July 2, 2010

The Congress has passed the following:

Tax credit processing extension Updates

The Congress has passed H.R. 5623, the Homebuyer Assistance and Improvement Act, which extends the tax credit closing deadline until September 30th. There will also be no gap between June 30th and the date the President signs the bill into law. The extension only applies to transactions in which the purchase contract was signed by April 30th.

·Flood insurance extension

The Senate has passed H.R. 5569 which extends the National Flood Insurance Program until September 30, 2010. The bill is retroactive from June 1, 2010 to the date the President also signs this bill.

USDA

There is still no decision on the USDA extension. Since the Senate adjoined until July 12th, the House must decide whether to accept the supplemental appropriations bill passed by the Senate or it will be necessary to delay final action on the USDA extension until after the July 4th recess.

Potomac Partners

Friday 25,2010

It has always been important for our borrowers to make sure that their financial situation does not change while we process their loan. With new rules from Fannie Mae it is even more important. Now we have to make even more of an effort to insure this (even possibly a new credit report just before closing). The problems associated with new debt or possibly lower credit scores are too numerous to spell out here. Of course the worst thing that could happen is that suddenly the loan could not be negated. Talk about disruptions. Especially if there is more than one closing hanging in the balance. So I am asking everyone in the process to push for the result we all desire. An uneventful closing.

Friday, June 11, 2010

You know, I just received the latest stats on the mortgage licensing situation. Seventy one per cent of the people are now passing the National test. I don’t know about the state test but I thought it was harder. That means that there are going to be fewer competitors’ for me come July 30th. That is unless the banks hire all the people that fail. They can do that you know. Obviously I recommend that you deal with a licensed person who has done the training and has the scores to prove it. My license number is 185895. The web site is http://mortgage.nationwidelicensingsystem.org/ Check out the site and look me up.
On another note congress still has not funded the Rural housing program and the Flood insurance program. You might want to let them know what you think about that. Although the market is better, we don’t need these kinds of impediments.

As I write this I am in disbelief. I just cannot understand why congress has let the flood program expire again and has still not funded the Rural housing program. I encourage everyone to email their Senators and representatives. Their web sites will give you contact info.
Also Fannie Mae has imposed rules which will require Lenders to re pull credit before funding loans. So a lower credit score or increased debts can kill a transaction at the last minute. So all involved have to make sure our clients know the consequences of more debt or missed payments.
And lastly (this one is more positive), THDA has lowered interest rates. The Great Rate loan is 4.6% and the Great Start is 5.2% (this one provides a 4% grant). If you are not familiar with these call me at 777-HOME (4663) and I will show you how you can increase your sales.

FHA's 203H plan

We have recently received noticed that First Time Homebuyers whose rental residence was damaged by flood waters (restrictions apply) may now possibly buy a home through FHA's 203H plan. It would be combined with a THDA loan and the benefit to the buyer would be a 100% loan at a great interest rate. Today that would be 4.75%

Also I want to remind you that Veterans have until April 30, 2011 to qualify for the tax credit. So it isn't entirely gone.

Also Veterans can get a THDA loan without being a First Time Homebuyer (they would not get the tax credit though). The first time buyer requirement is currently waived by THDA.

I read in a recent Mortgage Bankers article that the U.S. lost 1.2 million households during this recession. In a brief analysis, we find the following

1. The likelihoods that a young adult will form an independent household falls by up to 4 % during a recession

2. The home ownership rate dropped from approximately 69% to 67%.

3. The recession caused a dramatic increase in the rate of overcrowding.

4. Children whose parents have a higher income are more likely to remain at home.

5. Household formation will only pick up once the job market stabilizes.

When I think about this, I conclude that the most important item is the need for a fuller employment. March started improving this situation and as we move toward full employment the people crowded into these homes will rapidly start to begin new households. Then the housing crisis will be over. Hopefully sooner rather than later.

With the bargain prices we have now, plus low interest rates, the time is right.
In fact we just received notice that THDA has reduced their interest rate to 4.75% . This is now better then the FHA rate.

And there is only 23 more days to get under contract and get a Federal Tax Credit!

The Pendulum

Last weekend there may have been a very quiet turning point in the Real Estate and Mortgage situation. I have always said that there is a pendulum that swings both ways. For a while the rules relax until it goes too far. We have seen the latest results of that. Then it goes back the other way. The rules just tighten and tighten. Maybe we got close to the end of that last week. That is when we saw a little relaxing of the PMI rules for loan approval of high LTV loans. We can hope any way.

There is 30 days left before you have to have a contract accepted if you want to qualify for the tax credits. No pressure!