New Tax Credit for Home Buyers - Both First Time Buyers and Current Home Owners

The Tax credit for home buyers that was part of the economic stimulus package has been extended. There was an additional benefit for those who currently own a home to participate in that they can now receive $6500 bonus.

This adds a whole new group of buyers out to the market so if you are interested in buying a home in California and need help qualifying for the tax credit please see the report below and let me know how we can help.

By STEPHEN OHLEMACHER, Associated Press Writer

WASHINGTON – Buying a home is about to get cheaper for a whole new crop of homebuyers — $6,500 cheaper.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the Senate voted Wednesday to extend and expand the tax credit to include many buyers who already own homes. The House is scheduled to vote on the bill Thursday.

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.

The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that the Senate included in a bill extending unemployment benefits for those without a job for more than a year. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.

"We are still in a world of economic hurt, and Congress must continue to act boldly and creatively," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. "With the right mix of tax breaks and investments we will get through this recession and get folks working again."

The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes. While the measure passed the Senate by a 98-0 vote, Sen. Kit Bond, R-Mo., questioned its efficiency in stimulating home sales.

"For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home," Bond said. "And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place."

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

Expanding the tax credit for money-losing companies is projected to cost $10.4 billion.

The business tax break would allow money-losing companies to use current losses to offset taxable profits earned in the previous five years, giving them refunds of taxes paid in those years. Under current law, businesses with annual gross receipts of more than $15 million can claim losses back only two years.

The tax break would help industries suffering losses in 2008 or 2009, including retailers, homebuilders and newspapers. Congress included a scaled-back version of the tax break — for companies with revenues of $15 million or less — in the economic recovery package enacted in February. The new tax break would be available to companies of any size, providing a quick source of cash.

The U.S Chamber of Commerce has been a big backer of the tax break for money-losing companies.

"It frees up capital that they can use to maintain jobs and potentially even hire new people as the economy returns," said Caroline Harris, senior tax counsel for the U.S. Chamber of Commerce.

The tax breaks would be paid for largely by delaying a tax break for multinational companies that pay foreign taxes. It was passed in 2004 and originally was to have taken effect this year, but would now be delayed until 2018.

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The bill is H.R. 3548.

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On the Net:

Congress: http://thomas.loc.gov

HVCC and AMC - Mortgage Appraisal Issues Galore

OK so I need to vent a little bit.

The new mortgage appraisal rules have been rolling out over the past few months and still people don't pay attention or listen or read their email or listen to anything I say but they do listen to family or friends. Don't listen to professional Mortgage Companies in Roseville CA, what do they know!

So here is an example on how the appraisal issues are keeping us from having clean and successful Real Estate transactions.

I have a client who has been in contract on a short-sale for well over 3 months now. It's taken some considerable time to get to this point with these folks but the owners bank finally agreed to everything and rolled us out a 10 day period to close the deal! OK!

10 WHOLE DAYS? In THIS MORTGAGE ENVIRONMENT? WHAT'S THE DEAL?

For those of you who don't know, there are new rules surrounding both disclosures the buyer receives up front and the appraisal ordering process.

Upfront Mortgage Disclosure Rules -

I am not going to go into too much detail here but there has been a change in the process from the highest level on how to disclose loan documentation prior to the completion of the transaction. A bank will need to send out disclosures to a new client allowing 3 days for delivery and 3 days for review. THAT IS 6 DAYS FOR DISCLOSURES - remember I had 10 days mandated by the short-sale bank.

My Rant - you would think that a large banking institution would know about the new mortgage disclosure and that the 10 day timeframe is completely unreasonable. Now to make matters even worse I am dealing with a know it all real estate agent who keeps telling me "I haven't heard of these changes and my lenders never make me do this kind of thing!" Dude wake up! Pay attention! It's bad enough that I sent him the new rules changes, straight from the source, via email and he never bothered to pay attention and now he wants to make things up to put drama on the transaction. Now he has made his seller believe that I don't know what I am doing and that the deal is in trouble. Unbelievable.

OK Done with that for NOW!

HVCC and AMC - Appraisal ordering process for Mortgages -

Now again if you weren't paying attention, like most haven't been, the ordering process for an appraisal on a FNMA mortgage has changed. No longer can I just pick up the phone, call my buddy the appraiser and get him to visit the property as quickly as possible. Making matter worse I now have to deal with a third part company put into place by the GOVERNMENT to help protect the consumer from bad appraisers and appraisal fraud.

Interesting how something that is supposed to protect the consumer ends up coming back to bite them in the end. A traditional fee for and appraisal averages around $350 for the full report and an additional $100-$150 for an investment property. A lender could choose the appraiser who did the best job for him over the many years that they had been doing business and normally chose someone local who would know the neighborhoods and be able to understand the properties actual value.

With the new AMC, Appraisal Management Company, in the transaction fees have gone up $100 and appraisals are being ordered through whomever the AMC chooses. Now I am all for sending someone out there who is not going to commit fraud and has a clean record and all of that but the reality is that the AMC's are taking money out of the pockets of the appraisers who in turn have hired property inspectors for nearly nothing who know little to nothing about the neighborhoods they are doing the research in because the AMC's have turned the appraisal business into a volume based business versus a home based operation that does quality work. Not to mention some of the companies that the AMC's are approving to do the loans are not quality companies at all. Enough of the ranting but I just feel bad for my industry because this makes the process even harder than it ever was, because getting a Refinance Upside Down Mortgage wasn't difficult enough.

Now my transaction is no different than most, there are issues with something and in this case it the AMC who is ordering an appraisal through a non-responsive appraiser. To make matters even worse the real estate agents are also non-responsive making the challenges even more dramatic.

Not having the ability to communicate with the appraiser leave a HUGE void in the process flow and communication. I am going to have to work on dealing with this but agents and buyers and sellers all want to know what is going on and the best I could tell them was, "According to the status email the AMC sent me the appraiser is trying to contact someone to get the door....." now that isn't bad but trying to heard the cats, or real estate agents Roseville CA, is not an easy chore but something I would need to do if I was going to get the appraisal done within the time frame they needed.

This just shows on a small level the trouble with this new found big business of AMC's. You can find another example of a poor AMC and appraiser on my radio show page, AMC Appraisal Issues and Examples . Let me know your experiences with Appraisal Management Companies AMC's by commenting below.

Foreclosures in Rocklin CA - Buying Guide

Buying a Foreclosure in Rocklin CA doesn't have to be that difficult.

There are so many different programs to help you with the financing and working with the right Realtor has to be part of the equation as well.

Realtors have lots of pull when it comes to getting an offer accepted. They can make or break your offer in many ways. This is why finding someone who you can put your trust in is so important.

From a mortgage standpoint, buying Foreclosures in Rocklin CA can be relatively simple.

You don't need any fancy work up you just need to be focused on getting the back to see your complete picture. It's a common thought that the banks "DON'T" want to finance ANYONE yet they know that they need to do it. It's also worth saying that it's their money and they will ask you for more paperwork than ever before because they have been hurt so badly by past transactions.

Now if you are on the hunt for Foreclosures in Rocklin CA it's important to start first with a good Rocklin Realtor and get them to put you on their MLS email list because that is the only way to get up to date information.

This Rocklin Real Estate Agent here has some great FREE VIDEOS on how to be a great buyer.