry experts are chalking the instant defaults up to the weak economy, poor scrutiny of prospective borrowers and mostly to the suspect actions of unscrupulous lenders looking to make a quick buck, the newspaper said.

Kenneth Donohue, inspector general of the U.S. Department of Housing and Urban Development, said if a loan “is going into default immediately, it clearly suggests impropriety and fraudulent activity.”

The pattern is similar to the collapse of the subprime mortgage lending market that triggered the global financial crisis, except that with the FHA-backed loans, the U.S. Congress would have to bail out the lenders if the FHA cannot make good on guarantees from its existing reserves, the Post said.

Click Here for the full article

Christine Selzler
www.sellingpolkcounty.com

State Farm Homeowner Insurance exit is causing headaches

2009-03-05T17:45:52-05:00

According to State regulators, Florida'a insurance market can absorb most of the 1.2 million policies that State Farm plans to drop over two years beginning in November. The problem will be for homeowners with older homes and people in high-risk coastal areas.

“Some policyholders are going to find cheaper rates, but many of them, particularly those in older homes, are going to find much higher rates,” said Alex Sink, Florida’s chief financial officer.

State Farm decided to pull out of Florida after state regulators denied its request to raise homeowner premiums 47 percent on average statewide. Without a rate increase, the company said it would be insolvent by 2011. But regulators said the rate increase proposal would have raised rates to unaffordable levels, as high as 90 percent in some parts of Florida.

Click here for the full story

Christine Selzler
www.sellingpolkcounty.com

Learn About the Making Home Affordable Refinance and Modification Options

2009-03-04T15:07:32-05:00

The President's plan was created to help millions of homeowners refinance or modify their mortgages.

Refinancing: Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home. A Home Affordable Refinance will help borrowers whose loans are held by Fannie Mae or Freddie Mac refinance into a more affordable mortgage.

Modification: Many homeowners are struggling to make their monthly mortgage payments either because their interest rate has increased or they have less income. A Home Affordable Modification will provide them with mortgage payments they can afford.

Who is Eligible?

Please use the self-assessment tools provided on this website to see if you are among the 7 to 9 million homeowners who can benefit from Making Home Affordable. Based on your results, we will provide suggestions about what you can do next.

FIND OUT IF YOU ARE ELIGIBLE.

Courtesy of: Financialstability.gov

Christine Selzler
www.sellingpolkcounty.com

HOA's want foreclosures to happen faster

2009-03-03T07:18:24-05:00

Homeowners' associations are struggling from lost revenue, while lawmakers in Washington have been working hard to develop programs that hold off foreclosure. As a result, many of Florida's community associations are worried that banks aren't foreclosing fast enough.

That is because the lender does not have to start paying the regular association assessments on a property until it formally takes title at the very end of the foreclosure process. Under current state law, they are only responsible for unpaid assessments going back a certain period of time, meaning any process drawn out beyond that equals lost revenue for associations already struggling financially.

Click here for the full story

Christine Selzler
www.sellingpolkcounty.com

When a Landlord defaults, what are a tenants' rights?

2009-02-27T19:12:42-05:00

What happens when you are renting a home and your Landlord doesn't pay his mortgage?
You are not protected from being evicted. You need to learn your rights.

First and foremost, renters who are living in a home that is being foreclosed on shouldn't assume that they have to leave immediately. But you need to find out about state and local laws to determine your legal rights. You should also seek the advice of legal aid attorney or a housing counselor on what the next step should be.

Click here for the full story

Christine Selzler
www.sellingpolkounty.com

Mortgage relief may help homeowners by April

2009-02-27T18:22:12-05:00

Details are scheduled to be released by Wednesday but some of the guidelines of the Mortgage bailout are being released.

Homeowner's who owe up to 5 percent more than their home’s current value will be able to refinance, as long as their mortgages are held by mortgage finance companies Fannie Mae or Freddie Mac. At the same time, loan modifications will be available for borrowers who owe up to 50 percent more than their home’s current value.

A refinanced mortgage involves a new loan contract, while a modified mortgage involves changes to an existing one, such as extending the amount of time it takes to pay the loan back from 30 to 40 years, or lowering the interest rate.

