There are 217 days left in 2009 from today..... 2 things will happen in December.
$8K tax credit for First Time Home Buyers will go away 12/01/09 (we hope for an extension but who knows)
Thus there is really only 188 DAYS LEFT TO TAKE ADVANTAGE OF BOTH OF THESE
Let's break it down:
$8K tax credit the final HUD one MUST have a date of 12/1/09
So let's back it up:
All of the above applies to the Max loan limit of $729,950 the banks will have a cut off of when those loans can be submitted usually around the 1st part of Dec if not Dec 1st.
There is not a much time!
Reasons to buy:
Do you want to buy a house but your credit is just not here?
No sure what to do about it?
You want to repair it but it takes some much time and you just aren't sure if it will get removed or for sure what the process is?
Asking yourself what should the content of the letters be to each of the credit agencies?
Fix Credit Biz is a Full Service Credit Repair company who does not advertise and has been using a 15 year process to succesful repair people's credit. They also have a money back guarantee! They use processes that help increase your credit score and permanently remove negative times from your report.
https://kd.fixcreditbiz.com/credit_repair.php Watch the short video that explains how it all works.
https://kd.fixcreditbiz.com/faq.php (Frequently asked questions about Fix Credit Biz)
Sign up to get your credit repaired today: https://kd.fixcreditbiz.com
Fix Credit Biz:
A story to be told...
This past year, the real estate landscape is incredibly different. 1st time in 50 years in the Bay Area, it can actually be less expensive to buy than rent. In addition, the government is paying you to own by giving first-time home buyers up to an $8,000 tax credit if you buy before December 31, 2009.
Example of what a 25 year old first-time buyer with okay credit making $30,000 per year could qualify to purchase:
Buyer lives there for one year and decides to move on. Rents the house out for $1,800 per month. Positive cash flow of $660 per month. Takes the $660 and put it into an investment account for the next 29 years and assume an average rate of return of 5%, this would grow to $519,797. Of course, the rent would likely be increasing over the 29 years but there would be vacancies, maintenance costs, and potential management fees so the $660/mo. would represent a conservative monthly contribution. Also, it does not account for any tax benefits.
Fast forward; that 25 year old buyer is now 55 years old.
Home is owned free and clear. Assume rents are at least $2,500 at that time so now the monthly investment would grow to $2,200/mo. (after taxes and insurance) and over the next 10 years the net accumulation would grow to $1,199,155.
Now 65 years old......
The value of the home, assuming a 3.5% annual growth rate would now be worth $740,000. Home purchased 40 years ago for $160,000 would represent a net worth of $1,940,000. Borrower moves back into this property as owner-occupied and takes out a reverse mortgage.
Assuming a loan amount of $625,000, could take out approximately $315,000 in cash with no mortgage payment the rest of there life and live in the home rent free or he could elect to take a monthly income of $2,020 the rest of their life and live rent free until dies (based on today's rates and guidelines).
So, a 25 year old made this one decision to purchase a starter home in the Bay Area today and made no other plan at all for retirement, there would have an excellent income stream and retirement in place.
This could be you, someone you know, your child just graduating from college, friend, anyone!
Time is now! It took 50 years!!! to get to housing price like this and they will go back up!
Side note -- Reverse mortgages have changed dramatically over the past year and are very consumer friendly. They are insured by FHA and have very strict guidelines to protect the borrower. In fact today, reverse mortgages can also be used to purchase property. As a real estate professional, you need to be aware of all the amazing changes with reverse mortgages.
2 few things that have come out the last week with respect to helping:
1) First time home homeowners with payment if they should lose there jobs
2) Help for home owners through the Obama Making Home Affordable program.
C.A.R Mortgage Protection Program: limited funds available FIRST COME FIRST SERVE BASIS, $1M allocated to the program: What a way to help get your clients off the FENCE....
Here is where you would apply www.carhaf.org.
Additional information as well: http://www.car.org/aboutus/hafmainpage/carhafmortgageprotection/
Provides up to $1500/mn for 6 months to be used to help with mortgage payments if the borrower should becomes accidentally disabled or lose their job. The co-borrower can also be eligible for the benefit up to $750/mn would be given. The program also provides a $10K accidental Death Benefit
•· First Time Home Buyers are only eligible - not owned or had interest in a property in 3 years
•· Escrows closed between 4/2/2009 thru 12/31/2009
•· Must use a California REALTOR® in the transaction
•· W2 employees only CANNOT be self employed
•· Program is FREE for one year that is through CARHAF grant
•· No income limits or sales price limits
•· The C.A.R REALTOR® applies for the benefit for the buyer(s)
Making Home Affordable:
This program that was released by the Federal Administration Feb 18, 2009 further guidelines for Loan Mods and Help 4 Homeowners program were released. It is designed to help current homeowners with not only 1st lien modifications but also 2nd lien modifications and further evaluation through the Help 4 Homeowners refinance program.
