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REAL ESTATE NEWS &
ARTICLES OF INTEREST
We will try to keep you up-to-date,
informed, and sometimes
amused! ********************** The
market is starting to pick up but slowly! See what is happening in Grants Pass, Oregon. We've got some building going on!!!!!!!!!!! How are FHA rules changing? The government has delayed the deadline for closings on the First-time Homeowner Tax Credit to SEPTEMBER
30, 2010!!! How
low will interest rates GO??? Stay tuned. We'll keep you up
to date on the issues.
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THE SCHMIDT TEAM
Tim and
Nancy Schmidt Most
people like SOME news. When people are involved in the
Real Estate Market, like Buyers, Sellers, Investors etc.,
they usually like to know what is going on in that particular industry. We have chosen a few NEWS items that should be of
interest to most people. We hope that you will find this page interesting,
helpful, and at times, entertaining.
Find out what really makes the difference on our
economy!
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CHANGES IN FHA LENDING
FHA
lending has been the savior of many local markets over the last 24 months. Low down payment
requirements, lower credit score requirements and the allowance of non-occupying co-borrowers has made the
FHA loan the go-to financing vehicle for a lot of transactions. With such
a surge in business, the FHA has had to look at its financial capacity to insure those loans
(FHA only INSURES loans, it does not MAKE loans). In doing so, some changes have already happened and more are sure to impact
consumers. The increase in FHA
Up Front Mortgage Insurance Premium (effective April 1, 2010). This is a change that occurred earlier this year. UFMIP went up from 1.75% of the loan amount to 2.25% of the loan
amount.
Impact to consumers--Higher up front and/or monthly expense
if fee is financed. The increase of FHA Monthly Mortgage Insurance (not yet enacted). This is an idea that has not yet come to fruition. But, if it does, it will be
an increased monthly expense to consumers.
Impact to consumers--Buyers
with tight debt ratios will qualify for lower loan amounts. The decrease in
maximum seller contribution from 6% to 3% of contract price (not yet enacted). This is an idea that will move into the public comment period sometime in the third quarter. If this does
come to pass, it may negatively affect sales in some markets.
Impact to consumers--Those
who are reliant on seller contributions will no longer be in a position to purchase.
These are three simple things that you can be on the lookout for in the coming
weeks and months. Knowing what's coming down the road will help you to avert any loan challenges that could
potentially kill a transaction. Rich Hayden is the Chief Operating Officer and an active loan officer with HomeFirst Mortgage Corp
in Alexandria, Virginia.
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 Home Affordable Refinance Program (HARP) extended to June
30, 2011.
WASHINGTON – On March 1, 2010, the Federal Housing
Finance Agency (FHFA) announced the extension of the Home Affordable Refinance Program (HARP). FHFA is
the regulator and conservator of Fannie Mae and Freddie Mac. HARP is a component of the Obama Administration’s Making
Home Affordable Program. Borrowers with loans guaranteed or owned by Fannie or Freddie with loan-to-value
ratios between 80% and 125% may be eligible to refinance their mortgages under HARP. In 2009, there were
nearly 200,000 refinancings under HARP, far short of the original goal of helping up to 5 million homeowners.The U.S. Department of the Treasury and Department of Housing and
Urban Development (HUD) today kick off a nationwide campaign to help borrowers who are currently in the trial phase of their
modified mortgages under the Obama Administration’s
Home Affordable Modification Program
(HAMP) convert to permanent modifications.
WASHINGTON – Today, the Obama Administration released the next monthly report for the Making
Home Affordable (MHA) loan modification program. As part of an ongoing commitment to transparency, the report
includes for the first time state-specific trial modification numbers. With more than 650,000 modifications under way across
the country, the program is on track to meet its goals over the next several years.
WASHINGTON – Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan called on Congress to approve
three important measures to improve housing and the housing market for Americans: extension of the First Time Homebuyers Tax
Credit for a limited period, extension of higher loan limits for home mortgages, and secure funding for the Housing Trust
Fund.
from the National Association
of Realtors® Online Magazine of 03/05/10.
