Archive for the ‘For Realtors’ Category

Congress Extends Home Buyer Tax Credit Deadline

tax credits

Congress late Wednesday night extended the deadline by three months of a popular home-buyer tax credit that has helped fuel the real estate market in recent months.

The extension is only for those buyers who signed a purchase contract by April 30 and need extra time to close their deals. The deadline to close was Wednesday and the extension will push that deadline to Sept. 30. The incentive offers up to $8,000 for certain buyers.

Real estate brokerage offices and mortgage lenders have been backlogged with the number of people trying to close their deals by the Wednesday deadline, according to the National Assn. of Realtors, a group that lobbied heavily for the extension. The group estimated that the extra time would assist some 180,000 people nationally and 17,700 Californians who qualify for the credit but did not appear as if they would meet the Wednesday deadline to close their deals.

The federal tax credit was created in 2008 by the Bush administration as a $7,500 incentive for first-time purchasers, who were required to repay the money in a series of installments. Congress increased the amount to $8,000 in February 2009 when it passed the economic stimulus package and waived the repayment requirement. As an initial deadline for the credit loomed last November, Congress extended and expanded it to include as much as $6,500 for some current homeowners.

The Realtors group in Washington estimates that a total of 4.4 million people have received the credit since it was made nonrefundable last year. That includes 2.9 million first-time buyers and 1.5 million repeat buyers, the group said.

Source: Alejandro Lazo (Los Angeles Times)

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ATTN: Entrepreneurs / Business Minds! The greatest wealth factor is…

tired businesswomantired business man

There is nothing more pitiful than a ready and willing mind but an incapable body.

There is a well-known quote from the philosopher Virgil that says, “The greatest wealth is health.” I also believe that health is the beginning of wealth. In other words, your health will help you create wealth.

If you are in the business of attracting, influencing, selling or leading others, how you show up, your physical appearance, speaks volumes about who you are, how you are and what you are or not capable of.

I know, people shouldn’t judge you, right? Well, here is a clue… they do!

Here is a good question to consider: If your body is the billboard of your personal development, your calling card and your personal 15-second commercial, what is it communicating? Take a good hard look in the mirror (literally) and determine if that is the message you want conveyed. I know this is pretty direct and maybe a bit harsh, but this is the reality of life. This is also why I hope you read this blog—because I am willing to tell it to you straight with no holds barred.

If you want to attract committed, dedicated, disciplined and consistent people into your business, then you have to exhibit those qualities yourself first. And like it or not, how you show up, your physical outcome, is the demonstration of those qualities in you.

So I encourage you to take your physical fitness seriously. If not for the sheer benefit of having you live longer, look younger and feel better, then because it will attract more and higher quality people into your entrepreneurial pursuits.

Source: Excerpt from Darren Hardy’s article: There is Nothing More Pitiful.  Read the whole “no-holds-barred” article here.

Darren Hardy is the publisher and editorial director of SUCCESS magazine.  Darren has been engaging and inspiring audiences with his messages of personal achievement for more than 15 years. A product of the success principles he teaches, Darren became a businessman at age 18, and by age 27 was a self-made millionaire. A successful entrepreneur for more than two decades, he has led several business ventures, including two personal-development based television networks, The People’s Network (TPN) and The Success Training Network (TSTN).

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Home Buyers Tax Credit Extended for Armed Service Members

tax credit extended for armed force

The expiration date of the $8,000 first-time home buyer may have already passed for most, but there are some potential homebuyers who can still take advantage of this great opportunity.

For those who are qualified service members, you have an extra year to cash in on the credit. Your new deadline is April 30, 2011. The government defines “qualified service member” as a member of the uniformed services of the U.S military, a member of the Foreign Service of the U.S., or an employee of the intelligence community.”

The reasoning behind this extension is simple. National Association of Home Builders Chairman, Bob Jones, says, “Congress recognized that many service members may have missed out on the home buyer tax credit due to being posted overseas. It is only fitting that they be given another year to take advantage of this opportunity in appreciation of the sacrifices they have made serving our country.”

There has been another modification to the credit for members of the armed service. Currently, a buyer must repay the credit if they move out of their new home within three years. This particular contingency has been waived if the move is due to government ordered extended duty service.

Source: Carla L. Davis (RealtyTimes)

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New Alternative to Foreclosures

avoid foreclosure alternative

In an effort to stem the growing tide of mortgage loan defaults across the country, the federal government has come up with yet another alternative: a deed in lieu of foreclosure agreement (DIL).

The DIL offers another option to homeowners who are unable to complete a short sale or who don’t qualify for one.

The Home Affordable Foreclosure Alternative program (HAFA) is intended to encourage lenders to facilitate short sales and deeds in lieu as alternatives to foreclosure. HAFA is part of the Home Affordable Modification Program (HAMP).

A deed in lieu of foreclosure allows a homeowner to hand the house over to the bank and walk away from the property. While it would still negatively impact the home seller’s credit score, it is preferable to a foreclosure. A foreclosure can stay on the credit report for about five years; a deed-in-lieu can be wiped out in about four years.

A DIL also allows homeowners to voluntarily give up the home to satisfy the first mortgage, even if the home is worth less than the loan balance.

