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Current Conforming Limits Extended to 9/30/11

By jharris | October 16, 2010

On September 30th, President Obama signed a resolution that included a provision extending through fiscal year 2011 the current conforming loan limit of $729,750 for high-cost areas, including many in California. The same limits will also be extended to loans insured by the Federal Housing Administration.

Without the extension, which was set to expire at year’s end, FHA loan limits would have dropped by as much as 50 percent in some areas, and the conforming loan limit would have dropped by about 40 percent.

This action effectively extends the higher conforming loan limits for Fannie, Freddie, and FHA loans through Sept. 30, 2011.

Copyright 2010 CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.)

Topics: Buying Real Estate, Real Estate | No Comments »

CALHFA Offers a NEW 30 Year FHA Mortgage Program Aimed at Low-to-Moderate Income First-Time Homebuyers & Veterans

By jharris | September 16, 2010

The California Housing Finance Agency (CALHFA) and the Federal Housing Authority (FHA) are teaming up to offer home loans to low-to-moderate income households that feature below-market interest rates, affordable down payments, and other benefits. This program is specifically for first-time homebuyers or veterans.

In order to be considered a first-time homebuyer, borrower must not have owned and occupied a home within the last three years.Veterans who qualify under the Heroes Earnings Assistance & Relief Tax Act are also eligible for this loan program. This loan product does include upfront mortgage insurance, but the borrowers are permitted to use the California Homebuyers Downpayment Assistance Program (CHDAP), which can provide up to 3% of the home’s purchase price or closing costs assistance for added assistance.

 

Borrowers must meet a number of eligibility requirements to qualify for this CalHFA program including:

CalHFA’s income limits, which vary by county and family size. For a family of four in San Diego County, for example, income must be less than $115,640 per year.

Purchasing homes that are within FHA’s loan limits and CalHFA’s sales price limits. Mortgage loans are limited to $417,000 under FHA guidelines. CalHFA’s sales price limits vary by county. For San Diego County, the limit is $627,750 for non-targeted and $767,250 for targeted areas.

Meeting the minimum credit score requirements with maximum debt-to-income ratios.

Completion of a HUD-approved homebuyer education program.

Of course, homebuyers are still eligible for a purchase rebate of up to 1% of the home’s purchase price using a HouseRebate.com REALTOR

For further details on the CALHFA-FHA program, please visit:?? www.calhfa.ca.gov

 

Source:Central Valley Business Times, September 7, 2010

Topics: Buying Real Estate, Real Estate | No Comments »

Home Buyer Tax Credit Deadline Extended to 9/30/10

By jharris | July 27, 2010

The home buyer tax credit now has been extended with a closing deadline of September 30, 2010. Both the first-time home buyer credit of up to $8,000 and the “move-up buyer” credit of up to $6,500 have been extended.

Who is eligible for this deadline extension? If you are a first-time or “move-up” buyer who had a ratified contract in place as of April 30, 2010, but were unable to close by the previous June 30th deadline. To be considered a first-time homebuyer, you cannot have owned your own home in the last three years. The same income restrictions and rules apply for the extension as the initial tax credit guidelines.

Topics: Buying Real Estate, Real Estate, Tax Information | No Comments »

Avoiding Foreclosure: Your Options

By jharris | July 20, 2010

As your debts loom and your monthly mortgage falls behind, you might think that foreclosure is your only way out. Happily, that’s not the case for most homeowners. Depending upon your individual circumstances, you have plenty of other options, many of which are outlined below.

Refinancing

If you have enough equity in your home and your credit is still in good standing, you may be able to refinance your mortgage at a more favorable rate. Usually, this option is best for people who anticipate a decline in their income rather than those who’ve already fallen behind on their payments.

Forbearance or Repayment Plan

Let’s say you’re three months behind on your mortgage. In a forbearance or repayment plan, you would negotiate with your lender to repay the past due amount over a period of time. You still have to make your current payments, but this is a good solution for homeowners who have had a temporary hardship as banks would rather get their money than take your property.

