Brian Powers

Looks like our elected officials have finally agreed to move forward with voting the extension of the First Time Buyers Tax Credit along with a $6500 tax credit for other buyers. They are hoping to vote on it by the end of this week.

If you know anyone thinking of buying a new home, whether they are a first time buyer or not, please have them contact me so we cab discuss these new tax benefits to home buyers.

Senate Clears Homebuyers Tax Credit Extension; May Pass as Early as This Week

RISMEDIA, November 5, 2009—After two weeks of delay, the Senate cleared the way to pass a seven month extension and expansion of the tax credit for homebuyers. By an 85 to 2 roll call vote, the Senate voted to cut off debate on a package of measures that includes the homebuyer credit, making it virtually certain that the legislation will reach President Obama for his signature this week.

The homebuyer tax credit, due to expire at the end of November would be extended through April 30 of next year. First-time buyers who are in the process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.

For the first time, the legislation that was recently cleared makes move-up buyers as well as first-time buyers eligible for a credit. The $8,000 maximum first-timer credit will continue and will now be available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years.

For homebuyers across the country, the expanded tax credit would allow more people to qualify for the credit. While two-thirds of American families own their own home, and most earn less than the income limits that have been established within the extension, more buyers may be eligible. Move-up buyers don’t have to sell their current home to qualify for the new credit, but the money cannot be used to buy a vacation home. “It’s only for a primary residence,” said Regan Lachapelle, a spokeswoman for Sen. Harry Redi (D-Nev.), who helped engineer the deal. “In expanding the tax credit, we are helping first-time home buyers, as well as homeowners looking to move up to a new home, but we would exclude from the credit speculators who may have recently purchased a home intending to flip it for a fast profit,” said Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee.

The tax credit has fired-up the housing market, driving existing home sales to the highest level in over two years. The National Association Realtors reported sales jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September and are 9.2% higher than the 5.10 million-unit pace in September 2008.

The legislation included provisions added to address complaints of fraud as well. The Internal Revenue Service is given greater authority to oversee the process to root out fraud, and provisions are added in response to past abuses of false sales or underage buyers. An investigation by the Treasury Department’s Inspector General for Tax Administration found that more than 580 children, some as young as four years old, had received $627,000 in first-time homebuyer credits. The IRS has identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations of the first-time homebuyer tax credit.

For more information, visit www.realestateeconomywatch.com ^[2] and www.wsj.com ^[3].

http://rismedia.com/2009-11-04/senate-clears-homebuyer-tax-credit-extension-may-pass-as-early-as-this-week/

Nothing is finalized yet, but for you fans of the First Time Home Buyers tax credit, it appears as though an extension in now all but certain as President Obama called on Congress to extend the tax credit through April 2010. Obama also added that he wants current homeowners purchasing a home to be eligible for up to a ...$6500 tax credit. Nice to see that the tax credit might get extended to all, and not just first time home buyers! As always, I will keep you informed and on the ball as details emerge.

If you know anyone thinking about purchasing a home, it is critical they deal with a buyers agent who knows the fluid market we are in. Please have them contact me so we can see if it makes sense for them to buy a home.

First Time Home Buyer Tax Credit Gets Nod From Obama

An extension of the $8,000 first-time home buyer tax credit appears all but certain after the Obama administration called on Congress to give house hunters more time to claim the popular tax perk. The move comes shortly after Senate lawmakers stuck an agreement to not only push back the measure's looming deadline but expand it to allow current homeowners and more affluent buyers to claim the credit. "We welcome efforts taken by Congress to extend the first-time home buyers tax credit for a limited period," Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan said in a joint statement today. "This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide." Here are five things you need to know about the development:

1. Roots and impact: A tax credit of as much as $8,000 for certain qualified first-time home buyers was included in the Obama administration's sweeping economic stimulus package, which the president signed in mid-February. The measure was designed to stimulate additional demand for residential real estate and help absorb the overhang of unsold properties that was putting downward pressure on home prices. Along with cheaper home prices and attractive mortgage rates

, the perk has helped reduce the glut of unsold properties. Mark Zandi, the chief economist at Moody's Economy.com, expects the tax credit to result in as many as 400,000 additional home sales by the time of its scheduled expiration at the end of November. But trade groups—like the National Association of Home Builders and the National Association of Realtors—have been lobbying Congress to push the deadline back, arguing that failing to do so would jeopardize recent signs of stability in the housing market. The NAHB, for example, blamed yesterday's weaker-than-expected new home sales report on the tax credit's impending expiration.

