Updates from December, 2012

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  • FHA says flip away -- within limits

    1:18 pm on December 13, 2012 | Comments:0
    Tags: , , flipping,   Filed under: Consumer news and advice, Federal Goverment, FHA, investment, The Housing Market

    Temporary waiver of 90-day ‘anti-flipping’ rule extended through 2014

    By Ken Harney, Monday, December 3, 2012.

    Inman News®

    Good news for single-family home investors, rehabbers and buyers seeking to use low down payment FHA financing: The temporary waiver of FHA’s 90-day “anti-flipping” rule was extended last week through 2014.

    The waiver, which facilitates purchases of homes from sellers who have held title to their properties for less than 90 days, continues a policy first adopted by the Obama administration in 2010.

    Starting in 2003, FHA had imposed the 90-day standard as part of an effort to rein in rampant quick-flips of houses where investors made minimal or no improvements to rundown, foreclosed or abandoned houses, then sold them days or weeks later at high price markups with the help of inflated appraisals to purchasers using FHA loans.

    Those flips frequently involved collusion and fraud by teams of mortgage loan officers, realty agents and appraisers — even straw buyers who defaulted and disappeared without making a single payment — and racked up significant losses to FHA’s insurance fund. Neighborhoods suffered because the properties remained empty and in bad physical condition, depressing values of houses in the immediate vicinity. (More …)

     
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  • 3.8% Tax on Housing? Answers & Resources

    9:57 am on September 27, 2012 | Comments:1
    Tags: , federal tax, health care   Filed under: Consumer news and advice, Federal Goverment, Tax

    by The KCM Crew on September 25, 2012

    Here are the 10 Things You Need to Know About the 3.8% Tax according to the National Association of Realtors (NAR):

    1.) When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will NOT be subject to this tax.

    2.) The 3.8% tax will NEVER be collected as a transfer tax on real estate of any type, so you’ll NEVER pay this tax at the time that you purchase a home or other investment property.

    3.) You’ll NEVER pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year’s gross income.

    4.) If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will NOT pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.

    (More …)

     
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  • More Buyers Choose Conventional over FHA Loans

    9:40 am on September 27, 2012 | Comments:0
    Tags: , , ,   Filed under: Buyer Info, Consumer news and advice, Credit, Federal Goverment, FHA, Finance, mortgage

    The use of mortgage financing in the housing market jumped sharply in the month of August, but the use of FHA financing declined, suggesting the government program is losing favor and private lenders are gaining market share.

    “Conventional mortgages are making a comeback while FHA mortgages are not,” commented Thomas Popik, research director for Campbell Surveys. “Reasons for the growth in conventional mortgages include low rates, increased underwriting of high LTV mortgages by private mortgage insurers, and a price structure including insurance premiums that is cheaper than the FHA alternative.”

    Mortgages were used to finance 68.9 percent of home purchase transactions in August, up from 67.5 percent in July. Significantly, not all mortgage financing products saw the same gains in market share. FHA-financed transactions rose only slightly from 25.5 percent in July to 25.9 percent in August. Back in January, FHA transactions accounted for 27.3 percent of all home purchase transactions.

    Ellie Mae reported last week that the FHA share of mortgage originations has declined from 25 percent in May to 21 percent in August. During the same period, conventional mortgages increased their sales from 65 to 70 percent of all new mortgages. Purchase mortgages increased from 44 to 47 percent.

    Real estate agents responding to the latest HousingPulse survey indicated mortgage availability has improved over the summer months, especially for homebuyers with less than 20 percent cash down payments. “Mortgages for homebuyers with less than 20 percent down were available more than in previous months,” commented an agent from California. “Contrary to media reports, there is no shortage of mortgage money available for buyers with down payments less than 20 percent,” reported an agent in Texas.

    Real estate agents also commented on historically low interest rates. “Amazing rates – less expensive to pay mortgage per month than to rent. Unbelievable opportunity and buyers know it,” exclaimed an agent in California. “The money is almost free, with 3.785 percent being about average for a 30 year fixed-rate mortgage with 3.5 percent down,” contributed an agent in Washington State.