Click here for the full story

Christine Selzler
www.sellingpolkcounty.com

The Mortgage Relief Bill is being voted on today

2009-02-26T07:58:54-05:00

Good news and Bad News. Relief may be out there for desperate homeowners, but it will come at a cost to their credit. Homeowners facing foreclosure may need to resort to bankruptcy to force reductions in their monthly mortgage payments.

The bill set for a vote Thursday would let bankruptcy judges reduce the principal and interest rates on home loans. But the plan has been modified down since Democrats first proposed it, mostly because the mortgage industry lobbied to limit the cost for banks.

House Democrats agreed to push the requirement that borrowers prove they tried other ways of modifying their mortgages before resorting to bankruptcy. They are also putting a restrictriction on the measure to people who can not afford to make their home loan payments.

Click here for the Whole Story

Christine Selzler
www.sellingpolkcounty.com

Beware of Loan Modification Companies

2009-02-25T07:14:41-05:00

There are companies out there that are advertising they can stop a foreclosure
and reduce your mortgage payments. Many of them are scams.

In the past two weeks, the Florida attorney general's office fielded 108 complaints from possible victims of foreclosure rescue schemes. The attorney general has sued about a dozen companies, including Outreach Housing, based in Margate.

Loan modification companies offer, for an upfront fee or monthly retainer, to negotiate with lenders to save homes. The pitch includes assurances that billions are available to bail out homeowners -- and that lenders are eager to avoid foreclosing.

In the worst cases, the firms do nothing and pocket the money. Others make an earnest but unsuccessful attempt to help, then refuse to refund clients' money. Either way, homeowners lose thousands of dollars they could have paid their lenders.

Read the full story here

Avoid any person / company that does any of the following:

* guarantees to stop the foreclosure process – no matter what your circumstances
* instructs you not to contact your lender, lawyer
* collects an up-front fee before providing you with any services
* accepts payment only by cashier’s check or wire transfer
* encourages you to lease your home so you can buy it back in the future
* tells you to make your mortgage payments directly to it, rather than your lender
* tells you to transfer your property deed or title to it
* offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale
* offers to fill out paperwork for you
* pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.

Tips for finding a legitimate company:

1. Make sure the company is run by an attorney or licensed mortgage broker.
   You can do this by checking with your state real estate commission and
   Supreme Court.

2 Make sure that the company is not the subject of Federal or State prosecution.
    "Google" them. Go to your states Attorney General website and search for
    them. Finally, go to the Federal trade Commission website and run a search.

3. Contact your local Better Business Bureau and find out what they know
     about the company.

Christine Selzler
www.sellingpolkcounty.com

$8000 Credit can be an awesome opportunity

2009-02-24T07:27:25-05:00

If someone gave me $8000 towards buying a home, I would be tempted.

And Uncle Sam is willing to offer it to you, under certain conditions.

Basically, under the economic stimulus plan that became law last week, if you are buying a home for the first time, you can get your hands on up to $8,000. Under the rules for the new $8,000 tax credit, you have to buy your first home between Jan. 1 and Nov. 30, or have had no ownership interest in a home for the last three years.

This could be a way to help come up with a down payment, or to receive $8,000 to save for emergencies. Keep in mind, however, that Uncle Sam doesn't put the money directly into your hands when you need it most—at the point when you close, or complete the legal formalities, on the purchase of your home. You must come up with your down payment, then file your tax return and seek the $8,000 as a tax credit.

As a credit, you receive money the way you would a tax refund. The good part: This is a refundable credit, which means that even if you do not owe much in taxes, the government will give you the money. That makes it better than a normal credit or a deduction.

Click here for the full story, written by Gail MarksJarvis

Christine Selzler
www.sellingpolkcounty.com

Florida Governor Charlie Crist is pushing for property tax breaks

2009-02-23T15:55:32-05:00

There are interesting developments coming out of Florida's capitol.

On Friday February 20, 2009 Gov. Charlie Crist proposed giving property tax breaks of as much as $5,000 to first-time homebuyers and further lightening the tax burden for businesses, landlords and snowbirds.

