The real estate industry and especially the mortgage industry have been overwhelmed with changes, regulations and consolidations recently. In the last couple of months, many transactions nationally have experienced delayed closings or no closing at all as a result of the application of new guidelines affecting APR, Good Faith Estimates (GFE), Truth in Lending (TILA) and condo project approvals to name a few.
Effective with applications on or after June 1, 2010, Fannie Mae has issued new lender mandates ( Loan Quality Initiative) on a national basis that, if not understood properly, could have devastating consequences for many buyers and, of course, sellers as well. It is extremely important that Buyers understand the implications and make sure that they know what they need to know to minimize negative repercussions.
The intent of this initiative is to assure that all applicant information is disclosed and is honest and accurate as of the moment of closing. Well, there is nothing you can say against that, but the lenders will now be required to re-pull credit report information just prior to closing, re-verify employment, validate Social Security numbers, verify intent to occupy and verify that all parties to the transaction have been checked against the national “excluded party” list, which is managed by HUD and by the General Services Administration. Changes in any of these factors are likely to result in a re-underwrite, the need for additional documentation, or suspension of loan closing. This is very serious!
The most onerous of these is the credit re-pull. It is important that this is done as a “soft pull” so it does not show as an inquiry, which could potentially change the borrower’s credit score. Firms will, however, have to match the outstanding debts and inquiries with the report used to approve the loan. Additional credit or increased balances that change the debt-to-income ratio more than 2% (or less if it now exceeds guidelines) will require the loan to be suspended and re-submitted to underwriting.
Any additional delinquencies will result in a new, full credit re-pull and re-underwriting, utilizing the new credit. Any and all inquiries from other lenders or credit suppliers must be verified by the credit bureau and certified that new debt did not occur. If new credit has been extended, the new debt must be included in the borrower’s debt-to-income ratio and the loan must be re-underwritten.
Other considerations are W-2 employees that may own more than 25% of a business, mandating business returns and cash flow analysis and full disclosure of child support and alimony. Changes could render the applicant unqualified or could delay the closing. As a result of TILA, GFE and risk-based pricing changes, additional debt could result in re-pricing the loan due to a change in credit score, which even if approvable, would delay the closing three business days as re-disclosure would be required.
So How Do Buyers Manage the New Process?
The most important change is that the applicant needs to fully and honestly disclose all known facts at the time of application, during the loan process and at closing! Buyers must be cautious when applying for new credit during the process, changing jobs (30-day pay stub requirements are being enforced), and charging to credit cards. It is imperative to notify the lender if anything changes from application to closing.
As a Buyer you need to be aware that an applicant who signs an erroneous initial or final closing application could be committing fraud. Lenders choosing to approve loans without the proper loan quality processes and documentation are only endangering the buyer. Any lender or real estate agent that encourages someone to falsify information could be equally responsible. It is noteworthy to mention that many loans go through an immediate quality control audit post closing, so this could affect highly qualified applicants as well. Identified fraud of this nature could be investigated by the FBI.
While this new policy was implemented first by Fannie Mae, it is already a mandate of all national lenders and, based on experience, will soon be required on every loan. It is important to keep this in mind!
Source: RISS Media
Things You Need to Know to Pass Your Home Inspection
Nearly all buyers will hire a professional home inspector to take a closer look at their new
home before closing. In some cases home inspections are done before the home goes under
contract. When a mortgage is involved, all banks require a home inspection.
A home inspection covers several areas and systems within the house, but there are a few
that actually worry buyers the most.... Will the roof end up leaking? Is the wiring safe?
What about the plumbing? These, and others, are the questions that the buyers looking at
your home will seek professional help to answer.
It is important to not wait until inspection day to assess the condition of your home and
make necessary home repairs before you sell. Small problems can turn into major issues
which could end up costing more in the end and possibly lower your home’s value.
In most cases, you can make a reasonable pre-inspection yourself if you know what you’re
looking for.
