Redding

After April 5, 2010, All FHA loans will have the initial Mortgage Insurance increased from 1.75% to 2.25% and the monthly premium to .75 basis points of the loan amount – regardless of the loan-to-value ratio.

You must have your contract accepted and your loan locked by April 4th to fall under the older guidelines.

If you have questions, please feel free to call or email anytime.  I’m always happy to hear from you.

The Federal Housing Administration (FHA) today outlined future changes that will be coming to the FHA home loan program.

Rising defaults on FHA loans have led to the FHA’s cash reserves falling below federally mandated levels.  FHA officials hope that policy changes will ensure borrowers have a stronger equity position and are less likely to default.

Policy changes include:

• Raising the up-front mortgage insurance premium: The premium will rise to 2.25 percent from its current 1.75 percent.  HUD is expected to release a Mortgagee Letter on Jan. 21 making the premium increase effective in the spring.
• Raising the minimum credit score requirements: New borrowers will be required to have a minimum FICO score of 580 to qualify for the FHA’s 3.5 percent down payment program.  New borrowers with less than a 580 FICO score will be required to put down at least 10 percent.  FHA expects this to take effect in early summer after it goes through the normal regulatory process.
• Reduce allowable seller concessions:  The agency is lowering the maximum permissible level to 3 percent from its current 6 percent limit.  FHA expects this to take effect in early summer after it goes through the normal regulatory process.

If you are considering an FHA loan to purchase a home, you might consider making your purchase before the changes become effective.

If you have specific questions regarding your particular situation, please give me a call and we will discuss it.

Also, if you are a first time home buyer, the $8000 Federal Tax Credit is scheduled to end soon.  You will need to be under contract by April 30, 2010 and your escrow must close by June 30, 2010.

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
• Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by tow additional factors:

1. The price of the home.
2. The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000-may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income-over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Please call or email to discuss your particular situation, I will be happy to answer questions.

The Obama Adminsitration has announced its new Foreclosure Alternatives Program (FAP).  This new program may be advantageous for those borrowers who are unable to retain their home unter the Making Home Affordable Loan Modification Program.  With the  FAP program, the sevicer may consider a short sale or, if that is not successful, a deed-in-lieu of foreclosure.  Late July is the Tresury Departments current target for issuing guidelines and forms necessary to start the program.

Borrowers/homeowners qualify under the FAP if they meet minimum eligibility requirements for the Home Affordable Modification program but don’t qualify for a modification or do not successfully complete the trree month trial period.  Before proceeding with a foreclosure, the servicer must determine if a short sale is appropriate.

The program will include streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter.  The goal is to make it easier to use the short sale option.

Under the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions.  The property must be listed with a licensed real estate professional with experience in the neighborhood.  No foreclosure may take place during the marketing period (at least 90 days) specified in the Short Sale Agreement.

If you need additional information regarding short sales, please feel free to contact me via email or phone.

There are currently 1536 single family homes listed for sale in the Shasta MLS.

The total single family sales in June of 2009 were 189 units. Of those, 50 were bank foreclosure properties.

The average sale price of bank owned properties was $162,157 in June 2009. The average overall sales price for the same period was $212,107 with an average of 123 days on the market.

The total single family sales in June of 2008 were 153 units. Of those, 49 were bank foreclosure properties.

The average sale price of bank owned properties was $183,789 last in June 2008. The average overall sales price for the same period was $261,236 with an average of 140 days on the market.

It looks like prices fell approximately 20 percent overall in the year over year analysis. Prices are still falling and interest rates are rising a bit. We will be seeing more foreclosure activity hitting the market in the coming months. This will keep prices down and the ability to find affordable properties for first time buyers will continue to be favorable. Loans continue to be had by those with good credit scores. If you would like to review your particular situation whether buying or selling, please give me a call or a quick email. I would be happy to hear from you.

-Total Sales for April 2009 was 142 single family homes with an average of 132 days on the market.

-Total Sales for April 2008 was 166 single family homes with an average of 115 days on the market.

-Total Foreclosure Sales April 2009 was 42 single family homes with an average of 95 days on the market.

-Total Foreclosure Sales April 2008 was 56 single family homes with an average of 83 days on the market.

-Average Sales Price April 2009 was $234,455
-Average Sales Price March 2008 was $286,965

The April average sales price is up over March but total sales were down a tad. There were less closed REO properties as a result of the government “holding back” of foreclosures for the first quarter of the year. As the pent up foreclosures hit the market we will probably see a return to 30+ percent of sales being foreclosure properties and prices pushing downward. As long as interest rates remain below 5% along with historically low sales prices, it is a great time to buy. Call me to discuss your particular situation. 530-510-9988.

Among numerous investigations and lawsuits, the home finance industry has agreed to a government approved code of conduct for appraisals beginning May 1. Appraisal management companies will be the middlemen in the new agreement. No longer will lenders be able to “hand pick” appraisers nor will they be able to have direct contact with an appraiser regarding the value of a property being appraised. The appraisal management company will take the orders and make the appraisal assignments.

The director of the Federal Housing Finance Agency, James B. Lockhart, which oversees Fannie and Freddie reports that if AMC’s are applying undue pressure it would be a violation of Fannie and Freddie rules and they would take appropriate action. Lockhart says Fannie and Freddie can force lenders to buy back loans tainted by inflated appraisals.

The California Association of Realtors has established a fund to assist first time buyers who unexpectedly lose their job after the purchase of a home.

The Housing Affordability Fund is designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and the possibility of being unable to meet their monthly mortgage obligations.

To qualify for the Mortgage Protection Program, Applicants must:

• Be a first-time home buyer – someone who has not owned a home in the last three years.
• Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009
• Use a California REALTOR® in the transaction
• Purchase the property in California
• Be a W-2 employee (cannot be self-employed)

I will happily provide the application form for all first time buyers who use my services in the purchase of a home.

Total Sales for March 2009 was 148 single family homes.
Total Sales for March 2008 was 166 single family homes.

Total Foreclosure Sales March 2009 was 68 single family homes.
Total Foreclosure Sales March 2008 was 52 single family homes.

Average Sales Price March 2009 was $203,806
Average Sales Price March 2008 was $275,147

March sales are down but foreclosure property sales are up.  Once again, the foreclosure properties drive the market for the month.  As long as the foreclosures are nearly half of all the sales, the prices will continue to decline.  If you are thinking of buying, now is the time to get into the market.  Call me to discuss your particular situation.  530-510-9988.