Yesterday, the House pushed through a three month closing extension of the homebuyer tax credit.
Tonight, the Senate unanimously approved the bill — leaving the President to ratify the provision by signing it into law, as early as tomorrow morning.
"I thank my colleagues for joining me to pass this important extension and giving homebuyers in Nevada and around the country the opportunity to purchase their first home," said Sen Harry Reid (D-NV), in a statement following the bill's passage.
"In addition to helping thousands of families experience the American dream, this successful and popular program provides a much needed boost to Nevada's housing market and economy."
The deadline for the tax credit was midnight tonight but only if the mortgage went through, so with Obama's signature, it would have been possible that no contracts currently under offer — but unable to close — would fall through the cracks with the extended deadline.
The Senate approved provision will give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000.
If the President signs the bill into law tomorrow, it is unclear if the provision will apply retroactively to deals that close on Thursday, July
Reminder:
year to qualify for the first time homebuyer credit.
http://www.irs.gov/newsroom/article/0,,id=215594,00.html
Members of the military and certain other federal employees serving outside the U.S. have an extra year
to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy,
or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding
contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase.
Members of the uniformed services, members of the Foreign Service and employees of the intelligence
community are eligible for this special rule. It applies to any individual (and, if married, the individual’s
spouse) who serves on qualified official extended duty service outside of the United States for at least 90
days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
A bill that aims to support the rural housing market cleared a key hurdle in the House of Representatives this week. Under the bill, mortgage lenders would instead fund the guarantee program through mandatory fees, as opposed to the current system of using federal funding to backstop the program—a well that is about to run dry, supporters say.
The House Financial Services Committee unanimously passed House Resolution (HR) 5017, the Rural Housing Preservation and Stabilization Act of 2010. The bill now moves to a House vote, which could take place as early as next week.
Introduced by Rep. Paul Kanjorski (D-PA), the bill ensures the continued access by rural homebuyers to affordable mortgages through the US Department of Agriculture’s (USDA) loan guarantee program.
Loans made through the program have tripled since 2006, putting a strain on the federal funding — which, according to a press release from the Committee, will run out “within days.” The bill makes this program self-funded through fees imposed on mortgage lenders, ensuring borrower access to guaranteed loans in rural areas once the federal funding runs out.
“As a result of the unprecedented demand, the program is now unfortunately running out of money,” Kanjorski said in an e-mailed statement. “At no cost to taxpayers, my bill will preserve the access of millions of families living in America’s heartland to needed USDA loan guarantees, so that they can continue to buy homes with affordable mortgages. Without action, too many families in rural America will have no options for getting home loans. We cannot allow that to happen.”
Kanjorski’s bill will amend the Section 502 Single Family Housing Guaranteed Loan Program funding shortfall by enabling the program to pay for itself, rather than relying on federal funding. In order to pay for the program, lenders will pay up to a 4% fee on new home mortgages.
The USDA’s Rural Housing Service manages the Section 502 program, which aims to lower the costs of homeownership by giving rural areas access to a home loan guarantee program. These guarantees protect mortgage lenders from certain default-related losses. In 2009, loans made under the program averaged $112,000.
Hello Everyone,
The following information is very important with regards to your closings, especially FLOOD INSURANCE– PLEASE READ AND SHARE.
Flood Insurance
In the last quarter of 2009, many of the Central Florida Flood maps were revised by FEMA. Some properties fell into a Special Flood Hazard Area, some fell out. This has produced a lot of last minute scrambling to obtain Flood Insurance when required by the Lender. In addition, it can become a sore spot with your Buyer of Borrower if unexpected. And finally, discrepancies are occurring between Lenders Flood Determination results, and Insurance Agent’s Flood Determination results. The solution in this case is to have the Hazard Insurance agent forward conflicting Flood Determinations to a flood dispute unit, which manually pulls the current maps and makes a final determination. THIS CAUSES A DELAY.
Here’s our advice: Please have the Title Company, Lender, or Hazard Agent run a Flood Determination as soon as possible after an offer has been accepted by the buyer. If the Determination indicates the property is in a Flood Zone (A, AE, etc), an Elevation Certificate will most likely need to be ordered from a Surveyor.
Hazard Insurance
Within the past year, we have seen too many smaller start-up insurance carriers go out of business and get taken over by the State of Florida – the term is “Receivership”. The State basically takes on the responsibility of the affected company. Recent examples have been Magnolia Insurance, American Keystone (AKIC), and others. Homewise just lost their Demotech Rating… presenting the possibility that Lenders will no longer accept their Evidence of Insurance.
Here’s our advice: If the premium is significantly lower (BASED ON IDENTICAL COVERAGE LIMITS) as compared to other companies, view this as a red flag and investigate the company further by contacting the FL Insurance Dept at DFS: 877-693-5236.