Objective is to incentivize banks to do modifications on 1st and 2nds and to refinance homeowners under the Help 4 Homeowners program if they qualify. The incentives are through the Federal Government giving funds to the bank for each modification or refinance through Hope 4 Homeowners as well as to investors who bought into the bundles loans will be compensated for a portion of the lose on their investment. Money is also given to the borrower who keeps current after the modification is complete; the incentive is applied to their principal balance thus reducing it over time.
The 2nd lien program coordinates with the 1st lien modification to lower payments and offer an affordable solution for the homeowner. Some 2nd lien holders will choose to eliminate the 2nd lien all together.
Further legislation is in process to introduce guidelines that will help those that have higher debt to income ratios to qualify for loan modifications and refinancing troubled loans.
On May 1st the new law will go into affect which Disallows appraisers from engaging in ANY communication with mortgage brokers, loan officers, agents, or others that may receive a commission upon funding of a deal. This means appraisers are not allowed to talk to you, me, or your client. This is a restriction not placed on any other industry to date. This means all the client relationships we have built are rendered meaningless overnight, an unprecedented act against any industry segment to date. All communications with the appraiser will have to be through someone that is unrelated to the transition, 3rd party which many banks are getting ready to or are already using. Most of these companies are not located in any or our areas or are familiar with them thus leaving it to fate that hopefully the appraiser who comes out will give an accurate representation of the property. Than that appraisal will go back to that company in lets say Texas for review. Who in Texas knows about property in California?
The fees for the appraisals will probably increase or additional fees will be added. Now the appraisal process is not managed by the person that shows up but by the company she/he is registered with that has a large office building that has expenses with employees that need to be compensated. What does that leave for the appraiser who really did all the work and to your client who now has the additional cost to cover for them.
I feel this is a very serious issue and hope that each of you will contact your legislator. Below are good talking points and a link to contact your local legislator.
http://brokerscience.com/hvcc/hvcc-hurts-consumers-agents-and-brokers/
See below the CALL TO ACTION! Let's stop this if we can.
Dear NAMB Member:
There has been significant bipartisan movement forward by Congress on the Home Valuation Code of Conduct ("HVCC") as a result of the phone calls made to your legislators' in-district offices last week! Key Republican and Democrat Congressmen have shown their support for NAMB's cause, and we need to keep the momentum going. We can not stop now!
Follow Up Call to Action! Please contact your Senators and Representatives TODAY, and urge them to stop or delay the implementation of the final rule promulgated by the FHFA, which implements the controversial HVCC.
Congress has returned from recess; please contact your legislators' at their Washington, DC offices. You can access the contact information for your legislator here. We encourage you to make every effort to try again if you are not initially successful in contacting them. It is vital to the overall effectiveness of this call.
Also, please forward this Call to Action to your mortgage broker and appraiser contacts! By encouraging other mortgage professionals to make calls, legislators will better understand the HVCC's negative impact on the entire mortgage market.
Talking Points:
Its impact on Consumers:
A. The HVCC negatively affects consumers by increasing the costs to consumers for an appraisal, reducing consumer choice and adversely impacting a consumer's ability to obtain a reliable and quality appraisal.
B. The HVCC creates a heightened risk for consumers by requiring the use of unregulated Appraisal Management Companies (AMCs) for appraisals. The original investigation that prompted the HVCC's creation was of an AMC and WAMU alleging that they engaged in practices of pressuring appraisers on behalf of WAMU.
C. It increases the time to fund loans for consumers which necessitates longer rate locks or extensions of existing locks thereby increasing costs to consumers. In the case that a new lender or broker is chosen, a new appraisal will be necessitated, increasing the time to fund.
D. It restricts the portability of an appraisal since each lender, in effect, will require a new appraisal.
Its impact on Small Business:
E. The HVCC squeezes out small business professionals that are striving to survive and have been working with consumers in the very neighborhoods where they are looking to purchase homes.
F. The HVCC affects small business appraisers, mortgage brokers, Realtors and lenders in all 50 states without having been reviewed by ANY state or federal legislature or agency.
