Homeowner Affordability and Stability Plan

Click Here to download a PDF document including questions and answers taken directly from the U.S. Treasury in regard to the Homeowner Affordability and Stability Plan. It provides answers to many common questions about the new program announced by President Obama to help current homeowners. Full guidelines for the new program were released on Wednesday March 4, 2009.

We hope that this information is beneficial to you and that you feel free to share it with your friend, relatives and associates.

If you or someone you know would like to discuss this topic further or if you know of someone who would benefit from the first time homebuyers $8,000 tax credit program currently available please give us a call and I will take great care of them.

HOME BUYER TAX CREDIT REVISED:
$8,000 TAX CREDIT TO TAKE EFFECT WITH NEW BILL

After debate over the final dollar amount, the new economic stimulus bill awaiting President Obama's signature on Tuesday will contain an $8,000 tax credit. First-time buyers can claim the credit worth $8,000 or 10% of the home's value, whichever is less either on their 2008 or 2009 taxes.
This credit will be refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pay when they filed their returns - was less than that amount.
To qualify for the credit, potential home owners must have purchased January 1, 2009 or later and will have up until November 30, 2009 to close on their new home. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. Although higher-income buyers may receive a partial credit.
In addition, applying for the credit will be easy as home buyer will be able to just claim it on their return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
This new plan improves on the current $7,500 tax credit, which was passed in July and was more of an interest free loan than an actual credit. But it did not go as far as a proposed a $15,000 non-refundable credit for all homebuyers.
According to the National Association of Realtors, the $8,000 credit will bring an additional 300,000 new homebuyers into the market between now and its expiration on November 30, 2009 which should somewhat improve the housing market.
In addition, a carryover effect may occur because each first-time homebuyer sale will lead to two more trade-up transactions down the line. As it will allow more existing sellers to sell their homes to potential first time buyers. The true impact is yet to be determined, but the credit is a step in the right direction to help further stimulate the housing market.
If you or someone you know is thinking about purchasing a home and would like additional information on the home buyer tax credit have them call us today.

Phoenix Real Estate Market

If you think real estate sales are dead then check out the awesome article from Forbes regarding the Phoenix Real Estate Market!!
Reprinted courtesy of Forbes News


Michael Feder, chief executive of Radar Logic says "There's a pretty active housing market, it's simply at a lower-priced inventory, and there are now bidding wars taking place over homes in foreclosure."

In markets flush with motivated sellers, such as Phoenix and San Diego, transactions are up 10% and 90% respectively, as buyers are starting to compete for available deals.

All are bright spots in an otherwise dark economic climate. While in many cities, potential homeowners are waiting to see how low prices will fall before buying, in places with highly motivated sellers, prices have dropped far and fast enough to rekindle sales. While foreclosures continue to rise, and estimated 8.1 million more of them through 2012, financially solvent buyers are finding good deals at price points and mortgages they can afford.

"We're clearing out the bad news," says Kiva Patten, a director at Merrill Lynch specializing in housing derivatives. He says that continued price drops and uncertainty have kept many out of the marketplace but that some markets have reached a price level that's drawing in buyers. "If everyone is expecting bad news, when you get the bad news, and it's out of the way, that's good. Individual buyers start to come back into the marketplace."

Fannie & Freddie To Suspend Foreclosures Through New Year

Additional Time Taken To Implement New Program
The initiative has come down from Fannie Mae and Freddie Mac to their network of servicers to halt all foreclosure and eviction proceedings between Nov. 26 2008 and Jan. 9, 2009, meant to give a recently announced rescue plan time to work.

The move is expected to give Fannie and Freddie additional time implement the new streamline modification recently announced and set to launch December 15th. The plan enables delinquent borrowers to get a modified mortgage that lowers payments to no more than 38% of their gross incomes.

"By delaying these foreclosure sales, the nation's servicers will have the opportunity to work with more borrowers who could qualify for a modification under the new [program]," said Freddie Mac CEO David M. Moffett in a statement.