Crist gave only broad overviews of his latest property tax proposals as he introduced his $66.5 billion budget. Most of the measures would need legislative approval and support from 60 percent of Florida voters in 2010 before they could take effect the following year.

“We must keep property taxes low and local government fiscally responsible,” Crist said. “Now more than ever, as families are faced with economic challenges, we must reduce tax burdens on families and the businesses in our state.”

The proposals are aimed at invigorating Florida’s declining real estate market and at helping businesses cope with the recession. They come a year after Floridians approved a package of property tax breaks that have done little to stimulate the housing market.

Click here for the full article or watch below

Christine Selzler
www.sellingpolkcounty.com

Mortgage rescue eligibility still being finalized

2009-02-21T07:32:59-05:00

There is still a few more weeks of working out the kinks, in the plan to help delinquint homeowners save their homes. According to the following article from the Washington Post yesterday, the administration is putting together the guidelines of who will qualify and who will not.
It is an interesting read....

WASHINGTON – Feb. 20, 2009 – A day after President Obama unveiled his $75 billion foreclosure prevention program, administration officials yesterday said they were still determining which homeowners should qualify.

The administration is developing a standard for lenders to use in evaluating applicants that seeks to exclude homeowners who are not in real need or are too far behind in their payments to be saved. Officials have set some conditions for eligibility, including requiring that borrowers’ mortgage payments consume more than 38 percent of their income and that the property be a primary residence.

Government officials are working to finalize details before a self-imposed March 4 deadline when the program will go into effect and lenders are likely to be flooded with calls.

The program is aimed at stemming the tide of foreclosures as predictions mount that another wave of risky loans could begin defaulting later this year as a deepening recession makes it more difficult for borrowers to afford their homes.

The administration’s effort includes several elements, including a refinancing initiative for borrowers with little equity in their home. A separate loan modification program gives lenders incentive payments to keep borrowers in their homes rather than foreclose on the properties.

A chief goal of the loan modification program is to address complaints of consumer advocates that borrowers are often turned away by lenders when they seek help before becoming delinquent on loans. The plan includes extra incentive payments for lenders that reach “at-risk” homeowners and modify their loans before they become delinquent.

“But what counts as an at-risk homeowner?” said Edward R. Morrison, a professor at Columbia Law School. He said policymakers should avoid setting a standard that encourages lenders and mortgage servicers to rework sustainable loans just to get payments from the government.

Administration officials involved in developing the program said they are basing their effort on a model developed by the Federal Deposit Insurance Corp. The formula to determine at-risk borrowers likely will weigh a homeowner’s debt level and payment track record, officials said. But in setting eligibility standards, they are also trying to determine what documentation borrowers should provide to prove they could lose their job or face a reduction in income, they said.

Another key question facing the administration is how to calculate when foreclosure would be a better deal for lenders than keeping borrowers in their home, even with incentives. The administration will attempt to generalize the FDIC formula, known as the net present value test, and apply it to the entire mortgage industry, according to officials familiar with the effort.

“If a borrower has no means of repayment, even if you restructure the loan, then foreclosure may be the only option,” said Diane Casey-Landry, chief operating officer of the American Bankers Association. “We’re very interested in how they’re going to develop it.” The administration is canvassing the financial services industry and consumer advocates for input on this and other issues. “They want them as soon as possible, so we’re scrambling,” said Paul M. Leonard, vice president of government affairs at the Financial Services Roundtable’s housing policy council.

Obama has pledged to spend $75 billion on loan modifications. About $50 billion would come from federal bailout funds approved by Congress to shore up the financial system, with mortgage financing firms Fannie Mae and Freddie Mac and the Department of Housing and Urban Development also contributing, administration officials said. The HUD money will be used to help fund nonprofit housing groups, the officials said. The money from the Fannie Mae and Freddie Mac will be used pay incentive fees and rate subsidies to mortgage servicers that modify mortgages that the financing agencies own or guarantee.

Even as the administration finalizes details of the mortgage modification program, officials are getting pressure from some groups to include protection for lenders and mortgage servicers that rework a loan and worry they could face a lawsuit from investors.

