$8000 Federal Tax Credit for First Time Homebuyers-2009

In its efforts to stimulate the economy and revive the housing market, Congress has enacted legislation providing a tax credit of up to $8,000 for first-time home buyers.

The tax credit is for first-time home buyers only.

The tax credit does not have to be repaid.

The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.

The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.

Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

IRS Form 5405 can be found at http://www.irs.gov/pub/irs-pdf/f5405.pdf.

Attention First Time Homebuyers--New Program Available

Great news as there is a new down-payment assistance and rehabilitation funds available from the federal government (HUD) via the City of Los Angeles

Complete information is available at the City of LA Housing Dept website (LAHD) or on this link at http://lahd.lacity.org/nsp/PriorityFile.aspx?Type=93

This program is for homes in foreclosure within certain areas.  You can check if the property is within the map by searching on the LAHD website here http://lahd.lacity.org/nsp/.

Here is a link to the 2 page brochure summary http://lahd.lacity.org/nsp/PriorityFile.aspx?Type=94.

This program is a great program for homes which need repairs since they will provide upto $50,000 for approved repairs.  There are additional requirements such as 8 hour home buyer education course, HUD inspection, enviornmental report, and others. 

I heard today at my local Housing Committee Board meeting that many realtors are claiming to be Loan Modification specialists.  Just thought I would share some things I have learned recently on the issue.

1.  Only licensed real estate brokers who have had their advanced fee agreement approved by the CA Dept of Real Estate may charge an advanced fee.

2.  Without an approved advanced fee agreement, brokers can only accept payment for services after the modification has been complete.

3.  Brokers can assist in loan modifications only if there has not been a notice of default filed.

Please see the Consumer Alert Below from the DRE.

Consumer Alert - Advance Fees and Loan Modification Services

If you are behind in your mortgage payments, you may be contacted by individuals or companies that will offer to help you work out a loan modification with your lender or provide other services to you in order to help you prevent a foreclosure on your home.

You must be very careful if you are asked to pay for any of these services in advance, whether in cash, check or by charging your credit card. First, California Civil Code Section 2945, which regulates "foreclosure consultants", forbids anyone who falls under the definition of a "foreclosure consultant", as well as a real estate licensee, from collecting any advance fees for these types of services if a Notice of Default has been recorded against your property. If your lender has recorded a notice of default, do not pay an advance fee to a real estate licensee, or to any person or entity. California licensed lawyers when rendering services in the course of their legal practice(s) are exempt from this prohibition. There are non-profit agencies that can assist you without charging you a fee and real estate licensees who can represent you for a fee to be paid after they have completed their work. For information on non-profit housing counseling services, use the following links:

• Federal Housing Administration
• Hope Alliance Web site

If a Notice of Default has not been recorded against your property, it may be permissible for a real estate broker to assist you in working out a loan modification or otherwise negotiate a possible resolution to your problem with your lender or loan servicer and ask you for payment in advance for their services. However, the broker must have you sign an agreement that tells you what services will be performed, when they will be performed and how much you must pay. The broker cannot have you sign an agreement until it has been submitted to the Department of Real Estate for review and the broker has received permission to use it and collect the advance fee.

The following individual and corporate real estate brokers have submitted advance fee agreements for loan modification and/or similar services to the Department of Real Estate for review, and have received "no objection" letters regarding their use. You can obtain information on brokers and their locations by clicking on the "License Number" on the listing below or call (916) 227-0770.

• Advance Fee Agreement Listing

The Department of Real Estate does not approve, endorse, recommend or make any representations about any of the agreements or their terms, or any aspect of a licensee's business activities. Consumers wishing to contract with a real estate broker for loan modification or any other similar or related services should carefully review the agreement(s) and consider obtaining independent advice before signing an agreement(s) or advancing any fees. Consumers should also consider comparing the services and fees offered by other licensed brokers on the list.

Note: Licensed real estate brokers who provide loan modification or similar services without collecting fees in advance are not required to receive the Department of Real Estate's permission as long as their services are fully completed before you pay them.

The list is updated on a periodic basis and may not include those which have recently completed the review process.

According to the Realtor Report, "The $790 billion stimulus package hammered out by House and Senate conferees late yesterday increases the home buyer tax credit to $8,000, from $7,500, and drops the repayment feature for buyers who hold on to their property for at least three years.

The NATIONAL ASSOCIATION OF REALTORS ® has sought removal of the repayment requirement because it discourages buyers from taking advantage of the tax credit. The three-year minimum holding period is a safeguard against speculators' use of the credit.

The legislation also extends the effective date of the credit to December 1 from June 30, and extends eligibility to borrowers who buy their home with the help of state or local financial assistance that comes from the proceeds of tax-exempt mortgage revenue bonds.

The credit remains open only to first-time buyers (those who haven't owned in at least three years) and some income eligibility restrictions apply, but those are unchanged from the existing program.

Thanks to all that commented...I have updated the blog based on the current bill which will be on Obama's desk to sign.  Let's hope he does as everyone is expecting him to.

