Kevin Breeland

Yesterday, Secretary Shaun Donovan spoke to the National Association of Realtors Real Estate Summit. In that speech he announced HUD would allow the $8000 Tax Credit for First-Time Home Buyers to be "monetize" as he put it. Here are the details as outlined in Mortgagee Letter 09-15.

Remember the guidelines the govern the Tax Credit are IRS guidelines and not HUD. The guidelines have not changed. They are as follows:

• Credit is the smaller of $8000 or 10% of the purchase price of the home.
• Phase out of the credit begins when modified adjusted gross income exceeds $75,000 is single, $150,000 if married filing jointly and is eliminated completely at $95,000 (single), $170,000 (jointly).
• As a refundable tax credit if taxes are owed they are deducted from the refund. If the Taxpayer is receiving a refund anyway, then the tax credit is added to that amount.

Claiming the tax credit you can go to http://www.irs.gov/pub/irs-pdf/f5405.pdf. Confused now...just wait there is more.

FHA Guidance on Secondary Financing all for second mortgages from Federal, state, and local governmental agencies and nonprofit instrumentalities of government. Also FHA-approved nonprofits and you can find additional information on this at http://www.hud.gov/offices/hsg/sfh/np/np_hoc.cfm .

But there is more....The Tax Credit: Short Term Loan: this entities that the tax credit can be advanced with short-term loans. Again from the list above AND FHA-approved Mortgagees....who may provide "short-term Bridge Loans" secured only by the anticipated tax credit due the homeowner as collateral. How does it work...well that is the $64 dollar question BUT in principal like this:

The amount that can be borrowed using this tax credit can not exceed the anticipated tax credit DUE THE HOMEBUYER based on the COMPUTATIONS OF FORM IRS 5405. FEES AND CHARGES for the tax credit advance loan are not to exceed a nominal amount necessary for preparing and administering the loan. Of course leave it to HUD to leave this part open ended....I can assure you we will see case after case of abuse in FEES and CHARGES.

HAVE A GREAT DAY!

Kevin M. Breeland

General Manager

Residential Mortgage of South Carolina, LLC

427 Johnnie Dodds Rd.

Mount Pleasant, SC 29464

breelandk@residentialmtg.com

www.residentialscdailyrates.com

Competitive by nature...the Best by choice!

Photo taken by my daughter Tara

Today is the first time in weeks I have posted a blog on ActiveRain. What happened?

I am not sure why it has been so long but for me I have to "feel" something in order to write. I am not the most creative person you have ever meant and in fact I would say it would be fair to characterize me as introverted. Today thought, I have the "feeling" so I am back...at least for a little while.

HAVE A GREAT DAY

Kevin M. Breeland

General Manager

Residential Mortgage of South Carolina, LLC

427 Johnnie Dodds Rd.

Mount Pleasant, SC 29464

breelandk@residentialmtg.com

www.residentialscdailyrates.com

Competitive by nature...the Best by choice!

Change is the only Constant....how true is that? I have found over my life that change, and nothing else, is the thing I KNOW will take place everyday.

H. R. 1728, mortgage reform legislation passed by the U.S. House of Representatives last week contained language instructing HUD to suspend its new GFE and HUD-1 and to instead work with the Fed on a joint rulemaking to develop "compatible" RESPA and TILA disclosures within one year that would be implemented on the same date. The legislation still needs to clear the Senate. It was widely believed by industry HUD would follow the spirit of H.R. 1728 and suspend its new GFE and HUD-1. It seems in Washington, D.C., and this could speak to the bigger issue, these agencies have not and do not work together. The appearence is the opposite occurs with each trying to upstage the other agency. Yesterday Secretary Donovan announced his intention to go forward with HUD's new Good Faith Estimate and HUD-1 Settlement Statement as scheduled January 1, 2010. Of course this is despite the directive passed by the House I referred to earlier.

This Adminstration was elected with the spirit of "Change". So far, it has been a lot of business as usual and this announcement by Secretary Donovan continues to send that message. Industry that favors the House on this issue are as follows: American Bankers Association, American Escrow Association, American Financial Services Association, Consumer Bankers Association, Consumer Mortgage Coalition, Housing Policy Council of the Financial Services Roundtable, Independent Community Bankers of America, Mortgage Bankers Association, and others are being added daily such as Real Estate Service Providers Council.

This is not a group of "Good Ol Boys" complaining about having to change. This is a diverse group of men and women in the day to day trenches of everyday application who know it is very important for the Federal Reserve Board and HUD to work together in developing new and more transparent Mortgage Disclosures. It is obivous these two agencies can't do this for themselves without legislation and are even willing to ignore when there is legislation.

Change is the only Constant.

HAVE A GREAT DAY

Kevin M. Breeland

General Manager

Residential Mortgage of South Carolina, LLC

427 Johnnie Dodds Rd.

Mount Pleasant, SC 29464

breelandk@residentialmtg.com

www.residentialscdailyrates.com

Competitive by nature...the Best by choice!

The Blue Mosque, Istanbul, Turkey July 2006