2. Extending the deadline: Although various proposals to extend and expand the credit have circulated in Congress for weeks, Senate lawmakers finally reached a deal in recent days. Under the terms of the agreement, the deadline for first-time home buyers to claim the $8,000 credit would be pushed back to April 30, 2010. But the term "deadline" doesn't mean the same thing as it does in the current credit. The Senate agreement stipulates that buyers must have a sales contract on a house by April 30 to be eligible, but it gives them an additional 60 days to close the purchase. That's much different from the current credit, in which transactions must be closed by November 30. Looked at one way, the effective deadline of the credit under this agreement is actually the end of June.

3. Existing buyers: But perhaps the most significant change is that current homeowners would become eligible for the tax perk as well. The current credit prevents home buyers who have owned a primary residence within the past three years from claiming the credit. The agreement, however, would allow current homeowners to claim up to $6,500 as long as the property they are vacating has been their primary residence for at least five years. Expanding the credit beyond first-time buyers is intended to boost home sales to "move up" buyers—those moving from one house to another—which some lawmakers, most notably Georgia Republican Sen. Johnny Isakson, argue is essential to a housing recovery.

4. More-affluent home buyers: The agreement also enables more affluent Americans to claim the tax credit. Senators moved to increase its annual income limits from $75,000 to $125,000 for single buyers and from $150,000 to $225,000 for married couples. These limits apply to both first-time and move-up buyers, although neither can purchase a home for more than $800,000 and still get the credit. Anyone taking the credit on a 2010 purchase can claim it on his or her 2009 tax return. And as long as home buyers live in the property they purchased via the credit for three years or more, the tax credit does not have to be repaid.

5. Credit controversy: Zandi estimates that the Senate agreement would generate more home sales than the current credit would. "It's broader, [and] the industry is geared up to take advantage of it now," he says. But first-time home buyer tax credits have already cost the government more than $10 billion in lost revenue, and Zandi expects that the Senate agreement would cost at least as much. And although it's been popular with those purchasing homes, some economists have called the credit an inefficient use of federal resources. Calculated Risk, a financial blog, has estimated that Uncle Sam has paid $43,000 for every additional home sale. And the Senate agreement—which enables households making more than $200,000 a year to claim the credit—could certainly appear overly generous in a time of trillion-dollar budget deficits.

At the same time, the credit has recently been linked to widespread abuse. Russell George, the Treasury Department's inspector general for tax administration, told a congressional panel last week that 19,300 taxpayers had claimed the first-time home buyer credit before they had even purchased a home. In another 74,000 cases—totaling more than $500 million—taxpayers claimed the credit despite evidence that they had owned a home within the past three years. And in at least one case, a 4-year-old claimed the credit, George said.

Although the agreement appears to have broad bipartisan support, it still has to get out of the chamber. Along the way, it could be stripped of certain generous provisions. But in light of the White House support, it appears all but certain that at the very least, the first-time home buyer tax credit will be extended beyond its November 30 deadline.

http://www.usnews.com/money/blogs/the-home-front/2009/10/29/first-time-home-buyer-tax-credit-gets-obama-nod.html

If you owe more on your house than it is worth, don't feel too bad. You're not alone! Deutsche Bank is forecasting that the number of underwater, or "upside down" mortgages in the U.S. will be nearly half of all mortgages before the housing market fully recovers.

