Bill Black CMP

I have had 3 new pre-approvals from the weekend- All three of the clients were looking forward to the $8,000 tax credit, so today I will blog about the current status of the tax credit statue as well as some highlights around this.

The $8,000 tax credit cannot be used as down payment-

Out of these 3 buyers one was already pre-approved via an online lender at Quicken Home Loans but after our 20 minute phone consultation he was not told that his tax credit was not available as a down payment! I only hope the application taker “forgot” to ask where the down payment was coming from but this should have been apparent when his assets in the bank equaled less then 1% of his overall purchase price- so no 3.5% which is a red flag proving that we have no seasoned down.

So just to be clear- THE $8,000 TAX CREDIT IS NOT AVAILABLE FOR ANY PORTION OF THE 3.5% FHA REQUIRED DOWN PAYMENT.

What if I buy a duplex?

You can only get 10% of purchase price or $8,000 max. So a $70,000 house you would only earn $7,000 in credit. With a duplex you own half as an owner occupied and the other half as an investment so depending on the price makes all the difference- so a $160,000 duplex- half would be $80,000 and 10% of that is $8,000 so you get maximum credit. A duplex under $160,000 would only get 10% of half of the price.

Now to fully disclose I am not a CPA and certain things could affect this answer but if you ever have questions I refer all my accounting questions to the smartest CPA in the County- John Caughell CPA at 360-573-9800 or johnc@golden-cpas.com he is truly the best.

Timeline to qualify-

So as we go down one of the biggest unknowns to first time homebuyers we ask will the $8,000 be extended another six to 12 months? Could it be possible to have it increased? We have 14 weeks left for the $8,000 tax benefit with the buyers required to be fully closed by Nov. 30^th.^th and not just under contract. I have a feeling that short sale offers will see less activity as a result of this timeline and the fact that SO many of us have been burned by playing the hurry up & wait game while the servicing agents and banks fumble the ball and make up new rules as they go. That means funded and wired by Nov. 30

What is Happening Today-

The two biggest housing trade groups- the 1.2 million-member National Association of Realtors and the National Association of Home Builders- are spending the month mounting unusually intense grass-roots lobbying campaigns to make case for extending the credit, and maybe even expanding it. The effort is targeted first at the districts of members of the house of the two tax writing committees- House Ways and Means and Senate Finance- this is very strategic and could have been beneficial if we had that support for the HVCC issues we are now dealing with instead of a 1 page document that basically stated to suspend the HVCC until further review.

Economic “Ripple Effect”

According to Economists at National Association of Realtors 300,000-350,000 additional houses will be sold as a result of the tax credit. Each home is forecasted to contribute $63,000 in downstream “ripple effect” elsewhere in the economy, they say- sales of furnishings, appliances, lawnmowers, landscaping, renovation materials, plus moving expenses.

For those who know me understand that I always say “you always have to know where the information came from” so on this bullet point I realize the number seems high but having $8,000 of free money and buying a home at the bottom of the market seems to really make people feel better about spending. Accurate or not I feel it is a benefit that may be one of the only Obama plans that I have witnessed that worked without a flaw.

Path Forward

Bills are already pending in both houses to extend the credit for another year. Some have fantasized about the bill that Chris Dodd, D-Conn., and Chairman of the Senate Banking Committee is co-sponsoring with Georgia Republican Johnny Isakson that would raise the tax credit to $15,000! Meanwhile, both the Realtors and builders are pushing not only for extension but for the credit to cover ALL home purchases in 2010. I forecast some sort of an extension but I would caution spreading false hope and if we can capture the money for clients today that is soon-certain and positive they receive the $8,000 credit.

The MARKET

Pretty Good Day in the Market

Treasuries and mortgages rallied today; see-saw back and forth after the hammering treasuries and mortgages took on last Friday on the jump in existing home sales in July and the strong rally in equities. Today the stock market opened better following the 156 point jump in the DJIA Friday, but by mid-afternoon the equity markets rolled over and ended unchanged on the day.

Tomorrow Treasury will auction $49B of 2 yr notes, beginning three days of new issuances raising a total of $109B. Markets appear to be thinking demand for the new issuances will be strong as they have been for the past two months. Demand for US Treasury debt remains firm from indirect bidders (mainly foreign central banks). The 2 yr note usually does see good demand as it fits well with banks’ assets and liabilities. Banks are hoarding cash these days while telling the media there is little loan demand. Banks have the straight faced ability to paint the picture anyway they like. There is scant loan demand because banks will only lend to those borrowers that can get along without it.

We are currently 24 hours in UW

12 hours in Docs

12 hours in funding….. So let’s go have some fund!

Bill Black CMP

Branch Manager- Vancouver Branch

Loan Network LLC

Mortgage Banker

Click here for Bills Blog

LinkedIn: Bill Black

Bills Blog

Homepath Homes- No Appraisals, No MI, 90% NOO!

