In a move that surprised even the most attentive among our ranks, on January 15th, 2010 The US Department of Housing and Urban Development waived a set of requirements related to foreclosure sales that had have often shut out FHA buyers “from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”
Sellers, many of whom are investors who have learned to capitalize on the many opportunities in the foreclosure market, now have a new market of buyers that are currently a major part of the housing resurgence, courtesy of the First-Time Homebuyer tax credit which was extended through June of this year. Coupled with this Suspension of the 90-Day Seasoning Rule and the First-Time Homebuyer credit, those investors who are able to make moves on foreclosed properties in a weary market may be poised for big success in 2010.
The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. In an effort to protect FHA borrowers against what they deemed the predatory practices of “flipping where properties are quickly resold at inflated prices to unsuspecting borrowers,” this waiver is limited to those sales meeting the following general conditions:
While the government has still failed to admit the legitimacy of our business in whole, they have certainly taken a step in the right direction with this action as they create an excellent opportunity for community conscious investors to assist in the renovation and resale of thousands of foreclosures across the country.
Click here to view the Waiver of Requirements of 24 CFR 203.37a(b)(2), or visit www.NationalREIA.com/LegislativeInfo or http://www.hud.gov/ for more information.
Information provided by the National REIA
The $8,000 first-time homebuyer tax credit is set to be extended until April 30, 2010. The Obama Administration has urged Congress to pass legislation to extend the program from its original December 1, 2009 deadline. In addition, legislation may provide a tax credit for some current homeowners. NAMB will continue to monitor legislation and will inform members when the extension is formally enacted. http://nationalmortgageprofessional.com/news14521/namb-legislative-alert-first-time-homebuyer-tax-credit-verge-extension
Under the terms of the agreement, the deadline for first-time homebuyers to claim the $8,000 credit would be pushed back to April 30, 2010. But the term “deadline” doesn’t mean the same thing as it does in the current credit. The Senate agreement stipulates that buyers must have a sales contract on a house by April 30 to be eligible, but it gives them an additional 60 days to close the purchase.
That means buyers will have until approximately end of July 2010 to be CLOSED on their homes in order to receive the $8,000 first-time buyer tax break.
Stay Tuned for more updates.
Housing Crash to Resume on 7 Million Foreclosures, Amherst Says September 24, 2009, Bloomberg
The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said. The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said. “The favorable seasonals will disappear over the coming months, and the reality of a 7 million-unit housing overhang is likely to set in,” they said.
The Foreclosure Pain May Drag on for YearsSeptember 23, 2009, Wall Street Journal
(This is the first installment of a series of posts on the shadow market) Delays in dealing with home foreclosures are stretching out the pain for the U.S. housing market, as we reported in Wednesday’s Journal. That has stirred lots of debate over whether it is better for the nation to face the pain of millions of foreclosures immediately – to get it over with fast — or to draw the process out over several years in hopes that the economy and housing demand will recover. In some of the former bubble markets, including Florida, the problem will be aggravated by looming defaults on option adjustable-rate mortgages (ones that start with minimal payments but require borrowers to face the music later) and high unemployment rates, says Jack McCabe, a housing analyst in Deerfield Beach, Fla. Mr. McCabe says he knows people who haven’t paid their mortgages in more than a year and are still haven’t been evicted. “Some people are saying, ‘I could pay my mortgage bill, but why?’” Mr. McCabe adds: “The distressed real estate market has become the real estate market in many locations, and that isn’t going to change for years.”
Existing Home Sales Slide Unexpectedly September 24, 2009, CNNMoney.com
Existing home sales fell in August, snapping a four-month streak of increases, according to a report released Thursday. Sales of previously-owned homes fell 2.7% last month from July, but were up 3.4% from a year ago, said the National Association of Realtors. Sales had jumped 15.2% in the previous four months. August home sales hit a seasonally-adjusted annual rate of 5.1 million units, down from 5.24 million in July. That's well below the analyst consensus estimate of 5.35 million annual units compiled by Briefing.com. The median price of homes sold in July was just $177,700, a 12.5% year-over-year drop.
US Home Foreclosure Mediation in Jeopardy, Report SaysSeptember 23, 2009, Reuters
A slew of state and local home foreclosure mediation programs have enormous potential to help homeowners, but most suffer from lack of industry accountability, according to a study released on Wednesday. The nonprofit National Consumer Law Center, or NCLC, in a new review of 25 foreclosure mediation programs in 14 states, warns that there is no data to confirm that foreclosure mediation programs anywhere have led to a substantial number of affordable and sustainable loan modifications. “If the programs continue to demand little or no accountability from servicers, they will likely go the way of federal efforts to control foreclosures that have failed as a result of relying on voluntary compliance by the lending industry," wrote the report's author, NCLC staff attorney Geoffrey Walsh. “It is unfortunate that the industry has so far prevailed in blocking Congressional action on court-ordered loan modifications, the one step that would level the playing field for consumers and ensure the necessary accountability from all parties."
On May 29, 2009, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan announced that the Federal Housing Administration (FHA) will allow home buyers to apply the Obama Administration's new $8,000 first-time home buyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that this will help stabilize the nation's housing market by stimulating home sales across the country.
The announcement detailed FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's detailed guidance, see their new mortgagee letter.
Stay tuned to www.njar.com for details from the New Jersey Housing and Mortgage Finance Agency (HMFA) on how the program will work for New Jersey residents.
Article Provided by NJAR
Program offers up to $5,000 cash to qualified first-time home buyers
The New Jersey Housing Mortgage Finance Agency (NJHMFA) is offering cash payments of up to $5,000 for qualified first-time home buyers to help defray closing costs or satisfy down payment requirements and help new buyers to get into the housing market.
The loan, offered as part of NJHMFA's "Prefund" program, would function like a cash advance against the $8,000 tax credit being offered to first-time buyers who purchase a home between April 8 and December 1 of this year. In its simplest terms, purchasers would be provided with the payment as a loan and would be required to repay the advance when they receive their federal tax credit.
"This is a powerful incentive that will allow potential first time home buyers to actually enter the market because this cash advance will help them meet down payment requirements or pay for closing costs that might otherwise be an obstacle to a first-time buyer," said Jarrod C. Grasso, RCE, executive vice president of NJAR®.
The cash advance is available to first-time home buyers who:
View the full details of the NJHMFA's First-Time Home Buyers Tax Credit Loan Program (TCLP).
Credits to NJAR for this article
President Obama signed the economic stimulus package in Denver, CO which includes a gift for first time homebuyers– $8,000 (or 10% of the home’s value, whichever is less) on their 2008 or 2009 taxes.
Here’s the skinny, from CNN:
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