^[1]RISMEDIA, April 29, 2010—The expiration of the 2010 Home Buyer Tax Credits on April 30 is unlikely to put off Americans looking to purchase homes who believe now is a good time to buy and are confident that home prices will rise according to a survey released by Prudential Real Estate and Relocation Services, Inc., a Prudential Financial, Inc. company. The survey of 1,000 Americans between the ages of 25-64 with at least $35,000 household income was conducted during April 15-20, 2010.

More than 90% of consumers believe that the home buyer tax credits have helped both first-time home buyers and the U.S. housing market overall. Among consumers actually shopping for homes, 65% believe that the end of the tax credits will have little or no effect on their interest in purchasing a home.

While consumers remain unsure about the direction of the housing market, the survey reveals that they are optimistic about real estate values with 46% of consumers expecting real estate prices in their area to increase over the next year. Just 12% expect prices will decline. Over the next five years, 79% expect real estate prices to increase, with 20% expecting prices to increase substantially.

“The survey underscores the key role the federal home buyer tax credits played in stimulating residential real estate market activity and the U.S. economy,” said James Mallozzi, chairman and chief executive officer of Prudential Real Estate and Relocation Services, Inc. “It also shows that most consumers believe the market has hit bottom and are more optimistic about the future.”

Survey respondents identified concerns about rising mortgage interest rates and unemployment as the most important factors affecting their decision to purchase a home, along with more stringent lending criteria and fewer mortgage-backed securities purchased by the Federal Reserve. The expiration of the tax credits placed lowest on their list of concerns. Among those who have recently purchased a home, 61% cited low mortgage interest rates as “very important” to their decisions – an amount greater than either the tax credit or even cheaper prices. The 66% expecting interest rates to rise underscores potential headwinds for the market.

“The tax credits clearly helped stimulate the market when consumer confidence was low and housing inventory was high,” said Earl Lee, president, Prudential Real Estate and Relocation Services, Inc. “While the tax credit expiration is a concern for many, the bigger issues now are the availability and cost of financing as well as if they will have a job.”

Despite the significant downturn in the real estate market, the survey underscores that the dream of homeownership and the perception that owning a home is a good investment remain intact. Among current renters, 75% still believe owning their home is a better long-term choice for their needs than renting.

The majority of consumers also believe that homeownership is a better investment than individual stocks or bonds (75%), mutual funds (72%), or savings accounts (74%).

“The real estate market is precariously balanced. Consumers are clearly motivated to take advantage of the opportunities the current low interest rates and prices afford,” Lee notes. “While the market is picking up in terms of sales and confidence, and the majority still believe that owning a home is a good investment, the outlook for the market remains highly dependent upon the direction of the economy overall.”

Both Houses OK Tax Credit Extension

The House today and the Senate yesterday passed legislation to extend the $8,000 home buyer tax credit to May 1, 2010, for first-time buyers and add a $6,500 tax credit for repeat buyers if they’ve lived in their home for five of the past eight years. Home prices are capped at $800,000.

The legislation in both houses was included in a bill to extend unemployment benefits and is expected to be signed by President Obama shortly.

“REALTORS® appreciate the swift action by Congress to extend the home buyer tax credit and expand it to some current homeowners,” says NAR President Charles McMillan. “As the leading advocate of housing and real estate issues, we urge President Obama to sign this legislation into law quickly to keep the momentum going in the fragile recovery of the nation’s housing market.”

Under the bill, income limits are expanded to $125,000 for individuals and $225,000 for joint filers. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

Households who have binding contracts in place by April 30 will be allowed an additional 60 days to complete their transaction. The deadline for members of the military serving out the U.S. for at least 90 days between Jan. 1, 2009, and May 1, 2010, has been extended one year.

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a check. Taxpayers will be able to claim the credit on their 2009 income tax return for purchases made in 2010.

An $8,000 federal tax credit for first-time homebuyers that is set to expire at the end of the month inched another step closer to getting extended until April. The Senate voted 85-2 yesterday to move the bill to a final vote, and senior members of Congress said that they expected the bill to pass next week.