The Mortgage Bankers Association is also trying to persuade the administration to expand the refinancing portion of the plan. Under that program, the administration will loosen lending standards at Fannie Mae and Freddie Mac to allow millions of homeowners to qualify for refinanced loans as long as their mortgages do not exceed 105 percent of the current value of their property. But with housing prices in a free fall in parts of the country, including Florida, California and Arizona, that will not be enough for many homeowners.

“We think that 105 percent [loan-to-value ratio] should be revisited,” said Steve O’Connor, senior vice president for government affairs at the mortgage bankers’ group.

Copyright © 2009 washingtonpost.com

Fannie Mae & Freddie Mac - Backing up to 400 Billion

2009-02-20T08:05:50-05:00

President Obama unveiled his mortgage bailout yesterday. Here are details appearing yesterday in the Washington Post:

WASHINGTON – Feb. 19, 2009 – The federal government yesterday doubled its commitment to Fannie Mae and Freddie Mac, promising to reimburse the companies for up to $400 billion in losses on their investments in mortgage loans.

The massive expansion of the government backstop is a response to mounting strains on the two companies, officials said.

It was announced as part of the Obama administration’s broad plan to reduce foreclosures, which will further squeeze the companies’ revenue by requiring the pair to refinance or modify millions of loans to lower monthly payments.

And it comes as a souring economy is pushing more borrowers to default. Fannie and Freddie estimate they will need up to $65 billion from the original $200 billion backstop to cover their losses on mortgage-related investments in the second half of 2008.

“It is crucial to maintain confidence in these institutions even under worse-than-expected economic conditions,” Treasury Secretary Timothy F. Geithner said yesterday in a statement announcing the new aid package.

The companies, both based in the Washington area, were seized by the government in September to stabilize their role as the main funding source for mortgage lending. Fannie and Freddie buy loans from originators such as banks, allowing new loans to be made before existing ones are repaid.

At the time, the government promised to cover the companies’ losses, injecting money in any quarter when the companies’ liabilities exceed their assets, up to $100 billion each. Fannie and Freddie raise money from private investors to fund their loan purchases, and the government wanted to reassure those investors that the companies would be able to repay their debts.

Officials said in September that $200 billion was much more money than the companies would need. Officials now acknowledge that won’t be enough to calm investors. Yesterday, they said that $400 billion would be much more money than the companies would need.

“Resetting these agreements from $100 to $200 billion each should remove any possible concerns debt and mortgage-backed securities investors have about the strong commitment of the U.S. government to support Fannie Mae and Freddie Mac,” said James B. Lockhart III, director of the Federal Housing Finance Agency, which oversees the companies.

The Obama plan also increases by $100 billion, to $1.8 trillion, the volume of mortgage loans the two companies can own. The change has the effect of allowing the companies to sell more debt to raise money to buy additional loans. The administration also said that the Treasury would continue to buy securities created by the two companies, easing the pressure to find private investors. Both moves will tend to reduce the cost of financing mortgages, holding down interest rates for customers.

The expanded backstop was criticized by Republican lawmakers who have long pushed for the government to reduce the size of the two companies.

“Why should we reward Fannie Mae and Freddie Mac with $200 billion in taxpayer dollars without first reforming these housing entities that were at the heart of the economic meltdown?” House Minority Leader John A. Boehner (R-Ohio) said in a statement.

That debate remains in the offing, but the financial crisis has only increased the importance of the companies’ health. As other sources of financing disappeared, Fannie and Freddie bought or agreed to buy about three-quarters of all new mortgage loans last year.

Now the companies also will play a central role in the Obama administration’s plan. Officials described the effort as requiring sacrifices by private firms, but the greatest costs will be incurred by two in which the government owns an 80 percent stake.

Fannie and Freddie have been instructed to offer up to 5 million refinancings and to modify millions of additional mortgage loans. The plan is intended to benefit the companies in the long term by avoiding defaults on many of the loans, but only by reducing the amount they collect each month.

Copyright © washingtonpost.com. All rights reserved. Staff writer Zachary Goldfarb contributed to this report.

