Associated Press, Alan Zibel
WASHINGTON (AP) - Home sales surged for the second month in a row in October, climbing to the highest level in 2½ years as first-time buyers rushed to take advantage of an expiring tax credit.
Home sales nationwide are now up nearly 37 percent from their bottom in January, data Monday showed, though they are still 16 percent below the peak in autumn 2005. At the current sales pace, there is only a 7-month supply of homes on the market and in some areas there are bidding wars.
Joey Wilson, 53, and her husband made unsuccessful offers on 20 Las Vegas homes since midsummer before closing on a four-bedroom, $136,000 home this month.
"It's insane," said Wilson, who relocated from Kentucky. "I've never seen a market like this before."
The National Association of Realtors said home resales rose 10.1 percent to a seasonally adjusted annual rate of 6.1 million in October, from a downwardly revised pace of 5.54 million in September. It was the biggest monthly increase in a decade, and far above the 5.65 million pace expected by economists, according to Thomson Reuters.
The recovery is being driven by lower prices combined with federal programs to lower mortgage rates and bring more buyers into the market. The median sales price was $173,100, down 7 percent from a year earlier and off roughly 2 percent from September.
Many experts predict prices will hit a new low next spring, perhaps falling another 5 to 10 percent, as more foreclosures get pushed onto the market. The government has tried to counter that trend by offering a tax incentive for first-time buyers and by keeping mortgage rates around 5 percent since the spring.
The tax credit of up to $8,000 for first-time owners was originally set to run out on Nov. 30, but Congress renewed it earlier this month and broadened its reach. People who have owned their current homes for at least five years can now claim a tax credit of up to $6,500 for a home purchase. To qualify, buyers must sign a purchase agreement by April 30.
The Realtors' report on October home sales reflects offers made before buyers knew the tax credit would be extended. "The incentives really did get people to go out and buy," said Wells Fargo economist Adam York. "The question is: What does the trend look like when the credit is over with?"
Home sales are likely to drop over the winter as buyers hibernate for a few months without the looming tax credit deadline.
The new deadline means "we're going to see some good activity coming out of the spring," said Pat Lashinsky, chief executive of online real estate brokerage ZipRealty Inc.
But the government support can't last forever. For example, the Federal Reserve is likely to curtail its effort to push down mortgage rates next year. If rates then rise too high, it would make home purchases less affordable and dampen housing demand. "When we do kick those crutches out from under the housing market, will it be able to stand on its own?" said Mark Fleming, chief economist with real estate information company First American CoreLogic. "It's really hard to tell."
Monday, November 23, 2009
90 Day Foreclosure Moratorium
90 Day Foreclosure Moratorium
New law imposes a 90 foreclosure moratorium if lenders don’t modify loans
(SACRAMENTO) – Assemblymember Ted Lieu (D-Torrance) announced the California Foreclosure Prevention Act, ABX2 7 (Lieu), takes effect June 15, 2009. Beginning today, a foreclosure moratorium will give distressed homeowners an additional 90 days unless the lender implements a comprehensive and systematic loan modification program designed to keep people in their homes.
“We must put a stop to the unending tidal wave of foreclosures that has crippled our economy,” said Assemblymember Ted Lieu. “This law will help people stay in their homes by giving lenders a serious incentive to modify loans.”
“We’re seeing signs that the economy may be stabilizing and I’m hopeful AB X2 7 can get more homeowners to the light at the end of the tunnel,” said Speaker Karen Bass. “This important bill by Assemblymember Lieu will keep more Californians in their homes and stabilize neighborhoods, which is a necessary step for economic recovery.”
The California Foreclosure Prevention Act is designed to force Wall Street to help the citizens of “Main Street.” The Act will give lenders a choice: either enact a systematic and comprehensive loan modification program or face an additional 90 day foreclosure delay on all of your loans.
In order to avoid the foreclosure moratorium, a lender’s comprehensive loan modification program would have to be based, in part, on criteria set forth by the Federal Deposit Insurance Corporation. Additionally, loans could only be modified in a couple ways, including interest rate reductions, extension of the loan term, or principal reduction.