Here are some of the most common items to consider when preparing for your
home inspection:
1. Mold and Mildew
Mildew stains and odors scare buyers, especially now that toxic black mold is such a
hot topic. Chances are you won't even get an acceptable offer if mold and mildew are
present. Even if the mold in your house is the normal variety and not stachybotrys
chartarum, it is important that you take care of it immediately. Kill the mold and
mildew and fix the source of the problem.
2. Defective Plumbing
Defective plumbing can manifest itself in two different ways: leaking, and clogging. A
visual inspection can detect leaking, and the inspector will check water pressure by
turning on multiple faucets and flushing toilets at the same time. Appliances such as
dishwashers and clothes washers may be tested, too. Leaks and clogs will be
apparent during these checks. When checking the faucets if the water appears dirty
when first turned on, this is a good indication that the pipes are rusting, which can
result in severe water quality problems and eventually leeks.
The home inspector may also check the septic system. During one method dyes are
flushed and the inspector waits to see if the dye surfaces on the drain field.
If the buyers wants to finance with an FHA loan the water quality will be tested, too.
3. Damp or Wet Crawlspaces
An inspector will check your walls for a powdery white mineral deposit a few inches
off the floor. A mildew odor is almost impossible to eliminate, and an
inspector will certainly be conscious of it. The inspector might use a meter to
determine how much moisture is present in these spaces, because moisture
deteriorates building materials and attracts insects.
It could cost you a few hundred dollars or several thousand, depending on the
problem. You will have to weigh these figures into the calculation of what price you
want to net on your home.
4. Inadequate Wiring & Electrical
The electrical panel and circuit breaker configuration should be adequate for the
needs of the house. A 125 amp electrical panel works for most homes. Individual
circuits should not be overloaded. Wire should be copper or aluminum.
The inspector will look for receptacles with ground fault circuit interrupters (GFI) in
bathrooms and kitchens. These receptacles have little test-reset buttons on them.
The home inspector will likely make sure the receptacles are what they appear to be,
and not "dummies" that aren't wired to work. Some of the grounded receptacles
(with 3-pronged plugs) will be checked too. He is looking for Unsafe or Over-fused Electrical Circuits.
A fire hazard is created when more amperage is drawn on the circuit than was
intended. 15 amp circuits are the most common in a typical home, with larger
service for large appliances such as stoves and dryers. It can cost several hundred
dollars to replace your fuse panel with a circuit panel.
5. Poor Heating & Cooling Systems
Insufficient insulation, and an inadequate or a poorly functioning heating system, are
the most common causes of poor heating. While an adequately clean furnace,
without rust on the heat exchanger, usually has life left in it, an inspector will be
asking and checking to see if your furnace is over its typical life span of 15-25 yrs.
For a forced air gas system, a heat exchanger will come under particular scrutiny
since one that is cracked can emit deadly carbon monoxide into the home. These
heat exchangers must be replaced if damaged - they cannot be repaired.
6. Roofing Problems
Water leakage through the roof can occur for a variety of reasons such as physical
deterioration of the asphalt shingles (e.g. curling or splitting), or mechanical damage
from a wind storm. When gutters leak and downspouts allow water to run down and
through the exterior walls, this external problem becomes a major internal one.
7. Damp Attic Spaces
Aside from basement dampness, problems with ventilation, insulation and vapor
barriers can cause water, moisture, mold and mildew to form in the attic. This can
lead to premature wear of the roof, structure and building materials. The cost to fix
this damage could easily run over $2,500.
8. Rotting Wood
This can occur in many places (door or window frames, trim, siding, decks and
fences). The building inspector will sometimes probe the wood to see if this is
present - especially when wood has been freshly painted.
9. Masonry Work
Re-bricking can be costly, but, left unattended, these repairs can cause problems
with water and moisture penetration into the home which in turn could lead to a
chimney being clogged by fallen bricks or even a chimney which falls onto the roof.
It can be costly to rebuild a chimney or to have it repainted.
10. Adequate Security Features
An inspector will look for the basic safety features (smoke alarms etc.).
You've found your dream condo, and you're ready to relax among the mango trees and swaying date palms. Hold everything. To keep from getting stuck with a lemon, you've got to do some homework. Here are the seven most important questions you need to ask before buying a condo.
