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You've probably heard a lot about the $8,000 tax credit for first-time homebuyers. But did you know the $8,000 tax credit is about to end? The first article below provides details about the tax credit that you need to know. Another opportunity you don't want to miss is a low interest rate. Interest rates have dipped near historic lows, but the second article below explains how you can avoid a costly mistake when it comes to rates.
This information is important for anyone who has even thought about purchasing a home or refinancing. So please forward this newsletter to friends, family members, and coworkers who may benefit from this information. And if you need any assistance at this time, just call or email.
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$8,000 Tax Credit Nears End  |
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The government is offering an $8,000 tax credit for first-time homebuyers - that is, folks who haven't owned a home during the past three years. According to the plan, first-time homebuyers who purchase a home may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.
However, the program is scheduled to end soon. In fact, the Internal Revenue Service recently reminded potential first-time buyers that they must complete their first-time home purchases before December 1, 2009 to qualify for the special credit, which means the last day to close on a home and qualify for the credit is November 30, 2009. In other words, right now is the time to take advantage of this opportunity.
Here's some information to help you understand what the tax credit benefits are and who qualifies.
Benefits of the Tax Credit
It's important to remember that the $8,000 tax credit is just that... a tax credit. It's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing.
Better still, the incentive is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you're liable for $4,000 in income tax, you can offset that $4,000 with half of the tax incentive... and still receive a check for the remaining $4,000!
Who Qualifies?
The $8,000 incentive starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000 and is phased out completely at incomes of $170,000 for couples and $95,000 for single filers. To break down what this phase-out means, the National Association of Homebuilders (NAHB) offers the following examples:
Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out threshold is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer incentive to this couple, multiply $8,000 by 0.5. The result is $4,000.
Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible to reduce the tax liability by $2,800.
Remember, these are general examples. Borrowers should consult a tax advisor to provide guidance relevant to their specific circumstances.
What Type of Home Qualifies?
The tax credit is applicable to any home that will be used as a principal residence. Based on that guideline, qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured homes and houseboats used for principal residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.
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Avoid This Costly Mistake |
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If you've been following the financial news, you've probably heard that the Fed's been buying Mortgage Backed Securities. Unfortunately, people have picked up on the news and mistakenly discussed how these purchases will continue to cause rates to drop lower. But is that really what it means? - No.
The following information can help set the record straight and help you make smart decisions that lead to a low interest rate for your home loan.
How is the Fed's Bond Purchase Related to Rates?
The Fed has been buying Mortgage Bonds. BUT... more precisely, they're buying a lot of FNMA 30-yr 5.0% and 5.5% Bonds. Many of the mortgages in these pools are outstanding home loans with rates between 6.0% and 6.5%, as the rate that a borrower pays is different than the coupon rate given to an investor buying into that mortgage pool, with the difference being taken by Wall Street firms and government agencies. The loans in these pools are likely to be refinanced and paid - because current rates make it very attractive to refinance a loan over 6.0%. Thus, giving the Fed a quick recoup on some of its investment.
Bottom line: The Fed's purchase of higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.
The Problem Is...
Many consumers are in situations where they can refinance now and save hundreds of dollars a month on their mortgage payments. But if they hear people throwing around teases of lower rates ahead, they may decide to hold off on making the decision to save, in the hopes of gaining a few more dollars of savings per month if a lower rate came their way. Of course, while they're waiting, rates could turn higher - especially when you consider that the Fed is scaling back its purchases of Mortgage Backed Securities - and this window of opportunity could pass them by entirely.
Is the Fed Scaling Back? And What Will It Mean to Rates?
Last week, the New York Fed began to scale back their Mortgage Backed Security purchase program. The Fed has been buying about $25 Billion worth of Mortgage Backed Securities per week, but the new plan to drag out these purchases over a longer period of time means that they will be reducing both the frequency and amounts of their purchases. This will cause higher levels of volatility, as the Fed will be purchasing less often and less consistently. As a result, rates will probably rise gradually over time.
Here's the Clincher
Even if consumers are ultimately able to time the market perfectly and save another few bucks per month, they could still end up losing. That's because while they delayed, they lost the savings each month they could have gained by taking action sooner. In other words, they may have lost hundreds of dollars for every month they waited. So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting.
I don't want anyone to miss an opportunity by either waiting or misunderstanding the media headlines. Let's talk further on this. Call or email me, and let's discuss what this might mean for you.
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Everyone Wants a Lower Price, But What About the Impact of Interest Rates?
When shopping for a home, the natural tendency of any buyer is to want to pay the lowest price possible. It's important to keep in mind, however, that the sales price is not the only factor that determines what the monthly payment will be. In fact, the impact of higher interest rates can easily nullify any benefit of waiting for a lower price.