    The National Association of REALTORS® is continuing its battle for greater access to credit. Last week NAR’s president Moe Veissi urged Fed Chairman Ben Bernanke to weigh in on three key rule proposals—the Qualified Mortgage (QM), the Qualified Residential Mortgage (QRM), and the Basel III capital standards—that Veissi said are both putting a chill on lending and have the potential tighten credit further. All three individually and certainly together have the potential to tighten credit.

    For more information, visit http://www.realestateeconomywatch.com

    http://rismedia.com/2012-09-26/more-buyers-choose-conventional-over-fha-loans/

     
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  • Home Sales and Job Creation would Rise with Sensible Lending Standards ..

    9:25 am on September 27, 2012 | Comments:0
    Tags: , , , , jobs, lending standards, , ,   Filed under: Buyer Info, Consumer news and advice, Credit, economy, Federal Goverment, Finance, Housing Market, mortgage, NAR, National Association of Realtors, Seller Info, Statistics, The Economy, The Housing Market

    WASHINGTON (September 17, 2012) – New survey findings, combined with an analysis of historic credit scores and loan performance, show home sales could be notably higher by returning to reasonably safe and sound lending standards, which also would create new jobs, according to the National Association of Realtors®.

    Lawrence Yun, NAR chief economist, said there would be enormous benefits to the U.S. economy if mortgage lending conditions return to normal.  “Sensible lending standards would permit 500,000 to 700,000 additional home sales in the coming year,” he said.  “The economic activity created through these additional home sales would add 250,000 to 350,000 jobs in related trades and services almost immediately, and without a cost impact.”

    (More …)

     
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  • Is There a 3.8% House Seller Tax in the Health Care Bill?

    9:57 am on July 19, 2012 | Comments:0
    Tags: , ,   Filed under: Federal Goverment, Income Tax, Tax

    by The KCM Crew on July 17, 2012

    The political rhetoric surrounding the presidential election has renewed the debate about the Administration’s Health Care Bill. We are again getting many questions about a possible 3.8% tax on home sales that some claim is in the bill. To answer these questions, we have decided to re-run a blog we posted earlier this year. – The KCM Crew

    We have received many questions about a possible 3.8% tax which will be put on home sales beginning in 2013. We want to do our best to clarify this situation for everyone. We are not accountants and give you this information just as a simple answer to the misconception. Understand that, when it comes to IRS regulations, you should check with your accountant for the most accurate and up-to-date information.

    A little history on the confusion

    Fact Check.org explains it this way:

    The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home.

    (More …)

     
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  • Housing Finance Reform Must Provide Reliable Credit to Home Buyers, NAHB Tells Congress

    8:59 am on July 19, 2012 | Comments:0
    Tags: Congress, Home builders, mortgage regulations,   Filed under: Agent information, Buyer Info, Consumer news and advice, Credit, economy, Federal Goverment, Housing Market, mortgage, Real Estate Trends, Second Home Buyers, The Housing Market

    The National Association of Home Builders (NAHB) told Congress recently that proposed mortgage lending reforms under the Dodd-Frank Act must be imposed in a manner that causes minimum disruption to the mortgage markets while ensuring consumer protections.

    Testifying before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, NAHB First Vice Chairman Rick Judson, a home builder from Charlotte, N.C., said that “NAHB believes a housing finance system that provides adequate and reliable credit to home buyers at reasonable interest rates through all business conditions is critical to our nation’s economic health.”

    (More …)

     
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  • Housing Survey Shows Consumer Attitudes Demonstrative of Macroeconomic Indicators

    9:14 am on July 12, 2012 | Comments:0
    Tags: business outlook, , ,   Filed under: Agent advice, Consumer news and advice, economy, Federal Goverment, FHA, Home owner information, Housing Market, Real Estate Trends, Seller Info

    By Pete Bakel

    Housing market confidence among Americans continues to trend in a positive direction despite stalling optimism about the economy and personal finances, according to results from Fannie Mae’s June 2012 National Housing Survey. Results indicate flattening economic trends may be contributing to waning consumer expectations about their personal financial situation. Nevertheless, Americans’ continued positive sentiment about housing appears to remain buoyed by low house prices and interest rates at historically low levels.

    “While consumers remain cautious about the general economy, their attitudes toward the housing market continue to improve,” says Doug Duncan, senior vice president and chief economist of Fannie Mae. “Although this positive trend may be short-lived if the general economy falters, one might ask whether consumers are increasingly seeing the current environment as a unique opportunity to buy a home while home prices remain depressed, rental costs are increasing, and interest rates are near historic lows.”

