IMPACT
y
time
in the future. Credit scores can range between a low score of 300 and a
high score of 850. The higher the score, the
better it is for the consumer, because a high credit score translates
into a low interest rate. This can save literally thousands of dollars
in financing fees over the life of the loan. Only one out of 1,300
people in the United States have a credit score above 800. These are
people with a stellar credit rating that get the best interest rates.
On the other hand, one out of every eight prospective home buyers is
faced with the possibility that they may not qualify for the home loan
they want because they have a score falling between 500 and 600.
Finding out what your credit is prior to applying for any credit is
crucial. After all, you do not want to be that one out of 8 home buyers
that is denied for credit.
ir
Credit Reporting Act in
1971 to establish guidelines for fair practices in regard to the use of
credit scoring. This law was designed to promote accuracy in reporting
and protect the privacy of consumers. In light of the increased use of
credit scoring and a growing fear of identity theft, recent legislation
has been passed to further protect Americans and improve consumer
awareness. The Fair and Accurate Credit Transactions Act of 2003
(sometimes referred to as The FACT ACT or FACTA) was signed by
President George W. Bush on December 4, 2003. This amended the Fair
Credit Reporting Act, enabling each American to obtain one free credit
report every 12 months from each of the three main credit reporting
agencies (CRAs); Equifax,
Experian® and
TransUnion®.
Those bureaus have created a central web site, www.annualcreditreport.com,
to accommodate Americans who wish to obtain copies of their credit
report.
As I sit here plugging away at some work, I had to take a moment to vent! :-) It's funny how I'm venting about the amount of Rain we have been getting here lately on ActiveRAIN! While my lawn loves the immense amounts of rain, but I truly can't stand it anymore. Being down here for 8 years now, I'm used to the afternoon showers in the summer. It used to be like clockwork, 4 o'clock would hit and there would be a 30 minute shower, now it’s all day, every day. What is going on?!?! Thanks for letting me vent about the rain on the “RAIN”.
The following is an article from The National Association of Realtors:
Daily Real Estate News | May 18, 2009
Detailed guidance on the federal government's plan to provide short-term loans to borrowers using the First-Time Homebuyer Tax Credit is expected to be out shortly, but a spokesperson from the U.S. Department of Housing and Urban Development, which is writing the guidance, couldn't give a firm release date.
HUD policy staff are "still working out the details on it," HUD spokesperson Lamar Wooley told REALTOR® Magazine today. "So we expect it to be published shortly."
The short-term loan program, which would effectively monetize the first-time homebuyer tax credit by permitting eligible lenders to make bridge loans collateralized by the borrower's expected tax credit, was announced by HUD Secretary Shaun Donovan at the Real Estate Summit NAR hosted on the opening day of its 2009 Midyear Legislative Meetings in Washington last week.
At the summit, Donovan said the loans would enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash could be used as a downpayment.
"FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to 'monetize' the tax credit through short-term bridge loans," Donovan said. "We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly."
It's unclear at this point what shape the guidance will take and whether authorization for the loans will be available across the board or only in states in which the state housing finance agency already has a tax credit bridge-loan program in place.
There are 10 states today that have such a loan program, according to the National Council of State Housing Agencies: Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee.
You can access details of these loan programs on the NCSHA's Web site, "First-Time Homebuyer Tax Credit Loan Programs."
When it's released, the guidance is expected to be issued as a HUD Mortgagee Letter and will likely discuss which federal, state, and local governmental agencies and nonprofit organizations will be permitted to make the loans, and whether lenders such as FHA-approved mortgagees will be permitted to make the loans.
The guidance could also cover how loan amounts will be limited, what happens if repayment problems occur, and what repayment terms would look like.
REALTOR® Magazine will be checking with HUD regularly on the status of the guidance and will report its availability as soon as it's issued.
—By Robert Freedman for REALTOR® Magazine
Hopefully the tax credit loan will be put in place with enough time for potential home buyers to take advantage of it. With short sales and REO's taking a couple of months for approval and underwriting turn times taking longer than before, time is ticking.
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Joshua Lerette, The Tampa Bay Mortgage Pro, is a Mortgage Specialist working out of St. Petersburg, Florida offering FHA/VA/Conventional financing solutions for Florida homebuyers and homeowners.
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.
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