Homeowners in California continue to experience record foreclosures, a direct result of irresponsible lending. According to RealtyTrac, in April 2009, California posted the highest foreclosure rate in the nation, with one in every 138 housing units receiving a foreclosure filing during the month. Total foreclosure activity was up 42% from April of last year.
The California Foreclosure Prevention Act is the first law in the nation to impose a foreclosure moratorium and encourage quality loan modifications.
Assemblymember Ted W. Lieu is Chair of the California Assembly Rules Committee, the former Chair of the Banking and Finance Committee and represents the 53rd Assembly District.
New law imposes a 90 foreclosure moratorium if lenders don’t modify loans
(SACRAMENTO) – Assemblymember Ted Lieu (D-Torrance) announced the California Foreclosure Prevention Act, ABX2 7 (Lieu), takes effect June 15, 2009. Beginning today, a foreclosure moratorium will give distressed homeowners an additional 90 days unless the lender implements a comprehensive and systematic loan modification program designed to keep people in their homes.
“We must put a stop to the unending tidal wave of foreclosures that has crippled our economy,” said Assemblymember Ted Lieu. “This law will help people stay in their homes by giving lenders a serious incentive to modify loans.”
“We’re seeing signs that the economy may be stabilizing and I’m hopeful AB X2 7 can get more homeowners to the light at the end of the tunnel,” said Speaker Karen Bass. “This important bill by Assemblymember Lieu will keep more Californians in their homes and stabilize neighborhoods, which is a necessary step for economic recovery.”
The California Foreclosure Prevention Act is designed to force Wall Street to help the citizens of “Main Street.” The Act will give lenders a choice: either enact a systematic and comprehensive loan modification program or face an additional 90 day foreclosure delay on all of your loans.
In order to avoid the foreclosure moratorium, a lender’s comprehensive loan modification program would have to be based, in part, on criteria set forth by the Federal Deposit Insurance Corporation. Additionally, loans could only be modified in a couple ways, including interest rate reductions, extension of the loan term, or principal reduction.
Homeowners in California continue to experience record foreclosures, a direct result of irresponsible lending. According to RealtyTrac, in April 2009, California posted the highest foreclosure rate in the nation, with one in every 138 housing units receiving a foreclosure filing during the month. Total foreclosure activity was up 42% from April of last year.
The California Foreclosure Prevention Act is the first law in the nation to impose a foreclosure moratorium and encourage quality loan modifications.
Assemblymember Ted W. Lieu is Chair of the California Assembly Rules Committee, the former Chair of the Banking and Finance Committee and represents the 53rd Assembly District.
Thursday, November 5, 2009
The Home Buyer Tax Credit - EXTENDED and EXPANDED!
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
Nov. 5, 2009
More good news for consumers, our members, and the housing market recovery. Following the Senate’s favorable vote yesterday, the U.S. House of Representatives just voted 403 to 12 to extend the home buyer tax credit, expanding the parameters to include existing homeowners and not just first-time buyers. As you may know, C.A.R. and our partners at NAR have worked for months urging Congress and the Senate to extend and expand this crucial piece of legislation. We expect President Obama to sign the legislation in short order.
As it now stands, the federal tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to be eligible for a tax credit of up to $8,000, while existing homeowners will be eligible for a reduced credit of up to $6,500. To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years. The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.
Under additional provisions included in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The legislation maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.
Nationwide, more than 1.4 million first-time home buyers were given the opportunity to become homeowners as a result of the Federal Tax Credit for First-time Home Buyers. We expect that number to increase dramatically in the months ahead with this new legislation in place.
Thursday, August 27, 2009
C.A.R. Insurance for First-Time Home Buyers
From the C.A.R. magazine, by Paula Hess
The California Association of Realtors' Housing Affordability Fund (C.A.R.H.A.F.) just unveiled the Mortgage Protection Program, which is designed to restore confidence and assist as many as 3,000 first-time homeowners who purchase a home between April 2, 2009 and December 31, 2o09.