Mortgage Modification

Modifying your mortgage may make all the difference in your ability to keep your home. The government recognizes this and has initiated a program called Making Home Affordable with options like HAMP, HAFA, UP and HARP (see the link below for more information).Typically, a mortgage modification will involve a reduction in your interest rate or the principal balance of the loan, a change in the length of the loan, or a combination of these options. The goal is to lower your monthly payment to a number that you can afford.

Deed in Lieu of Foreclosure

Also known as a friendly foreclosure, a deed in lieu allows you to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option and you must vacate the property.

Service members Civil Relief Act (military personnel only)

If you are a member of the military and are in financial trouble due to your deployment or the deployment of a family member, you may qualify for relief under the Service members Civil Relief Act. The American Bar Association has a network of attorneys that can help service members to qualify for this relief.

Sell the Property

If you have sufficient equity in your home, you can list their property with a qualified agent who understands the market conditions and foreclosure process in your area. HouseRebate’s agents are experts in selling distressed properties and stand ready to help.

Short Sale

If you owe more on your home than it is currently worth, hiring an experienced real estate agent to market and sell your property is a great solution. Your HouseRebate agent will negotiate with your lender to get the best possible terms for you. You must be able to demonstrate financial hardship to qualify for a short sale. Short sales are also covered under the new government program, HAFA.

For more about Short Sales, click here.

Learn about government programs to help distressed homeowners here.

Topics: Foreclosures, Loan Modification, Real Estate, Short-Sales | No Comments »

Short-Sales vs. Foreclosures

By jharris | July 19, 2010

Some homeowners who are behind on their mortgage simply pack their things and leave. As a result, lenders have no choice but to foreclose upon abandoned properties. Foreclosure, however it may occur, can be damaging to your credit and reputation.Instead, working with your bank or lender to approve a short sale will have much less impact on your future. Read about the pros of short sales and the cons of foreclosure below.

Your Credit Score:

Next to bankruptcy, foreclosure has the biggest negative impact on your credit score.
vs. with a short sale, only late payments will show and those payments will be reported as paid as soon as your home sells.

Your Credit History:

Foreclosure will stay on your credit history as a matter of public record for up to 10 years.
Versus with a short sale, other than your history of late mortgage payments, your loan will appear as “settled” or “paid in full.”

Future Mortgage Loan:

There is a question on every standard loan form asking “have you had property foreclosed upon in the last seven years?” Your affirmative answer will affect your ability to get a mortgage as well as loan rates.

Versus there are generally no questions about short sales on mortgage questionnaires.

Your Employment:

Many employers regularly check their employees’ credit and most potential employers run a credit check before hiring a new employee. In most cases, foreclosure is grounds for termination or reassignment. As foreclosure is one of the most detrimental items on credit report, a majority of employers will not even consider hiring someone with a history of foreclosure, no matter how well qualified.
Versus again, your mortgage loan will appear as settled or paid in full on your credit report after a short sale.

Security Clearance:

Other than a felony conviction, foreclosure poses the greatest challenge to a security clearance. If you are a police officer, serve in the military, work in private security, work for a government agency or contractor or any other position that requires a security clearance, in nearly all cases clearance will be revoked and you may be terminated vs. a short sale on its own usually does not challenge security clearances.here.

 

Topics: Foreclosures, Real Estate, Short-Sales | No Comments »

What is a Short-Sale?

By jharris | July 8, 2010

If you need to sell your home and owe more to your lender than your home is worth, a short sale may be your best choice. In the past, it was rare for a bank or lender to accept a short sale. However, with the current downturn in our real estate market, banks and lenders are willing to consider these transactions and HouseRebate can help you sell your home quickly and easily for top market value.

In a short sale, the lender accepts a price that’s less than the amount you owe on the property. As part of this arrangement, your bank or lender typically agrees to forgive the rest of the loan. As a result, you avoid foreclosure, the buyer gets the property at a discount, and the lender avoids taking on the burden of selling the property.

To qualify for a short sale, you must prove that you are in circumstances that make it impossible for you to afford your mortgage. The banks call this ???financial hardship???. You will need to show the bank that you have a monthly income shortfall, or not enough money to cover your expenses including your mortgage. Acceptable hardships include but are not limited to mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more. Finally, your lender will ensure that you do not have significant liquid assets that you could use to pay your mortgage. Liquid assets include cash, stocks, bonds, IRAs, CDs and other securities. While ???financial hardship??? may sound bad, a short sale is far less harmful to your credit than a foreclosure.

