Bill Kamboukos

Home Buying Tax Credit Extension:

Officially Announced

It is now official; the current home buyer tax credit has been extended. In addition, the new plan is an expanded version of the original plan that allows some existing homeowners to take advantage of the credit as well.

The latest version of the credit still provides up to an $8,000 tax credit for first-time homebuyers. However, it also provides up to $6,500 for existing homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. This expands on the amount of home buyers who can now take advantage of the tax credit.

In addition, to qualify for the full credit, homebuyers must have adjusted gross income of less than $125,000 or $225,000 for married couples filing jointly. Furthemore, the credit will only apply to homes sold for $800,000 or less.

Under the new plan purchase contracts must be signed by April 30, 2010 (extended from November 30, 2009). However, the purchases have until June 30, 2010 to close in order for a buyer to qualify for the credit.

The expansion of the home buyer tax credit means that a potential new wave of additional first time home buyers can now still take advantage of this special tax credit. While also now allowing existing homeowners to take advantage of the credit as well. How this will affect the home buying market over the next year is to be seen. However, for now we know that home buyer tax credit will be available until mid 2010. As additional information is available we will present it on this important housing issue.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

FHA Home Loan Changes-

Pushed Back, But Loom Large

This next week was supposed to mark additional changes to lending standards by the Federal Housing Administration to their home loan standards. However, for the second time, the FHA has pushed back the date of these changes, originally set to go into effect on October 1^st, to December 7^th, 2009.

The major changes that we are supposed to see with these new revised rules most affect condominium financing through the FHA. The proposed changed would include the following:

The elimination of "Spot approvals" , as the entire condominium project has to meet FHA approval before a borrower can get an FHA-insured mortgage.

30 percent of the units maximum will be allowed to have FHA-insured mortgages.

50% of the units in a new complex will need to be sold before the FHA will insure a mortgage on a condo sold.

50% of the units in a project must be owner occupied.

However, the new rules do allow for some flexibility as well in the approval process of condo complexes and that is where the delay in releasing these new rules may stem from. The indication in the initial update is that Direct Endorsement Lenders can approve an entire project (not an individual spot approval ) and therefore allow a buyer to purchase a condo unit in that project using an FHA loan. However, it has been argued that this puts too much responsibility on Direct Endorsement Lenders and Underwriters and thus may be revised for the final rules being released December 7^th.

As always we will provide additional information and analysis as it becomes available on these latest proposed regulation changes.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Weekly Roundup -

The Housing Price Bottom & Tax Credit Extension

As we near the final two months of the year, two major issues in housing seem to have remained constant from the beginning of the year, housing prices and the first time home buyer tax credit.

In regard to falling housing prices, Rochdale Securities banking analyst Richard Bove this past week stated on CNBC that, "I really believe that the industry has bottomed, that we're not going to see further crashes in home prices or in home sales."

He followed that up by stating that analysts are no longer happy with banks breaking earnings and revenue forecasts and are now looking at early stage delinquencies, which appear to be declining.

If that is the case then perhaps the worse portion of foreclosures has already started. We will monitor to see how much this rings true going forward.

Home Buyer Tax Credit

On other fronts, HUD Secretary Shaun Donovan spoke in front of the Senate Banking Committee with one of the key issues being discussed being a possible extension of the first-time home buyer tax credit, set to expire November 30^th. Mr. Donovan said the government is weighing the costs and benefits very closely and will have an answer in the coming weeks, before the deadline, on an extension or not. Although this did not provide us an answer for now, it at least sets a time table for getting one. As always we will provide information as available.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Interest Only Loans For Homeowners? -

Lenders Push To Include In Modifications

The news this week is that banks will begin to push the Obama administration to expand its mortgage-modification program to allow interest-only periods on reworked loans, seeking to bring more homeowners into the initiative while recognizing concern that it may only postpone defaults.

This plan is part of a new round of ideas and plans to refine the $75 billion "Home Affordable" program, announced in February as a bid to rework as many as 4 million loans. The program's latest phase also is marked by a need to permanently convert more than 500,000 trial modifications by collecting paperwork so consumers' mortgage payments don't revert within months. See last week's article for information about efforts that even include going door to door to reach borrowers.

In addition, the Treasury will soon announce details of a program to encourage short sales of properties by homeowners who don't qualify for modifications. It will include "capped" payments to retire second mortgages that may form an "industry standard" and help curb the "back and forth" with owners of that debt which creates one of the biggest hurdles.

Furthermore, under the current federal program, taxpayer subsidies to lenders, servicers and homeowners are used to encourage the reworking of borrowers' mortgages to cut their monthly payments to 31 percent of their incomes. Servicers are first directed to lower interest rates to as low 2 percent, then extend terms to as long as 40 years and then suspend payments on a portion of the debt until maturity.

Therefore, banks have intimated that the benefit of allowing interest-only periods as well would be a significant pickup in terms of modifications being done, because the current methods often fail to allow loans to pass required tests on whether modifications serve lenders better than foreclosures.

However, there has also been concern that Interest-only periods of five or 10 years would mean a risk of defaults only being delayed, as payments would need to eventually include principal as well.

As always as additional plans and details are released we will provide both information and analysis on the latest changes to home loan and home retention programs.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Freddie Mac Coming Door To Door:

New Program To Help Homeowners

This past week, Freddie Mac, the very larger and now government controlled mortgage entity announced a plan to come door to door to get in touch with delinquent borrowers. The plan will be to touch base with borrowers that are behind on mortgage payments in an effort to help them complete the process of qualifying for programs such as the Making Homes Affordable Plan. Below is the information on this new effort as described by Freddie Mac themselves.

"Freddie Mac today announced it has hired Titanium Solutions, Inc. to meet with delinquent borrowers at their homes and help them supply missing information, documents and complete other actions needed to begin their three month trial payment periods for Home Affordable Modifications under President Obama's Making Home Affordable program.

Titanium Solutions will target late-paying borrowers with Freddie Mac-owned mortgages who have not returned letters or phone calls sent by their servicers, or who need to provide additional information or documents to launch their three-month Home Affordable Modification trial periods. Titanium will also help those borrowers who have started their Trial periods complete the documentation process to enable them to be converted into final modifications.

"By meeting with our borrowers, one on one, in their homes Titanium Solutions can help them overcome the roadblocks keeping them from starting their Home Affordable Modification trial periods, "said Ingrid Beckles, Senior Vice President Of Default Asset Management at Freddie Mac. "We believe this can give borrowers seeking Home Affordable Modifications the same type of personalized guidance they may have had when they were buying their home or applying for their mortgage."

"Through this initiative, Freddie Mac again demonstrates their commitment to helping homeowners in need. We are pleased to work with them to improve contact with at risk homeowners who are in jeopardy of losing their homes to foreclosure, as well as increasing the number of homeowners who receive and are approved for a modification," said Patrick Carey, Chief Executive Officer at Titanium Solutions, Inc.

Reaching Delinquent Borrowers in their Homes

Titanium Solutions representatives will provide borrowers seeking Home Affordable Modifications with a wide range of support and expertise from reviewing program requirements, to explaining which documents are needed, to securing signatures and walking them through unfamiliar processes.

To minimize potential fraud by imposters, Titanium Solutions representatives will not accept mortgage payments or any other money from borrowers. Representatives will also carry a copy of their servicers' solicitation letter the borrower initially received. These letters are specially formatted and include unique information about the mortgage loan.

For more information about Freddie Mac efforts to help borrowers and support Making Home Affordable, visit freddiemac.com/avoidforeclosure."

As more information on this program and others to help current and potential home owners develops we will of course provide information.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com