C.A.R.H.A.F. has committed $1 million to support the Mortgage Protection Program - and The National Association of Realtors another $420,000 - an insurance product that kicks in when the unexpected happens: job loss. First-time buyers who enroll in the program can draw upon their mortgage protection policy in the event they lose their job after purchasing their home. Under the program, first-time buyers will be eligible to receive $1,500 per month for six months in the event of a job loss; co-buyers are eligible to receive $750 per month.
To be eligible for coverage, the home must be a principle residence in California and a first-time buyer is defined as someone who has not purchased a home in the past three years. While there are no caps on the applicant's income or the purchase price of the home, the applicants are required to use a California Realtor in their transaction; they cannot be self-employed or older than age 70. Consumers can apply for the program via their Realtor.
The California Association of Realtors' Housing Affordability Fund (C.A.R.H.A.F.) just unveiled the Mortgage Protection Program, which is designed to restore confidence and assist as many as 3,000 first-time homeowners who purchase a home between April 2, 2009 and December 31, 2o09.
C.A.R.H.A.F. has committed $1 million to support the Mortgage Protection Program - and The National Association of Realtors another $420,000 - an insurance product that kicks in when the unexpected happens: job loss. First-time buyers who enroll in the program can draw upon their mortgage protection policy in the event they lose their job after purchasing their home. Under the program, first-time buyers will be eligible to receive $1,500 per month for six months in the event of a job loss; co-buyers are eligible to receive $750 per month.
To be eligible for coverage, the home must be a principle residence in California and a first-time buyer is defined as someone who has not purchased a home in the past three years. While there are no caps on the applicant's income or the purchase price of the home, the applicants are required to use a California Realtor in their transaction; they cannot be self-employed or older than age 70. Consumers can apply for the program via their Realtor.
Wednesday, January 28, 2009
IRS TO EXPEDITE TAX LIEN RELIEF FOR HOMEOWNERS
IRS TO EXPEDITE TAX LIEN RELIEF FOR HOMEOWNERS
The Internal Revenue Service (IRS) recently announced it will expedite its process of providing relief from federal tax liens for distressed homeowners. With over one million current federal tax liens against real and personal property, the IRS announcement should help REALTORS® and their clients resolve federal tax lien issues in their sale and loan transactions.
As background, a homeowner seeking to sell or refinance a property must generally pay off an existing federal tax lien. However, during the current economic downturn, many homeowners don't have the cash or equity to do so. Hence, for a refinance, the homeowner may request that the IRS makes its tax lien subordinate or secondary to the lien of the refinancing lender. For a sale, the homeowner may, under certain circumstances, request that the IRS discharge its claim. The IRS's processing time for subordination or discharge requests has been about 30 days. The IRS is currently working to expedite that time frame to help distressed homeowners.
For IRS instructions on requesting relief from federal tax liens, go to the IRS Publication 783 for discharges and Publication 784 for subordinations at www.irs.gov.
The Internal Revenue Service (IRS) recently announced it will expedite its process of providing relief from federal tax liens for distressed homeowners. With over one million current federal tax liens against real and personal property, the IRS announcement should help REALTORS® and their clients resolve federal tax lien issues in their sale and loan transactions.
As background, a homeowner seeking to sell or refinance a property must generally pay off an existing federal tax lien. However, during the current economic downturn, many homeowners don't have the cash or equity to do so. Hence, for a refinance, the homeowner may request that the IRS makes its tax lien subordinate or secondary to the lien of the refinancing lender. For a sale, the homeowner may, under certain circumstances, request that the IRS discharge its claim. The IRS's processing time for subordination or discharge requests has been about 30 days. The IRS is currently working to expedite that time frame to help distressed homeowners.
For IRS instructions on requesting relief from federal tax liens, go to the IRS Publication 783 for discharges and Publication 784 for subordinations at www.irs.gov.