Short sales require great negotiation skills and knowledge of procedures and paperwork. You should select a highly competent agent to represent your interests with your bank or lender and with the potential buyer of your property.?? HouseRebate has experienced short sale professionals available to help you, as well as interested, cash-ready buyers who are looking for properties like yours.?? Our goal is to make the short sale process quick, painless and hassle-free.

Learn about the benefits of a Short Sale vs. Foreclosure here.

Learn about government programs to help distressed homeowners here.

Topics: Real Estate, Short-Sales | No Comments »

Making Home Affordable: Your Options

By jharris | July 6, 2010

Recognizing that millions of Americans have lost or are in danger of losing their homes, the government has created a program with four options that may help you. The HAFA program, which simplifies short sales, is the most suitable for homeowners who do not feel that a loan modification or refinancing will provide an acceptable long-term solution.

Home Affordable Refinance Program (HARP)

HARP is available to homeowners whose loan(s) are owned or guaranteed by Fannie Mae or Freddie Mac. Under the program, four to five million homeowners will be able to refinance to today???s lower mortgage rates, significantly reducing their monthly payments. Here are the eligibility requirements:

?????????????????? You are the owner-occupant of a one- to four-unit home.

?????????????????? You are current on your mortgage payments at the time you apply.

?????????????????? Your credit score is at least 620.

?????????????????? Your debt to income ratio is less than 55%.

?????????????????? You owe less than 125% of the current market value of your home. For example, if your property is now valued at $160,000, you cannot owe more than $200,000 on your first mortgage.

?????????????????? Refinancing through the program will improve your long-term ability to repay your loan.

?????????????????? This program ends in June 2011.

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Home Affordable Modification Program (HAMP)


HAMP is expected to help up to 3 to 4 million at-risk homeowners avoid foreclosure by reducing monthly mortgage payments.?? Unlike HARP, your loan may be held by any bank or lender and you do not need to be current on your mortgage to qualify. There no modification fees. Other eligibility requirements are below:

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?????????????????? You are the owner-occupant of a one- to four-unit home.

?????????????????? Your mortgage must be more than 31% of your gross monthly income.

?????????????????? You must owe $729,000 or less on a single-unit residence (this amount is higher for multiple units).

?????????????????? Your loan must have originated before January 1, 2009.

?????????????????? You can be either current or late on your payments but if you have a Notice of Sale from your lender, the sale date must be more than 60 days away.

?????????????????? You must be able to demonstrate financial hardship such as job loss, reduced income, divorce, death in the family, etc.

?????????????????? This program ends in December 2012.

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Home Affordable Unemployed Program (UP)

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The Home Affordable Unemployment Program (UP) provides homeowners forbearance, which is a temporary period of time during which your regular monthly mortgage payment is reduced or suspended. These are the eligibility requirements:

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?????????????????? You are the owner-occupant of a one- to four-unit home.

?????????????????? Your mortgage must be more than 31% of your gross monthly income.

?????????????????? You must owe $729,000 or less on a single-unit residence (this amount is higher for multiple units).

?????????????????? Your loan must have originated before January 1, 2009.

?????????????????? Your mortgage has not been previously modified under HAMP and you have not previously received a UP forbearance period.

?????????????????? You must request that your lender consider you for UP before three mortgage payments have been missed.

?????????????????? You must be unemployed and able to document that you will receive unemployment benefits in the month of the forbearance period effective date.

?????????????????? Some lenders require that you receive unemployment benefits for up to three months before your forbearance period can begin.

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Home Affordable Foreclosure Alternative (HAFA)

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HAFA establishes streamlined procedures to help homeowners take advantage of short sales. In a Short Sale, the homeowner sells the property for less than the full amount due on the mortgage. Through HAFA, homeowners receive pre-approved short sales??? terms before listing the property with a qualified real estate agent. While the property is on the market, a temporary loan modification will ensure that loan payments do not exceed 31% of the homeowner???s gross monthly income. With the sale, borrowers are fully released from any future liability on their property or loans and can receive $1,500 for relocation assistance.