In what officials say is a move to stimulate the economy, the measure might even be expanded to give a $6,500 tax credit to homebuyers who have lived in their previous home for at least 5 years.

Top 5 Steps Toward Improving Your Credit Score
Home prices and interest rates are down, and your desire to buy a home is high. But many of my clients worry that their credit score just isn’t good enough for lenders to see them as a worthy credit risk, especially in light of today’s tougher credit and lending standards.

As a member of the Top 5 in Real Estate Network®, I am often asked if there is anything that can be done to improve your credit score. There are, in fact, several steps you can take. Here are five great suggestions from Bankrate.com:

1. Order your credit reports. You can do it for free once a year at annualcreditreport.com. If you’ve been denied credit, you are entitled to a copy of your report from the reporting agency. The company you applied to must supply the contact information and you have 60 days after denial to request a copy.

2. Examine your credit reports. Creditors do not necessarily report to each agency, so you may find differences in reports—and credit bureaus do not verify the information they get from creditors. Note any errors, such as incomplete or outdated information or inaccurate account histories. If you find errors, such as a paid-up account that was not reported or a difference in the amount owed, proceed to step number three.

3. Dispute and document. Complete the dispute form that came with the credit report or write a letter identifying each mistake and stating why it is wrong. Include a copy of the report with errors circled and copies of any supporting documents. Keep copies of everything you send. The credit bureau must investigate disputes within 30 days of receiving your letter. Items not verified as accurate by a creditor are removed and you will be sent a free, updated report.

4. Fix negatives. Call your creditors and ask for reduced monthly payments to help you keep current. See if the repayment schedule for fixed-rate loans can be extended. This may end up costing you more, but may keep you from being reported as delinquent. Arrange to pay off accounts in collection. Slowly close out unused credit accounts. Don’t cancel them all at once, as this may negatively affect your score. Remember, cutting up a card is not the same as closing the account.

5. Add positives. If you have a good credit history from a company that does not report to a credit bureau, ask them to do so. Apply for a secured credit card and build a solid payment history. Open a savings account to show creditors you are working to save and have reserves to help pay down debt.

Remember that your credit score is not always set in stone. There are actions you can take immediately to raise your score both in the short term and long term. If you would like more information on other ways to change your credit score, please e-mail me; and please also be sure to forward this important article to others who may be caught in the credit-score crunch.

Sincerely,

John

John Bendall
RE/MAX Classic Group
Top 5 in Real Estate Member
john@bendallgroup.com
www.centralnewjerseyhomes.com

The Clock is Ticking – Taxpayers Need to Act Fast to Take Advantage of Temporary Tax Breaks
If the first half of 2009 is any indication, taxpayers have their work cut out trying to keep up with available tax breaks and potential tax pitfalls of 2009, according to CCH, a Wolters Kluwer business and a leading provider of tax, accounting and audit information, software and services.

In February 2009, Congress passed the Economic Recovery and Reinvestment Act of 2009. The nearly $800 billion economic stimulus package offers significant tax incentives; however, many of the incentives, as well as other tax breaks, are temporary.

“It’s always confusing for taxpayers when rules change,” said CCH Principal Federal Tax Analyst Mark Luscombe. “But with so many people struggling economically, it’s well worth their effort to see where they may be able to save on taxes, even if it’s only temporary relief.”

According to CCH, among the important temporary tax changes affecting individual taxpayers and set to expire during 2009 are:

-First-time homebuyer credit. This credit reaches $8,000 for purchases between January 1 and November 30, 2009. Taxpayers must be qualified buyers and satisfy income requirements. Eligible taxpayers also can file an amended 2008 tax return to receive the credit sooner.

-Motor vehicle sales tax deduction. Taxpayers can take an extra standard deduction for state and local sales taxes paid on the purchase of a new vehicle and, in states without a sales tax, taxpayers can deduct other fees to take advantage of the temporary motor vehicle sales tax deduction enacted as part of the 2009 Recovery Act. The amount of the deduction is limited to the portion of the state sales or excise tax imposed on the first $49,500 of the purchase price of the vehicle and is effective for vehicles purchased between February 17 and December 31, 2009.