1. "What's the Beef?"
Take a look at the minutes of the condo association board meetings to see what the owners have been griping about. If everyone was complaining about the faulty plumbing or the gardener's absence, you know that the complex is having management difficulties. Even if there aren't any complaints, reading the minutes will reveal the sorts of projects that are under way at the complex -- projects the seller may have neglected to mention.
2. "Who's Been Naughty and Who's Been Nice?"
Find out the delinquency rates of present owners. If people aren't paying their association dues on time, that is either a sign of discontent or an indication that the association might be underfunded.
3. "How Much Is In the Repair Fund?"
Ask if the community has done a reserve-fund review in the past five years. Lester Giese, the author of The 99 Best Residential & Recreational Communities in America, recommends the following formula: If the complex is one to 10 years old, the reserve fund should have 10% of the cost of replaceable items (roofs, roads, tennis courts, etc.). Between 10 and 20 years old, the repair fund should be at 25% to 30%. At 20 years, that amount should be 50% or above. Residents who brag that they don't pay much in maintenance may be in a complex that either is not being kept up well or is living beyond its means.
4. "Can You Cover Me?"
If you look at nothing else, get a copy of the certificate of insurance, which is a summary of the association's policy. First see if the replacement costs covered by the policy are an accurate estimate of the cost of rebuilding. Then make sure that the policy has a building-ordinance clause, which means that the insurance will cover the cost of bringing the building up to code if there is any rebuilding to be done. On older buildings, there may have been many code upgrades since the time of construction. Finally, make sure that you understand exactly what the association policy covers and what you are responsible for. The smart condo owner will insure his or her personal belongings, along with any other items within the unit that are not covered by the association's policy. If you have trouble understanding the insurance lingo, take the insurance certificate to an agent whom you trust and who understands the state laws.
5. "Does the Association Present Any Legal Problems?"
Buying a single-family home without a lawyer is no big deal for many people. But with a condo, there's so much more involved. Contact a local real estate lawyer and have him or her go over the bylaws of the association. Do they make sense? Are they consistent with the state laws? Giese, the author, once found that the association bylaws of a large garden-style condo complex had been lifted from the books of a high-rise condo, leaving confused tenants with rules about shared hallway space and the correct use of garbage chutes. Benny Kass, a Washington real estate attorney, recommends that you also have your lawyer screen the association at the local courthouse, to see if any owners have filed suit against it.
6. "Is the Complex Renter-Friendly?"
If the renter population is over 10%, there should be clear rental policies, either listed in the bylaws or tacked on as an amendment. Does the management company find renters for you? If so, do they get enough good renters? Ask other tenants about their experience. In addition, ask to see the association's rental lease, and have a real estate lawyer look it over. Keep one thing in mind, though: An association can change its bylaws to prohibit or restrict renting at any time. The more owners who rent, the less chance that will happen.
7. "Am I My Community's Keeper?"
Watch out for a condo whose owners manage the place themselves. Although many are operated efficiently, self-management can lead to more hassles for owners -- especially those who live thousands of miles away. If the complex is professionally managed, check out the management company as thoroughly as you check out the association. Ask other owners. Ask people in nearby buildings. And be sure to interview the day-to-day manager directly. If you hook up with a bad manager, you can be sure of this: Your dream condo will keep you up at night.
RISMedia
Hank Fishkind predicts a new flood of foreclosure filings
Economist Hank Fishkind, with Orlando-based Fishkind & Associates, spoke Thursday morning at an event hosted by the Manatee County Chamber of Commerce's Economic Development Council. Fishkind shared his economic forecast, saying that 2010 was going to be a difficult year for the Sarasota-Bradenton housing market, but he predicted 2011 would bring improvement.
By Aaron Kessler
Published: Friday, January 22, 2010 Herald Tribune
BRADENTON - Economist Hank Fishkind predicts 2010 will be "an ugly year for foreclosures" in the Sarasota-Bradenton area and across Florida, putting further pressure on home prices, and that new housing starts will be "miserable."
