House Passes Tax Credit Extension – Awaiting Action By The Senate June 30, 2010
Posted by Matt Siggerud in Finance & Mortgage: News, Real Estate: Current Listings, Real Estate: Foreclosures And Short Sales, Real Estate: News, Real Estate: Residential, Real Estate: Taxation, Real Estate: Traditional Sales.add a comment
Yesterday, the House of Representatives passed by a vote of 409-5 an extension of the $8,000 homebuyer tax credit for first time homebuyers. The extension was set to expire on June 30th. The extension, sponsored by Rep. Frank Kratovil and his colleagues Rep. Travis Childers (D-MS) and Kathy Dahlkemper (D-PA), will extend the credit to September 30th, 2010.
“The first time home buyer tax credit is working to revitalize the housing industry, a major indicator of the overall strength of the economy,” said Rep. Frank Kratovil. “However, more than 2,000 Marylanders who have already signed a contract to purchase a new home are having their closings delayed through no fault of their own. This common sense legislation will ensure that these individuals receive the tax credit that they rightfully deserve. Extending this tax credit will not only boost our economic recovery and support our housing market, but it is also the right thing to do.”
The bill extends the credit for all homebuyers with a binding contract as of April 30, 2010 so that they are afforded more time to close the sale and still benefit from the credit.
In late September Reps. Frank Kratovil (D-MD) and Travis Childers (D-MS) introduced a bill, The Tax Credit Extension for Homebuyers with a Loss Deduction Incentive Act (H.R. 3640), to extend the first time home buyer tax credit. A similar home buyer tax credit extension was eventually signed into law on November 6, 2009.
From the National Association of REALTORS:
Timely action is essential. Only one more day of eligibility remains for the credit. Despite the urgency, as many as 75,000 buyers and sellers still await bank approval of short sales or must cope with delays caused by third parties with responsibility for closing the transaction. Those selling properties damaged in natural disasters also are experiencing significant delays as they repair and restore homes that were under contract.
Extending the closing date from June 30 to September 30 is a pro-consumer relief provision that will also benefit many communities. It assures the fair treatment of purchasers who have followed the rules and done their part to assure that the sale goes through. Congress must assure that those who have met the eligibility requirements for the credit and done all within their power to satisfy the timing requirements will not have to forfeit the credit because of events and challenges outside their control.
The Senate must vote on the bill now. Senate Majority Leader Harry Reid should be on a mission to get this pushed through the process. If you’re one of the folks who need this deadline extended…get on the horn with your Senator and make sure this bill gets passed ASAP.
#2 National RE/MAX Team Ranking – First Quarter 2010 May 25, 2010
Posted by Matt Siggerud in Real Estate: Commercial, Real Estate: Current Listings, Real Estate: Foreclosures And Short Sales, Real Estate: Legal, Real Estate: News, Real Estate: Residential, Real Estate: Taxation, Real Estate: Traditional Sales.add a comment
The MN Real Estate Team of RE/MAX Advantage Plus continues to perform well. In the first quarter, through March 2010, we were ranked #2 with strong April and May numbers coming in each day.
Year-to-date we have pended or closed 424 properties on behalf of our clients!
Contact me for more information about why we are successful in the current market environment.
Questions And Answers About The Simplified Short Sale Process April 1, 2010
Posted by Matt Siggerud in Finance & Mortgage: News, Real Estate: Commercial, Real Estate: Foreclosures And Short Sales, Real Estate: Legal, Real Estate: News, Real Estate: Residential, Real Estate: Taxation, Real Estate: Traditional Sales.add a comment
While meeting with buyer and seller clients in the past month many questions about the foreclosure and short sale market forecasts have come up in discussion. This Q&A format is very informative with regard to how those two markets will possibly be impacted this year under the new Treasury Department’s Home Affordable Foreclosure Alternative (HAFA) Program.
What is a Short Sale?
In a Short Sale, a lender agrees to let a homeowner facing financial hardship sell a home for less than the mortgage owed. A Short Sale is an attractive alternative to foreclosure, typically not pursued until after other efforts to keep the owner in the home have been exhausted. There are potential tax consequences that should be discussed with a tax professional.
Why is a Short Sale better than foreclosure?
