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The current $8,000 tax credit awarded to first time homebuyers is set to expire November 31, 2009. The current tax credit has been responsible for the recent influx in home sales and slowly recovering economy.
Many consumers as well as law makers feel that if this tax credit were to end, that it would have a severely adverse reaction to the fragile real estate market as well as the economy in general. For this reason, law-makers are currently debating whether or not to extend the current tax credit to carry on well into next year. Here are the details.
The tax stimulus is set to expire at the end of November 2009. There are currently a few house representatives that have proposed bills to extend the tax credit and offer more incentive. Under the current qualifications for this tax credit; buyers must be first time homebuyers or must have not purchased a home within the past 7 years. Buyers will be given an $8000 tax credit when purchasing a home and closing on the purchase on or before November 30, 2009. Senator Johnny Isakson (R-Georgia) is planning to present their own version of this tax credit to the rest of the Senate for debate on whether or not to extend the current homebuyer credit.
Under the new proposal, the tax credit of $8,000.00 will carry on into next year and slowly decline as time progresses. Offering $8,000 now, $6,000 if the purchase occurs in the second quarter of next year, $4,000 if a home is purchased in the third quarter and $2,000 is purchased in the fourth.
Additionally, an increase in the maximum household income is being proposed so that more people can qualify for this tax credit to allow a maximum of $150K household income for a single person and $300K for a couple.
There is some resistance to this amendment as well; many argue that extending the tax credit for so long will result in lesser taxes being paid back to the government. Although the opposition is small, their position will still be heard by the Senate this week.
An expected decision on this tax credit is expected by the end of this week, after which it will go to the House of Representatives for a final debate and decision.
Stay tuned for more information about this and other real estate news. Check back with us weekly at http://www.gsigllc.com/ or follow us on twitter at http://www.blogger.com/www.twitter.com/gsigllc/
Wednesday, October 28, 2009
Wednesday, October 7, 2009
U.S. Treasury Moves Quickly To Offer Rewards for Short Sales!
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12 % - That is the number of home owners that actually have successful loan modifications done. What happened to the other 88%? They have been relatively unsuccessful in re-modifications of their home loan, at no fault of their own in most cases.
According to many realtors (who shy away from short sales), lenders can take up to 6 months to successfully negotiate a short sale or loan re-modification. The reason for this massive delay is the fact that there are just too many loans in danger of default.
The only thing left for these homeowners who are unsuccessful in reaching an agreement is foreclosure. The foreclosure process alone is very costly, having to deal with evictions, past due HOA fees, taxes, etc. Not to mention that a majority of foreclosed homes are left in deplorable shape. Many times they are left without appliances, holes in walls, and sometimes without any walls at all!
These foreclosed homes sit vacant for months on end waiting for the foreclosure process to finalize market and sell. This leads to a whole batch of new problems such as; squatters, vandals, and thefts such as AC units.
With an estimated 7 million homes in the pipeline ready for foreclosure, The U.S. Treasury has finally realized the problems facing successful short sales and loan modifications and has implemented a new plan. Incentives for both the lender and buyer!
The U.S. Treasury has an upcoming plan which would use up to $10Billion dollars of government funds strictly dedicated for those homeowners seeking loan modifications and short sales. The funds will be used for various purposes such as; “catch-up payments”
The details of the plan are in the final stages of completion, but here is a brief description of what it should entail; “Paying lenders $1000 to successfully negotiate a short sale, loan re-modification and/or deed in lieu transactions”
For the homeowner, they can expect a payment from the Treasury as well; “Possibly $1500 in closing fees paid for agreeing to a short sale” If there is a second mortgage holder on the property – they can get paid up to $1000 as well to sign away any and all claims against the property.
This U.S. Treasury Plan will hopefully help both side’s homeowners and lender to move a little more quickly to avoid unnecessary expenses if they aren’t successful associated with foreclosures. Expect more news regarding this plan in the upcoming weeks.
For more information on news like this, check back weekly at our blog or visit our website at http://www.g-sig.com/
12 % - That is the number of home owners that actually have successful loan modifications done. What happened to the other 88%? They have been relatively unsuccessful in re-modifications of their home loan, at no fault of their own in most cases.
According to many realtors (who shy away from short sales), lenders can take up to 6 months to successfully negotiate a short sale or loan re-modification. The reason for this massive delay is the fact that there are just too many loans in danger of default.
The only thing left for these homeowners who are unsuccessful in reaching an agreement is foreclosure. The foreclosure process alone is very costly, having to deal with evictions, past due HOA fees, taxes, etc. Not to mention that a majority of foreclosed homes are left in deplorable shape. Many times they are left without appliances, holes in walls, and sometimes without any walls at all!
