On June 10th, Johnny Isakson, a Senator for the State of Georgia, introduced legislation that would give ALL buyers a $15k tax credit with NO income limitations. Senator Isakson was cited as follows:
"The first-time homebuyer tax credit has made a difference. First-time home buyers used it and the market stabilized, but we don't have a recession in first-time home buyers. We have a recession in the move-up market," Isakson said. "One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can." --Sen. Isakson--
Today came the news that HUD is getting close to OK'ing Upfront Tax Credit for first time homebuyers. According to Sean Donovan, FHA is close to monetizing First Time Homebuyer Tax Credit! When this happens, this means that HUD will allow FHA approved lenders and HUD approved non-profits, as well as state and local governmental entities to monetize the tax credit through short term bridge loans. In short, that tax credit has just become a part of a first time homebuyers' down payment!
Video: FHA Close to Monetizing First Time Homebuyer Tax Credit!
Today, I blogged about a new policy that went into effect on May 1st, 2009 regarding the new Home Valuation Code of Conduct or the "HVCC." The new code grew out of a lawsuit filed by the Attorney General of New York, Andrew Cuomo. While the intent of the new code is well meaning, there are a few flaws to note. One big flaw is the partial ownership big banks have in the Appraisal Management Companies, or the new middlemen of the appraisal industry. According to the new code, appraisals of 1 to 4 unit properties must be ordered through Appraisal Management Companies to ensure the integrity of the appraisal. However, here is the snag. If the point is to keep the appraisal process separate from the lending process by way of the "Appraisal Management Company," then what sense does it make for a big bank to have even a partial ownership interest in such a company.
It is a new can of worms.
For more info, please refer to my blog entry. Your feedback and thoughts are valued.
In my quest to find helpful information for homeowners who are currently struggling under the burden of a heavy and toxic adjustable-rate mortgage, I found information on FinancialStability.gov about a new federal program introduced under President Obama's plan to help homeowners struggling to hang on to their homes. The name of the program is called the Making Home Affordable program. The detailed program description describes the conditions surrounding the current housing climate, explains the purpose and intent of the program that it intends to assist 7 to 9 million homeowners who have tried in good faith to make their mortgage payments, and describes the many incentives created to influence lender and servicer participation in the modification of toxic mortgages, for example:
According to a press release by the US Department of Treasury Dated March 4th, 2009:
"Second Liens: While eligible loan modifications will not require any participation by second lien holders, the program will include additional incentives to extinguish second liens on loans modified under the program, in order to reduce the overall indebtedness of the borrower and improve loan performance. Servicers will be eligible to receive compensation when they contact second lien holders and extinguish valid junior liens (according to a schedule to be specified by the Treasury Department, depending in part on combined loan to value). Servicers will be reimbursed for the release according to the specified schedule, and will also receive an extra $250 for obtaining a release of a valid second lien."
To read more about the two options available under the Making Home Affordable program as well as basic eligibility requirements, please refer to my residential blog for related links:
I updated my blog with the recent news that King County now requires all septic systems to be inspected at time of sale. I also quoted some interesting factoids about septic systems from pottyon.com (nice name!), as well as Evergreen Septic Design, a local company that specializes in septic systems.
This week I re-instated my membership with NAEBA after a few years of going it alone as an exclusive buyers broker. The decision to reinstate my membership resulted from the news that things have changed for the better within the past year. I am looking forward to the organization's new developments in the coming months and hope to join a committee very soon in order to contribute my energy in the promotion of exclusive buyer agency and advocacy.
Today, I found out about a new online resource center dedicated to the prevention of foreclosures presented by Freddie Mac. As I visited the homepage of this new resource center, I read about Freddie Mac's commitment to helping borrowers to avoid foreclosure and to keep them in their homes whenever possible. According to the website, the resource center provides a one-stop shop for those who interface with consumers - especially the Sellers, Servicers, and community-based organizations working in neighborhoods every day that are helping homeowners avoid foreclosure. Despite the recent troubles Freddie Mac has been facing, it is good to know that they are doing what they can to help homeowners stay in their homes.
For more info, please visit my residential blog post:
I have written a blog that comprises a collection of information gathered from various key sources regarding the state of the economy and the impact it is having on commercial real estate, as well as their predictions for the coming months ahead.
It is hardly a secret. Not only is the American economy in trouble, but so is the global economy. Sparked by the mortgage crises, we have seen the decline of mortgage-backed securities, which was the engine that drove liquidity in the lending industry. When the crisis hit, it was mostly subprime and alt-a mortgage products. However, in a recent interview, Jaime Peters, a Senior Equity Analyst at Morningstar, explained that the crisis has bled into the prime market.
For more information and to read about where we are heading in 2009, click here:
Periodically, I will come across informative articles that are very helpful in general. Today, I had the pleasure of reading such an article geared towards residential buyers. While there are some differences with respect to closing commercial real estate sales transactions and closing residential sales, the general steps are are somewhat the same except the due diligence process for commercial real estate is more complex than buying a personal residence.
The following article is helpful to those buying a home for the first time, since it demystifies the very basic steps of the closing process beginning after a buyer has chosen a home, has negotiated the purchase and sale agreement, has the property inspected, and has secured the mortgage:
I am pleased to announce my new blog with a focus on commercial real estate and sustainable building and development. In the weeks and months ahead, I am looking forward to reporting and writing about the local and regional economic climate of the South Puget Sound Region, as well as the local, regional, and national news radiating from the ranks of the growing "Green Community."
On the Economy and the Lending Environment in Commercial Real Estate
There are so many things going on with our country during this economic crisis, but I believe we can surely turn things around for the better with the right leadership in government. I keep my fingers crossed that the next four years brings positive change to our economic outlook. In the meantime, the real estate market must do all it can to stay afloat during these volitile times. The overall sentiment among developers large and small in my area is that the lending environment is unfavorable (no surprise).
At a recent developer roundtable sponsored by the Washington State Chapter of the CCIM Institute, a well-known institutional developer revealed how their 20-year banking relationships are now requiring them to have larger equity positions in their development projects. Smaller community lenders who are still in a position to lend are cherry-picking their deals and one such lender I approached is charging at least 8% for the loans he makes. For developers, the climate is such that many are taking their projects through feasibility and then taking a wait-and-see approach until the lending environment improves. The common sentiment I have heard from institutional developers is that they anticipate starting new developments within two to three years--when the lending environment improves, as they hope.
Investors may find it a bit easier to secure financing for acquisitions if they have a strong financial statement, can acquire properties with a healthy equity position (30 - 40%), and the properties are cash-flowing. Even then, the search for financing requires a concerted effort, as well as generous financing contingency periods to allow for the time it takes to find a lender who is still making loans at reasonable rates; financing that will allow a property to cash-flow until it is refinanced in five or ten years. In this lending climate, a financially strong investor will have an advantage as investment property inventory increase and investment real estate buyers deacrease from the tightening of the credit markets.
As we watch an old administration make the transition into the new, we will see how the future unfolds for us. If this economic crisis has not bottomed out yet, I hope it happens soon enough so that we may begin the process of recovering, rebuilding, and strenghtening our economy, our businesses, and our lives.
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.
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