The city of Detroit has passed the Vacant Property Ordinance. Effective immediately, the city intends to enforce the ordinance in an effort to clean up the city.
JMO: For anyone that is acquiring or selling Detroit REO's, I would take this very seriously. The city needs to either revitalize the real estate market or begin recovering some of the lost tax revenue that's associated with foreclosures and unemployment. With GM, Chrysler and Ford in trouble it's likely that things will get worse in Detroit before they get better. This is reminiscent of Texas in the 80's when the oil market literally dried up.
Friday, May 29, 2009
New HUD Letter re: Tax Credit Along With IRS Guidelines
Due to the serious implications associated with the improper use or misunderstanding of this program, I am going to withhold offering an "opinion" and just provide the links to the information so each of you can make your own decisions of how this best suits your clients and their needs.
FHA HUD Letter: 09-ML-15Using First-Time Homebuyer Tax Credits, see HOT TOPICS:
IRS: Guidelines for using Tax Credit
FHA HUD Letter: 09-ML-15Using First-Time Homebuyer Tax Credits, see HOT TOPICS:
IRS: Guidelines for using Tax Credit
Wednesday, May 27, 2009
Phoenix Housing Bust Goes Boom!
More good news about the Phoenix Real Estate Market.
JMO: If you've been following the blog, then you know I've been saying for some time now that the markets are beginning to improve. What is most encouraging about this article is that it was written in the LA Times. That means that Californians are once again, being notified of the great real estate opportunities that exist in Arizona. With the dramatic increase in tele-commuting and the unfortunate increase in the number of individuals that have lost their jobs. Moving to a less expensive location will become increasingly popular.
Monday, May 25, 2009
Plan To Allow Homebuyers To Use Tax Credit At Closing Is Repealed...For Now.
HUD Mortgagee Letter 2009-15 REPEALED
I recently posted FHA Preps Tax Credit for Down Payment Use . That was based on HUD Letter 2009-15 . It stated that the $8,000 first-time home buyer credit (that’s, of course, not just for first-time home buyers) could be used as collateral allowing the buyer to borrow against the tax credit for the down payment. HUD has taken the letter off its website. My best guess on this is that borrowing against the tax credit violates longstanding FHA rules on that issue. Borrowers must come up with their downpayment on their own. I suspect FHA rules will be quickly modified to allow the borrower to tap into the credit at closing. The $8,000 is a great incentive, but those who would typically qualify for this program tend to need cash for the downpayment. If they will be getting the credit when they file their taxes for that year, what harm would be caused by allowing them to access those funds when they really need them?
Hopefully, the letter will be quickly reinstated with some guidance from HUD and FHA.
I recently posted FHA Preps Tax Credit for Down Payment Use . That was based on HUD Letter 2009-15 . It stated that the $8,000 first-time home buyer credit (that’s, of course, not just for first-time home buyers) could be used as collateral allowing the buyer to borrow against the tax credit for the down payment. HUD has taken the letter off its website. My best guess on this is that borrowing against the tax credit violates longstanding FHA rules on that issue. Borrowers must come up with their downpayment on their own. I suspect FHA rules will be quickly modified to allow the borrower to tap into the credit at closing. The $8,000 is a great incentive, but those who would typically qualify for this program tend to need cash for the downpayment. If they will be getting the credit when they file their taxes for that year, what harm would be caused by allowing them to access those funds when they really need them?
Hopefully, the letter will be quickly reinstated with some guidance from HUD and FHA.
Sunday, May 24, 2009
Phoenix, Arizona showing very strong numbers
Some very strong numbers are coming out of the Phoenix Real Estate market indicating that we are in a strong recovery. New home construction numbers continue to dip as reflected in the National Housing report. However the resale market is getting stronger by the month in Phoenix. Here is some eye catching numbers.
Active listings are down 11% from last month and down 27% from a year ago. Pending sales are up 4% from last month and up 48% from last year. Sales are up 14% from April and up 42% from last may. What does this mean? Inventory is shrinking and activity is increasing, dramatically.
Here is something alarming if you are an investor. The average price per square foot is rising. The Price per square foot last quarter was $174.25, last month $177.80 and as of May 17th. $181.22. What does this mean? Although pricing is moving up home values are still historically low in the Metro Phoenix area.