Wednesday, October 29, 2008
Hope For Homeowners Initiative H4H
The Hope For Homeowners (H4H) initiative that was part of the July stimulus package began to be implemented Oct. 1. The H4H program allows troubled homeowners to keep their home, while enabling lenders to receive a Federal Housing Administration (FHA) guarantee on the loans.
Under terms of the voluntary program, lenders agree to refinance the existing mortgage at 90 percent of the current appraised value and assume the loss on the remaining balance; the new loan is an FHA guaranteed 30 year, fixed-rate, fully amortized, fully documented loan; and the homeowner must forego a portion of the home’s future appreciation to the FHA when it is sold.The FHA has posted a list of lenders participating in the HOPE for Homeowners program.
When contacting the lenders, the FHA is strongly encouraging consumers to also contact their servicing lender and any subordinate lien holders as their participation is vital in order to refinance into a H4H mortgage. The program is voluntary and servicing lenders may offer different solutions for avoiding foreclosure.
The FHA plans to update the list weekly on Fridays. The list is available at http://portal.hud.gov/portal/page?_pageid=73,7605762&_dad=portal&_schema=PORTAL.
Under terms of the voluntary program, lenders agree to refinance the existing mortgage at 90 percent of the current appraised value and assume the loss on the remaining balance; the new loan is an FHA guaranteed 30 year, fixed-rate, fully amortized, fully documented loan; and the homeowner must forego a portion of the home’s future appreciation to the FHA when it is sold.The FHA has posted a list of lenders participating in the HOPE for Homeowners program.
When contacting the lenders, the FHA is strongly encouraging consumers to also contact their servicing lender and any subordinate lien holders as their participation is vital in order to refinance into a H4H mortgage. The program is voluntary and servicing lenders may offer different solutions for avoiding foreclosure.
The FHA plans to update the list weekly on Fridays. The list is available at http://portal.hud.gov/portal/page?_pageid=73,7605762&_dad=portal&_schema=PORTAL.
Tuesday, August 5, 2008
Housing and Economic Recovery Act of 2008
President Bush signed the "Housing and Economic Recovery Act of 2008." For the past several years, C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® have aggressively lobbied for Congress to pass numerous provisions found in this historic bill.
This federal housing bill is a significant move in the right direction for California homeowners. It will aid in stabilizing our economy and help stem foreclosures, while also providing support to first-time homeowners.
The legislation will assist an estimated 400,000 homeowners facing foreclosure, many of whom reside in California, by allowing them to refinance their current mortgages with a Federal Housing Administration (FHA)-backed loan. The bill also will permanently increase FHA, Fannie Mae, and Freddie Mac loan limits in high-cost areas.
The bill permanently increases the conforming loan limit to $625,500. C.A.R. has long advocated for higher conforming loan limits. In February, the Economic Stimulus Act of 2008 was signed, temporarily raising the conforming loan limit in high-cost areas to $729,750 from $417,000 until December 31, 2008.
Although we would have liked Congress to make permanent the current $729,750 loan limit, C.A.R. is pleased with the new permanent loan limit of $625,500. It will allow California homeowners to refinance their loans into safe affordable loan products and allow first-time home buyers to enter the market.
The new loan limits for Fannie Mae and Freddie Mac are the greater of either $417,000 or 115 percent of an area’s median home price, up to $625,500. The new FHA loan limit will be the greater of $271,050 or 115 percent of an area’s median home price, up to $625,500. Both new loan limits will be effective at the expiration of the economic stimulus limits on December 31, 2008.
C.A.R. also supports the following bill provisions:
A temporary increase in mortgage revenue bonds to refinance subprime mortgages.
New regulator for Government Sponsored Enterprises to restore investor confidence in GSE loans and help the market and economy stabilize.
First-time home buyer tax credit, which allows first-time home buyers to receive a tax refund worth up to 10 percent of a home’s purchase price, up to a maximum of $7,500. The refund serves as an interest-free loan and the homeowner is required to repay it in equal installments over 15 years.