Banks and lenders are incentivized to participate as the program covers administrative costs, processing fees, etc. The other option available through HAFA is a deed-in-lieu of foreclosure, where the homeowner voluntarily gives the deed of the property to the lender.

To be eligible for HAFA, you must meet the following guidelines:

?????????????????? You are the owner-occupant of a one- to four-unit home.

?????????????????? Your mortgage must be more than 31% of your gross monthly income.

?????????????????? You must owe less than $729,000 on a single-unit residence (this amount is higher for multiple units).

?????????????????? Your loan must have originated before January 1, 2009.

?????????????????? You can be either current or late on your payments but if you have a Notice of Sale from your lender, the sale date must be more than 60 days away.

?????????????????? You must be able to demonstrate financial hardship such as job loss, reduced income, divorce, death in the family, etc.

?????????????????? You either do not qualify for HAMP, have not successfully completed the HAMP trial period, you are delinquent on a HAMP modification, or you simply request a short sale.

Benefits of HAFA:

?????????????????????? Pre-approved terms for the short sale of your home

?????????????????????? Full release from liability on your mortgage with sale

?????????????????????? Reduced mortgage payments (if applicable) while your home is on the market

?????????????????????? A $1,500 ???bonus??? to help with moving expenses

With the HAFA Program, as with any short sale, it is critical to have an experienced and knowledgeable real estate professional working on your behalf. HouseRebate???s agents are familiar with short sale guidelines and have cash-ready buyers. We will work hard to market and sell your property, ensuring the process is quick, easy and hassle-free.

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For more about Short Sales, click here.

Read about the benefits of a Short Sale vs. Foreclosure here.

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Topics: Loan Modification, Real Estate | No Comments »

GSEs Release HAFA Guidelines

By jharris | June 15, 2010

Government Sponsored Enterprises (GSE) Fannie Mae and Freddie Mac last week released guidelines for implementing the Treasury Dept.???s Home Affordable Foreclosure Alternatives Program (HAFA).?? The new guidelines apply to loans owned or guaranteed by the GSEs; servicers are required to implement the new policies no later than Aug. 1.??

While largely consistent with the HAFA guidelines for non-GSE mortgages, both Fannie and Freddie have implemented changes. To qualify for the Freddie Mac HAFA program, borrowers must be more than 60 days delinquent and have cash reserves of less than $5,000 or three times the current monthly mortgage payment, whichever is greater.?? Similar to the non-GSE HAFA program, Fannie Mae allows borrowers to qualify if they are at imminent risk of default.?? However, Fannie prohibits borrowers from participating in HAFA if the borrower: Has the ability to continue making mortgage payment, but chooses not to do so; has substantial encumbered assets of significant cash reserves equal to or exceeding three times the borrower???s total monthly mortgage payment or $5,000, whichever is greater; or has high surplus income.

Fannie and Freddie both allow the real estate commission in the listing agreement, but not more than 6 percent.?? Consistent with the non-GSE HAFA program, Fannie and Freddie guidelines do not permit subordinate lien holders to require contributions from the real estate agent or borrower as a condition for releasing its lien and releasing the borrower from personal liability.

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More info on Fannie Mae guidelines

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More info on Freddie Mac??guidelines

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Copyright ?? 2010 CALIFORNIA ASSOCIATION OF REALTORS?? (C.A.R.)

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First-Time Home Buyer Tax Credit Extended For Armed Service Members

By jharris | May 17, 2010

The expiration date of the $8,000 first-time home buyer may have already passed for most, but there are some potential homebuyers who can still take advantage of this great opportunity.

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For those who are qualified service members, you have an extra year to cash in on the credit. Your new deadline is April 30, 2011. The government defines “qualified service member” as a member of the uniformed services of the U.S military, a member of the Foreign Service of the U.S., or an employee of the intelligence community.”

The reasoning behind this extension is simple. National Association of Home Builders Chairman, Bob Jones, says, “Congress recognized that many service members may have missed out on the home buyer tax credit due to being posted overseas. It is only fitting that they be given another year to take advantage of this opportunity in appreciation of the sacrifices they have made serving our country.”