First Time Home Buyers Credit - Important information

2009-02-18T16:17:30-05:00

The Florida Association of Realtors sent out a notice today that the
The National Association of Home Builders (NAHB) has launched a
consumer Web site with detailed information and an extensive list of
frequently-asked questions. The homebuyer resource is found at: www.federalhousingtaxcredit.com

This website will provide consumers with the information regarding the tax credit
provided through the stimulus package.

It is important to know, that in order to qualify for the credit, you must purchase your home
before December 1, 2009.

Christine Selzler
ERA Select International
www.sellingpolkcounty.com

First-time homebuyers: How to get the $8,000 tax credit

2009-02-18T08:52:35-05:00

The Florida Association of Realtors sent out an explanation of how the First Time Home Buyers Tax credit works. Here is the explanation of the Tax credit:

WASHINGTON – Feb. 17, 2009 – How does a first-time homebuyer take advantage of the $8,000 tax credit that President Obama is expected to sign into law tomorrow? It comes with a few rules. According to the most recent analysis, the following rules will apply – though things could change as tax professionals weigh the details:

• The deduction is worth 10 percent of a home’s value up to $8,000, which means all homes worth more than $80,000 could qualify for the maximum amount.

• There is an income limit to qualify. A married couples’ modified adjusted gross income (MAGI) should be under $150,000 and single filers’ MAGI should be less than $75,000.

• Partial tax credits may be available for married couples with MAGI incomes over $150,000 but under $170,000, and single filers with incomes over $75,000 but under $95,000.

• If married couples file separately, they can both claim 5 percent of the home purchase ($4,000 each for a home over $80,000) on their tax returns.

• It’s a tax credit, not a deduction. That means the entire amount goes back to the first-time homebuyer unlike deductions, such as mortgage interest, that are subtracted from gross income before tax is calculated. If qualified for $8,000, the buyer gets $8,000, even if they would not owe that much in taxes otherwise.

• The tax credit applies to homes purchased between Jan. 1, 2009, and Dec. 31, 2009.

• The tax credit does not have to be paid back, providing the homebuyer keeps the property for at least 36 months and resides in the home.

• To qualify as a first-time homebuyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer.

• If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009 but the owner does not take possession until 2010, the buyer would not qualify.

• The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that President Obama signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly.

The tax credit is not a downpayment, but it could be used toward a downpayment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund.

By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a downpayment. There is one caveat, however: Should they not buy a home in the qualifying period, they would still owe the IRS the money, and reducing their withholding amount could result in a high bill at tax time.

© 2009 FLORIDA ASSOCIATION OF REALTORS®

Housing tax credit downsized from $15K to $8K

2009-02-14T09:01:42-05:00

WASHINGTON – Feb. 13, 2009 – A new tax credit of up to $8,000 for first-time homebuyers that’s being included in the economic stimulus package was far less than the homebuilding industry wanted, and analysts expect it will provide only a modest boost to the battered U.S. housing market.

The tax credit is part of the economic stimulus package expected to be signed by President Barack Obama on Monday. It was scaled back from a Senate proposal of $15,000 and limited to first-time buyers who act between the start of this year and the end of November.

The credit for 10 percent of the value of a home, up to $8,000 was estimated to cost the government $6.6 billion.

It starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Struggling homebuilders, already looking ahead to the traditional spring selling season, had been counting on Congress to help spur pent-up sales after completing the worst year for new home sales since 1982.

Executives for one major builder, Beazer Homes USA Inc., noted earlier this week that they had seen an uptick in traffic over the weekend as many prospective buyers learned of the Senate’s original incentive provision.

But with that proposal gone, Wall Street analysts said the homebuyer provision will have a negligible effect on homebuilders’ fortunes.

“Congress, unambiguously, left the builders out in the cold,” said Deutsche Bank analyst Nishu Sood. “It’s a pretty big disappointment that they scaled it back.”

Real estate agents were more optimistic. The National Association of Realtors projected the change will stimulate an additional 200,000 home sales.

“It’ll make a big impact, I think on our market,” said Paula Swayne, a real estate broker in Sacramento, Calif., an area flooded with foreclosures and sales of distressed properties. “Buyers will finally have to get off the fence in order to use it ... There are so many affordable houses.”