Fishkind told a gathering of the Manatee Economic Development Council on Thursday that thousands of more jobs were likely to disappear this year in Southwest Florida. But the economist with Orlando-based Fishkind & Associates predicted that the situation on those fronts would improve in 2011, and that signs of recovery may begin to take place later this year.
Fishkind joined a growing chorus of economists who expect a surge in foreclosure filings this year that they say will eclipse the large numbers for 2009. Collectively, Southwest Florida finished 2009 with 27,129 properties in some stage of foreclosure, a 20 percent increase from 2008, according to data from California-based RealtyTrac Inc.
A flood of new foreclosures could further weigh down the market with increased housing inventory and thus continue to put pressure on home values. Fishkind said the largest concentration of foreclosures will take place in the early part of this year. He is forecasting another 20,000 foreclosures in 2010 for Manatee County, which would be about double the 10,000 of 2009. Though he sees a more promising 2011, Fishkind said that there would likely be another 10,000 foreclosures that year in Manatee before the phenomenon recedes -- meaning 5,000 foreclosures actions in 2012 and 2013.
For Sarasota County, Fishkind does not predict as dramatic a rise in 2010, though he is expects as many as 12,000 filings. He sees foreclosures ebbing in 2011, but remaining at 2009 levels. In 2012, he expects 4,000 filings and about 2,000 more in 2013. Housing starts in Sarasota County will be almost negligible this year, but Fishkind predicts they will pick up in 2011.
Manatee County is expected to have a slightly better performance on housing starts this year, but will still face difficulty until 2011 as well.
The upside of the local housing market, Fishkind said, is that buyers have been flocking to take advantage of low prices, which would likely mean the number of home sales will continue going up as prices remain low or drop even further. "This past year has proved that given enough affordability, people will buy houses," he said.
Overall -- in terms of economic growth -- Fishkind said Manatee County was in a much more advantageous position than Sarasota County. He called the "Sarasota 2050" growth plan a "failure," and said the community was "squandering its opportunity," and would no longer be able to use its reputation alone a physically beautiful place to sustain its economic future.
Statewide, Florida will be slower coming out of the recession than other parts of the country, and it will likely take most of 2010 before the state will find anything resembling an economic bottom, Fishkind said. Some hard-hit areas of Florida may not be able to return to anything approaching normal activity anytime soon, he said. "There may be parts of Cape Coral and Lehigh Acres that won't recover," Fishkind said. "It could be that 10 years from now, they are still having problems."
Fishkind did not see that kind of fate for Sarasota and Manatee counties, but the region will still take some time to come back; 2010, in particular, will be very difficult, especially the first half.
On the national economic front, Fishkind said the stimulus programs have been working, and that fourth quarter gross domestic product numbers, when they are released, could show as much as 5 percent growth. But he cautioned that the GDP figure would not represent "self-sustaining gains" because it will be mainly due to increases in inventory rather than consumption. "In order to see a real recovery, we need to see that consumption, and to spur that we need employment," Fishkind said.
Time is running out on the jobs front, Fishkind said. It will be important to see substantial job creation taking place before the government stimulus programs begin winding down later in 2010. If the economy is not creating jobs by May or June on the scale of 150,000 per month, then a sustainable recovery may be at risk of slipping away.
As we begin 2010, home buyers have something to look forward to and more importantly, take advantage of—the extended and expanded home buyer tax credit.
Originally created in 2008, the home-buyer tax credit has evolved from a $7,500 credit, which had to be repaid by the home buyer over the course of 15 years, to an $8,000 tax credit with no repayment required in 2009. Now, for a limited time in 2010, the $8,000 home buyer tax credit will still be available to first-time home buyers and certain current homeowners will also be eligible for a $6,500 credit.
To help everyone better understand the extended and expanded home buyer tax credit, here are some highlights of the changes.
Who can claim the credit?
"First-time home buyers" who purchase homes between November 7, 2009 and April 30, 2010 are eligible for the credit. To qualify as a "first-time home buyer" the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
For current homeowners purchasing a home during the same time frame, they are also eligible for a tax credit, so long as the home being sold or vacated was their principal residence for five consecutive years within the last eight. To elaborate, it must be the same home; it is not enough that they have been homeowners for five consecutive years, they must have been in the same home for five consecutive years.
