Shelli Dore’s Real Estate Blog

Posts Tagged ‘Tax Credit

Even as the housing market continues to stagger, foreclosure filings in October declined for the third month in a row. Foreclosure filings were reported on 332,292 properties last month, or 3 percent fewer than September’s tally, real estate firm RealtyTrac said today. Even though filings remained 19 percent higher than a year earlier, “[t]hree consecutive monthly declines is unprecedented for our report,” RealtyTrac CEO James Saccacio said in a statement. But with unemployment busting through the 10 percent threshold and a slew of state and federal initiatives against foreclosures in place, foreclosure trends aren’t as optimistic as they may appear in this report. Here are five things you need to know:

1. Obama rescue: The monthly foreclosure decline comes as the Obama administration ramps up its sweeping effort to get as many as 4 million struggling homeowners into more affordable mortgages. On Tuesday, the Treasury Department said it had extended more than 650,000 trial loan modifications through October, putting it on track to meet its ambitious goals. However, mortgage modifications have a checkered history of success, and it remains unclear how many of these borrowers will simply fall behind on their new loans. The concern is that the program may be delaying foreclosures rather than preventing them. “Every loan servicer or lender I have spoken to in the last couple months has basically told me that they have had to slow down foreclosure initiations because they have had to re-evaluate their portfolio of loans to see which ones qualify for [a rescue program],” says Rick Sharga, RealtyTrac’s vice president of marketing. There are about 5.5 million delinquent loans. It just takes an awful lot of time to go through each loan individually.”

[Check out Obama’s Loan Modification Plan: 7 Things You Need to Know.]

2. State rescue efforts: While the Obama administration’s is the most expansive, the foreclosure crisis has prompted a number of state governments to launch housing rescues of their own. But as was the case with the Treasury Department, it’s possible that these state-level initiatives are just postponing reality. Take Nevada, for example. With 1 in every 80 households getting a filing last month, Nevada has the nation’s highest foreclosure rate. However, a new state law requiring foreclosure mediation helped trigger a 26 percent plunge in foreclosure activity from September and a 4 percent drop from a year earlier, Sharga says. Mediation very well may put some troubled borrowers into sustainable home loans, but it’s quite likely that others will just redefault at a later date. “The intention is good,” Sharga says. “But there will be a bill to pay at the end of this.”

3. Seriously delinquent: To get a sense of where foreclosures may head from here, economist Patrick Newport of IHS Global Insight points to Fannie Mae’s serious delinquency rates, which track loans mostly made to well-qualified borrowers. The serious delinquency rate hit 4.45 percent for single-family-home loans in August, up sharply from 4.17 percent in July and just 1.57 a year earlier. “That number keeps on growing, and the monthly increments keep getting bigger,” Newport says. “I am almost sure that the foreclosure rate is going to continue to rise.”

4. Unemployment problem: These days, the primary driver of home foreclosures isn’t exotic mortgage products but the nation’s dismal labor market. As more people lose jobs, a growing number of borrowers—even those with sound credit histories—can no longer pay their mortgage. And with the unemployment rate hitting 10.2 percent last month, job losses will continue sending homeowners into foreclosure. “I don’t think that foreclosures are going to peak until the unemployment rate does,” Newport says. Newport projects the unemployment rate will peak at around 10.5 percent sometime in the middle of next year.

5. Hole in the rescue: Rising unemployment also highlights a gaping hole in the Obama administration’s housing rescue. Homeowners need an income stream in order to qualify for a modification, which makes anyone who can’t pay their mortgage because of a job loss ineligible. But borrowers facing foreclosure after losing a job are increasingly at the heart of today’s housing crisis. The administration’s initiative “was not designed to address foreclosures caused by unemployment, which now appears to be a central cause of nonpayment,” a congressional oversight panel said in an October 9 report. “It increasingly appears that [the Obama administration’s housing rescue] is targeted at the housing crisis as it existed six months ago, rather than as it exists right now.”

By Luke Mullins
Posted: November 12, 2009
USNews

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Shelli Dore

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…Remember! The next time you are in a conversation with someone who is thinking about a move – IN ANY CITY OR STATE IN THE US OR CANADA – call me first! I can help make sure your friends, family members and work associates are very well taken care of.

