Today is a big day for the real estate industry. Here's why...
Today the National Association of Mortgage Brokers will be delivering 117,000 signed petitions from mortgage brokers all over the country to Attorney General Cuomo's Manhattan office. The petitions seek the killing of HVCC - Home Valuation Code of Conduct.
HVCC, which was put in place by Fannie Mae and Freddie Mac along with New York State Attorney General, Andrew Cuomo, is not only driving appraisers out of business but also killing real estate sales transactions throughout the country which doesn't really help the housing recovery. Inexperienced appraisers are performing appraisal inspections on markets they're not necessarily familiar with and driving prices even lower.
The National Association of Home Builders has just released a monthly sentiment survey that says that "fully one third of respondents indicated that they have recently lost sales due to low appraisal values".
There's currently a bill in the House of Representatives (H.R.3044) sponsored by Rep. Travis Childers to institute a moratorium on HVCC, but it's currently stalled.
Have you had any problems with HVCC recently? I would love to hear your story!
Chris is a single father raising two teenage daughters. He had called me from a posting on Craigslist about helping first time home buyers and at that time had no idea if he could buy a home or not. He was wondering what he needed to do to be ready to buy including how much down payment was required. He had no high expectations. He also didn't know anything about credit or what kind of employment history is needed to qualify. I remember Chris saying "I know this is a long shot but I need to try for my daughters' sake." What Chris did know was that it was a great time to buy.
After going through the pre-approval process, Chris didn't believe he could actually purchase a house with very little down payment and could even have the seller credit money towards his closings costs. His financial situation was actually good and his dream of having both daughters living with him in their own home became closer.
He met with a good Realtor I introduced him to who took the time to show him every single property that met his specific needs. After a few weeks, Chris got an accepted offer. And the rest is history.
What I will always remember about this very special experience and about Chris is the look on his face when we gave him his home keys. This man shows up at the property with his two daughters who at the time didn't have a clue they now had a place to call home. You see, Chris REALLY didn't believe he would ever be a home owner and didn't tell his daughters about the house until the keys were in his hands.
The opportunity to change lives in this profession is endless, especially in this day and age...Embrace it and do the best you can possibly do for people.
Times are tough now and our industry is changing BUT Chris' story is the reason why you'll hear me say I have the best job in the world!
It's now on the President's desk and just needs his autograph.
President Obama should be signing the extension and expansion of the first time homebuyer tax credit today as part of H.R.3548 - The Worker, Homeownership, and Business Assistance Act of 2009.
Here're the highlights of the new tax credit:
Remember, you are considered a first time homebuyer and are eligible for the $8,000 credit if you have not owned a primary residence in the past 3 years.
You must have an accepted offer on or before April 30th, 2010
Purchase transaction must be closed before June 30, 2010
Previous homeowners can claim $6,500 instead of $8,000 (for tax payers filing joint or single) and $3,250 or $4,000 (if married filing separate) as long as they've lived in their primary residence for the past 5 years.
In order to qualify for the $6,500 credit you must have lived in your primary residence (as claimed on your tax returns) for five consecutive years out of the last eight years.
Income limits have been raised from $75,000 for single tax payer and $150,000 for joint to $125,000 for single and $225,000 for joint.
Maximum purchase price of any qualifying single family residence is $800,000.
SPECIAL EXTENSION
There is a special extension for any qualified extended duty armed forces (military, foreign services, intelligence) serving out of Country.
If a person is out of Country on official government duty for at least 90 days during the period after December 31st, 2008, and before May 1st, 2010 - They or their spouse will be eligible for the tax credit extended until the same dates (in Contract on or before April 30th, close on or before June 30th) of the year 2011.
If you plan on taking advantage of this credit I'd suggest that you start NOW. Choose you Team (Realtor & Lender), get pre-approved and get the process started.
If you're a buyer, here is some good news for you and it could save you money!
On Monday, October 12, 2009 Governor Schwarzenegger signed AB 957, The Buyer's Choice Act and it's now in place. The Buyers ChoiceAct allows by law the buyers of foreclosed (bank owned) properties to choose the title and escrow company in their transaction.
Until now, sellers have been requiring a buyer to purchase title and escrow services from a company chosen by the seller as a condition to receiving offers or selling the property. The banks and asset managers no longer can direct buyers to title and escrow companies of their choice.