Here’s wishing each of you a productive year… and please let us know how we can help meet your goals.
Rob Owen, Agent
2009-2010 Better Business Bureau Rating: A+
ROB OWEN INSURANCE, INC.Property Insurance for Closings2221 Lee Road Suite 12Winter Park, FL 32789Ph: 407-644-1615 Fax: 407-644-8503Toll Free: 800-803-0866
WASHINGTON -- Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.
The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit.
Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.
The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.
Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.
Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.
Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.
Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.
Majority Democrats have refused to add the amendments.
If the Senate passes the bill, it would go to the House, which passed a similar bill extending unemployment benefits last month. House leaders have also said they support extending the tax credit for homebuyers.
Sen. Chris Dodd, D-Conn., has been negotiating for several weeks with Sen. Johnny Isakson, R-Ga., to craft an extended tax credit for homebuyers that would pass the Senate.
Lawmakers didn't release a cost estimate for extending the tax credit, though similar proposals were projected to cost about $10 billion.
Industry representatives said uncertainty about the tax credit is hurting new home sales. September's decline was the first since March.
It takes 45 days to 60 days to close on a house, making it unlikely a sale made today would be consummated by the end of November, said Lucien Salvant, spokesman for the National Association of Realtors.
"Buyers right now have an incentive to hold off, not knowing whether the credit will be extended," Salvant said.
About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.
The tax credit for money-losing businesses is a favorite among Republican lawmakers. Businesses could get tax refunds by using losses from 2008 and 2009 to offset taxable profits made in the previous five years. Under current law, they can only offset profits from the previous two years.
The provision would help a variety of industries, including retailers, manufacturers and home builders, though it's expensive.
"It's clearly a way to put cash in the hands of some major economic players," said Clint Stretch, a tax policy expert at Deloitte Tax.
A similar proposal that was ultimately dropped from the economic stimulus package enacted in February would have cost nearly $20 billion over 10 years. Lawmakers are working to reduce the price tag.
Because people are so strapped for cash, this is a good way to get refunds when businesses need them for operating expenses, said Rachelle Bernstein, vice president and tax counsel for the National Retail Federation.
Copyright 2009 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed
Everyone Wants a Lower Price, But What About the Impact of Interest Rates?
By James Comtois July 22, 2009
As part of a massive federal-state crackdown on loan modification scams, the Federal Trade Commission, with the help of 24 other federal and state agencies, filed a total of 189 lawsuits and cease-and-desist orders across the country against companies and individuals offering allegedly fraudulent loan mod services.
The nationwide sweep of fraudulent loan mod consultants, announced at a press conference held in Los Angeles last Wednesday led by FTC chairman Jon Leibowitz and California attorney general Jerry Brown, is part of Operation Loan Lies, a coordinated national law enforcement effort to crack down on foreclosure rescue and mortgage modification scams. Twenty-three state attorneys general and other agencies are participating in the operation.
The FTC announced four lawsuits, bringing to 14 the number of mortgage foreclosure rescue and loan modification scam cases the commission has brought since April.
The FTC also released "Real People, Real Stories," a three-and-a-half-minute video about keeping one's home. It features people targeted by foreclosure rescue scammers sharing lessons learned from their experiences. The FTC is distributing the video and a version in Spanish, to more than 5,000 housing counseling and consumer protection organizations around the country and posting them at http://www.ftc.gov/yourhome and http://www.youtube.com/ftcvideos.
"Some of these scammers brand their product to make them look official," said Mr. Leibowitz. "People facing foreclosure should avoid any company or individual that requires a fee in advance, guarantees to stop a foreclosure or modify a loan, or advises the homeowner to stop paying the mortgage company."
As part of Operation Loan Lies, the FTC and the states of California and Missouri charged that U.S. Foreclosure Relief falsely claimed years of experience and a high success rate and promised quick results. Instead, homeowners paid the defendants thousands of dollars for services they never received. The FTC also charged the defendants with violating the FTC's Do Not Call Rule by calling consumers on the national Do Not Call Registry. The court barred the practices and froze the defendants' assets, pending a hearing.
In addition, Lucas Law Center allegedly used an attorney to circumvent state prohibitions against receiving a fee before providing any services. The defendants charged up to $3,995 in advance. In addition to falsely representing that they would obtain mortgage loan mods, the defendants told some homeowners to stop paying their mortgage in order to pay the defendants' fee. Consumers obtained promised refunds only after repeated complaints to the Better Business Bureau, the California AG and the State Bar of California. The court barred the practices and froze the corporate defendants' assets, pending a hearing.
Loss Mitigation Services marketed primarily through direct mail solicitation. The defendants allegedly targeted consumers whose mortgage payments have increased, who have made late payments, and whose homes were in foreclosure. They charged up to $5,500 in advance and promised that a loan mod was assured or virtually assured if consumers hired them. The defendants also misrepresented that they were affiliated with the consumer's lender or mortgage servicer. Some of their customers lost their homes while waiting for the promised results.