The big unknown, however, was the state of the economy. With employers laying off thousands of workers, many potential homebuyers are nervous about making such a big financial commitment.

Mortgage rates remain low, falling this week to a national average of 5.16 percent for a 30-year fixed-rate mortgage, according to mortgage finance company Freddie Mac.

But credit remains tight and borrowers need a downpayment of at least 3.5 percent to qualify for a loan backed by Federal Housing Administration, a popular option for many first-time buyers.

Many potential buyers haven’t saved up enough money for a downpayment. “If you don’t have a way to get that, the tax credit doesn’t do them much good,” said James McCanless, an analyst who covers builders for FTN Midwest Securities.

But if the government can prod lenders to loosen credit standards and buy enough mortgage-backed securities to keep mortgage rates low, the tax credit could make a difference, said Mark Zandi, chief economist at Moody’s Economy.com.

“I don’t think it’s enough to jolt the housing market back to life, but it’s a plus,” he said.

Last year, Congress enacted a $7,500 tax credit for first-time buyers, but that had to be paid back over 15 years and the impact on home sales was negligible. First-time buyers, in last year’s law, were defined as those who haven’t owned their own homes for three years.

When the new credit is signed into law, Chris Sipe, a loan officer with Mason Dixon Funding in Rockville, Md., plans to e-mail the more than 1,000 contacts in his database to let them know about the opportunity.

“The bulk of the market right now is first-time buyers,” he said.

First-time homebuyers bought 2.2 million new and existing homes last year, according to the National Association of Realtors, making up about 41 percent of total U.S. home sales, up from 39 percent in 2007 and 36 percent in 2006.

Concerns about the bill’s overall costs, plus criticism that a much larger credit would not benefit borrowers on the verge or foreclosure, and mainly help people with healthy enough incomes to buy a house helped sink plans for a much larger credit.

The homebuilding industry mounted an unsuccessful push for a credit for up to $20,000 for all buyers, flying builders in from around the country last month for a massive lobbying push that wound up falling short.

“What the builders wanted was massive relief – not targeted toward where the real problem was – paid for by everybody,” said Thomas Lawler, a Northern Virginia housing economist. “That seemed to be pretty egregious.”

Sales fell in the fourth quarter of last year around the country, except for six states where buyers have been able to snap up foreclosed homes at a bargain: Nevada, California, Arizona, Florida, Minnesota and Virginia, the National Association of Realtors said Thursday. Nationwide, the median sales price was $180,100, down 12 percent from a year ago.

10 steps to negotiating an affordable loan modification

2009-02-13T07:03:58-05:00

DETROIT – Feb. 12, 2009 – Ralph R. Roberts, consumer advocate and spokesperson for Federal Loan Modification Law Center, LLP, released a list of the top 10 steps homeowners can take to negotiate an affordable loan modification. The following steps apply to homeowners working directly with a lender, as well as to those teaming up with an attorney or alternative third-party representative.

1. Come clean. It can be tempting to bend the truth when you are trying to convince a lender to approve a loan modification. Only by laying all your cards on the table and disclosing the truth can you begin to develop and implement solutions that will put you back on the path to long-term financial health.

2. Understand your lender’s point of view. As far as your lender is concerned, it all boils down to money. You are most likely to be approved if you can show modifying your loan will cost the lender less than a foreclosure.

3. Keep a cool head. Expressing anger toward your lender puts you in an extremely disadvantageous position. For example, your lender may decide that you are unreasonable and that foreclosing would be less costly overall.

4. Give them what they need. In order to expedite the situation, find out exactly which forms you need to fill out and which documents your lender needs to process your application. Make sure you provide everything to your lender or representative in the manner specified.

5. Ask for what you want. Before meeting with your lender, make sure you spend some time figuring out what you want and need. For example, how much can you realistically afford to pay each month?

6. Let them do their job. Loan modifications typically take between 30-90 days from start to finish. During this time, avoid the temptation to micromanage the process. To alleviate unnecessary anxiety, ask your lender for an anticipated timeline.