The recent interest rate increases are a real wake up call for every buyer in the market thinking about taking action soon. Some are even going to feel like they have missed the boat and you should not let them feel that way. The chart below demonstrates the quick increase in mortgage rates. Please understand that it is an inverse relationship. As the mortgage bond prices decline(below) mortgage rates increase.
Chart: Fannie Mae 4.5% Mortgage Bond (Friday Jun 05, 2009)
Why Should I Rush to Buy?
While you may have heard discussions in the media about the decline of property values in many markets, the rate of decline appears to be stabilizing.
That being said, it would not be unreasonable for buyers to want to hold out for an additional decline of 10%, hoping to capture the best possible price. However, as property values have declined in many areas to 2003 levels or lower, waiting longer to pull the trigger could be a mistake. Many markets are reporting that lower property values have been bringing out investors and the result has been multiple offers on many properties. Properties priced correctly are not declining and, in fact, are creating a lot of interest.
Interest Rate Complacency
The problem is that many home buyers have been lulled into a sense of complacency because of extremely low interest rates. Since the Federal Reserve initiated its program of buying mortgage-backed securities, which control the rates people pay for their home loans, rates had been range bound, bouncing between 4.50% to 5.00% for a 30-year fixed-rate loan.
But buyers shouldn't be confused by this. These rates are artificially low! Historically, interest rates have been above 6.00%. And any rate obtained below this number is a great deal, especially on homes with price tags from 2003!
Markets are Unforgiving
The last two weeks of May showed just how unforgiving the markets can be for people who choose to procrastinate. In just five days, interest rates from many lenders increased anywhere from .50% to 1.00% as fixed-income investors demanded more for their money.
For anyone who was waiting for prices to drop even more, a 1.00% increase in interest rate would bring a higher monthly principal and interest payment on a home, even if the price of that same home had fallen an additional 10% in value.
If your clients are waiting for prices to fall even lower, be aware that while holding out for a lower price may help them win the battle, they could lose the war in terms of monthly payments and overall affordability. With the Federal Reserve scheduled to end its buying of mortgage-backed securities this year, rates only stand to go higher for those that wait. In fact, interest rates are already on the rise and could go higher from here.
Clock is Ticking on Free Money
If you have clients who are planning on purchasing their first home this year, be sure to let them know that they need to take possession before 12/01/2009 to be eligible for a tax credit of up to $8,000. In a survey conducted in March by Move.com, nearly 50% of home buyers are currently unaware that this free money exists in the marketplace. And since over 50% of all buyers are first-timers in today's market, this could impact a lot of your clients.
If you have questions about this update, give us a call. I can show you how waiting for the lowest price could really cost your clients more in the long run.
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In March we sent out an appeal message for homeowners to take action early on county property assessments. Hopefully you filed and have good news. But I am afraid for most of us this is not the case. Having just received my 2009 assessment I am confused as my home value according to the county has not changed in the last 12 months. Being in real estate and having access to sales data - I know this is not the case. Just go to www.zillow.com and plug into the local info to see general market data.
This is a challenging year for the Tax assessors office as they are under incredible pressure by homeowners who look for assessed home values to follow market values. In the past, assessed values have typically trailed market values by 10% or so. Today we are seeing the opposite as market values are now below assessment values.
Dont look for Counties to lower assessed values as most homeowners will not challenge them. I look at it this way - the county is going to take a position that may be the initial stage of negotiations and just looking to see how serious you are on challenging the assessed value.
However recent legislation is empowering homeowners with more options than before. Senate Bill 240 changes this - assessments must now be fair or a property owner can take a professional appraisal straight to an arbitrator and receive a lower, true fair market valuation. Some highlights to the legislation is the following
- The appeal must be filed within 45 days of the mailing
- Taxpayer will provide an appraisal dated with 30 days of appeal
- Board of Assessors has 30 days to review to accept - if not
- Information will go to clerk of superior court and arbitrator assigned in 15 days
- Arbitrator has 30 days to set appointment and 30 days to render decision
- **The Board of Assessors has the burden of proving value
- Whichever party loses they shall pay the cost of the arbitration
Sort of an interesting proposition above as if the county loses the arbitration we all still lose because our tax dollars continue to pay the bill. Hopefully there will not be big issues as the Assessor office is able to deal with the appeals efficiently.
As a resource to our clients we have set up some options for you to have appraisals completed by experienced appraisers who can assist you. Please contact us if we help with this.
As always we continue to work to provide the most relevant information and hopefully you can use this to save yourself money this year. Dont pass up this opportunity to save money now and beyond.
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On Monday, May 11th, Gov. Sonny Perdue signed into law HB 261 a tax credit from the state.
