Congress Passes Homebuyer Tax Credit

After the Senate gave final approval last night without a dissenting vote, the House of Representatives voted overwhelmingly this afternoon to pass legislation containing an extension and expansion of the homebuyer tax credit, completing Congressional action and sending the tax credit to President Obama for his signature, possibly as early as tomorrow.

The $8,000 homebuyer tax credit for first-time buyers, due to expire in 25 days, will be extended through April 30 of next year and buyers will have an additional two months, until the end of June, to close. First-time buyers who are in the process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in existing law.

For the first time, the new legislation makes buyers who already own a home eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.

The legislation takes effect December 1 and is not retroactive. Both credits are available only for primary residences, not second homes or investment properties.

REO Buyer Can Select Escrow and Title

Effective October 11, 2009, the Buyer’s Choice Act prohibits an REO lender selling residential property up to four units from directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company. A buyer, however, who has received written notice of the right to make an independent selection, may agree to the REO lender’s escrow or title recommendations. An REO lender that violates this law can be held liable for three times the charges the buyer incurred, whereas a violation by the seller’s agent may be subject to license disciplinary action. This law expires on January 1, 2015. CA Assembly Bill 957.

New home sales at historic low

New home sales in California remained at historic low levels in August, signaling that the state’s housing sector may be slow to recover from a stubborn recession, according to a recent report from the California Building Industry Association (CBIA).
“While there are some encouraging signs in California housing markets, activity remains low,” said CBIA President and CEO Liz Snow. “These reports are evidence that housing markets remain depressed and continue to hamper a broader economic recovery in California.”
During August, 2,617 new homes and condominiums were sold in the subdivisions tracked by Hanley Wood Market Intelligence (HWMI), compared with 3,001 for the same period a year ago, a 12.8 percent decline. Sales of single-family homes were down by 20 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were down 35 percent and sales of condominiums were 26 percent higher than a year ago, according to the CBIA report.

Banks bite bullet on loans

A new report from the Office of the Comptroller of the Currency and the Office of Thrift Supervision shows that the portion of loan modifications in the second quarter that involved reducing the principal increased to 10 percent from 3.1 percent in the first quarter.

While strategies such as lowering interest rates or extending mortgage terms can temporarily help borrowers struggling to make payments, reports show that often times borrowers redefault because the modifications do not lower payments to a truly affordable level. Of loans modified in the first quarter of 2009, 28 percent were in default again within three months, according to the Office of the Comptroller of the Currency. Among those modified in last year’s second quarter, 56 percent were in default again a year later.

Banks are beginning to reduce mortgage principal due, in part, to prodding from the Obama administration, whose housing plan includes financial incentives for mortgage-servicing firms that modify loans. At the same time, banks now have more flexibility to modify loans because of their success in stabilizing their balance sheets and, in some cases, raising fresh capital.

368 Pine Dr, Lake Arrowhead, CA 92321 – Zillow

368 Pine Dr, Lake Arrowhead, CA 92321 – Zillow

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C.A.R. Mortgage Update

New rules
Beginning Oct. 1, new rules adopted by the Federal Reserve went into effect, requiring greater diligence on the part of mortgage lenders and brokers who issue high-cost loans for borrowers with less than favorable credit. The interest rates on these loans are at least 1.5 percentage points greater than the average prime mortgage rate. The regulations, which were finalized in July 2008, prohibit lenders from making a high-cost mortgage without verifying that a borrower could repay the loan in the conventional way, and not through a foreclosure sale.

During the height of the market, subprime lenders often would offer loans without requiring borrowers to provide proof that they could make the monthly payments. In some cases, borrowers used stated income loans, which allowed some borrowers to fabricate annual income figures and buy homes without down payments.

Although many believe the Federal Reserve’s new rules represent one of the more substantial efforts on the part of the federal government to combat such lending practices, some consumer advocates are concerned. According to a policy associate at the Center for Responsible Lending, the new regulations do not cover option ARMs, which enable borrowers to choose from several monthly payment options during the loan’s early years.

Porter Ranch Neighborhood Council

http://www.prnc.org/

Pasta Dinner – October 16

SUPPORT DEVONSHIRE LAPD

” All you can eat”

Friday, October 16, 2009

5:00 pm – 7:30 pm   $8.00 per person (at the door)

St. Nicholas Church (Balboa & Plummer)

Proceeds will be used to purchase “non-City-supplied” equipment and materials. For information call 818-756-9011

• Bring your children, grandchildren and other young people
• free child ID
• digital picture and thumb print

Mortgage problems are walloping Americans’ credit scores

Homeowners who find themselves struggling with mortgage payments and unsure how to handle the situation—short sale, foreclosure, or walk away—are advised to consider the impact of each on their credit scores. Loan modifications that roll late payments and penalties into principal debt owed on the house can actually increase borrowers’ scores modestly, while refinancing underwater mortgages may have little or no negative effect on credit scores, according to Vantage Solutions, a scoring company created by the three national credit bureaus. Short sales on the other hand can trigger large declines in credit scores, according to researchers. A homeowner with an excellent credit score might see a 120 to 130 point decline after a short sale. Homeowners who choose to walk away from the home and stop payments altogether should expect their credit scores to fall 140 to 150 points, plus negative marks on their credit bureau files for up to seven years. People filing for bankruptcy protection covering all their debts will get hit with an average 355- to 365-point drop in their scores. Bankruptcies remain on borrowers’ credit bureau files for 10 years. But there is good news. Homeowners facing financial stress can experience minimal declines to their scores if they contact their loan servicer or lender when they first discover that they may have trouble making their monthly payments.

Anti-Graffiti Website

You can now report online to have graffiti removed. The Office of Community Beautification, Board of Public Works, has created a “self-help” website for residents requesting graffiti removal. The website is http://anti-graffiti.lacity.org Requests submitted via the website will be directed to one of the contracted graffiti removal agencies. Typically, graffiti should be removed within 48-72 hours of the initial report. Graffiti will be removed from public property and private property (with owner consent). The graffiti must be visible from the public right-of-way in order to use this service. Structures not included in this service include schools (maintained by LAUSD), freeways (maintained by CalTrans), billboards (maintained by owner of billboard) and parks (maintained by Recreation & Parks). This info is “hot off the press”, and will be a great tool in our battle to fight graffiti!