Margaret "Maggee" Miggins

The Federal Reserve Board has amended the "Truth In Lending Act," Regulation Z under the "Home Ownership and Equity Protection Act (HOEPA)." Originally passed in 1994, HOEPA targets abusive practices in home equity lending. The Fed now extends the Act's protections to include home purchase loans. Effective October 1, 2009, these new rules should help prevent future runs on bad loans. The new rule's four key provisions include protections that:

• Prohibit a lender from making a loan without regard to borrowers' ability to repay the loan from income and assets other than the home's value. Lenders must more closely scrutinize a borrower's debt-to-income ratio, looking for less debt, more income and savings, larger down payments, and other liquid assets the borrower can fall back on.
• Require creditors to verify the income and assets they rely upon to determine repayment ability. This provision will make it especially tough for home-based business owners, self-employed people, contract workers, and others who don't get a regular pay stub.
• Ban any prepayment penalty if the payment can change in the initial four years. For other higher-priced loans, a prepayment penalty period cannot last for more than two years. Without this lender risk-reducing tool they are more likely to offer a narrower variety of loans, forcing some consumers out of the market and more of them to spend more time shopping around.
• Require creditors to establish escrow accounts for property taxes and homeowner's insurance for all first-lien mortgage loans. This means borrowers will have to figure on paying more each month than just the home loan's principle and interest (or interest only, where available).

Other rules include:

• Creditors and mortgage brokers are prohibited from coercing a real estate appraiser to misstate a home's value.
• Companies that service mortgage loans are prohibited from engaging in certain practices, such as pyramiding late fees. Servicers are also required to credit consumers' loan payments as of the date of receipt.
• Creditors must provide a good faith estimate of the loan costs, including a schedule of payments, within three days after a consumer applies for any mortgage loan secured by a consumer's principal dwelling, such as a home improvement loan or a loan to refinance an existing loan.

With a gallon of gasoline costing around $3.75, up more than a dollar from a year ago, affordable housing isn't just a measure of your mortgage and related expenses, but also the cost of transportation to and from work, school, stores, and all the other locations you regularly travel. The closer you live to these destinations, the less money you'll spend on gasoline.

If you want to reduce your gasoline usage (and the associated high costs) consider moving to a transit oriented development (TOD). TODs are communities designed to encourage compact growth around transit stops. They include pedestrian-friendly development with easy access to essentials. They are viable in both urban and suburban settings and provide mobility options for the elderly, young, low-income, or people who just prefer not to drive or own cars.

TODs can help defray gasoline costs by lowering demand and reducing the environmental impacts of pollution and sprawl. They reduce annual household driving times by 20 to 40 percent, thereby reducing associated driving expenses by thousands of dollars per year. This reduced drive time further translates into reduced air pollution and energy consumption. Estimates show than each TOD household can reduce greenhouse gas emissions by 2.5 to 3.7 tons per year. TODs likewise consume less land than low-density growth and reduce the need to convert farmland to development spaces.

Finally, by creating active communities that are busy through the day and evening, TODs put more "eyes on the street" and increase safety for pedestrians, transit-users, and others.

The time has never been better to buy your first home.  The Housing and Economic Recovery Act of 2008 grants first-time homebuyers (or homebuyers who have not owned a principal residence during the three-year period prior to their home purchase) up to a $7,500 tax credit if the purchase is completed between April 9, 2008 and July 1, 2009. 

There are certain income requirements. But even if you are over the modified adjusted gross income level of $95,000 (single) or $170,000 (married), you may be able to receive partial tax credits.  Just claim the tax credit on your federal income tax return.  If you want quicker access to the funds, your are permitted to reduce your income tax withholding by submitting a new W-4 with your employer or adjusting your quarterly estimated tax payments.

Keep in mind, though, this is a tax credit not a deduction, meaning you must repay the government either over the next 15 years (no interest charged), or when you sell the home.  For example, if you claim a $7,500 credit, you would repay the credit at $500 per year beginning two years after receiving the credit.  So if you claim the credit on your 2008 tax return, your first $500 payment is due when you file your 2010 tax return.  If you sell your home, the remaining credit will be due from the home sale profit.  If there's insufficient profit, the remaining credit will be forgiven.

So, first-time homebuyers, what are you waiting for?

Your home never has a second chance to make a first impression. A buyer's first impression will generally be their most lasting, and you want your home to show off its assets so that you can make a quick sale for as close to full price as possible. Keep things simple, stick with the basics, and think like a buyer to accomplish this goal.

Eliminate all clutter, clean deeply, and let in the light. Stick with neutral paint colors, and repair anything worn, torn, or broken. You want the buyer to walk in and immediately be able to see your home as their home, instead of seeing its flaws and thinking of price reductions or other properties. If you started packing early, you'll not only get a head start on your own future, but you'll be making room for the buyer's dreams to fit in your home as well.

Consult with an experienced agent to learn how to best show your home, and consider hiring stagers as well. These will help you present your home in the best way to appeal to buyers. Thinking like a buyer can help you sell faster and for the price you really want.

Looking to sell your home takes a "Get It Done" Attitude. Here are some ways to help attain and sustain a positive outlook and help increase your chances of selling your home in today's market on your terms.

Find the Right Agent. Selling a home is different than buying a home and a seller who means business knows this. Look for an experienced agent who specializes in listing and selling, they will often go by "Selling Agent" or "Listing Agent". These agents will be able to market to both other agents and to homebuyers for you, which will increase your odds of a faster and smoother home sale. Look for someone who can really see and/or find the "uniqueness" in your property and is willing to really market these aspects of your home which will not only increase your market value but will also draw the attention of other agents and buyers.

Disconnect Your Emotions. This in itself may be the hardest element for many people as the house they are selling has often been their home with many memories. But in order to have a "selling" attitude, you must be willing to set aside any emotions you may have with your home and now view this as a valuable asset. With this attitude, you will be able to set and negotiate the most favorable price and terms. Being more objective will also allow you to be realistic in your selling expectations. This in turn will normally shorten the time your house is on the market.

Prepare Your Home For a Sale. Regardless of your time restrictions and budget, there are some basic tasks that must be done. Stand back and look at your property from the road and take special care to look at the front entrance. Both will form the buyer's "first impression". A simple coat of paint and maintenance of all doors and windows should be done if needed. All odors should be addressed and not just masked. Odors that you may not notice will most likely be noticed immediately by a buyer. Any kind of maintenance that shows your house is healthy, well maintained and looks nice will help improve sale potential.

Set a Reasonable Price. Things to consider when setting a price include market analysis, list price of comparable homes in the area, the local market conditions, and any time restrictions you may have on making the sale. Be prepared to be flexible and open-minded to increase chances of a positive outcome of the sale.

Be Available For Your Agent. Being accessible to work with and/or answer any questions your agent might have will help eliminate any chances of losing a sale because they couldn't contact you in a timely manner. So you should not only be accessible, but also be prepared to answer questions and respond to any offers that are made in a timely manner. Be on top of the game and you will increase your chances of a great outcome in selling your home.