Some highlights of HB261
- $1,800 or 1.2% of the purchase price spread over 3years(1/3 each year)
- For purchases between June 1 and November 30 2009
- Do not have to be a first time homebuyer
- For investment properties as well as owner occupied
- Only one credit per taxpayer
The tax credit is taken over a 3 year period and, unlike the federal tax credit, there is no income restriction. The income restriction for the federal tax credit begins at $75,000 for individuals or $150,000 for married couples and then phases out. The federal credit ends on November 30th as well.
With up to $8000 from the federal government and now $1800 more from Georgia, coupled with the lowest home prices and interest rates in a long time - um - this is just plain ridiculously good for buyers.
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Property Taxes
In this economy it is more important than ever to be informed about how we can save money. In Henry County Georgia, recently there was a town hall meeting hosted by District 4 County Commissioner Reid Bowman explaining the property tax assessment process and the procedures necessary to dispute property valuations with the Assessor's Office. Property taxes are figured based on fair market value as defined by the State of Georgia in the official code. At present, the assessor cannot use sales of distressed properties (foreclosures, auctions, etc.) in determining market value. (That may change as there is proposed legislation under consideration in this session of the Legislature.)
If you believe that your home is currently valued at more than it's fair market value, and want to file a dispute for review, you must file the attached form with the Henry County Assessor's Office by April 1, 2009. You can go to the Assessor's Office for assistance with the completion of the form http://qpublic.net/ga/henry/TaxPayersReturnRealProperty.pdf
IF THIS FORM IS NOT SUBMITTED, YOU CANNOT REQUEST A HEARING.
Submission of this form will preserve your right to a hearing on your valuation which you should receive sometime in early May.
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Joe Farro
Certified Mortgage Planner
Premier Capital Mortgage
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This is somewhat long and I apologize, please take time to read as it explains many questions that homeowners have on the current status of the refinance details for the Financial Stability plan. I have been hard at work trying to keep you up to date of the information as it is released. Yes, I am here at 11 pm on Monday night - thanks Red Bull.
First of all do not panic and feel that you will miss out by not responding this week. Time is actually on your side with this right now as more details are coming.
Fannie Mae and Freddie Mac have just released details on how they will handle refinance transactions authorized by the Home Affordable Refinance program. The complete details of both programs can be found by accessing the program guides from Fannie Mae and Freddie Mac, but we will discuss some of the highlights below.
Many mortgage professionals are not aware of the guidelines so do not be surprised if you have more information than they do with what is provided here.
You may have seen that lenders are in a holding pattern, as they determine if, when and how they will accept these transactions. Even though this legislation has passed - they are not all required to participate. For right now, the very first step is to determine if it makes sense to refi at prevailing rates and to see if you are eligible.
To see if you are eligible you may do this by a couple of ways.You may contact your loan servicer and ask...or you can visit one of the links below. Also I am available however It may take a bit to validate since I am only 1 person. I am attempting to release this info to be proactive and form the response generated from my message over the weekend I was not able to call everyone back today and I apologize. The good news is that this program will be available for a while so as to accommodate those that qualify. Note that the property address must be entered exactly as the agency has it on file, or it may not be found (ie: Rd or Road? St or Street? You may want to compare it to how it appears on your mortgage statement.
Does Fannie Mae Own Your Mortgage?
Does Freddie Mac Own Your Mortgage?
these links are also available on our website - Home Loan Toolbox
Let's look at the guidelines for both Fannie Mae and Freddie Mac and point out some of the key factors we see that will impact or enhance your ability to participate. While we point out the highlights, once again, we highly encourage you to both read the guidelines and then address them with both your underwriters and account executives for specific details on how you can proceed.
One key point to remember is that these are the guides as they are originating from the agencies. And just as participation in the programs is voluntary, individual investors and servicers may choose to implement constraints that deviate from the guidelines, much in the same manner that we are seeing additional underwriting overlays in the processing of loan files today.
Fannie Mae
Let's look at the difference between the types of refinancing available from Fannie, and know which you can originate. The primary difference for originators is as follows between the two programs..
DU Refi Plus (Desktop Underwriter - DU is the computer generated underwriting that approves your home loan)
- Available to all Fannie Mae approved lenders using DU; borrower must credit qualify.
- Available across all lending channels (retail, wholesale and correspondent).
Refi Plus
- If a client does NOT qualify for DU Refi Plus, they may still be able to refinance, but would have to work directly with the current servicer, or one of the servicer's affiliates or retail channels.
Applications may be taken now, but DU Refi Plus loan findings may not be available until early April. As such, they will include the MI flexibility that is outlined in the guidelines from the agencies linked above. Fannie has also said that other enhancements may not be added to DU until early May. Again, this does not mean your loan cannot be taken - but please keep in mind everything not all guidelines have been released as of yet.
Many of the guidelines are similar for both DU Refi Plus and Refi Plus. Similarities include:
- That the borrower must be receiving either a lower mortgage payment or moving to a more stable type of product like an ARM to a Fixed-Rate. ARM programs are available but must have initial fixed periods of five years or greater.