Another key point is that the existing home does not need to be sold. One must, however, occupy the new home as a principal residence and do so for three years or risk recapture of the credit. Also, the new home does not need to cost more than the old home despite the concept that it is directed at "move up" buyers.
How much is the credit and what are the income limits?
The maximum allowable credit for first-time home buyers is $8,000 or 10% of the sales price, whichever is less. For current homeowners, it is $6,500 or 10% of the sale price, whichever is less. Under the extended home buyer tax credit, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum credit.
The credit decreases for single buyers who earn between $125,000 and $145,000 and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit deceases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income – over $145,000 for singles and over $245,000 for couples – are not eligible for the credit.
What are the deadlines for qualifying for the credit?
Under the extended home buyer tax credit, as long as a written binding contract to purchase a home is in effect on April 30, 2010, and the deal is closed by July 1, 2010, one can claim the credit.
Will the tax credit need to be repaid?
No, the buyer does not need to repay the tax credit if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount of the credit will be recouped on the sale. Another provision of the law waives the recapture provisions for service members who receive orders that require them to move.
Are there any other critical provisions?
-There are three provisions people should be aware of:
-There is an $800,000 limitation on the cost of the home -The purchaser must be at least 18 years old on the date of purchase -For a married couple, only one spouse must meet this age requirement and dependents are not eligible to claim the credit
Finally, as an anti-fraud measure, purchasers must attach documentation of purchase to his/her tax return claiming the credit. Normally this would be a copy of the HUD-1, but could include other documents memorializin the settlement.
As with all tax matters, responsibility for complying with the tax code belongs to the taxpayer. Buyers should consult their tax professionals to ensure eligibility for the credit and the proper way to claim the credit. For more information including the required IRS forms please contact the Internal Revenue Service at 800-829-1040.
The Law is in effect and this is an overview about old vs. new. It is not complete, though, and is always advised to talk to a tax consultant.
The old law will be terminated on November 30, 2009 – the new law is in effect November 7, 2009 and is going to end April 30, 2010. Therefore, if you want to take advantage of the tax credit, you need to act now. Let’s have a look, what is old? What is new?
1. First-time Buyer Amount of Credit? Remains the same, $8,000 0r $4,000 married, filing separate.
2. Definition First-time Buyer definition for eligibility? Remains the same, must not have had an interest in a principal residence for 3 years prior to purchase.
3. Current Homeowner Amount of Credit? This has changed. Old: No Provision. New: $6,500 or $3,500 married, filing separately.
4. Effective Date Current Owner? Old: No Provision. New: November 7, 2009.
5. Current Homeowner Definition for Eligibility? Old: Now provision. New: must have used the home sold or being sold as a principal residence consecutively for 5 of the previous years.
6. Termination of Credit? Old: Purchases after November 30, becomes April 30, 2010 on Date of enactment. New: Purchases after April 30, 2010.
7. Binding contract rule? Old: None. New: So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
8. Income Limits (Note: Increased income limits are effective as of date of enacted bill).
Old: $75,000-single, $150,000-married, additional $20,000 phase out. New: $125,000-single, $225,000-married, additional $25,000 phase out.
9. Limitation on Cost of Purchasing Home? Old: None. New: $800,000 November 7, 2009.
10. Purchase by a Dependent? Old: No Provision. New: Ineligible November 7, 2009.
11. Anti-fraud Rule? Old: None. New: Purchaser must attach documentation of purchase to his tax return.
If buyer currently owns a home and is going to keep that home as his second home, or if it has not sold ….. buyer is out of luck. He is not eligible for the $6,500.
Source: National Association of REALTORS
Our neighbor really enjoys his newly replaced air conditioner at his house. The A/C was subsidized by a federal tax rebate. So your car isn’t a clunker? You’re not buying a new home? Maybe your air-conditioning unit is on the fritz? Alternatively, perhaps you have always wanted solar panels. Then there is a tax break waiting for you, too.