The FTC alleged that Coeur d'Alene, Idaho-based Apply2Save charged consumers upfront fees of up to $995, claiming they could obtain a loan mod in 30 to 90 days when they did not obtain loan mods for most consumers and were unable to stop foreclosures. Steven Curtis Lux, the former vice president of sales for Apply2Save, paid the state of Idaho $50,000 as part of a settlement agreement. The settlement agreement with Mr. Lux prohibits him from engaging in mortgage modification and loan broker activities in the state of Idaho. The Idaho AG's office plans to distribute restitution to victims later this year.
Also at the press conference, AG Brown added his office has filed legal action against 21 individuals and 14 companies who allegedly ripped off thousands of homeowners desperately seeking mortgage relief.
One company, Irvine, Calif.-based U.S. Homeowners Assistance, is accused of claiming to be a government agency and bilking dozens of homeowners out of thousands of dollars. AG Brown is also suing Home Relief Services LLC, its executives, the Diener Law Firm and its principal attorney for allegedly charging homeowners more than $4,000 in upfront fees and failing to provide any loan mod services.
Representatives from the previously mentioned alleged scam companies could not be reached for comment.
LOS ANGELES, March 23, 2009 /PRNewswire-FirstCall via COMTEX/ -- While half (52%) of all Americans are concerned they or someone they know will face foreclosure in the next six to 12 months, 23% of adults plan to purchase a home in the next five years, and more than half of them (53.5%) are first time homebuyers, according to a new survey commissioned by Move, Inc., the leader in online real estate and operator of Realtor.com(R), the #1 homes for sale Web site.
The Move survey also found nearly one out of five homeowners (18.9%) plan to take advantage of the administration's new program to help prevent foreclosures. While searching for answers in the past 12 months, 21% of all homeowners with a mortgage contacted a lender to restructure their loan. Half (10.6%) of those homeowners that contacted their lender experienced success while 5% still await an answer.
Unemployment is a driving factor causing many Americans to fear foreclosure, according to the survey. More than a quarter (27.1%) of adults feel they or someone they know may default on their mortgage due to recent unemployment (27.1%), future unemployment (29.3%) or because they owe more on their home than it's worth (25.6%). One out of eight (15.4%) is having a hard time making mortgage payments because they've recently increased or because they have too much debt (18.8%).
Determined to remain in their homes, nearly three-quarters (72%) of adults reduced spending in the past year in order to make monthly mortgage or rent payments, mostly by cutting discretionary spending such as vacations, entertainment and eating out (75%), personal items such as clothing, personal care and personal luxuries (72%) and energy costs such as gasoline and utilities (71.6%). Regardless of age, most Americans are cutting spending back from some aspect of their life to pay housing costs.
Despite today's challenging market conditions, 18.1% of adults plan to buy a home this year in order to take advantage of the $8,000 tax credit recently passed by Congress in the administration's economic stimulus package.
"It's not all doom and gloom. We found Americans are optimistic about homeownership despite concerns," said Move, Inc., CEO Steve Berkowitz. "They're doing everything they can, from reducing discretionary spending to pay their mortgages, to planning to take advantage of the administration's new program to stop foreclosures. They're also working with lenders to modify loans. Even more impactful are numbers that show interest in home ownership is strong as nearly a quarter of all adults plan to buy a home in the next five years."
Pent-Up Demand Increasing
The Move survey found the housing downturn, now entering its third year, has created significant demand for homeownership especially among first-time homebuyers. While 5.8% plan to purchase a home in the next 12 months, 12.8% of Americans say they plan to buy a home in the next two years and 11% plan to purchase a home in two to five years.
Over half of those planning to buy in 2009 are first-time homebuyers (53.5%). By comparison, 41% of homebuyers in 2008 were first-time homebuyers, according to the National Association of Realtors[1].
While 18.1% of homebuyers do plan to buy this year to take advantage of the $8,000 tax credit, nearly half (47.6%) said they didn't know about the credit and 29.3% said it wasn't large enough for them to act right now. Potential homebuyers with higher incomes are more interested in the tax credit than those in lower income brackets, as 43.4% of first-time buyers earning $50,000 or more say they plan to use the tax credit.
Potential buyers are watching real estate prices more closely today than 12 months ago. Half of all Americans (49.6%) are paying more attention to home values today than they were a year ago, especially those aged 25 to 34 (61.9%). The median age of first-time homebuyers is 30 years old[1].
"Having the wealth of information on home values available on Realtor.com makes it easy for potential buyers to research and plan their real estate purchase as they begin their search. In fact, the average buyer researches properties online for 10 months[1] before contacting a Realtor(R). So quick and convenient access to information is critical, especially in today's highly competitive environment," said Errol Samuelson, president of Realtor.com.