- The maximum LTV is 105%. There is no limitation on CLTV, but 2nd lien holders will need to re-subordinate.
- If PMI(private mortgage insurance) does not exist on the loan today, it will not be required on the new loan, regardless of LTV. If PMI does exist on the loan, the loan will be required to be re-insured through the existing PMI company.
- LLPA's (loan level pricing adjustments) exist for both loans, see guides for details or consult your investors.
- The availability for appraisal waivers will exist in limited situations.
Freddie Mac
The Freddie Mac guidelines are somewhat similar to Fannie Mae's but there are some points that are vague. Most of my clients participated in Fannie Mae loans over the years. There still are some questions as to who may be able to assist you should you have a Freddie Mac loan - details are still to come and I will keep you updated.
Additional Resources:
Fannie Mae
Freddie Mac
Does Fannie Mae Own Your Mortgage?
Does Freddie Mac Own Your Mortgage?
Home Loan Toolbox
As always I do appreciate your business and loyalty. As you can tell from my message above I have fortunately been overwhelmed with responses from this past weekend. My goal is contact you this week if you have already responded. If you respond via email I will get back with you as soon as possible. If you matter is of a more urgent nature please do not hesitate to call. Please remember all details are not yet released and I felt it better to be proactive rather than not provide details at all. I will be working late hours all week as well as weekends to assist you.
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Joe Farro
Premier Capital Mortgage
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I know you may be a little bit overwhelmed and frustrated right now with all the NOISE and confusion about all the new government interventions in the mortgage and housing markets. As a Certified Mortgage Planning SpecialistTM, I make it a priority to stay updated on developments in the mortgage markets that may impact my clients. I have spent a lot of time reviewing the latest Making Home Affordable government program, and here are some of my observations. If you think this information is useful, please pass it along. Feel free to forward this email to anyone you know that may be impacted!
The Making Home Affordable government program is divided into two parts:
•· Modification Program
•· Refinance Program
As before there are still more details to come as administration figures out how this will be administered in the private sector. We will know more in the next month or so. I already know of people who have contacted their loan servicer's and have been told they do not have the details and to call back in 5 weeks. Below are some of the details condensed for you as well as the links for all the information released.
Lastly before you read further there is still much chatter on lower rates. Nothing has been announced by the administration on lower rates as of yet - however we may see the stock market continue to experience losses which will in turn see mortgage rates move lower. This was a good week for rates as we broke through some resistance levels.
Below are the specific link provided by the administration in there attempts for transparency.
Refinance or Modification Eligibility Link
Fact Sheet
Summary
Guidelines
As a resource for all of our clients we have a devoted a resource web page to always provide links for important links Home Loan Toolbox
Part 1 - Modification Program
Believe it or not, the details of this program are still being worked out. Despite all the hoopla and fanfare surrounding this program, it remains 100% VOLUNTARY, and mortgage servicers (the companies that actually collect borrowers' mortgage payments) are not obligated by law to follow these rules and guidelines...YET. Oddly enough, if a financial institution has already received government funding, they are NOT obligated to participate. However, if a financial institution receives new or more government funding in the FUTURE, they WILL be obligated to participate.
In other words, the rules are still a bit sketchy and nobody really knows who will participate and how it will all work from a practical perspective. Most of what you read and hear about in the media will most likely be speculation at this point. In a nutshell, the program has three elements:
•· The government is offering financial incentives to mortgage servicers who modify loans for borrowers.
•· The government is offering financial reimbursement to investors if they allow servicers to modify loans and then take a hit on the borrower's re-default if the property declines in value after the loan modification
•· The government is offering financial incentives to borrowers who modify their loans and make their new payments on time
Vacation homes and investment properties don't qualify for the program; only primary residences are eligible. Only borrowers who have experienced some type of financial hardship can qualify. In other words, you will need to document that your financial situation is worse now than it was at the time that you originally got the loan. Your income needs to have gone down, and/or your expenses need to have gone up. Click on this link if you want to see if you qualify for at least the minimum requirements:
http://www.financialstability.gov/makinghomeaffordable/modification_eligibility.html
Remember, even if you do qualify under these minimum requirements, your servicer (the company where you send your payments) might not be participating in the program just yet.
Part 2 - Refinance Program
Here's how it works:
•· You need to be current on your mortgage payments (no late payments in the last 12 months)
•· Your mortgage balance cannot exceed 105% of the current value of your home
•· Your mortgage needs to be owned or guaranteed by Fannie Mae, Freddie Mac, FHA or VA.
Based on current market conditions, this might make sense for you if:
•· You have an adjustable rate, interest only, or balloon mortgage that you want to convert into a fixed rate; or,
•· You have a fixed rate mortgage where the interest rate is greater than 6%. In fact, contact me even if your rate is as low as 5.5%. I'll put you into my rate watch program and let you know when rates get to the point where you would benefit by refinancing.