As a result, Freddie has told its servicers to immediately contact the 6,000 borrowers who already have auction sales or evictions scheduled for between the specified dates to tell them the sales are postponed. Fannie estimated that 10,000 of its borrowers will be affected. Borrowers facing eviction between Nov. 20 and Nov. 26 were not expected to get relief.

The foreclosure suspension affects only a small percentage of homeowners facing foreclosure over the next two months. Although Fannie and Freddie mortgages account for more than half of all mortgages, they have relatively few of the most risky subprime loans at the center of the foreclosure crisis. "The vast majority of what's going into foreclosure are not Fannie Freddie loans," said Freddie Mac spokesman Brad German.

The Fannie, Freddie plan was unveiled on Nov. 11. Eligibility is determined by several factors: Homeowners must be 90 days or more late in their mortgage payments, owe at least 90% of their home's current value, live in the home on which the mortgage was taken and have not filed for bankruptcy.

The mortgage rate could be lowered to as little as 3% for five years. After that, it would increase by 1 percentage point a year until it hits either the market rate or the original interest rate, whichever is lower.Unlike previous federal efforts, participation by servicers is not voluntary. However, as mentioned in previous articles, this plan may not affect a great deal of at risk borrowers. We will continue to provide details of this plan and others as they roll out.

Prop 100 Wins

PROP 100 WINS!

Arizona voters sent a strong message to legislators on November 4 by passing the Protect Our Homes Initiative.
Thank you to everyone who helped us achieve this major victory for Arizona homeowners to protect their homes and property from double taxation.
We need to get together this week so you can show me how to include messages myself. What day would work best for you?

A Shifting Market

Wow, when they called today’s real estate market a "shifting market," they were right on target. It keeps shifting, and shifting, and shifting ... Every time we turn on the news there’s a new development that affects our economy and therefore the ability of buyers to "buy" and the sellers to "sell."

SHIFT, the most recent book by Gary Keller, co-founder and Chairman of Keller Williams Realty Inc., begins with the following paragraph: "The Real Estate Market has shifted drastically and dramatically. Sales volume and the number of transactions have dropped significantly. Inventory has reached an all-time high. Buyers have never been more reluctant. Fear is rampant, anxiety is high, and people are getting out of the business left and right. Sounds familiar? Sure it does. The year was 1979!"

Does it make us feel better to know that this has happened before? What did we learn from it in 1979? Fast forward to 1987 and it happened again. Changing tax laws this time had a disastrous affect again. Well guess what? History repeats itself. Now we are faced with this again, in 2008 but this time there are real differences.

In 1979 mortgage interest rates topped 18 percent. Last week buyers were still getting approved at under 6 percent through local lenders. That is a huge difference! Today’s sellers, with the help of their real estate agents, are becoming realistic with today’s pricing, bringing our market back on track.

The real estate business is "cyclical." An experienced real estate agent and a mortgage broker will understand this and be prepared to give counsel that is in tune with the current market. Remember though, the news you heard last week is "old news," so stay in touch with your local, trusted real estate agent for updates on this ever changing market.

We are participating in seminars, conference calls, webinars, and many other training events to stay on top of the game to better assist you.

Real estate remains your single most valuable asset if handled correctly.

New Housing Act

We’ve had a lot of people asking questions about the new housing act that was signed in to law by President Bush last week. There are a lot of helpful housing provisions in the act. However, there is a lot of confusion as to what is in the act. There is one item in the act that caught my eye and is garnering a lot of attention as follows:

“If you have not owned a house during the last three years, or are considering buying a first home, and you close on a purchase before the end of next June, you may be eligible for a credit of as much as $7,500 against your federal taxes for 2008 or 2009 ($3,750 if you file taxes as a single person).” Check out:

http://www.latimes.com/business/la-fi-harney3-2008aug03,0,6352284.story