Great news has come from the treasury dept..."Treasury Secretary Timothy Geithner on Saturday told lawmakers that financial institutions that receive government assistance will have to make loan modifications and meet other new standards, according to Democratic sources."

This is great news for homeowner who might be facing foreclosure.  I am very busy working with homeowners who need loan modifications and this is becoming a large part of my business.  I applaud the Treasury Dept if they take a strong stance on forcing these abusive loans to be redone with more fair and reasonable terms to the borrower.

Temporary Suspension of Some CalHFA Programs

The Pooled Money Investment Board (PMIB) voted on December 17, 2009 to defer all bond expenditures from the Pooled Money Investment Account (PMIA) until the State's budget shortfall is resolved.  This freezes any disbursements from the PMIA until they meet again in January 2009. The result of this is that CalHFA must temporarily discontinue several programs.  CalHFA will suspend purchases of 30-Year Fixed Rate Mortgages until we receive an update and clarification from the PMIB.  CalHFA will also temporarily discontinue the Extra Credit Teacher Home Purchase Program (ECTP), California Homebuyers Down Payment Assistance Program (CHDAP), School Facility Fee Down Payment Assistance Program (SFF) and Affordable Housing Partnership Program (AHPP). Please note that the 100%-financed Community Stabilization Home Loan Program (CSHLP) and SMART Program will still be accepting loans through the usual channels.  Down payment assistance from non-CalHFA sources will continue to be accepted.

 Here's a list of programs currently available:

·         American Dream Down Payment Initiative (ADDI) - 6% Down Payment Assistance for Low Income First Time Homebuyers within the City of Los Angeles.

·         City of Los Angeles Housing Department's Mortgage Credit Certificate Program (MCC) - Allows an eligible homebuyer to claim an annual federal income tax credit and is applied to a portion of the total mortgage interest paid every year for the duration of the first mortgage loan.

·         SRAR First Time Home Ownership Grant - Southland Regional Association of Realtors currently offers a $4000 grant to low- and moderate-income buyers who purchase a home in the San Fernando Valley.  Funds are available after the close of escrow and there are no repayment requirements.

·         FHA (Federal Housing Administration) Loans - Offers a first mortgage with 3½ % down payment required and up to 6% in seller paid closing costs or repairs.

Contact: Jason Hector, Real Estate Broker (818) 357-9658

jhector@socal.rr.com

www.jasonhector.com

Right now we are giving money to banks with so called "Liquidity Injections" in hopes that they will do more lending.  Doesn't seem to be working because they will just hoard the cash till they know the future is brighter.

Loan Modification will be the primary focus with   Regardless, I'm thinking that Barak Obama will be more helpful to homeowners facing foreclosure.

Some of the proposals which are likely to be a government proposal to cover as much as 50% of the losses on modified mortgages.  Wow, another handout to the banks.  Why shouldn't they just take the loss

Check Obama's site for info on foreclosures Obama, http://www.barackobama.com/2008/03/27/how_not_to_prevent_foreclosure.php

What are some of the proposals you think will be passed during the Obama administration?

Let's hope that we can get through these massive layoffs and job losses.

This new program seems to be a great foreclosure prevention strategy by the FHA.  I found this great information sheet on the FHA website I'd like to share.  Here is the link:

http://portal.hud.gov/pls/portal/docs/PAGE/FHA_HOME/LENDERS/MORTGAGEE_LETTERS/2008_MORTGAGEE_LETTERS/08-13MLATT.DOC

So far, I had a prospect for this program however, unfortunately, their loan size was too high.  Used this link to help you sort through the cases to see if your client might be eligable for the FHA Secure Program.

Anyone who has a success story to share, please do since that's what we wan't to hear.  Happy Active Rain Blogging!!!

Great news this week from our Government to help those who are more than 90 days late on their mortgage.  Let's keep track on Active Rain if the results are as promissed and people are having any luck.

According to the CAR Market Matters Advisory, "The Federal Housing Finance Agency (FHFA) this week announced a new government program to help mitigate foreclosures on loans owned or guaranteed by Fannie Mae and Freddie Mac.  The program is targeted toward borrowers who are at least 90 days delinquent in their mortgage payments and have a high loan-to-value ratio.  Reduced interest rates and longer terms of as much as 40 years may be offered to qualified borrowers.  Some economists believe that areas such as California, Florida, and other high-cost areas will benefit the most from the program due to larger debt loads and higher rates of nontraditional mortgages".

Anyone who has been working with this program please let the rest of us in on the news.  Happy Blogging!!!

CAR’s mortgage update shows that “Citigroup is expanding its foreclosure prevention efforts by establishing a new program, Citibank Homeowner Assistance Program, which only is available to homeowners who are current on their mortgage payments, but at risk of defaulting. Citibank Homeownership Assistance Program will reduce monthly payments, including property taxes and insurance, to 40 percent or less of the borrower’s income. The mortgage modification program will freeze or reduce interest rates, extend the terms of the loan, and possibly reduce the loan principal.”

s new program is a great way for people to stay in their homes and get a mortgage they can actually afford. Good luck with this program and anyone with experience, please leave your story or feedback. Thanks, Jason