Friday, May 29, 2009

HUD Sec'y Donovan Announces Method of Bringing Tax Credit to FHA Closing

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.

Sunday, May 24, 2009

Supply and Demand in Real Estate Prices and Gas/Diesel Prices

It seems like so long ago that the price of real estate went on an upside ride. In addition to other factors, it really was supply and demand in action.
How long ago was it that a gallon of diesel fuel was $1/gallon more than regular gas. Why is it that I've seen diesel now any where from just 2-3 cents above to 4 cents per gallon less than regular gas. Typically, the price of gas rises several cents in 'honor' of the Memorial Day weekend. And, the price of oil has risen in recent weeks. Is this the gas companies way of making the roads safer by discouraging the purchase of their product? The percent increase at the pump has gone up approximately 2X the cost of the raw material. So, where is the supply and demand?

Happy Holiday and do not forget the real reason for the day off is to remember those who have given their lives so that we may enjoy our freedom.

Saturday, May 23, 2009

Sell Your House In 7 Days !

OK! The exclamation mark is mine, but I just drove by East Milton Square and there, nailed to a utility pole is a sign that reads "SELL YOUR HOUSE IN 7 DAYS" , followed by a phone number. I'll bet every Realtor wants to know how they do it. ; )

Friday, May 22, 2009

Memorial Day: Three Day Weekend or May 30th

The origins of Memorial Day go back to just after the Civil War, with remembrances of the war dead. Quoting from the Wikipedia write up about Memorial Day:

"According to Professor David Blight of the Yale University History Department, the first memorial day was observed in 1865 by liberated slaves at the historic Washington Race Course (today the location of Hampton Park) in Charleston. The site was a former Confederate prison camp as well as a mass grave for Union soldiers who died in captivity.
The freed slaves disinterred the dead Union soldiers from the mass grave to be inhumed properly reposed with individual graves, built a fence around the graveyard with an entry arch, declaring it a Union graveyard. A daring action for freed slaves to take such in the South just shortly after the Union's victory. On May 30, 1868, the freed slaves returned to the graveyard with flowers they had picked from the countryside and decorated the individual gravesites, thereby creating the first Decoration Day. Thousands of freed blacks and Union soldiers paraded from the area, followed by much patriotic singing and a picnic."

You can read the entire Wikipedia about the holiday HERE

For some time, there has been a movement to restore the observance to May 30th, similar to the resetting of the observance of Veteran's Day.

If you are interested in learning more about the efforts to restore the observance of Memorial Day to May 30th, then visit the site of where you can also sign a petition.

Saturday, May 09, 2009

Twitter Power Review

I just finished reading "twitter power ..How to Dominate Your Market One Tweet at a Time" by Joel Comm. As you might have heard or seen, twitter is a 'microblog' where you can post short statements, up to 140 characters in length.. In that regard it's similar to texting except your message can be seen by millions.
This is a great tool for real estate agents to network with other real estate professionals and perhaps more importantly with buyers and sellers. You can check out my 'tweets' on Twitter at QuincyBroker
Joel Comm's book tells you how to get started on twitter, from setting up an account, enhancing your page , and getting a following. After the basics, must reads are: Chapter 8 Using Twitter to Help Build your Brand, Chapter 9 Leveraging the Poweer of Twitter to Drive Behavior in Your Followers, Chapter 10 Beyond Third Party Tools You Will Want to Know and Chapter 11 Building Powerful Solutions on Top of the Twitter Platform. These chapters of the book show how even the non-techie can make use of thes relatively simple tools and methods. You can get your own copy of this book at Amazon: Twitter Power: How to Dominate Your Market One Tweet at a Time

Friday, May 01, 2009

"Avoiding Mortgage Foreclosure"

Last night I attended a Forum on "Avoiding Mortgage Foreclosure" at the Thomas Crane Public Library in Quincy, MA. The program was led by Kim Arouca of the Office of Congressman Bill Delahunt. It featured presentations by Attorney Nadine Cohen of the Greater Boston Legal Services, Attorney Deidre Jacobs Hall from Quincy Community Action Program (QCAP), Attorney Jean Healy from the office of the Massachusetts Attorney General, and Attorney Joe Leanard from the Massachusetts Division of Banks.

This was an excellent presentation with information of resources for homeowners who are experiencing difficulty in paying their home mortgage.

In addition to explaining the foreclosure process and the various options that are available, including mortgage remodification, they all cautioned against scammers that our preying on home owners. The two most prevalents scams involves (1) prepaying someone who promises to help you through the mortgage remodification process and (2) receiving offers to purchase your home, clean up the mortgage problem and then sell the house back to you.