Although there hasn’t been much hype surrounding these credits and deductions-all increased or expanded by federal stimulus bills passed this year and last year-retailers say sales of new, energy-efficient products are beating expectations in the midst of the recession. What is the reason for the hype? Right now the prices are that good that hoemeowners can hardly resist.
You may pay the same amount for a new air conditioner as you did for the one you bought about 20 years ago. However, they are a lot more energy efficient as the older units. Ask your A/C guy, and he will tell you what has to come out of your wallet and what not. The combination of a rebate from Florida Power & Light, the manufacturer and a $1,500 credit on your taxes next year means you will pay probably $2,000+ less for a medium size A/C unit. On top of that, the family electric bill will be a lot less than it used to be in the previous months, and that will continue month for month - year for year. Don't wait too long, it might not be worth repairing your 15 year old unit since you could experience a dramatic monthly saving with a more energy efficient one.
Any air conditioner that qualifies for the tax credit will most likely qualify for the FPL rebate. The reason is that the Federal energy efficiency requirement is more stringent than the power company’s. However, you need to be careful. Don't take a company's word that their product qualifies. Get a written statement from the manufacturer explicitly stating that the item qualifies for the rebates.
Federal stimulus laws also allow homeowners to get a tax credit of 30% of the cost of energy efficient windows, doors, water heaters (solar ones and non solar ones) , air conditioners and furnaces, up to a maximum of $1,500. Just keep in mind: if you max out the credit on your new A/C, you can’t use it for one of the other items. But if you don’t use any or all of the credit this tax year, you can buy a qualifying item and claim the credit or any remaining credit in 2010. It would be nice if the credit would be unlimited, but we are still a few steps away from living in paradise. There is one important deadline to remember: The items have to be installed by Dec. 31, 2010, for taxpayers to claim the credit. No excuses will be accepted. And again, you need to be careful: some windows may be energy efficient. However, the building code can overwrite the use of those windows. For example, in Miami Dade County windows need to be impact resistant, too. There are products out that qualify as impact resistant and energy efficient. Ask an expert or the county before you go on a shopping spree.
For some homeowners solar energy systems are "hot" items. You can get a 30 % tax credit for solar systems as well, and one good thing is that they are separate from the credit for air conditioners, doors and windows. A homeowner can actually use both credits. What does the credit include? Solar energy systems such as water and pool heaters, small wind systems, geothermal heat pumps and photovoltaic systems. Deadline is December 31, 2016.
And there’s no cap on the amount of the credit. If you spent about $50,000 to install solar panels and a battery back-up system for your home, you might get about $20,000 from the state solar energy rebate program, and will receive a further $10,000 as a credit on your taxes. That puts the final price tag for your system at around $24,000. And after completion you will see nice monthly savings on your electricity bill as well.
Some of the deductions and credits might be harder to come by than others. The state is expecting at least $17.5 million in federal dollars it can issue in the form of rebates to buyers of the right kinds of dishwashers, washing machines, refrigerators, dryers, air conditioners and other items. Nevertheless, the Feds have to approve Florida’s list of appliances, and that might not happen until later this year. Think carefully before you run out and buy a new dishwasher right away, you might end up paying the whole thing out of your own pocket.
Jan Heitmann
[Source: RISmedia]
Lawmakers are pushing to revive legislation in the Senate that would almost double an $8,000 tax credit for first-time home buyers and expand the program to all borrowers.
Senator Johnny Isakson, a Georgia Republican, plans to introduce a bill this week that increases the tax credit to $15,000 and removes income and other restrictions on who can qualify for the credit, according to his spokesman, Sheridan Watson.
The legislation, which is co-sponsored by Senate Banking Committee Chairman Christopher Dodd of Connecticut and other Democrats, would extend the home buyer credit to multi-family properties that are used as the borrower’s primary residence. It would also eliminate income caps of $75,000 and $150,000 on individuals and couples seeking to claim the credit.