Other Recent Developments
There have been many other recent developments in the markets, as well as new government legislation. Here are just a few recent items that may impact you or someone you know:
•· Home improvement tax credit
•· First-time home buyer tax credit
•· Reverse mortgages for home purchase transactions (age 62 or older)
•· Suspension of required minimum distributions for certain retirement accounts (age 70 ½ or older)
Let me know if you'd like to discuss any of these items in further detail.
Conclusion
I know that all the NOISE you are hearing about the mortgage industry and government interventions can be distracting and confusing. That's why were here for you! As a Certified Mortgage Planning SpecialistTM, my role is to help you make sense of all the chaos and confusion in the market, so that you can make smarter mortgage and home buying choices. Please send me an email or give me a call so that we can discuss how these and other recent developments may impact you and your situation!
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Joe Farro
Premier Capital Mortgage
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How Ready Are You for 2009?
Now that the holidays are over and a new year has begun, now is the perfect time to make sure you are ready for 2009. Here are five things you should do this month that will make your life easier in the months ahead:
- Clean Out the Clutter: You keep saying you'll do it...go ahead and do it. Spend an hour going through your old files, and shred those receipts, bills, and statements you no longer need, like old ATM receipts and utility bills, paystubs more than a year old, and receipts for things that are not deductible.
- Get Organized: While you're at it, create new files for your 2009 tax-related papers and receipts. Examples of categories include medical expenses, gift and charitable donations, and home improvements.
- Check the Gift Card Fine Print: If you received gift cards as a present over the holidays, use them soon. Some have expiration dates, or the amount on the card may get reduced over time. In addition, in the current economy, retailers that go out of business may not honor gift cards.
- Do Some Review: Review your various insurance policies - life, home, auto, etc - to make sure the coverage you have is still the best fit for your needs and situation. To save on cash out of pocket, you might even consider raising your deductible to get a lower premium.
- Do Some Reflection: Take an honest look at your schedule and responsibilities and make sure you are taking the time you need to stay healthy and feel good. Don't feel bad about actually scheduling specific blocks of time to exercise or spend special time with family and friends, to ensure it actually happens. This will make everything else you have to do this year easier...and more enjoyable, too!
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Joe Farro
Certified Mortgage Planner
Premier Capital Mortgage
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4.5% Rates Possible?
The news is abuzz about the Treasury lowering home loan rates to 4.5% to stem the foreclosure crisis but details have been lacking. The Treasury Department stated it is looking for additional ways to help the struggling housing industry and believes lower rates are needed.
This idea is similar to the November 26th announcement from the Federal Reserve where they indicated the intent to purchase up to $500 billion in mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. In addition they would buy another $100 billion in direct debt issued by those firms. The November news caused bond prices to spike higher and forced mortgage rates lower. Just like any commodity, whenever tremendous buying interest exists, prices rise. Mortgage rates fell almost 1/2% in rate following the announcement. However, the following week market forces continued and rates spiked a bit higher from the recent lows.
It is important to remember that there are no details to the Treasury plan as of yet. The Federal Government does not directly dictate home loan rates. Rates are determined by price movements of Mortgage Backed Securities (MBS), which compete for investor funds in the open market. The Treasury can buy mortgage bonds on the open market but remember that they are not the only entity buying and selling these instruments.
The Treasury is in a very tough position in trying to manipulate home loan rates. Creating a new Federal mortgage program could be very risky. How would rates be set, who would qualify, and can the funds be used for purchases and refinances are just some of the questions being asked. The other critical concern is implementing such a program without destroying the current mortgage securities market. Doing so could have the unintended consequence of causing additional economic turmoil.
Rates are not going to 4.5% with the wave of a wand by Hank Paulson or Ben Bernanke. As a matter of fact, the massive borrowing to fund the TARP program has a negative effect on rates. At this time, the announcement still leaves a lot of uncertainty. What we do know is that rates are at historic lows and house prices have moderated setting up a great scenario for people who need to refinance or are looking to buy a home. Waiting for rates to fall to 4.5% may leave people sorely disappointed. Take advantage of the great opportunities today
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Joe Farro
Certified Mortgage Planner
Premier Capital Mortgage
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Sunday, as I sit here and prepare for the upcomming week I cannot help but think about what a sales person said to me as she was leaving my office on Friday. As she walked out the door she asked “Is there still money being lent for mortgages.” That statement has been turning in my head all weekend.