These foreclosed homes sit vacant for months on end waiting for the foreclosure process to finalize market and sell. This leads to a whole batch of new problems such as; squatters, vandals, and thefts such as AC units.
With an estimated 7 million homes in the pipeline ready for foreclosure, The U.S. Treasury has finally realized the problems facing successful short sales and loan modifications and has implemented a new plan. Incentives for both the lender and buyer!
The U.S. Treasury has an upcoming plan which would use up to $10Billion dollars of government funds strictly dedicated for those homeowners seeking loan modifications and short sales. The funds will be used for various purposes such as; “catch-up payments”
The details of the plan are in the final stages of completion, but here is a brief description of what it should entail; “Paying lenders $1000 to successfully negotiate a short sale, loan re-modification and/or deed in lieu transactions”
For the homeowner, they can expect a payment from the Treasury as well; “Possibly $1500 in closing fees paid for agreeing to a short sale” If there is a second mortgage holder on the property – they can get paid up to $1000 as well to sign away any and all claims against the property.
This U.S. Treasury Plan will hopefully help both side’s homeowners and lender to move a little more quickly to avoid unnecessary expenses if they aren’t successful associated with foreclosures. Expect more news regarding this plan in the upcoming weeks.
For more information on news like this, check back weekly at our blog or visit our website at http://www.g-sig.com/
Thursday, October 1, 2009
NEW FHA GUIDELINES - MAY LEAVE BUYERS OUT
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Beginning November 1, 2009 FHA will be implementing a new rule that is disallow a commonly used proceed for underwriting called “Spot Approvals”. What spot approvals are is when the lender will approve a single unit in an association or condo complex instead of the whole building for FHA financing.
Typically, if an association has a heavy default rate or low reserves the complex /association will not qualify for any property to be purchased via FHA financing. Spot approval gave qualified buyer the opportunity to purchase these homes regardless of the previously mentioned conditions if the single unit can pass FHA inspections and appraisals.
The advantage of FHA financing reaches every buyer who is qualified enough, hasn’t purchased a home in over 3 years or is purchasing their first home ever. FHA financing allowed for lowered interest rates and sometimes credit from the government for purchase.
Now that the FHA “spot approval” is being taken away this will cause a serious ripple effect for our real estate market not to mention taking many potential buyers out of the running’s to purchase these homes.
Buyers will now have two popular options in front of them. Either pay cash, or come up with a large down payment to qualify for conventional financing options. Both options being harder to obtain than what FHA guidelines require for purchasing a home, traditionally only a 3.5% down payment.
With less homeowners being able to qualify for FHA financing more homes will go unsold, depleting home values across the city and county.
Additionally, the more values drop and condo assessments drop the collective tax base will decline therefore leaving other homeowners, specifically single family home owners to pick up the slack and pay the extra amount through increase property tax and millage rates.
Before you purchase a condo it is best that you visit the www.fha.gov website and see if a particular condo association is FHA approved.
For more news and information on (REO’S) visit our website atwww.gsigllc.com
Beginning November 1, 2009 FHA will be implementing a new rule that is disallow a commonly used proceed for underwriting called “Spot Approvals”. What spot approvals are is when the lender will approve a single unit in an association or condo complex instead of the whole building for FHA financing.
Typically, if an association has a heavy default rate or low reserves the complex /association will not qualify for any property to be purchased via FHA financing. Spot approval gave qualified buyer the opportunity to purchase these homes regardless of the previously mentioned conditions if the single unit can pass FHA inspections and appraisals.
The advantage of FHA financing reaches every buyer who is qualified enough, hasn’t purchased a home in over 3 years or is purchasing their first home ever. FHA financing allowed for lowered interest rates and sometimes credit from the government for purchase.
Now that the FHA “spot approval” is being taken away this will cause a serious ripple effect for our real estate market not to mention taking many potential buyers out of the running’s to purchase these homes.
Buyers will now have two popular options in front of them. Either pay cash, or come up with a large down payment to qualify for conventional financing options. Both options being harder to obtain than what FHA guidelines require for purchasing a home, traditionally only a 3.5% down payment.
With less homeowners being able to qualify for FHA financing more homes will go unsold, depleting home values across the city and county.
Additionally, the more values drop and condo assessments drop the collective tax base will decline therefore leaving other homeowners, specifically single family home owners to pick up the slack and pay the extra amount through increase property tax and millage rates.
Before you purchase a condo it is best that you visit the www.fha.gov website and see if a particular condo association is FHA approved.
For more news and information on (REO’S) visit our website atwww.gsigllc.com
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