“The housing market continues to be a drag on the economy, said John Castellani, president of the Washington-based Business Roundtable, which represents the interests of more than 100 CEOs including General Electric Co.’s Jeffrey Immelt and Exxon Mobil Corp.’s Rex Tillerson. “We believe that if we don’t stabilize this vital sector, we can’t turn the tide on the recession.”
The Business Roundtable and the National Association of Realtors are both pushing to expand the tax credit and to lower mortgage rates to revive the U.S. housing market.
Isakson’s bill would extend the credit, which expires at the end of 2009, to one year after it’s signed into law, according to Watson. It would also allow borrowers to divide the credit over two years. The bill is co-sponsored by Republican Senators Lamar Alexander of Tennessee, Saxby Chambliss of Georgia, David Vitter of Louisiana and James Risch of Idaho.
Senators Patty Murray, a Washington Democrat, and Joseph Lieberman, a Connecticut independent, have also signed on to the bill, according to Watson.
The roundtable and Realtors groups also recommended the Federal Reserve continue its plans to purchase mortgage securities guaranteed by Fannie Mae, Freddie Mac and the Federal Home Loan Banks to drive down mortgage rates below 5%.
The Fed is about a third of the way through its $1.25 trillion commitment, holding $427.6 billion of mortgage debt backed by the government-sponsored enterprises as of June 3, according to the New York Federal Reserve.
The average rate on a 30-year fixed-rate U.S. mortgage jumped last week to the highest level since November, rising to 5.57% from 5.25% the prior week, according to data released today by the Mortgage Bankers Association.
RISMedia welcomes your questions and comments.
Interesting stuff to think about because those numbers may have an influx of the well being of our kids and grandkids because they may have an impact on the future job market and the way how world resources are distributed around the globe.
Over the next 40 years, the greatest population increases worldwide will occur in China, India and the U.S.; while Africa, the Middle East, Southeast Asia and South Asia will be the globe’s fastest growing regions.
Europe is the one region of the world that will experience population declines between now and 2030.
Mature but still growing economies (the U.S., Canada, U.K., Ireland, Australia, and New Zealand) will offer attractive real estate investment and development prospects once the recession subsides.
The developed world’s large workforce is aging rapidly, while the young labor pools in the Middle East, Africa and South Africa are expanding.
Fertility rates have dropped globally, even in developing countries. As national economies improve and household incomes rise, fertility drops, children receive more education, and they find better jobs than their parents.
Many developing nations are emerging consumer markets, with expanding numbers of moderate- and middle-income households generating enthusiastic consumer demand.
Population growth is highest in the poorest countries (Yemen, Bangladesh, Haiti, Liberia, and Afghanistan) and they have the most difficulty reversing a cycle of abject poverty.
In developing countries, the number of elderly is rising because of longevity gains, but their share of the total population is reduced by very large younger cohorts
Source: RISSmedia
Last time we talked about credit scores. This blog is for first time home buyers.
Let us start: First-time homebuyers will soon have another option if they want to use their $8,000 tax credit toward a downpayment. On the tails of a Florida-created program that Gov. Charlie Crist is expected to sign into law, the federal government announced its own downpayment assistance program at the National Association of Realtors® Midyear Legislative Meetings & Trade Expo taking place this week in Washington, D.C.
While the tax credit applies to “first-time homebuyers,” the term is misleading. In general, anyone who hasn’t owned a home for the past three years is considered a first-timer under the program. Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development (HUD), hopes to have additional details available within a few days, though it’s still unclear how soon homebuyers can apply for the credit.
Donovan said that the Federal Housing Administration (FHA) would allow its lenders to credit homeowners up to $8,000. He made the announcement to several thousand Realtors yesterday at a special daylong session called, The Real Estate Summit: Advancing the U.S. Economy.
“We all want to enable FHA consumers to access the homebuyer tax credit funds when they close on their home loans, so that the cash can be used as a downpayment,” Donovan said. According to Donovan, FHA approved lenders will be permitted to “monetize” the tax credit by using short-term bridge loans. Donovan also said that more will be done, and the Obama administration plans to further stabilize the housing market.