The media has done a very good job of making people believe that the mortgage industry is at its end and that mortgage money is virtually impossible to obtain. The truth is that mortgage money remains readily available for credit worthy borrowers as it always has since I entered the industry in 1992. Fixed interest rates (for loans of $417,000 or less) remain at historically low levels (although they have been on an amazing rollercoaster ride recently) and adjustable rate mortgages offering initial fixed rate periods and conservative adjustment caps remain viable options for those wishing to keep their payments lower in the initial years of their mortgages or for those who are looking for an alternative to the higher fixed rates that are available today for larger loans. It is true that the mortgage business has been battered lately. In the end, it will be a better and a stronger industry comprised of reputable lenders who offer quality products for borrowers who have demonstrated both an ability to save and a willingness to repay debt. It is my desire that we will also be able to find a way to provide solutions to those who were led down the wrong path by unscrupulous mortgage lenders or by their own lack of knowledge about the products that they chose to finance or refinance their homes.
I am writing today to ask that, as we all struggle through these uncertain economic times, consider introducing me to anyone you know who might be in need of a review of their current mortgage or of financing for either a purchase or for a refi. Now more than ever, the need to seek out sound financial advice and services is critically important. As a CMPS and CMP, I have spent the past 16 years developing my knowledge base and providing unparalleled service to my clients. It would be my pleasure and honor to assist anyone whom you might know to be in need of sound, honest mortgage advice. I hope that this email finds you all well and I hope to be of service to you whenever you need my assistance.
Best Regards
Joe
Mortgage News
What an Obama Administration
Means to Your Mortgage
 The debates are done, the election is over, and on January 20, 2009, Barack Obama will be inaugurated as President of the United States. No matter where you fall in the political spectrum, no one knows for sure exactly what this will mean to the future of our country. With this in mind, let's put all politics aside, and take a closer look at Obama's plan for our future. And since a home is still one of the biggest, most important investment you'll ever make, we'll focus the limited space of this short article on Obama's basic housing measures.
More Economic Stimulus – Since trouble in the economy won't wait until January 20th, plans for another economic stimulus package are already in the works, so we might even see this happen, in one form or another, before Obama takes office.
Obama has also discussed a housing stimulus as well, to stem the tide of foreclosures, including a temporary 90–day freeze on foreclosures, as well as measures to address the demand side of the housing issue. This package includes $25 billion in state fiscal relief, which Mortgage Law Central says will help avoid "painful property tax increases."
Obama also wants to "aggressively and comprehensively" implement the recently–passed rescue plan and the Hope for Homeowners Act. This means the Treasury, HUD, Fannie Mae and Freddie Mac, and all of the banks and loan servicers who benefit from the rescue bill will continue to coordinate broad mortgage restructurings and loan modifications for struggling homeowners. No one knows for sure exactly how this will be implemented or what it even looks like yet, but we'll keep you updated as the details are released.
Reformed Bankruptcy Laws – Obama has promised to repeal the 2005 bankruptcy bill. A controversial measure, this will allow judges to alter mortgage terms during a bankruptcy, providing more protection for struggling homeowners.
New Mortgage Interest Tax Credit – Obama is expected to create a 10% universal mortgage interest credit for those who don't currently itemize. This means about $500 in savings for 10 million American homeowners.
Protection Against Mortgage Fraud and Predatory Lending – During the campaign, Obama blamed the financial crisis on lax government regulations, so look for tougher regulations, new criminal penalties for mortgage fraud violators, more funding for enforcement programs, more detailed loan disclosure laws, new counseling programs and other consumer protections, including a new Home Obligation Made Explicit (HOME) score (kind of like a new APR calculation) to help borrowers better understand and compare mortgage costs during the mortgage process.
This may go a long way in protecting new home buyers from the opportunists that have given good mortgage professionals like us a bad name in the last few years. Another hope is the new mortgage lisencing legislation will help develop a new breed of mortgage professionals that work with the clients best interests. And since so much of our business depends on referrals from satisfied clients, the good news is a lot of these people are now out of business. We hope that any new measures introduced by the Obama administration will help keep a new breed of copycats from invading our industry as the real estate market begins to change for the better in 2009 and beyond. From now until the end of the year, you can expect volatility to continue in the financial and credit markets. This means mortgage rates, too, so if you or anyone you know is looking to buy or refinance a home, give us a call. We monitor the performance of mortgage–backed securities on a daily basis, which allows our clients to capitalize on changes that will help lock in the best rate for their individual goals and needs. Also, if you'd like to discuss any of these or other changes that could affect your mortgage, don't hesitate to give us a call.
 If you know anyone who is looking to buy, sell or refinance a home, please forward their name and telephone number to us. We will happily provide the same high level of service that we have provided to you. The greatest compliment you could possibly give us is the referral of your friends and family. Finance News
Four Tips for Saving on Child Care Costs
 According to the National Association of Child Care Resource and Referral Agencies, full–time child care can reach up to $14,000 a year for a single infant. And while child care is the last thing you want to be cheap about, there are a few proven and practical ways to limit your costs, which can really help in today's tough economy.