Having an upside down mortgage doesn't automatically mean that foreclosure is inevitable if you are having trouble keeping up with payments or need to sell. Troubled homeowners have several options at their disposal to avoid foreclosure, and recent law changes here in Michigan expand those options even more.

Foreclosure doesn't HAVE to happen. If you or someone you know is having trouble keeping up with mortgage payments, or needs to sell but can't because they owe more than the home is worth, I can help. I'll be glad to sit down with you or anyone you know in this situation to discuss your options.

Feel free to contact me by phone at (248)379-1750 or via email at brianpowers@kw.com

Lifeline Law gives homeowners an extra 90 days before foreclosure.

Feel free to contact me if you need any assistance utilizing this ‘Lifeline Law’ , or if I can be of any assistance in order to help you or someone you know avoid foreclosure.

Cedar Springs, Mich. (WZZM) — If you’re one of the thousands in Michigan facing foreclosure, a new law can help you.

Michigan ranks 6th in the country for foreclosures as of the first quarter of this year.

In all 33,000 properties are in foreclosure.

Last year more than145,000 Michigan properties were in foreclosure, a 21% percent increase from 2007.

But the new law taking effect Sunday gives you more time to fix the problem.

It’s called the “Lifeline Law”, in which homeowners are given an extra 90 days to work with their banks.

It’s meant to help everyone; even those who’ve exhausted all options. Homeowners like Kelly Roush of Cedar Springs.

Even while getting ready for her three-year-old’s birthday party, she can’t stop thinking about what lies ahead.

“If he (her husband) loses his job we won’t be able to make the next payment,” she says. “Then (our home) goes into foreclosure automatically.”

Kelly’s husband has been laid off three times and they just signed their third mortgage to keep their home.

“We’re okay right now, but if he even does a temporary layoff, or especially a permanent, I don’t know what’s going to happen.”

Metaphorically speaking: they’ve been pushed to the edge of the cliff.

State Representative Mike Huckleberry doesn’t like cliffhangers.

“There’s too many home foreclosures,” he says. “We’re all one job loss away from foreclosure, one serious illness to our family away from this, it could affect any one of us.”

Enjoying Independance Day weekend with his wife and grandchildren, “Huck” says the new law gives homeowners extra time to hold on to their American Dream.

“There’s going to be people that wake up tomorrow morning with a little hope,” the lawmaker says. “Maybe they didn’t have it before, now it’s an opportunity to try to save their home.”

The law allows homeowners an extra three months to negotiate with their lenders; hopefully avoiding foreclosure.

They must also commit to working with a housing counselor.

“The 90 days comes in when they’ve reached a crisis moment,” says Huckleberry. “So they should have a month or two when they’re trying to figure out what to do before that. This 90 days could be the difference between you’re out and 90 days after that.”

“I think it’s excellent for homeowners,” says 20-year mortgage counselor Sam Mickens. He says the law is especially helpful because homeowners are forced to realize some really want to help.

“In this instance you’re working with a professional that understands the process that those homeowners don’t. It gives you more of an ease to the process so you know exactly what’s going on,” he says.

“I think they’re intimidated because of the documents, the letters, the phone calls you get. So you’re intimidated because you don’t think you’re going to get someone that will work with you,” says Mickens. “But now with this law and this situation, I think you should be encouraged to do so, especially if you’re facing foreclosure.”

The common theme between lawmakers, counselors and homeowners is hope.

They say that, and the 90 days, can make or break a family.

“(It) gives us an extra three months, maybe find another job, and then the bank says, ‘Okay, you’ve got a job, we’ll work with you and you can stay’.”

Both Representative Huckleberry and Sam Mickens say it’s most important to understand the process and know if a lender wants to work it out if they can.

The last thing a bank wants is another foreclosed home.

“The lenders are going to come out better then they would have if they had to foreclose on it,” says Huckleberry. “The people that own the home, the families are going to come out better.”

Read the entire article here

Home sales in southeast Michigan continue to rise. Hopefully a sign that the market is bottoming out.