Here are the highlights:
It applies only to residential property and covers title insurance and escrow services
A buyer can agree to accept the recommendation of the seller as to which title or escrow company to use provided that a written notice of the right to make an independent selection of those services is first given by the seller to the buyer.
A seller who violates the law is liable to the buyer for three times all charges made for the title insurance or escrow service.
A purchase transaction cannot be invalidated solely because of the failure to comply with the law.
But why the Act? The Legislative findings and declarations state that the recent troubled real estate market has resulted in a concentration of the majority of homes available for resale withing the hands of foreclosing lenders and has dramatically changed the market dynamics affecting ordinary home buyers. The Act says that the potential for unfairness occasioned by the resale of large numbers of foreclosured homes required that protection against abuse be made effective immediately.
If you have any other questions regarding this Act, please don't hesitate to contact me.
When getting ready to buy your first home, a down payment can get in the way of making things happen.
One of the great features of a FHA loan is being able to have a family member or a close relative gift you the FULL 3.5% down payment required by the program. But to make sure your transaction goes smooth and there are no "surprises", it's very important to understand how gifted down payment works.
First, make sure the person who will be gifting you the money is a family member or a close relative. Gifts from non-family members are generally not acceptable unless your can document a close past relationship. In other words, you friends or co-workers may not work.
Second, the bank will require proof of "ability to gift" meaning, whoever is gifting you the down payment will need to provide recent bank statements to show they do have the funds (just like a bank would ask YOU if you're bringing your own funds to close). So make sure that person knows what to expect. It will help the transaction go smoother.
Third, the bank will also supply you with a form called "Gift Letter". This letter will state the relationship between the parties, the property address and the amount of the gift. The gift letter clearly states that the funds are a gift and not required to be repaid. You and the person providing the gift will be required to sign the letter.
Last but not least, you'll need to provide proof that funds came out of that person's (who is gifting) account and deposited in to yours. Keep all the transfer receipts and statements.
If you have any questions on gifted down payment or on mortgages in the Sacramento and surrounding areas, please don't hesitate to contact me.
Last week one of my clients got an accepted offer after making quite a few unsuccessful ones. If you're actively house hunting and making offers with no success, here's a story for you. Being a deligent agent, Debbie Baldes aways makes sure to check several times a day if new homes that fit her clients' specific needs came out in the market. And this time was no different. She noticed a new property in the market and scheduled an appointment that same day for our clients to see the inside. The house was a charm so she advised them to make an offer RIGHT AWAY. The reason behind the "right away" was because Debbie knew that the property wouldn't be around for long. Even days. They immediately got a verbal acceptance and the rest is history.
So what's the big deal? Well, the next day that same property had other offers up to $20,000 higher than our client's offer and if it wasn't for the sense of urgency and the trust between all parties, our buyers wouldn't be in escrow now and would risk loosing the chance of taking advantage of the$8,000 tax credit.
The lesson..."ACT NOW...THINK LATER", Debbie says. Don't be afraid of making an offer on a house that you like because you'll always have time to do all your inspections and due diligence. But you need to get the offer in. Listen to your agent.
hoIn this real estate environment it is crucial that you trust your Realtor. A few hours could make a difference. You sooze...you loose. With home prices as low as they are and rates at historic lows, investors are coming in with cash offers and the houses are going very fast. So make sure you work with an agent that understands the market and is pro-active. Follow their lead and you'll get the keys to your home.
Last week Mortgage Bonds finished at levels not seen since May 21 and home loan rates hit near historic lows. It’s hard to believe that some borrowers locked their interest rates under 5% on 30 year fixed rate mortgages. Stocks closed lower and the Dow market had its worse week since mid-June. As a result, money flowed to Bonds which helped home loan rates to stay low.
With weaker than expected Job Report for September and the unemployment rate of 9.8%, the Labor Department wasn’t showing much love for US workers. We also saw a decline in the Average Workweek and Average Hourly Earning. Both reports show the weakness in the labor market.
Personal Spending indicated that spending rose in August – the fastest monthly pace in almost 8 years. It sound like great news but we need to take into consideration the results of the “Cash for Clunkers” vehicle purchasing incentive, which is no longer in effect. Pending Home Sales were up above expectations which could be due to the $8,000 First Time Home Buyer Tax Creditset to expire on November 30. So if you're still thinking of taking advantage of this great incentive, it's certainly time to act and get off that fence.
