THE GOVERNMENT GIVETH AND THE GOVERNMENT TAKETH AWAY

Daily Real Estate News | September 30, 2009 |

Tougher Federal Housing Administration standards and falling investor interest in the federal Low Income Housing Tax Credit program has stalled construction of affordable housing. And even when it is built or rehabilitated, it's become difficult for potential buyers to get financing.

"This is a national tragedy," said Judith A. Kennedy, president and chief executive of the National Association of Affordable Housing Lenders.

Affordable-housing giant Enterprise Community Partners and other nonprofit community development leaders have been lobbying Congress to change tax rules to broaden the appeal of the tax credits.

Sandy Marenberg, a real estate practitioner who owns Marenberg Enterprises, has found it particularly frustrating that he's unable to find buyers able to qualify for loans to buy energy-efficient properties selling for about half their cost to build.

"The pendulum's gone from giving loans to everybody, whether they deserve it or not, to only giving loans to the overqualified. The folks in between are getting turned down, and many of them would be fine home owners," he said.

Source: The Baltimore Sun, Jamie Smith Hopkins (09/28/2009)

The following analysis indicates that buyers can no longer depend on rapid appreciation to bail them out of onerous mortgages. Homes will always continue to appreciate but at a much slower rate than we are used to. It requires that buyers look at a much longer time lines if they expect to cash in on the increased value of their property. Maybe it's time we got back to buying homes to provide us with shelter for the long term and stop looking at homes as a short term investment.

Daily Real Estate News | September 29, 2009 |

With the tax credit for first time home buyers expiring in November, State mortgage programs for low-income buyers may get some relief from the U.S. Treasury.

Daily Real Estate News | September 28, 2009 |

The U.S. Treasury is contemplating a new program that would provide as much as $15 billion to purchase tax-exempt mortgage bonds issued by states over the next three years.

The program would be beneficial for low-income home buyers who have long depended on state programs for low-interest mortgages. States have been unable to offer these mortgages in the last year because they haven't been able to sell mortgage bonds. This program would solve that, according to the National Council of State Housing Agencies.

Details are expected to be announced on Sept. 30.

Another Indication of a Bottom in the Housing Market

Daily Real Estate News | September 23, 2009 |

U.S. home prices rose 0.3 percent in July compared to June, the Federal Housing Finance Agency said Tuesday.

The index is 4.2 percent below what it was in 2008 and 10.5 percent off its peak in April 2007.

The index excludes most expensive homes from its calculations, so prices appear to have declined less than they have by other measures.

The report "supports other evidence that the three-year long decline in prices has come to halt," Paul Dales, U.S. economist with Capital Economics, wrote in a note to clients.

Other economists were less positive. "We think house price indexes are likely to edge somewhat lower in the fall when foreclosures become a larger share of home sales," Barclays Capital economist Nicholas Tenev wrote in a note to his clients.

Source: The Associated Press, Alan Zibel (09/22/2009)

Not a big surprise, but maybe an indicator of future increased demand as affordability goes up.

Daily Real Estate News | September 22, 2009 |

Homeownership declined to 66.6 percent last year, the lowest level in six years, according to the U.S. Census Bureau, which released its American Community Survey on Monday.

Homeownership fell the most for Asians, dropping 1.24 percentage points to 59.4, largely because about one-third of Asians live in foreclosure-prone California.

Homeownership for African-Americans declined 0.88 percentage points to 45.6 percent. Hispanic ownership declined 0.80 percentage points to 49.1 percent, and whites' ownership was down 0.40 to 73.4 percent.

Source: The Associated Press, Alex Veiga (09/21/2009)

If you are in escrow and counting on closing before Nov. 30 in order to qualify for a tax credit, pay heed to the following:

Buyers who are under contract and hoping to close before Nov. 30 when the first-time home buyer credit expires should refrain from buying furniture and other things on credit.

Lenders are running credit checks prior to closing day and any increase in credit card or other debt can jeopardize the loan, says Lew Reich, an associate with Keller Williams Realty in Plano, Texas.

Reich warns buyers to even refrain from checking out a new large purchase because even an inquiry on a credit report could scare a lender.

Reich tells borrowers: "If someone's squeaking by and, all of a sudden, they may be looking at increasing debt, the lenders will have a keener eye in looking at your loan," he says.

"Don't look until you've closed is basically what it comes down to. That's the safest way. Stay out of the stores," he adds.

Source: The Associated Press, Dawn Wotapka (09/18/2009)

Here's how the most common foreclosure-prevention scams work:

The desperate home owner gets a letter that says something like, "We know you're having a hard time. We have a pipeline to your lender and can help you save your home. Call this toll-free number now."