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First-Time Homebuyer Tax Credit Closing Deadline Extended to September 30, 2010
The deadline for the completion of qualifying First-Time Homebuyer Credit purchases has been extended.
Taxpayers who entered into a binding contract before the end of April now have until September 30, 2010 to close on the home.
The Homebuyer Assistance and Improvement Act of 2010, enacted on July 2, 2010, extended
the closing deadline from June 30 to Sept. 30 for eligible homebuyers who entered into a binding purchase contract on or before
April 30 to close on the purchase of the home on or before June 30, 2010. Here are
five facts from the IRS about the First-Time Homebuyer Credit and how to claim it. - If you entered into
a binding contract on or before April 30, 2010 to buy a principal residence located in the United States you must close
on the home on or before September 30, 2010.
- To be considered a first-time homebuyer, you and your spouse
– if you are married – must not have jointly or separately owned another principal residence during the three
years prior to the date of purchase.
- To be considered a long-time resident homebuyer, your settlement date must be
after November 6, 2009 and you and your spouse – if you are married – must have lived in the same principal residence
for any consecutive five-year period during the eight-year period that ended on the date the new home is purchased.
- The
maximum credit for a first-time homebuyer is $8,000. The maximum credit for a long-time resident homebuyer is $6,500.
- To
claim the credit you must file a paper return and attach Form 5405, First Time Homebuyer Credit, along with all required documentation, including a copy of the binding contract. New homebuyers
must attach a copy of the properly executed settlement statement used to complete the purchase. Long-time residents are encouraged
to attach documentation covering the five-consecutive-year period such as Form 1098, Mortgage Interest Statements, property
tax records or homeowner’s insurance records.
For
more information about the First-Time Homebuyer Tax Credit and the documentation requirements, visit IRS.gov/recovery. Article direct from IRS updates via email July 2, 2010.
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Venture to resurrect
subdivision projects a bright spot amid gloom of
recession!
It’s easy to see at least some of the carnage left by the “Great Recession” of 2008-10. Just
drive around town and look at the empty storefronts. Many of these empty buildings
once housed businesses that had prospered for years, sometimes decades, before they succumbed to the worst economic downturn
in 80 years. Every
one of those failed businesses at one time represented somebody’s dreams, somebody’s hopes – dreams and
hopes that have been dashed. So
it’s not surprising that would-be entrepreneurs are cautious about wading back into the free enterprise
pool. A basic tenet of free enterprise is risk. Those who take a risk and succeed will
reap the rewards, while those who take a risk and fail will face hardship. For the past two years, the
odds of failure have steadily increased as the economy soured.
Now, economists tell us the worst is over and our nation is finally
beginning to recover from this painful recession. But who can blame Americans if they are still economically
shell-shocked after what has transpired during the past two years? They’re timid, waiting for someone
else to make the first move. That’s
why it’s encouraging to see Bill Thorp has put up his own money to keep three proposed residential developments
from potentially slipping into foreclosure. According to a report published in the Daily courier earlier
this week, one of those developments is aimed at entry-level home buyers, another features mid-range houses,
and the third offers homes to people who probably didn’t suffer much during the recession. Thorp’s
approach is cautious. Homes will be built to order, not on speculation with the hope they
can be sold to as-yet-unidentified customers. But he’s hiring local workers, local subcontractors
and buying materials locally. Consequently, Thorp’s efforts will almost certainly have an economic
ripple effect. These
efforts may well have a psychological ripple effect as well. As others see activity at the construction
sites, as they see supply trucks on their way to work sites, they will feel a little better about the economy. Maybe they’ll
fell a little better about pursuing their own entrepreneurial aspirations.
Maybe they will follow Thorp back into the pool of free enterprise.
An editorial by Kevin Widdison as published in the Grants Pass DAILY COURIER, May 1, 2010 edition.
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Mortgage rates hit new Low
of 4.54 percent
NEW YORK -- Mortgage rates dropped to the lowest level on record for
the fifth time in six weeks, making homebuying and refinancing the most attractive in decades for those who can get loans.
The average rate for 30-year fixed loans this week was 4.54%, down from 4.56% last week, mortgage company Freddie Mac
said today. That’s the lowest since Freddie Mac began tracking rates in 1971.