"If you're basing a real estate decision on old or out-of-date information, you risk making a poor decision with potentially significant financial consequences," explains Samuelson. "Providing current and detailed information drawn directly from a local MLS, in conjunction with our 15-minute update program, educates buyers and sellers on market conditions and results in more productive conversations with Realtors."
Changing Views of Homeownership
The Move survey uncovered changing attitudes towards owning a home. About two-thirds (62.5%) now consider their home primarily a place to live as opposed to an investment. Adults earning up to $20,000 and between $30,000 and $39,900 annually are significantly more likely to feel most strongly that a home is more of a place to live than an investment as compared to those earning $50,000 or more.
In light of the fact that homes are more affordable today, Americans said that if they could purchase more home for their dollar, bigger is definitely better. Survey results found today's homeowners value more space by a slight margin (10%) over a list of other options, including, energy saving features (6.8%), bigger or nicer yard (6.1%), a better location (4.2%) or updated amenities (3.4%).
Message to Washington: Fix the Economy
The overall economy is by far the most pressing issue on the domestic agenda in the opinion of Americans (51.8%) and it was the first choice of survey participants to be the top priority for both the President and Congress. Health care was a distant second (15.2%) and the federal debt third (11.7%).
Americans believe that cracking down on mortgage fraud (56.9%), lower interest rates (51.6%) and giving first time homebuyers tax breaks as incentives to buy (43.5%) are the top three solutions that would have the most impact in stabilizing the housing market. Opinion is split over whether the government is doing enough to stabilize the housing market, with 46.2% indicating "yes" and 43.8% indicating "no."
Survey Method
The results of the survey are based on interviews conducted from March 6 to 8, 2009. A total of 1,005 interviews were completed. The margin of error on weighted data is [+/-] three percentage points for the full sample. The survey was conducted by OmniTel, in a weekly national telephone omnibus service of GfK Custom Research North America. The raw data are weighted by a custom designed computer program, which automatically develops a weighting factor for each respondent. This procedure employs five variables: age, sex, education, race and geographic region. Each interview is assigned a single weight derived from the relationship between the actual proportion of the population with its specific combination of age, sex, education, race and geographic characteristics and the proportion in our sample that week. Tabular results show both weighted and unweighted bases for these demographic variables.
ABOUT REALTOR.COM(R)
REALTOR.com(R), where the world shops for real estate online, is operated by Move, Inc., (Nasdaq: MOVE) and is the official Web site of the National Association of REALTORS(R). Ranked as the #1 homes-for-sale site, REALTOR.com(R) currently offers potential homebuyers access to over four million property listings, as well as the most brokers and agents. It also provides REALTORS(R) and the home sellers they represent with the Internet's largest real estate marketplace, reaching more than 5.7 million consumers in February 2009[2]. Agents and companies have the power to customize REALTOR.com(R) resources to maximize their brand and productivity.
REALTOR(R) and REALTOR.com(R) are registered trademarks of the NATIONAL ASSOCIATION OF REALTORS(R). REALTOR(R) is a federally registered collective membership mark, which identifies a real estate professional who is a Member of the NATIONAL ASSOCIATION OF REALTORS(R) and subscribes to its strict Code of Ethics. All other trademarks appearing above are the property of Move, Inc., or of their other respective owners.
ABOUT MOVE, INC.
Move, Inc. (NASDAQ: MOVE) is the leader in online real estate with 7.4 million[2] monthly visitors to its online network of websites. Move, Inc. operates: Move.com(R), a leading destination for information on new homes and rental listings, moving, home and garden and home finance; REALTOR.com(R), the official Web site of the National Association of REALTORS(R); Welcome Wagon(R); Moving.com; SeniorHousingNet(TM); and Top Producer(R) Systems. Move, Inc. is based in Westlake Village, California.
This press release may contain forward-looking statements, including information about management's view of Move's future expectations, plans and prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the results of Move, its subsidiaries, divisions and concepts to be materially different than those expressed or implied in such statements. These risk factors and others are included from time to time in documents Move files with the Securities and Exchange Commission, including but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other unknown or unpredictable factors also could have material adverse effects on Move's future results. The forward-looking statements included in this press release are made only as of the date hereof. Move cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Move expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances.
[1] National Association of REALTORS(R) Profile of Homebuyers and Sellers 2008.
[2] comScore Media Metrics, February 2009
(Logo: http://www.newscom.com/cgi-bin/prnh/20080213/MOVEINCLOGO)
(Logo: http://www.newscom.com/cgi-bin/prnh/20090323/LA87113LOGO)
SOURCE Move, Inc.
Laura Meyers, CMPS
Your Certified Mortgage Planner for Generations
The Mortgage Firm
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E-Mail: laura@laurameyers.net
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