Let Uncle Sam Chip In – Working parents can claim up to $3,000 for one child and up to $6,000 for two or more children on their 2008 income taxes for qualified child care expenses. Ask your tax professional about the Child and Dependent Care Credit to see if you qualify for this valuable credit.
It's important to note that this credit can be reduced if you have a dependent–care flexible spending account (FSA) through your employer. These special accounts allow employees to set aside pretax dollars up to $5,000 for qualified expenses. Find out if your employer offers this program and discuss the benefits of each option with your tax preparer. If you need a referral to a qualified tax professional you can trust, don't hesitate to give us a call.
Don't Discount Your Employer – Be sure to ask your employer about any other child care programs it might offer. It's not uncommon for companies to negotiate discounts in your area that can offset expenses and travel time. Also, find out if your employer offers flex time or telecommuting, even on a short–term or part–time basis.
 Schedule for Success and Savings – For many couples, a simple change in schedule can cut down on the amount of child care you need each week. While having one spouse work the day shift and the other work the night shift might eliminate child care altogether, this could be very stressful on your relationship. But what if you just altered your schedules slightly? For example, if one spouse works from 7 am to 3 pm and the other works 10 am to 6 pm, this would cut down on child care and might not affect your time together as much. For couples who work together or even close together, working the same schedule could be more beneficial to child care costs and your marriage.
The right school program combined with the right work schedule can significantly reduce your child care needs. Some public schools offer pre–kindergarten programs, often for free, and many schools also offer before– and after–school care for older children at much lower rates than child care professionals.
Share with Friends And Family – While finding a relative to help out would be ideal, hiring a nanny with a few relatives or a few good friends is also a great option. This will allow you to share the cost of child care and pay less individually for each child.
Creative Cuisine
Perfect Prime Rib
 This is a foolproof way to make a PERFECT prime rib. Paramount to this venture is that you follow the directions to the tee.
- 1 standing rib roast of either prime or choice quality (size will depend on the number of guests – consult your butcher on this)
- Herbs d’ Provence
- Extra virgin olive oil
- Kosher salt and freshly ground black pepper
In a bowl, mix together the ingredients for the marinade. Allow the rib roast to come to room temperature. In order to make it happen with a piece of meat this size, you must take it out of the refrigerator from the moment you wake up the morning of.
Preheat oven to 375 degrees.
Brush the top of the roast with olive oil and season with salt, pepper and Herbs d’ Provence.
Put roast in oven and leave alone for one hour.
At the end of the hour turn off heat but DO NOT OPEN THE OVEN DOOR.
When guests arrive or whenever it’s appropriate, turn the oven back on to 375 degrees. From the time you turn oven back on, roast 35 minutes for rare, 40 minutes for medium rare, 45 minutes for medium and 50 minutes for well done.
Note: the roast must sit for at least 2 hours before turning the oven back on. It can, however, sit longer.
Allow roast to rest for 15-20 minutes before serving.
Street Smarts
The Gift that Keeps on Taking
 Gift cards have become extremely popular. In fact, the variety of cards offered and the sheer convenience of these little plastic gems have created a new global culture of gift–giving that few could ever have anticipated. The National Retailers Federation estimates that a total of $97 billion in gift cards – $26.3 billion during the holidays alone – were purchased in the US last year. This year, however, experts say that this hassle–free holiday gift may have met its match: a tough economy.
Earlier this year, when Sharper Image declared bankruptcy, nearly $20 million in gift cards were instantly voided, forcing shoppers to suddenly reconsider the merits of the gift card. Remember, unlike banks accounts, gift cards are not protected by the FDIC or anyone, and there is no guarantee that you can redeem the value of the card if a company goes under. And with other major retailers filing for bankruptcy protection recently (Circuit City, Mervyns, and Linens–N–Things, to name a few) giving gift cards this year could be as risky as playing the stock market.
The good news is, with US retail sales expected to shrink this holiday season, retailers will be working hard to get their share of your holiday budget, no matter how large or small. This means major sales and deals that could make going to the mall this year a much better option than simply handing out gift cards anyway. Because of these deals, what a $50 gift card would have purchased last year could turn into a much more valuable and memorable gift for everyone on your list.
Either way, if you receive any gift cards this year, or you still have a few you haven't used yet, be sure to redeem them right away.
Home News
Renovation Mistakes in a Buyers' Market
 With home prices on the decline, some homeowners may be tempted to renovate their home to make it more desirable or valuable to potential buyers. But there are certain renovations that can actually decrease the value of your home – even in an up market.