There is no reason to believe that Phoenix can’t recover quickly. Arizona as a whole is nationally ranked in the top 3 in growth rate according the the census bureau. Phoenix also ranks in the top 5 for Business relocation, according to Entrepreneur Magazine. Housing affordability, climate, as well as cost of living make the Metro Phoenix area one of the most desirable places to live among the nations larger cities. This might be several reasons why the Phoenix housing market is showing signs of recovery.
The driving force in the activity in the Phoenix Housing market is first time home buyers and investors. Its well read what the Government has done to stimulate the first time home buyer market with tax credits and other incentives. Many investors are entering the Phoenix housing market to take advantage of early pricing and ample supply.
Active listings are down 11% from last month and down 27% from a year ago. Pending sales are up 4% from last month and up 48% from last year. Sales are up 14% from April and up 42% from last may. What does this mean? Inventory is shrinking and activity is increasing, dramatically.
Here is something alarming if you are an investor. The average price per square foot is rising. The Price per square foot last quarter was $174.25, last month $177.80 and as of May 17th. $181.22. What does this mean? Although pricing is moving up home values are still historically low in the Metro Phoenix area.
There is no reason to believe that Phoenix can’t recover quickly. Arizona as a whole is nationally ranked in the top 3 in growth rate according the the census bureau. Phoenix also ranks in the top 5 for Business relocation, according to Entrepreneur Magazine. Housing affordability, climate, as well as cost of living make the Metro Phoenix area one of the most desirable places to live among the nations larger cities. This might be several reasons why the Phoenix housing market is showing signs of recovery.
The driving force in the activity in the Phoenix Housing market is first time home buyers and investors. Its well read what the Government has done to stimulate the first time home buyer market with tax credits and other incentives. Many investors are entering the Phoenix housing market to take advantage of early pricing and ample supply.
Wednesday, May 20, 2009
House Passes H4H Bill
House Passes H4H Bill
May 19, 2009
The House passed by a 367-54 vote a bill that revamps the FHA 'Hope for Homeowners' program and gives the HUD secretary discretion in setting insurance premiums on refinancings of underwater borrowers. The Senate is expected to pass the measure later this week. The bill (S.896) allows the Department of Housing and Urban Development to charge an upfront mortgage insurance premium of up to 3% and an annual premium of up to 1.5%. Previously, Federal Housing Administration had to charge a set premium of 3% and 1.5% respectively. It "requires the HUD secretary to weigh both the financial integrity of the program and the bill's purposes of foreclosure prevention in setting premiums," according to a summary of the legislation Servicers are expected to reduce the principal amount of the existing mortgage to qualify borrowers for the H4H program that Congress enacted last summer. However, the program is so restrictive that FHA had endorsed only one H4H refinancing as of April 30 with 916 applications pending. The Mortgage Bankers Association and other industry groups support Congress' efforts to relax the eligibility requirements and other requirements to make the program user friendly for homeowners, servicers and investors. S.896 also shields mortgage servicers from investor lawsuits and provides the Federal Deposit Insurance Corp. with more borrowing authority to deal with the rising bank failures. House and Senate leaders agreed to keep a temporary increase in the $100,000 deposit insurance limit at $250,000 through 2013.
JMO: This is a good thing. By allowing the HUD to charge "up to" 3% and 1.5% respectively, this will allow HUD to carry some for burden for affordability. These are fees that directly impact the homeowner/borrowers debt-to-income ratio. By lowering these fees, it could allow more borrowers to qualify.
TARP Repayment Line Grows
Banks are scrambling to meet the capital requirements that will enable them to repay the TARP funds.
JMO: I'm still trying to figure out how the banks are able to not only meet the capital requirements AND repay the TARP funds if they were on the brink of failure just a short while ago. They haven't been lending any NEW money and they are experiencing record defaults on the money they've loaned over the last several years.
JMO: I'm still trying to figure out how the banks are able to not only meet the capital requirements AND repay the TARP funds if they were on the brink of failure just a short while ago. They haven't been lending any NEW money and they are experiencing record defaults on the money they've loaned over the last several years.
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