Among the government’s other HAMP guidelines:

* Homeowners can receive 1,500 dollars in relocation expenses at closing. This amount may be reported as income to the IRS.
* Short sale buyers can’t resell the home within 90 days of the purchase.
* The home must be the homeowner’s principal residence.
* The homeowner’s monthly mortgage payment must be greater than 31 percent of his or her gross income.
* The mortgage needs to be delinquent or default must be reasonably foreseeable.
* The unpaid loan balance must be less than 729,750 dollars for a single house or condominium.

The program started April 5 and is scheduled to go until December 31, 2012. Right now, loans that are owned or guaranteed by Fannie Mae or Freddie Mac are excluded. However, the two government-run mortgage corporations are expected to release their own guidelines shortly.

Source: Snow Anderson (writer on

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Pending Home Sales on an Upswing

home sales on an upswing in March 2010
Pending home sales increased again in March, affirming that a surge of home sales is unfolding for the spring home buying season, according to the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said favorable affordability conditions have been working with the tax credit. “Clearly the home buyer tax credit has helped stabilize the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales,” he said. “Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing.”

Another encouraging sign is the improvement in the availability for jumbo and second-home mortgages,” Yun said. “As bank balance sheets strengthen, it is just a matter of time before lending of non-government-backed mortgages steadily opens up.”

Watch the video NAR interview with Lawrence Yun.

Source: National Association of Realtors (NAR): The Voice for Real Estate

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Shorter Waiting Periods for a new Mortgage after a Preforeclosure Event

happy home buyers

Fannie Mae is changing the required waiting period for a borrower to be eligible for a mortgage loan after a preforeclosure event. The waiting period commences on the completion date of the preforeclosure event, and may vary based on the maximum allowable Loan to Value numbers (LTV) of the property and occupancy of the property.

The following describes the waiting period policy changes for Deed-in-Lieu of Foreclosures, Preforeclosure Sales and Short Sales:

  • 2 years at 80% max LTV (with a 20% downpayment)
  • 4 years at 90% max LTV (with a 10% downpayment)
  • 7 years at LTV ratios per Eligibility Matrix

There are exceptions to the Waiting Periods for extenuating circumstances.  More information on Fannie Mae’s Announcement.

The multiple bankruptcy policy is being clarified to state that two or more borrowers with individual bankruptcies are not cumulative. For example, if the borrower has one bankruptcy and the co-borrower has one bankruptcy, this is not considered a multiple bankruptcy. The current waiting periods for bankruptcies remain unchanged.

The Desktop Underwriter® (DU®)
DU is the software that Fannie Mae uses to determine if a borrower qualifies for a mortgage. DU will be updated in June to reflect the deed-in-lieu of foreclosure policy changes outlined above. Because preforeclosure and short sales cannot be identified in the credit report data by DU at this time, DU will not be updated in June to include these policies. However, effective for loan applications dated on or after July 1, 2010, lenders will be required to determine during their review of the credit report if there is a preforeclosure or short sale and must manually apply the new policies to all loan casefiles underwritten through DU.

See the Selling Guide, B3-5.2-03, Accuracy of Credit Information in a Credit Report, for Fannie Mae’s current policies regarding the lender’s responsibility for reviewing the credit report.

Effective Date
This policy is effective for manually underwritten mortgage loans with application dates beginning July 1, 2010; for DU loan casefiles see above.

Source:  Fannie Mae Announcement SEL-2010-05

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6 Essentials to PreQualify for a Home Loan

prequalify for a home loan

One of the first steps to take as a potential home buyer is to get pre-qualified for a loan. This step helps both you and your lender learn just how much home you can afford. It is best to begin this process before you even start looking for a home.

According to the Federal Housing Administration (FHA), their pre-qualification essentials include:

* Having a steady employment history, at least two years with the same employer.

* Consistent or increasing income over the past two years.

* Credit report should be in good standing with less than two thirty day late payments in the past two years.

* Any bankruptcy on record must be at least two years old with good credit for the two consecutive years.

* Any foreclosure must be at least three years old with good credit for the past three years.

* Mortgage payment qualified for must be approximately 30 percent of your total monthly gross income.

Other lenders’ ideas regarding pre-qualification are all similar to those outlined above. A mortgage lender will look at your credit report, earnings, debts, and savings in order to see how much home you really can afford.

Why is this important?

In recent years there has been a “mortgage crisis,” where the industry was rampant with fraud and with loans that put homeowners into situations they could not afford. As payments rose, homeowners found themselves unable to meet their monthly obligations. According to and their U.S. Foreclosure Market Report, in January 2010, one in every 409 households in the country had received a foreclosure filing.

Since pre-qualification for a home loan typically costs you nothing, but gives you both a goal of what homes are in your affordability range, as well as how much money you should look to have saved for a downpayment, you can hardly wait to take this step.

What if the home you want is out of your reach? Experts recommend reducing your debt and saving up a larger amount for your down payment. Let’s say your dream home is $225,000, but you only qualify for a $180,000 loan. If you have a downpayment of $45,000, then you are ready to make a move!

During the pre-qualification process, you will be expected to provide the following information:

* your gross monthly income

* your total monthly payments (car payments, credit cards minimums, child support payments, student loan payments, any other monthly debts)

The lender will be looking to see that your debt to income is below about 40 percent, and the lower the better.

So, if you are looking to buy in the near future, be sure to talk to your lender soon!

Source: Carla L. Davis (Managing Editor for Realty Times)

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