If you're trying to sell your home in the next 6 to 18 months, be extremely discerning about your choices, get advice from an expert real estate agent and appraiser before you begin any major renovations, and avoid these costly projects in today's buyers' market:
An in–ground swimming pool or hot tub – In certain parts of the country, yes, a pool or hot tub can increase your home's value. But, for many potential buyers with young children, these items are a true liability and will only decrease your home's value – not to mention the built–in maintenance and energy expenses that come along with them. If you're looking to sell your home in today's tougher market, you simply can't afford to isolate a large number of potential buyers.
New additions – Of course, home additions add valuable square footage, but one false move and your addition can be an eyesore that could hurt your home's value, even when the market turns. A well–designed new addition is time–consuming and expensive and needs to be properly planned and executed. If you're looking to sell your home anytime soon, save yourself the hassle. With just a portion of what it would cost to add a new wing, you could upgrade your kitchen cabinets, appliances, and counter tops and get far more bang for your buck.
Conversions – Yes, with so much competition, it's important that your home stands out from the crowd, but following today's trends could cost you big tomorrow. Right now, space for a home office or a recreation room might be trendy, but converting a den or your garage into one can be a costly mistake. A good real estate agent can achieve the same effect by defining a space through staging. If you want to upgrade your garage, a new door is much cheaper and adds valuable curb appeal.
We have partnered some of the best market experts who can let you know if your renovations make sense in todays market. Please dont hesitate to contact us if you need assistance with this decision.
Facts and Figures
Companies with Unusual Perks
 Chesapeake Energy Corp. – Employees can earn their scuba diving certificates on the company's tab on–site at Chesapeake's Olympic–sized pool.
Amgen Biotechnical Company – This company provides an in–house florist, photo developer and a cafeteria that fixes up family–sized meals to bring home.
Sprint – Sprint buys houses that are available for employee purchase. If an employee buys a Sprint home, Sprint will give them back 2% of the sale price.
Microsoft – As a part of the company's campus expansion, employees are allowed to design their own work stations. For example, the Zune team has a deejay booth in their meeting room.
eBay – Stressful day? eBay's office in San Francisco offers a room filled with yoga mats, pillows, and meditation music so employees can take a break from a hectic day in the office.
Healthways – The company's headquarters provides walking trails, easy–to–locate stairways and bikes for rent to their employees to stay active and exercise.
General Mills – Employees returning from maternity leave are phased back to work on a part–time basis for eight weeks to help ease the transition.
Camden Property Trust – Employees who live in one of the firm's 180 apartment complexes, receive a 20% discount on their rent.
EOG Resources – This company will match their employees' contributions to charities dollar–for–dollar, up to $60,000.
Google – Google employees receive $1,000 towards their purchase of a hybrid or electric car.
 Table of Contents
· Mortgage News
· Finance News
· Creative Cuisine
· Street Smarts
· Home News
· Facts and Figures
· Five Quick Tips
· Did You Know?
· Quote of the Day
· Special Offer
· Trivia Challenge
· Book Review
There are more than 1,450 recorded species of edible insects.
YUM!
The AAA Foundation for Traffic Safety recommends these tips for staying safe on the road this holiday season.
Tip 1: Offer to be the designated driver.
Tip 2: Drive with extra attention.
Tip 3: Stay calm: Forget about the annoyances.
Tip 4: Stay alert in parking lots.
Tip 5: Call Tipsy Tow 800–400–4222 (12–31 to 01–01).
 "Eighty percent of success is showing up."– Woody Allen
How many degrees does a bowling pin need to tilt in order to fall?
- 90
- 28.5
- 45
- 7.5
Call (678) 289 - 6600 and ask for Whitney or email us at wgasaway@joefarro.com with the correct answer, and your name will be entered into a drawing to win dinner and movie tickets for two!
Brain Rules: 12 Principles to Surviving and Thriving at Work, Home, and School
by Dr. John Medina
Developmental molecular biologist John Medina is the first to admit that we don't know much about how our brains work. But, he says, our ability to solve problems, learn from mistakes and create alliances has been the key to our survival and how we took over the world. In his best–selling book, Brain Rules, the Seattle doctor lays out 12 overarching principles, or rules, that he believes can be applied to our daily lives to help us to better teach, learn, conduct business and parent.
Brain Rules: 12 Principles to Surviving and Thriving at Work, Home, and School is available at Amazon.com.
About the author: Dr. John Medina is a developmental molecular biologist and research consultant. He is an affiliate Professor of Bioengineering at the University of Washington School of Medicine. He is also the director of the Brain Center for Applied Learning Research at Seattle Pacific University. To learn more, visit www.brainrules.net.
Thank You
As always, we wish to thank our clients who have been kind enough to refer business to us. We appreciate the opportunity to provide excellent service to your family, friends, and co–workers.
Joe Farro
Premier Capital Mortgage
360 Corporate Center Court, Suite B
Stockbridge, GA 30281
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Joe Farro
McDonough,
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Premier Capital Mortgage
Office Phone: (678) 289-6600
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