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Impact of New Home Buyers Tax Credit
Now that the extended and expanded tax credit bill for home buyers has been passed by Congress and signed by the president, more people are seriously considering buying a home or selling their residence.
A quick review of the new tax credit law:
…Read more.
Manufactured Homes: a Viable Option
Individuals and families who are determined to own their own home but have very limited income often opt for a mobile home. Or they may go to the next level and purchase a manufactured home. Both of these factory-built home options are significantly …Read more.
Real Estate Recession Will be Over in 2010
The real estate market will experience growth and expansion next year, according to projections from most major real estate organizations. The recession will be behind us.
That's the forecasting consensus of the National Association of Realtors, …Read more.
Reverse Mortgages Prove More Risky
Reverse mortgages are becoming riskier for senior homeowners, due to the rising number of shady operators who are marketing these programs. The trend has prompted the National Consumer Law Center (NCLC) to issue a special report, "Subprime …Read more.
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Short Sales Get a BoostHome sale transactions that are categorized as "short sales" will soon become more frequent and popular. A new incentive program is planned that will make these sales more appealing to lenders, thus making them more cooperative in arranging such sales. A short sale of a home is when the proceeds from the sale fall short of the balance owed on a mortgage loan secured by the property. In a short sale, the lender agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower (homeowner). This negotiation is all done through communication with a lender's loss mitigation or workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. The lender has the right to approve or disapprove a proposed sale. Extenuating circumstances influence whether or not lenders will discount a loan balance. They are usually related to the current real estate market and the borrower's financial situation. The incentive plan, recently proposed by the Treasury Department, would provide subsidies of up to $2,500 (total) to lenders and servicers who accept a short sale. It's a way to encourage short sales as a means of clearing a lender's excess inventory and reducing the number of foreclosures. The fees are designed to help compensate lenders for the extra time and effort required to process a short sale, according to a report from John Burns Real Estate Consulting, a research and consulting firm. It also motivates lenders to be more cooperative, and homeowners to leave their property in good condition. "Presumably, the Treasury is trying to help facilitate transactions that will result in less loss to the lender than in the case of a foreclosure," the Burns report noted. In the past, short sales have not been popular with many lenders, particularly with proposed sales where the purchase price was below the currently appraised value of the home. However, the new incentive plan will certainly focus more interest in and create more activity with short sales, and make them more feasible for lenders. Q: What's happening with the first-time home buyers tax credit? A: At this writing, the tax credit of up to $8,000 for first-time home buyers is scheduled to expire Nov. 30. However, organized real estate is putting increasing pressure on legislators to extend and expand the tax credit. Here is one industry leader's view: "Though existing and new home sales appear to have stabilized in recent months, the industry is facing a number of housing-specific headwinds that are continuing to buffet any significant housing recovery," said Joe Robson, chairman of the National Association of Home Builders. "Not only are we continuing to feel the impact of foreclosures and short sales, but are facing a severe credit crunch for acquisition, development and construction lending. Meanwhile, the use of foreclosed and short sale properties as comparables is resulting in inappropriately low appraisals that are effectively sinking one quarter of all new home sales right now. "Our association is urging Congress to extend the tax credit for an additional year and to make it available to all buyers of a principal residence," Robson added. Q: Is the California housing market still depressed? A: Hardly. The state where national trends often start is now strongly rebounding, due in large part to distressed properties entering the market. Here's a statement from James Liptak, president of the California Association of Realtors, regarding the future prospects of housing activity in his state: "After experiencing its sharpest decline in history, we expect the median price to rise modestly next year. 2010 will mark the beginning of the new normal for California's housing market. This 'normal' will likely feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation." To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com. COPYRIGHT 2009 CREATORS.COM
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