360.326.8891 Office

360.910.3290 Mobile

360.326.1861 Fax

My core business is based upon trust and honesty with it’s clients; we feel that this is the most important component of any business relationship. We constantly measure our business processes to ensure that our clients receive the highest level of service possible.

Wa #520-CL-49546

Hello and GOOD Friday to you,

The good news is we have some ROCKIN turn times- the bad news is rates are starting to sneak up on us as anticipated. I have never seen so much volatility. Rates under 6% are still good but it’s hard for me when I just had rates at 5.25 less then a week ago. The market will swing back and forth but now but I think what REALLY needs to be identified is the new TILA regulations and HVCC appraisal issues that will be killing deals as well as slowing down turn times and charging buyers for multiple appraisals if they are dealing with web based brokers or lenders that do not have bank lines.

I have said this before and I will say it again- a realtor and a lender HAVE to be a team in this challenging market. My phone rings 2-3 times a day to try to “help” a fallout due to a poor appraisal or a poor underwriting decision. Most of these items should have been identified in the very beginning of the transaction and could have had a solution. A majority of these are when the buyer is using web based company such as Quicken Loans or Dietech. They have no idea of the issues and if a client was to only google the lender they would find numerous “ripoff.com” findings about these.

So before I get on my soap box- let’s not forget it’s FIRST FRIDAY and the downtown Vancouver area is booming this evening. There is something from 1220 Main Street restaurant all the way down to 1^st and main at the West Coast Bank that is open house for appetizers and wine. The galleries are full of energy and some very interesting art and to end the evening at the glass shop watching them make hand blown glass objects is a perfect way for an affordable, entertaining Friday night! My 12 year old daughter even has fun with me on this walk about!

Current Turn Times as follows:

Underwriting: 12 Hours

Conditions: 12 Hours

Docs: 24 Hours

Funding Review: 48 Hours

*UW Turn Times start when file submission is complete.

*Doc Turn Times start when file has cleared doc prep and is ready to draw.

Our Current Rates for 8/7/2009 are as follows:

15 year fixed – 25 day lock – 4.875%

30 year fixed – 25 day lock – 5.75% at

*Based on o/o, r/t refi w/80% ltv

The Labor Department reported this morning that only 247,000 jobs were lost last month and that the U.S. unemployment rate fell to 9.4%. It is always interesting to see the “revised” numbers 6 months later that are more accurate but hey- good news is good news. Both of these readings were stronger than expected. Analysts had forecasted a job loss of 328,000 and an increase on the unemployment rate of 0.1% to bring it to 9.6%. In addition, average hourly earnings also exceeded forecasts with a 0.2% increase.

Today's news was definitely negative for bonds and mortgage rates. It indicates that the employment sector is not as bad as many had thought. While it was still softening last month, it was at a much slower pace than expected. That helps support the theory that the recession may be nearing an end. In fact, some analysts are already stating they think it has ended. This is bad for bonds because economic growth often creates an environment with inflation concerns that make bonds less attractive to investors. The result usually ends up being higher mortgage rates as investors shift funds into a growing stock market.

Next week is another busy one for the markets and mortgage rates. There are several very important economic releases scheduled to be posted in addition to another FOMC meeting that can heavily influence bond trading and mortgage rates. None of them is due out Monday, but there is relevant data or events scheduled for every other day of the week. Look for more details on next week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would....

Lock if my closing were taking place within 7 days...
Lock if my closing were taking place between 8 and 20 days...
Lock if my closing were taking place between 21 and 60 days...
Lock if my closing were taking place over 60 days from now...

This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Be sure to say hi if you are downtown Vancouver this evening.

Bill Black CMP

Branch Manager- Vancouver Branch

Loan Network LLC

Mortgage Banker

Click here for Bills Blog

360.326.8891 Office

360.910.3290 Mobile

360.326.1861 Fax

My core business is based upon trust and honesty with it’s clients; we feel that this is the most important component of any business relationship. We constantly measure our business processes to ensure that our clients receive the highest level of service possible.

Wa #520-CL-49546

August 4th, 2009 – USA

FHA Suspends Taylor, Bean & Whitaker

I stopped using Taylor Bean & Whitaker about 3 months ago as I noticed their practices was not up to standards and now I see that wa s a very good decision. Here is the actual announcement HUD made today regarding TBWs suspension and the potential debarment of 2 of their top executives.

I was not that surprised to hear this since i got a call about 4 months ago from Taylor Bean asking for a copy of an appriasal our office closed with them in 2005! I couldnt beleive they lost the whole appriasal!!! To read more please read at www.billcblack.com

Hello first time home buyers and Investors,

Fannie Mae is offering special financing program on all the Bank Owned properties with benefits such as No mortgage Insurance, No Appraisal... http://www.utipu.com/app/invited/id/bdfbf211

Banks are bullies- but knowledge is power!

Appealing Short Sale Commissions-

I keep running into short sale transaction that are Fannie mae insured with only 5% Realtor commissions. This is assumed that it's required. Please read on to find out how you can maximize your earnings and appeal the bank that is trying to maximize thier income by reducing yours.