7. Get your financial house in order. Put a tracking system in place today and start developing a budget to ensure you are not spending more money than you are earning.

8. Keep everyone posted of any changes. If anything changes related to your financial situation, be sure to keep your loan modification representative or lender in the loop.

9. Make sure the lender’s offer is truly affordable. If the loan modification is unaffordable or makes your budget so tight that you are only one car repair or medical bill away from defaulting again, head back to the negotiating table to try to work out a better deal.

10. Hold up your end of the bargain. The key to success is discipline and commitment. All the effort you spend setting up a plan is of no use if you don’t follow the plan you created or agreed to.

© 2009 FLORIDA ASSOCIATION OF REALTORS®

Obama plan holds off on foreclosure rescue details

2009-02-12T06:34:37-05:00

WASHINGTON – Feb. 11, 2009 – To those on the front lines of the housing crisis, the Obama administration’s pledge to spend $50 billion to combat foreclosures was a welcome change in the government’s approach. But the actual plan won’t be unveiled for at least a week and might not be enough to prevent the housing market’s troubles from mushrooming further.

Housing counselors say the government’s response to a huge surge in defaults and foreclosures over the past two years has been a failure. They blame former President George W. Bush’s administration for sticking with voluntary programs led by the mortgage industry and not committing public dollars to foreclosure prevention.

They are hoping President Barack Obama will have more success, especially as foreclosures continue to grow. A Credit Suisse report published late last year forecast up to 10 million foreclosures by 2012, depending on the severity of the recession.

“The question is: Can we work to design a system where the banks recognize it’s in their interest to avoid foreclosure?” Obama said Tuesday in Fort Myers, Florida, which has been devastated by foreclosures and sinking home prices.

Obama said he would announce his housing strategy in the coming weeks. Meanwhile, home prices are not expected to hit bottom until year-end at the earliest.

A report published this month by Moody’s Economy.com projected that home prices will plummet by at least 50 percent in more than 30 metro areas in California, Florida and Nevada by the time the housing bust ends. More than 60 percent of all metro areas nationally are expected to see prices fall by 10 percent or more, the study found.

While Treasury Secretary Timothy Geithner’s revised plan to stabilize the financial system offered few details about housing on Tuesday, consumer advocates said they were still confident that the forthcoming proposal would offer far-reaching help to borrowers.

“It’s a tough problem,” said Michael Calhoun, president of the Durham North Carolina-based Center for Responsible Lending. “They want to make sure to get it right.”

Less patient was Democratic Rep. Barney Frank, chairman of the House Financial Services Committee. He issued a statement criticizing the administration for taking too long to put together a housing plan.

Frank also said he fears that $50 billion in funding “understates the amount that we will need” and called on lenders to halt foreclosures as the government develops its plans.

The Obama administration is expected to back a push in Congress – opposed by the mortgage industry – to let bankruptcy judges alter the terms of primary home loans. Earlier this week, Obama said it “makes no sense” that judges are not allowed to do so. The mortgage industry argues that this prohibition allows lenders to charge lower rates.

Fannie Mae allows investors to mortgage more properties

2009-02-10T12:48:11-05:00

WASHINGTON – Feb. 9, 2009 – Fannie Mae modified a policy that allowed real estate investors to have only four financed properties. The number can now be five to 10, depending on whether certain eligibility, underwriting and delivery requirements are met. Florida Association of Realtors® (FAR) President Cynthia Shelton raised the investment issue with Fannie Mae officials last week.

“Many of our members have voiced concerns about Fannie Mae limiting investors to four properties,” says FAR Vice President of Public Policy John Sebree. “This comes as good news.”

The change is noted in a just-released update of Fannie Mae’s “Multiple Mortgages to the Same Borrower Policy.” The change is effective March 1. To qualify, borrowers must meet Fannie Mae’s criteria. They cannot, for example, have a history of recent bankruptcy, or a delinquency payment over the past 12 months.

Fannie Mae offers more information about its new policy in Announcement 09-02, released on Friday. To download the policy guidance (PDF format) and get more information on qualifying and underwriting, go to: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0902.pdf