G. Small business professionals who have indepth knowledge of local market conditions are being sacrificed for large AMCs who operate on a national scale to distribute orders through a primary processing hub or hubs which can be located up to thousands of miles away from the property being appraised.
Its failure to comply with procedural law:
H. Although the HVCC is broad regulation having a significant impact on small businesses and consumers, it did not go through the Administrative Procedures Act, the Regulatory Flexibility Act or other procedural laws as required by any regulation issued by a federal agency.
I. FHFA claims that as Conservator of the GSEs, its actions are not "agency actions" under the APA and that its actions are "expressly precluded from judicial review" as a result of the Housing and Economic Recovery Act.
Appraisal standards exist:
J. The Federal Reserve issued appraisal independence standards through Regulation Z being implemented this October which applies to every industry participant.
K. The banking regulators issued interagency guidance on appraisal standards which are expected to become final this year.
Background:
1) The HVCC negatively affects consumers and the already fragile economy.
As it stands today, the HVCC will take effect on May 1, 2009, and this rule states that GSEs will no longer purchase loans from lenders "accepting appraisal reports completed by an appraiser selected, retained, or compensated in any manner by any third party." It overwhelmingly impacts small lending institutions and independent appraisers to the detriment of consumers.
a) Consumers will have to pay more for their appraisals to have them completed by AMCs.
b) The exclusive use of AMCs limits competition in the marketplace, leaving the consumer and independent appraisers at a disadvantage.
c) The AMC model is flawed and will produce poor quality work that will create a continuation of the declining housing market.
2) The manner in which lenders will collect fees in compliance with the HVCC is a potential violation of RESPA.
a) Lenders may be in direct violation of section 8(b) of RESPA due to possible up-charging and fee-splitting. Every lender will be at risk of HUD action on every brokered loan they underwrite.
b) Lenders will not utilize brokers for fear of potential RESPA violations. In addition, those lenders who only do brokered loans will go out of business all together, and competition within the marketplace will cease to exist. Again, at the detriment of consumers.
3) There already exists pervasive federal regulation of the mortgage lending industry's acquisition of real estate appraisals.
a) FIRREA - In 1989, following the savings and loan crisis, Congress passed the Financial Institutions Reform, Recovery and Enforcement Act ("FIRREA"), which established a multi-faceted real estate appraisal regulatory system involving the federal government, the states, and The Appraisal Foundation. Since 1989, the federal agencies responsible for regulating financial institutions have promulgated regulations under FIRREA that set forth "generally acceptable appraisal standards," and have issued guidance relating to real estate appraisals, which, among other things, set forth standards for selecting qualified appraisers. These regulations and appraisal guidelines both prohibit improper influence on appraisers and work to ensure appraisal independence.
b) FRB Final Rule - In July 2008, the Federal Reserve Board ("Board") issued a final rule prohibiting all mortgage brokers, mortgage lenders and their affiliates "from coercing, influencing, or otherwise encouraging appraisers to misstate or misrepresent the value of a consumer's principal dwelling." In issuing this final rule, the Board concluded that "[no] particular procedure for ordering an appraisal necessarily promotes" fraudulent appraisals. Rather, the Board determined that the "coercion of appraisers," whether by lenders or mortgage brokers, "is an unfair practice" and the final rule should apply to lenders and mortgage brokers alike. NAMB fully supported the Board's final rule because it targets problematic practices, rather than business relationships that present no inherent problems.
c) FFIEC Interagency Guidance - On November 19, 2008, the FFIEC regulatory agencies issued proposed revisions to the "Appraisal and Evaluation Guidelines," and requests for comment. The FFIEC regulatory agencies are currently reviewing the submitted comments and plan to issue a final rule this year.
d) H.R. 1728 - "The Mortgage and Anti-Predatory Lending Act of 2009" was introduced on March 26, 2009. TITLE VI of the bill -APPRAISAL ACTIVITIES - deals with every facet of the appraisal process that will ensure true appraisal independence and protect consumers.
4) The HVCC fails to comply with the Administrative Procedures Act.
The HVCC is a substantive rule that created de facto regulation of the entire mortgage industry in violation of the Administrative Procedure Act ("APA").
a) The FHFA is an agency and the HVCC falls within the definition of a rule under the APA. As such, the FHFA was required to utilize notice and comment rulemaking proceedings under the APA, but the agency failed to do so.
b) Because this rule regulates the entire mortgage industry and the FHFA failed to follow proper rulemaking procedures, we believe the HVCC is void, invalid, and unenforceable.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