I wonder if Timothy Geithner's home has sold yet... Check out what our Secretary Of The Treasury is trying to do with his house. It's hillarious!
Looking Forward
The markets may see some volatility due to the Treasury Department auctions coming up this week and the auctions will certainly compete with Mortgage Backed Securities. As you may or may not know, the Fed has decided to scale back their purchase of Mortgage Backed Securities so Mortgage Bonds may not get as much support now. We could see more of a wild ride on this week’s auctions than before.
Always Remember
When economic news are weak, money flows out of Stocks and into Bonds which helps the bond market and home loan rates to improve. Strong economic news usually has the opposite result.
In big news this week, the Fed said that there won't be any additional Mortgage Backed Securities purchase on top of what they've committed to buy. Instead, they'll slow down on the purchase and extend it through the first quarter of 2010 in order to provide a smooth transaction back to normal market conditions. It's important to remember that once the Fed stops purchasing Mortgage Backed Securities interest rates will start climbing. It also means that they'll be purchasing lower quantities since the remaining will be spread over a long period of time. Needless to say...we could see some home loan rates increase in the near term.
Existing Home Sales and New Home Sales reports came lower than expected but continue to show that the housing market seems to be getting a little better. Inventory of unsold existing and new homes went down. In the case of new homes it is partially because we haven't seen as many constructions as before.
Stocks struggled this past week and one of the reasons being concerns of Iran's nuclear sites construction. Stocks and Bonds could suffer some more if the situation escalates. There's a meeting scheduled for Thursday where members of six nations will discuss the situation further.
Durable Goods Orders fell in August and adding stocks struggles to that, the Bond market did well and we saw some improvements on interest rates.
Looking Forward...
The biggest report coming out this week is the Jobs Report for September. It's a very important one because it can show signs of an improved economy. August report wasn't good so hopefully we'll see something a little better.
Other reports coming out this week...Consumer Confidence (Tuesday), Core Personal Consumption Expenditure (PCE) Index (Thursday) - Fed's favorite measure of inflation, and the Jobless Claims report just before the Job Report on Friday.
Remember...Weak economic news causes moneys to flow from Stocks to Bonds, helping home loan interest rates. Strong news has the opposite effect.
It is no news that the current real estate market has attracted a large number of real estate investors. With all the great deals available and home loan interest rates extremely attractive it has become evident that some investors are taking advantage of the market by doing what is called “flipping”. Flipping is when an investor purchases a real estate property, makes some improvements and sells it for a profit.
If you’ve been involved with flipping, you’re aware of the “90 Day Flipping Rule” but if you haven’t here’s the scoop on this very important rule that could change the course of your real estate transaction. Based on the “90 Day Flipping Rule” a lender won’t approve financing on a property that is being flipped within the first 90 days. So it’s extremely important that all parties involved in the transaction know the last time that specific property was sold. If it’s been less than 90 days a buyer may have to review their financing options. If purchasing with cash…no problem. But if financing is necessary, the buyer needs to make sure they're getting the correct mortgage.
FHA loans are now very popular but will be a problem for flipping properties. You see, HUD won’t allow flipping within the first 90 days so it’s in your best interest not to even get in contract until the 91st day. VA loans are OK.
Technically the rule does not apply to conventional loans (Fannie and Freddie) but it’s smart to make sure your mortgage professional is aware of each lender’s specific guidelines. Even though the rule doesn’t technically apply to conventional financing, different lenders will have their own “overlays” that could get in the way. Banks will look at the new appraised value, amount of profit, etc, and if not within the investor’s parameters it could be a problem. So the rule will vary from lender to lender and it’s crucial that your mortgage professional knows which lender to use in order to avoid surprises, especially after you’ve invested your time and money.
Nope. It's not about beef! It's about a great zero down payment home loan.
USDA Rural Development's Guaranteed Rural Housing Program is designed to assist home buyers who have dependable income and satisfactory credit history, but not the down payment funds. It's a great option for home buyers who need 100% financing.
Here are the highlights:
- 100% financing. No down payment required - No loan limits or sales price limits. - Income limits will apply - No monthly mortgage insurance - This is a big one! - You DO NOT HAVE to be a first time buyer - Sellers can credit up to 6% of purchase price towards buyers' closing costs - No cash reserve requirements - Property must be USDA eligible - Property must be owner occupied
This is a great program that has been helping hundreds of home buyers.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
When getting ready to buy your first home, a down payment can get in the way of making things happen.
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