Temporary raise in the loan limit for the Veterans Affairs home loan guarantee program to the same level as the economic stimulus limits until the end of 2008.
Adjustment to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), allowing sellers to provide the non-foreign affidavit to a qualified closing entity and not just the buyer.
The setting of minimum requirements for mortgage originators, which mandates fingerprinting of loan originators and establishes a nationwide loan originator licensing and registration system. The requirements do not apply to those only performing real estate brokerage activities unless they are compensated by a lender, mortgage broker, or other loan originator. States will have the ability to implement more stringent laws.
The creation of a National Affordable Housing Trust Fund to help cover the cost of the FHA rescue plan for the first five years and develop affordable housing in subsequent years.
Other provisions in the legislation:
The Treasury Department’s proposal to create a federal backstop program to insure the financial well-being of Fannie Mae and Freddie Mac.
The FHA’s inability to insure loans that utilize a seller-funded down-payment assistance program. Down-payment assistance from family, employers and other nonprofits is still allowed.
The Community Development Block Grant Programs’ $4 billion allotment for communities to purchase and refurbish foreclosed homes.
This federal housing bill is a significant move in the right direction for California homeowners. It will aid in stabilizing our economy and help stem foreclosures, while also providing support to first-time homeowners.
The legislation will assist an estimated 400,000 homeowners facing foreclosure, many of whom reside in California, by allowing them to refinance their current mortgages with a Federal Housing Administration (FHA)-backed loan. The bill also will permanently increase FHA, Fannie Mae, and Freddie Mac loan limits in high-cost areas.
The bill permanently increases the conforming loan limit to $625,500. C.A.R. has long advocated for higher conforming loan limits. In February, the Economic Stimulus Act of 2008 was signed, temporarily raising the conforming loan limit in high-cost areas to $729,750 from $417,000 until December 31, 2008.
Although we would have liked Congress to make permanent the current $729,750 loan limit, C.A.R. is pleased with the new permanent loan limit of $625,500. It will allow California homeowners to refinance their loans into safe affordable loan products and allow first-time home buyers to enter the market.
The new loan limits for Fannie Mae and Freddie Mac are the greater of either $417,000 or 115 percent of an area’s median home price, up to $625,500. The new FHA loan limit will be the greater of $271,050 or 115 percent of an area’s median home price, up to $625,500. Both new loan limits will be effective at the expiration of the economic stimulus limits on December 31, 2008.
C.A.R. also supports the following bill provisions:
A temporary increase in mortgage revenue bonds to refinance subprime mortgages.
New regulator for Government Sponsored Enterprises to restore investor confidence in GSE loans and help the market and economy stabilize.
First-time home buyer tax credit, which allows first-time home buyers to receive a tax refund worth up to 10 percent of a home’s purchase price, up to a maximum of $7,500. The refund serves as an interest-free loan and the homeowner is required to repay it in equal installments over 15 years.
Temporary raise in the loan limit for the Veterans Affairs home loan guarantee program to the same level as the economic stimulus limits until the end of 2008.
Adjustment to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), allowing sellers to provide the non-foreign affidavit to a qualified closing entity and not just the buyer.
The setting of minimum requirements for mortgage originators, which mandates fingerprinting of loan originators and establishes a nationwide loan originator licensing and registration system. The requirements do not apply to those only performing real estate brokerage activities unless they are compensated by a lender, mortgage broker, or other loan originator. States will have the ability to implement more stringent laws.
The creation of a National Affordable Housing Trust Fund to help cover the cost of the FHA rescue plan for the first five years and develop affordable housing in subsequent years.
Other provisions in the legislation:
The Treasury Department’s proposal to create a federal backstop program to insure the financial well-being of Fannie Mae and Freddie Mac.
The FHA’s inability to insure loans that utilize a seller-funded down-payment assistance program. Down-payment assistance from family, employers and other nonprofits is still allowed.
The Community Development Block Grant Programs’ $4 billion allotment for communities to purchase and refurbish foreclosed homes.
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