Typically, a Short Sale is less damaging to the borrower’s credit. The former owner can qualify for a mortgage backed by Fannie Mae or Freddie Mac to buy another home in as few as two years – far sooner than if there had been a foreclosure. Short Sales also help protect other property values in the community by keeping the home out of potential disrepair.
Why has the U.S. Treasury issued new Short Sale guidelines?
Because of the challenges many homeowners have faced in their attempts at Short Sales, RE/MAX International has worked closely with major lenders, the U.S. Treasury and other federal agencies to streamline and standardize the process. The new guidelines are in response to this advocacy by RE/MAX and others in the industry. Short Sales are seen as a critical component in stemming the increasing number of foreclosures and stabilizing the housing market. More than 75 percent of the mortgages in the United States are covered by the recently streamlined Short Sale guidelines issued by the U.S. Treasury Department.
What’s been improved in the Short Sale process?
Under the Treasury’s Home Affordable Foreclosure Alternatives Program, mortgage servicers have 10 business days to respond to a Short Sale offer. In the past, a lack of timely response has been one of the main reasons for delayed or derailed Short Sales. Also, paperwork and documentation are now standardized. Previously, such procedures varied widely between lenders. Various deadlines in the Short Sale process also have been standardized.
What’s improved for the homeowner?
Under the Treasury program, a successful Short Sale will release the borrower fully from the primary mortgage obligation. This lender will not pursue a deficiency judgment. Additionally, homeowners who complete Short Sales are eligible to receive $1,500 to offset the expense of moving from the home.
What’s the incentive for a primary lender to approve a Short Sale?
Using program guidelines, lenders will determine a minimum acceptable offer for the property. Typically a lender’s loss on a Short Sale is less than the loss it faces should the property go into foreclosure. Through the Treasury program, mortgage servicers receive $1,000 for every Short Sale closed.
How does the program work?
If the owner of a principal residence does not qualify for refinancing and has exhausted Making Home Affordable loan-modification options – or if they make a direct Short Sale request to a lender in the program – the lender determines if a Short Sale is possible. If it is, the borrower is given at least 120 days (up to a year, depending on local market conditions) to sell the home using a real estate agent experienced in the local market. Meanwhile, the foreclosure process can move forward, but it cannot be finalized until after the marketing period has expired. During the marketing period, lenders must respond to a fully completed “request for approval of a Short Sale offer” within 10 business days.
Does the borrower continue to make primary loan payments during the Short Sale marketing period?
Yes, in some cases. The amount is determined by the loan servicer in accordance with terms of the Treasury guidelines. If there is a payment, it cannot exceed 31 percent of the borrower’s gross monthly income.
What if there’s a second mortgage, home equity line of credit or other junior lien?
The borrower is responsible for either paying off such debt or negotiating release from the debt and any potential for deficiency judgment. Contact me to help you with this process. I will send out a valuable packet of information outlining steps needed to be taken and program contact information. The Treasury program provides some financial incentive for junior lenders and investors who hold such loans to participate in the Short Sale and release the liens.
Are there restrictions on who can make a Short Sale offer?
Yes. Among the program’s many restrictions are requirements that the property not be sold to a relative and not be occupied or repurchased by the former owner. The buyer may not receive any funds from the transaction and cannot sell the property for at least 90 days after closing.
Is a Short Sale the only alternative to imminent foreclosure?
If a Short Sale is not successful, the lender can opt to take a “deed in lieu of foreclosure.” In this process, the homeowner gives clear title to the property to the lender. Under terms of the Treasury program, the borrower is released from the remaining mortgage obligation and can still receive the $1,500 for relocation expenses. The borrower then has 30 days to vacate the property. In some cases, it’s possible to pursue a “deed in lieu of foreclosure” without first pursuing a Short Sale.
When does the program begin?
The official effective date is April 5, 2010, but participating mortgage servicers can begin operating under the terms of the plan as soon as they are ready to meet reporting requirements.
Is there an expiration date for the Treasury program?
Borrowers have until Dec. 31, 2012, to enter into a Short Sale or deed-in-lieu agreement with their lender under terms of the Treasury program.
Are Short Sales still possible for borrowers and lenders not covered by the Making Home Affordable Program?
Yes. Short Sales remain possible for borrowers with mortgages not covered by the Treasury program’s incentives and guidelines. Contact me for more information on how to pursue a Short Sale with their mortgage servicer or investigate other possible options.
Source: RE/MAX International