There has been another modification to the credit for members of the armed service. Currently, a buyer must repay the credit if they move out of their new home within three years. This particular contingency has been waived if the move is due to government ordered extended duty service.

Buyers must meet the other qualification for the credit, however, including the income limits. These limits are set at $125,000 for single taxpayers and $225,000 for married taxpayers filing joint returns.

You must be a first-time home buyer, which is defined as “a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.”

If you don’t fit under this definition, then be sure to check into the $6,500 repeat buyer tax credit.

To get the first-time home buyers credit, you will need to claim it on your federal income tax return. There is a specific form (IRS Form 5405) that helps you determine how much the credit will be. Be sure to talk to your tax professional about the credit to ensure it is submitted correctly.

For those interested in the credit, you can visit FederalHousingTaxCredit.com to find out more information.

Article written Carla Davis, Realty Times, May 4, 2010

Topics: Buying Real Estate, Real Estate, Tax Information | No Comments »

California Home Buyer Tax Credit

By jharris | May 4, 2010

Below is a summary of the recently enacted California Home Buyer Tax Credit

Amount of Tax Credit:???? 5% of purchase price, not to exceed $10,000 for first-time homebuyers or buyers of properties that have never been occupied.

Date of Purchase:?????????????????????? Taxpayer must enter into an enforceable contract by December 31, 2010, and close escrow between May 1, 2010 and July 31, 2011, inclusive.

Principal Residence????????? Yes. Property purchased must be a qualified principal residence and eligible for the homeowner???s exemption from property taxes (Cal. Tax & Rev. Code ?? 218).

Type of Property:?????????????????????? Single-family residence, whether detached or attached, condominium, co-op, manufactured home, mobile home, or house boat. A home constructed by the taxpayer is not eligible because the home has not been “purchased”.

Eligibility:???????????????????? 1. First-Time Homebuyer: Up to $10,000 if the buyer (and buyer???s spouse/RDP if any, according to FTB) has not owned a principal residence for the three-year period before date of purchase; OR 2. Never-Occupied Property: Up to $10,000 for a principal residence if the property has never been previously occupied as certified by the seller.

Income Restriction????????????? No

Maximum Purchase Price:???????????????????? N/A

Tax Credit:?????????????????? No

Repayment:?? ???????? No repayment required if the buyer owns and occupies the property for at least two years immediately following the purchase.

Multiple Buyers (not married to each other):?? ???? Tax credit must be allocated between eligible taxpayers based on their percentage of ownership.

Maximum Credit for All Taxpayers:???????????????? $100 million for first-time homebuyers and $100 million for never-occupied properties, both on a first-come-first-served basis.

Reservations of Credit: Yes. Buyer may reserve credit before close of escrow for a property that has never been occupied by submitting a certification signed by buyer and seller stating they have entered into an enforceable contract between May 1, 2010 and December 31, 2010, inclusive.

When to Claim: ???????????????????????????? 1/3 of total tax credit may be claimed each year for 3 successive years (e.g. $3,333 for 2010, $3,333 for 2011, and $3,333 for 2012).

Tax Agency:?????????????? Franchise Tax Board (FTB).

How to File:???????????? Submit application to the FTB to obtain Certificate of Allocation. The FTB may prescribe additional rules and procedures to carry out this law.

Other Restrictions:???????????????? Cannot be an acquisition from related persons as defined; buyer or spouse must be 18 years old; buyer cannot be another taxpayer???s dependent; credit is allowed for only one qualified principal residence; credit is disallowed if taxpayer received 2009 new home tax credit; and credit allowed cannot be a business credit under Cal. Tax & Rev. Code ?? 17039.2.

Legal Authority:???????????????????????????? Cal. Rev. & Tax Code section 17059.1 (as added by Assembly Bill 183).

Date of Enactment:???????????????? March 25, 2010.

More Information:?????????????????? FTB Web site at http://www.ftb.ca.gov/individuals/ New_Home_Credit.shtml.

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Copyright?? 2010, CALIFORNIA ASSOCIATION OF REALTORS?? (C.A.R.)

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Topics: Buying Real Estate, Real Estate, Tax Information | No Comments »

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