Home owners call the number and agree to pay $1,200 to $1,500 upfront for help with their mortgage. Nothing happens. Their home still goes into foreclosure.

Harold Kirtz, a lawyer for the Federal Trade Commission who is prosecuting these scammers, says victims are often well educated and financially savvy, but they also are "in a very vulnerable state."

Here are some red flags that should make a home owner run in the opposite direction:

• If the company guarantees success. Nobody can guarantee a lender won't foreclose or will modify a loan.
• If the company wants money upfront. "We can't say all advance fees are illegal," Kirtz says, "But in most cases they're probably bogus."
• If the company wants the home owner to send mortgage checks directly to the modification firm. The only certainty there is that the company will cash the checks.

Source: Washington Post Writers Group, Kenneth R. Harney (09/13/2009)

The following article is, for me, a dilemma. On the one hand the extended stimulus would make it easier for people to get homes and would stimulate the the real estate market. However, I am not sure how I feel about the added deficit burden that it will load onto future generations of Americans. There is definitely a short-term gain to be realized but at a future cost that I have a hard time justifying.

Daily Real Estate News | September 16, 2009 |

More than 40 percent of all home buyers in 2009 will qualify for the federal tax credit, costing the government about $15 billion, twice the original estimate, but most housing experts applaud the policy and favor expanding it.

Now the decision is up to Congress.

Mark Zandi, chief economist for Moody's Economy.com, believes that the credit should be expanded to all homebuyers, even investors, through summer of 2010. "The risks of not doing something like this are too great," he said. "I don't think the coast is clear."

James Glassman of JPMorgan Chase also favors expanding the credit but continuing to limit it to first-time buyers.

Industry members who are lobbying for the extension are optimistic and say they believe an extension will be approved in some form. "There will be a lot of water under the bridge, a lot of compromise, between now" and a final bill, said Richard A. Smith, chairman of the Business Roundtable's Housing Working Group.

Source: The New York Times, David Streitfeld (09/15/2009)

Anybody who will be selling a property in the spring should get a jump on curb appeal by working now on beautifying the lawn.

Here are some key tasks that will lead to a green and healthy yard in the next selling season:

• Calculate the total lawn area to learn how much seed and chemicals are required.
• Treat weeds with an herbicide.
• Test the pH level and, if indicated, add lime.
• Plant ground cover like pachysandra and hardy ferns in low-light or slopping areas.
• Before preparing, seeding and fertilizing the rest of the lawn, consider whether there are areas that might be better candidates for stepping stones or another attractive alternative to plantings.

Source: Charlotte Observer, Nancy Brachey (09/05/2008)

So much for cutting your taxes. Congress is going to go at you through the back door in order to raise the revenue they need to initiate the spending programs they want.

Daily Real Estate News | September 8, 2009 |

The Congressional Budget Office has prepared a report that suggests ways for Congress to raise revenues. One key suggestion is that Congress cut deductions for homeowner mortgage interest from the present $1.1 million cap to $500,000, phasing in the reduction by $100,000 annually starting in 2013. Over a 10-year period, the change would increase revenue by an estimated $41 billion.

Alternatively, the CBO proposed replacing mortgage interest deductions with a flat tax credit that is 15 percent of mortgage interest paid. This would potentially increase revenue by nearly $390 billion from 2013 to 2019.

It also proposed eliminating deductions for all state and local taxes, including property taxes, which would cost taxpayers $862 billion by 2019.

What are the odds these ideas will fly? In the past, the mortgage deduction has been sacred. These days, some analysts say it may be vulnerable.

Source: Washington Post Writers Group, Kenneth R. Harney (08/30/2009)

Click on the "free guide" link below.  When the web page loads, enter you zip code, where requested, and hit return.  When the new page loads, click on the Wildfire button.  When that page loads go to the appropriate area of the country you are in and click on the link.

Daily Real Estate News | September 3, 2009 |

Guide Helps Owners Protect Against Wildfires
As hot, dry weather heats up the wildfire season, the non-profit Institute for Business & Home Safety is making available a nine-region-specific wildfire property protection guide.

The free guide is downloadable in PDF format, includes advice for retrofitting a home to make to make it more fire resistant.

"We have seen the benefits of effective preparation time and again. On the news, you'll see homes left standing, when others right near them burned. This isn't luck; this is because the surviving home's owner did the right things to make their home more fire resistant," says IBHS CEO Julie Rochman.

Source: Institute for Business & Home Safety (09/02/2009)