Page under construction 1/25/2010
Top Real Estate News
For the week of 01/25/10
In our top news, the Federal Housing Administration is planning to increase the amount of up-front cash paid by all new borrowers and to require higher down payments from those with the poorest credit. Recently, the agency has made efforts to bolster its ailing finances, which have been worn by the recent economic and housing crisis , stemming from rising defaults in its always popular mortgage insurance program.
How important is this to the average American? Well, the FHA currently backs about 30% of all loans for home purchases and 20% of refinanced loans, so of the millions of aspiring home buyers out there, this could have serious ramifications. Under the plan, the agency would increase the up-front insurance premium that borrowers pay at the closing table from 1.75% to 2.25% of the loan?s value starting this spring. The really big change is that while most FHA borrowers can continue to make down payments of as little as 3.5% when they take out a loan, those with a credit score of less than 580 will have to make a down payment of at least 10%, possibly starting in the early summer.
In other news, there?s a little more good news on the homebuilder front as KB Home said this week it made money in the fourth quarter. Like Lennar last week, KB?s fourth quarter profit came about not because it was selling and building at an unexpected pace, according to an article in the Los Angeles Times. Rather, they received a huge tax credit that pushed them into the black for the first time in more than two years. KB?s chief executive, Jeffrey Mezger, called the company?s performance in the last quarter of 2009 ?heartening.? But he did also warn that the outlook in the short term might be rocky for a while. Mezger pointed out the housing market is stabilizing in some regions. But how things shake out depends on a lot of factors such as unemployment, the foreclosure rate and federal policies that have created incentives for homebuyers.
Still, there are good signs out there. Builders broke ground on new residences at a faster clip in November than in October, up by 8.9%. And both KB Home and Lennar are buying land again.
The federal government issued a report on its program designed to help stave off more foreclosures by getting borrowers into loan modification. Since the Home Affordable Modification Program started last spring, more than 900,000 borrowers have entered into trial modifications. So far, though, only 66,465, or about 7%, have successfully transferred into a permanent modification, according to the Wall Street Journal. In addition, 46,000 trial mortgage modifications were approved and awaiting only the homeowner signatures before they were made permanent as well. Borrowers must make three months of payments on the trial modifications to be eligible to get a permanent fix. According to the Treasury Department, as many as 545,000 borrowers have been in trial modifications for at least three months, but have not been converted.
Mortgage servicers have been slow to turn the trial modifications into permanent ones. The pace did pick up in December after the administration increased scrutiny and threatened banks with fines. The federal government has stressed that the paced needs to speed up because modifying loans may help the foreclosure rate, which will have a huge impact on the housing market in the year to come.
IRS 5405 e-File Glitch?
These last couple of months have seen thousands, maybe even a million, taxpayers that have been in limbo and haven?t got the chance to claim the home buyer?s tax credit ? and get the money back as quickly as they would have liked.
According to Amy McAnarney, executive Vice President of the Tax Institute at H&R Block, there are likely 2 reasons for that:
The IRS wants to ensure people are claiming these credits for the right reasons. The rules have changed from the first time homebuyers credit ? there are 3 key points with the new form that people should know.
It?s amazing when you think of it, how in just a few seconds, so many thousands of lives, homes and businesses can be lost. And, it?s also amazing to think about how many years the rebuilding effort will take.
But news reports this week indicate that so far, Americans have contributed more than $100-million dollars towards Haiti?s recovery, and rebuilding. Talk about amazing ? Americans are second to none, when it comes to giving what they can to people in need.
This week, the NATIONAL ASSOCIATION OF REALTORS?, which is the biggest trade association in the country, has teamed up with Lowes, one of the nation?s biggest home improvement companies, to get help to the people in Haiti. Both will each contribute $100,000 to the REALTORS? Relief Foundation, which will then get the money to charities helping the earthquake victims.
And that?s not all ? beyond the initial $100,000 amount matched by Lowes, NAR announced it would contribute an additional $350,000 to the Clinton-Bush Haiti fund, bringing NAR?s total Haiti contribution to $450,00 and with Lowes, that total is $550,000.
And, $50,000 of that money will go to Harvest for Haiti, founded by REALTOR? Pat Moore from Fort Gratiot, Michigan. He?s no stranger to Haiti. He?s been traveling there for the last decade, bring the impoverished citizens there food, medicine and clean water. He also built an orphanage, in one of the poorest rural areas of Haiti. In 2007 Moore received the NAR?s ?Good Neighbor Award,? for his efforts to make life better for the people of Haiti. And now he?ll be going back, with that brand new $50,000 contribution from Lowes and the NAR.
Moore?s immediate goal? To provide at least six months worth of food to the orphanage he founded in Anse Rouge, and also focus on helping residents in and around Port-au-Prince.
Here at Real Estate Today, which as you know is a presentation of the NAR and its REALTOR? members, we?re proud of the efforts being made by Pat Moore, as well as the hundreds of thousands of REALTORS? who have contributed to the REALTORS? Relief Foundation over the years.
If you?d like to learn more about Harvest for Haiti, and the REALTORS? Relief Foundation,
Source: Real Estate Today Show (www.retradio.com)