Neil Blumberg

Good news for home buyers and sellers in Louisville Kentucky and the rest of the US. Congress has now passed an extension of the Homebuyer Tax Credit closing deadline. The extension applies only to transactions that have valid ratified contracts as of April 30, 2010 which have not yet closed. The legislation creates a seamless extension so that there will be no gap between the old June 30th, 2010 deadline and the new September 30th, 2010 deadline.

In addition, the Federal Senate recently passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5669) which retroactively extends the program until September 30, 2010.

If you bought a foreclosure home and intend taking immediate possession, think again. Under the Protecting Tenants at Foreclosure Act of 2009 (S. 896), signed into law on May 20, 2009, tenants, including section 8 tenants, must receive at least 90 days notice before they have to vacate the property.

More specifically, If (1) you intend to use the foreclosed property as your primary residence, or (2) the tenancy is month to month, or even if (3) there is no lease at all, then the tenant is entitled to at least 90 days notice. And If one of the above 3 conditions is not met, a bona fide tenant will be allowed to stay for until the end of the lease period.

Here is the full text of sections 701 and 702 and 704 of the law.

TITLE VII—PROTECTING TENANTS AT FORECLOSURE ACT

SEC. 701. SHORT TITLE.

This title may be cited as the “Protecting Tenants at Foreclosure Act of 2009”.

SEC. 702. EFFECT OF FORECLOSURE ON PREEXISTING TENANCY.

(a) In General.—In the case of any foreclosure on a federally-related mortgage loan or on any dwelling or residential real property after the date of enactment of this title, any immediate successor in interest in such property pursuant to the foreclosure shall assume such interest subject to—

(1) the provision, by such successor in interest of a notice to vacate to any bona fide tenant at least 90 days before the effective date of such notice; and

(2) the rights of any bona fide tenant, as of the date of such notice of foreclosure—

(A) under any bona fide lease entered into before the notice of foreclosure to occupy the premises until the end of the remaining term of the lease, except that a successor in interest may terminate a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a primary residence, subject to the receipt by the tenant of the 90 day notice under paragraph (1); or

(B) without a lease or with a lease terminable at will under State law, subject to the receipt by the tenant of the 90 day notice under subsection (1),

except that nothing under this section shall affect the requirements for termination of any Federal- or State-subsidized tenancy or of any State or local law that provides longer time periods or other additional protections for tenants.

(b) Bona Fide Lease Or Tenancy.—For purposes of this section, a lease or tenancy shall be considered bona fide only if—

(1) the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;

(2) the lease or tenancy was the result of an arms-length transaction; and

(3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit’s rent is reduced or subsidized due to a Federal, State, or local subsidy.

(c) Definition.—For purposes of this section, the term “federally-related mortgage loan” has the same meaning as in section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602).

SEC. 704. SUNSET.

This title, and any amendments made by this title are repealed, and the requirements under this title shall terminate, on December 31, 2012.

http://thomas.loc.gov/home/gpoxmlc111/s896_enr.xml#toc-idD7CBC8F36AAA414681FCB2BA91686023

Further Information: Ask your attorney if there have been any amendmants to this law, or if the state you're buying the propertry in offers greater protections to renters; if so the stronger protections will apply. If you are buying a foreclosure property in the Louisville Kentucky or Southern Indiana area, you may call Metro1 at 502-254-9600 for foreclosure, short sale, distressed property and attorney contact information.

Nothing lasts forever. Great rates, great financing terms, Stimulus money. At some stage these all disappear. FHA entry terms just tightened (Jan 21, 2010): it announced yesterday new policy changes to strengthen it’s capital reserves and protect itself from rising defaults. The most significant changes include: (1) increasing the amount of up-front cash paid by all new borrowers and (2) requiring much higher down payments from those with the poorest credit.

The FHA will increase MIP (mortgage insurance premiums) that borrowers pay upfront at closing from 1.75 percent to 2.25 percent of the loan value. Most FHA borrowers will continue to make down payments of as little as 3.5 percent (this increased from 3% not too long ago) when they take out a loan, but those homebuyers with credit scores of less than 580 will have to come up with a down payment of at least 10%.

If you're a short sale or regular buyer in the Louisville Kentucky or S Indiana area, call Metro1 at 502-254-9600 for updates and referral to lenders for mortgage locks. Inquire also how your $8,000 stimulus money can be used to assist in these charges. For buyers in the Louisville Metro area as much as $20,000 may be available to you from local programs.