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RISMEDIA, April 4, 2009-With the deadline for filing federal tax returns fast approaching, the National Association of Home Builders (NAHB) has made information available for qualified home buyers about how and when to claim the $8,000 Continued

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Your friend in the real estate business,

Shelli Dore

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…Remember! The next time you are in a conversation with someone who is thinking about a move – IN ANY CITY OR STATE IN THE US OR CANADA – call me first! I can help make sure your friends, family members and work associates are very well taken care of.

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Your friend in the real estate business,

Shelli Dore

Find me on Facebook!
Connect with me on LinkedIn!
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…Remember! The next time you are in a conversation with someone who is thinking about a move – IN ANY CITY OR STATE IN THE US OR CANADA – call me first! I can help make sure your friends, family members and work associates are very well taken care of.

The new economic stimulus package allocates $787 billion to boost our multi-trillion dollar economy. Here are some provisions individuals can take advantage of now.

1. Housing help. First time homebuyers can get up to an $8,000 tax credit if they close by November 30, 2009. This credit does NOT have to be paid back if you own the home three years. It phases out for single taxpayers making over $75,000 and for married couples filing jointly making over $150,000 (adjusted gross income).

Communities receive $2.0 billion to redevelop abandoned and foreclosed homes. 

In high-cost areas, the bill restores the $729,750 upper conforming loan limit for Fannie Mae, Freddie Mac and FHA loan guarantee programs.

2. Home improvement tax credits. For money spent to make homes more energy efficient, a 30% tax credit through 2010, up to $1,500.

3. Residential renewable energy tax credits. Dollar caps have been removed on the 30% residential credit for solar thermal, geothermal and small wind upgrades.

4. Income tax credit. This will be up to $400 for individuals earning up to $75,000 and up to $800 for married couples filing jointly with up to $150,000 in income.

5. Alternative Minimum Tax reduction. Exempts from the AMT up to $46,700 of an individual’s and $70,950 of a couple’s income in 2009.

6. Earned Income Tax Credit. For 2009 and 2010, goes from 40% to 45% of the first $12,570 earned by families with more than three children.

7. Higher education tax credits. For 2009 and 2010, a $2,500 per year tuition tax credit for all four years of college. It’s now 40% refundable and covers textbook costs. The credit phases out for individuals making $80,000–$90,000 and couples earning $160,000–$180,000.

8. Hybrid vehicle tax credit. Increased to $7,500 for purchasing a plug-in hybrid vehicle.

9. Help for car buyers. In 2009, anyone purchasing a new vehicle for up to $49,500 can deduct state, local and excise taxes, as well as car loan interest. This is an above-the-line deduction that can be taken even if you don’t itemize. It begins to phase out for single taxpayers making over $125,000 and couples over $250,000.

There are many more programs for individuals, businesses and states, as well as a future foreclosure relief program!

Now is a great time to buy!

Your friend in the Real Estate business,

Shelli Dore
Find me on Facebook!
Connect with me on LinkedIn!

…Remember!  The next time you are in a conversation with someone who is thinking about a move – IN ANY CITY OR STATE IN THE US OR CANADA – call me first!  I can help make sure your friends, family members and work associates are very well taken care of.

Be sure to visit http://www.recovery.gov/ for all of the plan details!

Interest rates improved slightly this week but the big news for the real estate industry is the $8000 tax credit and The Homeowner Affordability and Stability Plan.  While the tax credit is part of the stimulus plan already signed into law,  The Homeowner Affordability and Stability Plan is still a work in progress for which we are suppose to see details March 4th.

Rates for the weekend:

FHAs and conforming conventional loans are ranging from 5.000% to 5.500%.   The extension of the higher FNMA limits may take some time to filter in to the market.  We should have greater clarity on that in early March as well.

Beginning March 2nd, CHFA will begin accepting reservations on their modified loan product, the CHFA home opener.  There are a number of changes but here are the basics of the program.  Minimum $1000.00 investment from the borrower, CHFA will do 1st and 2nd mortgage at the same rate and a 30 year amortization, income limits have been increased, 1st time homebuyer requirements have been lifted, and rates are expected to be competitive with the general mortgage market.

Combine the CHFA product with the tax credit and you have many first time homebuyers who can purchase a home with $1000 and get $8000 back.  And they can amend there 2008 tax return to get the credit still this year!

Now is a great time to buy!  Please do not hesitate to contact me with any questions.

Your friend in the Real Estate business,

Shelli Dore
Find me on Facebook!
Connect with me on LinkedIn!


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