The last
time rates were lower was during the 1950s, when most mortgages lasted just
20 or 25 years. The rate on the 15-year fixed loan dropped to 4%, down from 4.03% last week and the lowest
on record. Low rates helped spark a little activity in the weak housing market. Still,
households across a majority of large U.S. cities received more foreclosure warnings in the first six months of this year
than in the first half of 2009, new data shows. The trend is the latest sign that the nation’s foreclosure
crisis is worsening as homeowners battling high unemployment, slow job growth and an uneven rebound in home prices continue
to fall behind on their mortgage payments. In all, 154 out of 206 metropolitan areas with at least 200,000
residents posted an annual increase in foreclosure activity between January and June, foreclosure listing firm RealtyTrac
Inc. said today.
From the Grants Pass DAILY COURIER,
07/29/10 edition.
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Buying a home? Make Lenders love you!
With
post-crisis credit still tight, you’ll need to work harder to demonstrate you can handle a mortgage. Jump
through these 5 hoops to prove you’re worthy. You might be tempted by tax credits to buy your first home this year
or to move up from your current house. But getting a mortgage is tougher than it was just a few years ago.
Lenders are pickier about all facets of the process, including:
Your credit scores. The size of your down
payment. Your income and how steady it is. Your other debts. The value of the
property versus how much you want to borrow.
Here’s how to get into the best possible shape to land a mortgage today:
1.
Burnish those credit scores
Mortgage lenders typically
pull FICO credit scores from each of the three major credit bureaus (Equifax, Experian and
TransUnion) and use the middle score to help determine your rate and terms. If you’re a couple, a
set of scores will be pulled for each of you, and the lower of the two middle scores is typically used. These days,
you need a 740 middle FICO score to get the best deals. If you fall much below that, you’ll
pay more. Someone in the 700 – 720 range, for example, might get an interest rate that’s a quarter-point
to half a point higher than someone with better scores, says Cameron Findlay, the chief economist for mortgage
quote site on Lending Tree. The cost climbs as your score sinks, and many lenders these days have a 620 cutoff
point. Below that, they won’t even consider you, so you might have to shop for a lender
that will. The Federal Housing Administration’s minimum score is 580 if you want to put down
the minimum 3.5% down payment. Below that, you’ll need 10% down. The fastest
ways to boost your scores are to correct any serious errors in your credit reports (AnnualCreditReport.com
is where you get your free look) and pay down your credit card debt.
2.
Be a worker bee
The days of “liar’s loans” are gone. Now lenders want proof
of steady income. Ideally, you’ve been working at the same job for two years or
more and have the W-2 forms to prove it. Lenders want to see two year’s worth of
tax forms, as well as your most recent pay stubs. Any other income
with a two-year history, such as investment income, alimony or disability payments, can
be counted when lenders determine how big a mortgage you qualify for. If you’re
self-employed, prepare to jump through more hoops. You’re likely to be asked for
more documentation of your income, including business tax returns, a profit-and-loss statement, copies of
your business license and even a letter from your accountant. What if your work history is spottier? Say you lost a job in
the recession and had to take one at a lower salary. That doesn’t knock you out of the running for
a mortgage, but the amount you can borrow will be based on your new, lower pay.
3. Keep your debts low
Lenders are moving
back to old-school ratios, whereby your mortgage wasn’t supposed to exceed 28% of your gross
monthly income and your other debts no more than 8%, for a total debt-to-income ratio
of 36%. You can get a mortgage with higher debt loads, but you might pay a higher interest
rate. If your debt-to-income ratio exceeds 45%, you’ll
typically need high credit scores and lots of cash in the bank to persuade a lender
to go along. About 50%, you might be out of luck. When figuring your debt load,
lenders typically factor in only the minimum payments on your credit cards and other loans.
If you have credit card debt at all, you’re probably not ready to a homeowner.
Credit card debt indicates you’re living beyond your means, and buying a home
is likely to make that worse. Develop the discipline to pay off your cards, and you’ll be in better
shape to buy a home.
By Liz Pulliam Weston, MSN Money
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