    (More …)

     
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  • Obama Administration Releases June Housing Scorecard

    9:02 am on July 12, 2012 | Comments:0
    Tags: , , , , ,   Filed under: Buyer Info, Consumer news and advice, Federal Goverment, Foreclosure, Housing Market, Seller Info

    Posted By susanne On July 10, 2012

    The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury recently released the June edition of the Obama Administration’s Housing Scorecard – a comprehensive report on the nation’s housing market. Data in the June Housing Scorecard show some promising signs of stability, though the overall outlook remains mixed. Home equity rose $457.1 billion in the first quarter of 2012, a 7.4 percent increase from the previous quarter and its highest level since the second quarter of 2010. Sales of previously owned homes posted sharp gains in May of 9.6 percent compared with a year ago and new home sales in May recorded their highest level in more than 2 years. However, foreclosure starts and completions turned up in May, underscoring continued fragility in the housing market. The full report is available online at http://www.hud.gov/scorecard [2]. (More …)

     
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  • Buying a Home? What About Greece? The Election?

    9:01 am on June 14, 2012 | Comments:0
    Tags: , , , , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, economy, Federal Goverment, Interest Rates, International, mortgage, People, Seller Info

     by Steve Harney

    As I travel across the country speaking with thousands of agents a month, I am always amazed at the first two questions I am usually asked:

    What impact will the European economic crisis have on real estate here in the U.S.?

    Shouldn’t people wait until after the election to find out who will be the President before buying a home?

    Today, I want to tell a story about Kevin Miller who works here at Keeping Current Matters and just signed contracts on the home he and Crystal, his wife, are purchasing. Kevin got married about a year ago and recently found out that he is about to become a father. He’s a great guy who truly loves his bride and wants the best for her and their family. It is for that reason that Kevin and his wife started to look
    for a home of their own.

    What About Greece?

    Kevin and I have discussed the purchase at times and the interesting thing is the European situation never came up – not even once! It isn’t that Kevin is naive to the situation. He probably understands it better than most as he has a degree in International Business and Economics. But, he isn’t buying a house in Greece or Spain. He is buying a home in Babylon,New York – in a wonderful neighborhood with a nice backyard that his future children will play in. Does the world economy impact his purchase? Yes it does. It is one of the major reasons he is getting a 30-year mortgage rate under 4%.

    What About the Election?

    Again, it never came up. We did talk about the fact that he is buying the home for a fraction of what it would have sold for just a few years ago. We did discuss the great school district. We did talk about how convenient the neighborhood is to the things he and Crystal love. Did we talk about the election? No.

    Not that the election won’t have an impact. It was just announced that Congress will postpone its decision on the government’s role in mortgage financing until next Spring (aka until after the election). The new rules, which are anticipated to be more stringent than the current rules, won’t be enacted until after Kevin, Crystal and their child are comfortably living in their dream home financed by a 30-year mortgage at an historically low interest rate. Meanwhile, no one knows what the new mortgage requirements will even be next year.

    Is the situation in Europe important? Of course. Is this election one of the most important in our nation’s history? Many believe so. Did either of these situations enter Kevin’s mind while he was deciding to buy a home? No.

    He was too busy caring about his wife, his new child and his family’s happiness.

    http://www.kcmblog.com/2012/06/12/buying-a-home-what-about-greece-what-about-the-election/

     
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  • Mortgage Forgiveness Debt Relief Act: Will It Be Extended?

    9:23 am on May 17, 2012 | Comments:0
    Tags: , debt relief, , ,   Filed under: Consumer news and advice, Federal Goverment, FHA, Finance, Foreclosure, Home owner information, Income Tax, mortgage, Tax, Tax credit

    by The KCM Crew on May 16, 2012

    Many of our readers have asked whether or not we believe the Mortgage Forgiveness Debt Relief Act of 2007will be extended past its current expiration scheduled for the end of the year. As a reminder, the legislation ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.

    The reason this act is important in today’s housing market is that, without the act, debt is reduced through mortgage modifications or short sales qualifies as income to the borrower and is taxable. If the legislation is not extended, then it would require homeowners to complete a short sale or modification prior to year’s end in order to avoid a tax consequence.

    (More …)

     
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