Washington Report: $8,000 Home Buyer Tax Credit

Washington Report: $8,000 Home Buyer Tax Credit

Quick passage by the House last week of a bill extending the $8,000 home buyer tax credit next year for military, diplomatic and intelligence personnel serving overseas increases the odds that Congress will agree to an extension, maybe even an expansion, of the entire credit program well into 2010.

The White House is also signaling that it sees the overall tax credit program — currently set to expire November 30 — as an important element in cutting the unemployment rolls and stimulating new jobs next year.

After an economic policy strategy meeting last week in the Oval Office involving President Obama, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, congressional aides said Democrats generally support an extension of the housing credit.

Reid already has made clear he wants an extension. He is co-sponsoring a Senate bill that would do so for six months. (Source: Realty Times)

Short Sales Spread Across Real Estate Market

To read the full story, please click here:
http://www.latimes.com/classified/realestate/news/la-fi-lew20-2009sep20,0,1828223.story
Chicago Tribune
Short sales spread across real estate market, leaving frustration in their wake
As more homeowners find themselves underwater -- owing more on their mortgage than their home is currently worth -- and unable to make the monthly mortgage payments, many are turning to short sales,which allow a homeowner to sell their home for less than owed on the mortgage. Short sales can be a win win situation for all parties, because they enable home buyers to purchase properties in desirable neighborhoods and at favorable prices.
KEEP THIS IN MIND
• Theoretically, short sales should be a win-win for the bank and the homeowner. Although the bank does not receive the full amount owed on the mortgage, it also does not incur the costs of foreclosure and/or eviction, if necessary. Many homeowners also prefer short sales because it is less damaging to their credit scores than a foreclosure. However, many real estate experts say that the majority of banks are reluctant to approve short sales, and often let properties go into
foreclosure, even when there are reasonable offers on the property. In addition to considering the price, most lenders also take into consideration whether the homeowner can demonstrate financialhardship. If the homeowner is capable of making payments, many lenders will try to work out a loan modification, rather than a short sale.
• Unlike foreclosed properties, which may be run-down and vacant for many months, short-sell properties are likely to be better maintained, as most owners may still live in the home.
• Short sales often are more time intensive than traditional transactions and often require additional paperwork. Due to the large number of offers on short sales, many take as long as a few months to receive approval. If information or required forms are missing or incomplete, the bank may set the offer aside, which could delay the process and cause the property to go into foreclosure. To expedite the process, sellers should work closely with their REALTOR® to provide all of the necessary paperwork.
• Working with a REALTOR® who has experience with short sales can help both sellers and home buyers during the transaction. A seasoned REALTOR® will be able to serve as the mediator between the seller and the lender, and lead to a successful transaction.
• It is important to remember that in a short sale, although the seller may be anxious about selling the property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what price, the property can be sold. Home buyers should work closely with their REALTOR® to submit realistic offers.

To read the full story, please click here:
http://www.chicagotribune.com/classified/realestate/chi-sun-short-sales-0920sep20,0,5529436.story

In Other News…
San Francisco Chronicle
U.S. home prices rise 0.3 percent in July
U.S. home prices rose slightly in July from a month earlier, according to a government index, further
evidence the housing market is stabilizing.
To read the full story, please click here:
www.sfgate.com

Mortgage industry calls for big changes at Fannie and Freddie

Trying to get out there first with a proposal for the future of Fannie Mae (FNM) and Freddie Mac (FRE), the Mortgage Bankers Association (MBA) is calling for Fannie and Freddie to be broken up into several smaller privately held companies that issue securities with an explicit government guarantee, not just an implied guarantee, according to a Wall Street Journal report.

The Obama administration has not yet issued its recommendations and they're not expected until next year. The Center for American Progress plans to issue its report on the future of housing finance this fall.

You can be pretty sure there will be a bit of a frenzy over what to do about the housing finance market as the government gets closer to making a decision. In today's marketplace, three key players -- the FHA, Fannie and Freddie -- buy 90 percent of new mortgage loans. The private mortgage marketplace has dried up. The U.S. government has propped up Fannie and Freddie with capital infusions totaling $96 billion plus almost ten times that amount through purchases of debt and mortgage-backed securities by the Treasury and Federal Reserve.

MBA wants to avoid any similar federal bailout in the future. It proposes that the new companies pay fees into a federal insurance fund that would guarantee interest and principal payments to bondholders if companies were unable to make them. This would replace the current system of assumed federal backing. Investors have lost confidence in the assumed federal backing and reduced their holdings of Fannie and Freddie debt.

MBA also wants the new smaller private companies to focus solely on the mission of mortgage creation, but not be allowed to hold large amounts of mortgages and securities, as Fannie and Freddie do now. Instead, the MBA calls for government agencies rather than the new companies to assume the mission of promoting affordable housing that Congress assigned to Fannie and Freddie.

Republicans want to end government conservatorship within 18 months, but Democrats haven't spelled out a time line for this process. They likely won't take a public stance until they get some word from the Obama administration, which won't be until next year.

In a related story, FBR Capital said Freddie and Fannie have no "underlying value" to justify the recent tripling in their share prices this month. Since their big jumps, both dropped by about 50 cents per share from Aug. 28 to the close of market on Sept. 1. On Aug. 28 Fannie closed at $2.04, but dropped to $1.59 at the close on Sept. 1. Freddie was at $2.40 on Aug. 28 and dropped to $1.90 at close on Sept. 1.

Lita Epstein has written more than 25 books, including Trading for Dummies.

Sacramento County Real Estate Market Update

After the hot foreclosure market of last year, this summer seems - in comparison - quiet and lackadaisical. A total of 1883 homes sold this July, a number close to the June homes sold. 50% of these sales are still REOs; however, the change is remarkable. Foreclosures have fallen 36.4% year over year. Short sales have gained ground by 75.6% and non-distressed sales by 30% but even that surge is not enough to make up for the unit volume shortfall of 12.5% year over year.

Sold price per square foot remained around the $120 mark where it was in June giving evidence to the argument that the market may have bottomed out after all. Currently average sold price per square foot is at $120.93. Average sales price has fallen 14% year over year from a high of $228,312 to rest at $196,323. Median sales price is currently at $175,000.

Inventory also continues to hover around the 3 month mark. Total inventory is at 3.3 months based on the last year of sales and 3.4 months based on the last six months of sales. Foreclosure inventory is at 0.5 months and 0.6 months respectively.

NEW SHORT SALE LISTING VIDEO IN ROCKLIN!

New Short Sale listing in Rocklin take look at my first video. Still learning how to use the flip!

Call me if you would like to schedule an appointment to view this property.