“I do think we have some early signs that the market overall is stabilizing,” said Donovan. “Since January, we’ve seen both home sales moving up and down around a relatively stable number, and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
2009 FLORIDA ASSOCIATION OF REALTORS®
Let's talk about your credit score because this simple three digit number affects everything in your life. It determines whether you can get certain things and how much they will cost you.
With many Americans considering a home purchase or refinance, seeking a new job, purchasing a new car, or striving to pay off credit card debt, 2009 might be the year of the credit score, said Bills.com president Ethan Ewing.
“Many Americans hold mistaken beliefs about credit scores,” cautioned Ewing, who heads the free online consumer portal at Bills.com. “Misinformation on television and in hearsay from friends and neighbors only compounds the problem.”
Here are the top 10 commonly held myths surrounding credit scores:
Myth #1: A credit score is a credit report. The credit report is a detailed listing of all debts and payments, going back throughout an individual’s entire payment history, Ewing explained. For each entry, it shows the creditor’s name, amount owed, the highest balance owed, the available credit, whether the account is open or closed (and who closed it), the number of late payments and whether the account is in default. A credit score is a number between 300 and 850 that is based on complex formulas incorporating all the data in the credit report.
Myth #2: Those who are not in default do not need to check their credit report. Everyone should check his or her credit report at least once a year (quarterly is not a bad idea in today’s market) to be sure the report contains no erroneous information. Visit www.annualcreditreport.com for a free, no-obligation copy of the report.
Myth #3: Checking a credit report damages credit. Reviewing your own credit information has no effect on a credit score, Ewing said. Neither does a credit report review by a prospective landlord or employer.
Myth #4: Everyone has one credit score. Credit score calculations are compiled using data from three different credit scoring agencies (Equifax, Experian and TransUnion). The resulting scores might vary slightly among the three agencies if they have slightly different information, but they will be similar.
Myth #5: Married couples share a credit score. If all of a couple’s accounts are joint, their scores will likely be similar, but each individual maintains a unique credit record and credit score. On the flip side, after a divorce, ex-spouses need to follow protocol to have creditors remove either party from a joint account.
Myth #6: Shopping for a loan destroys credit. It is true that “hard inquiries” - examinations of a credit score in preparation for extending credit can have a small negative impact on credit. However, credit bureaus take into account that consumers might inquire about a loan from multiple mortgage companies or auto lenders. “If multiple inquiries are received from the same type of lender within a 14-day period, the credit scoring companies do not count each inquiry against the borrower,” Ewing explained. But credit card account inquiries to open new accounts are counted individually.
Myth #7: To improve a score, close unused accounts. An important component of a credit score is available credit, or the unused credit that has been offered (on a credit card, for instance) but not used. Closing unused cards removes those available balances from the equation and can actually lower a credit score. Today, some banks are automatically lowering limits or closing accounts to reduce their own credit exposure. Individuals whose debt load is manageable should not experience an extreme effect on their scores.
Myth #8: To boost credit quickly, just pay off bills. Credit scores reflect performance over time. Scores will not change overnight.
Myth #9: For a fee, vendors can fix a bad score. Again, credit scores show historic behavior. Be cautious about companies that claim to “fix” or “repair” credit. “You yourself can remove inaccurate information,” Ewing said. “Beyond that, be aware that some companies send credit scorers a deluge of letters asking that they verify - and in the process, remove all past negative information. If and when truthful information is verified, however, it will quickly return to the credit report.”
Myth #10: Never get help - it is too hard on credit. It is true that credit counseling, debt settlement and bankruptcy all can cause significant black marks on a credit report. “If you are in real trouble, however, you can and should seek help,” Ewing urged. “Which option you choose will depend on the severity of your situation. Credit counseling can help to manage bills, and lower interest rates and monthly payments to creditors. Debt settlement firms can negotiate to lower the principal amount of your debts, typically providing a faster path to debt freedom than credit counseling. Bankruptcy, an even more serious alternative, should be discussed with a bankruptcy attorney.”
“Credit is important, but knowing the truth about credit might be even more important,” Ewing concluded. “Before taking action that might hurt or help your score, check your facts to be sure your actions will help your financial picture.”
RISMEDIA, May 7, 2009