-COBRA premium assistance. Individuals laid off from their jobs between September 1, 2008 and December 31, 2009 meeting income limits may qualify for nine months of COBRA premium assistance under the 2009 Recovery Act. Individuals pay 35% of the COBRA premium and employers must treat that as full payment. Employers claim a credit for the other 65% of the premium on their payroll tax returns.

-Economic recovery payments. The 2009 Recovery Act authorized one-time payments of $250 to individuals receiving Social Security benefits, disabled veterans and others on fixed incomes. The Social Security Administration began sending the bulk one-time payments by mail and direct deposit in May 2009.

-Exclusion of unemployment benefits. Individuals receiving unemployment benefits in 2009 can exclude the first $2,400 from their income. The exclusion is only available for 2009.

-Tax evasion forgiveness. In an effort to shore up tax revenues, the IRS is encouraging taxpayers to disclose unreported foreign bank accounts and assets. In exchange for full disclosure and paying all back taxes plus interest and penalties, the IRS agrees not to criminally prosecute tax evaders and to waive the 75% fraud penalty. The settlement offer is only available up to September 23, 2009.

Additionally, Luscombe pointed out that while the Making Work Pay credit, another outcome of the 2009 Recovery Act, is in effect for both 2009 and 2010, taxpayers and pension recipients need to take a look at their withholdings now to make sure they don’t end up owing more than they expected in taxes. Specifically, Making Work Pay is a credit against a worker’s income tax equal to the lesser of 6.2% of their earned income or $400 ($800 for married couples filing jointly). This amount can be reduced by any economic recovery payment an individual received and phases out beginning at adjusted gross income of $75,000 for single filers and $150,000 for joint filers. Individuals with multiple jobs may need to adjust their withholdings if the credit results in too little income tax being withheld from their wages. In May, the IRS also issued a withholding option for pension plans to offset the credit which could result in some pension recipients underwithholding.

Looking Ahead at Tax Legislation
The rest of 2009 will likely bring additional tax law changes, although many will not take effect until 2010 or beyond. In May, President Barack Obama released details of his tax proposals which included extensive reform of the international tax rules, higher tax rates on upper income individuals, extended middle income tax breaks and deficit reduction. Individual tax cuts would total $736.5 billion over 10 years and business tax cuts would total $71 billion over 10 years. In addition, in late July, the administration outlined tax proposals to help pay for health care reform, including a surtax on families earning more than $1 million a year.

“Congress has already noted its opposition to some of the president’s proposals,” said Luscombe. “However, there are several more months remaining in the year, a growing deficit, an economy that is still trying to find traction and an urgency to reform health care. As a result, it’s a fluid time where policymakers can shift their priorities and make concessions in order to move forward the programs they think are important.”

DONOVAN ANNOUNCES RECOVERY ACT’S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
FHA plan will stimulate new home sales and help stabilize housing market
WASHINGTON – Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration’s new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today’s action will help stabilize the nation’s housing market by stimulating home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today’s announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to “monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA’s new mortgagee letter, visit HUD’s website.

“We believe this is a real win for everyone,” said Donovan. “Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation’s housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we’re doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing.”

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today’s announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower’s own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today’s action permits the first-time homebuyer’s anticipated tax credit under the Recovery Act to be applied toward the family’s home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.

According to estimates by the National Association of Home Builders, the Administration’s homebuyer tax credit will stimulate 160,000 home sales across the nation – 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA’s current market share, it’s estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.

Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.

For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.

The secretary of HUD made an announcement Monday and a HUD/FHA letter was published on the website Monday night stating the the $8000 could be used for upfront down payment (although the mortgage letter was vague at best and has been removed from the site).

BUT……..the new director of HUD pulled that Mortgagee letter Thursday morning and it is no longer even available on the HUD website because it appeared to violate a federal law that became effective October 1, 2008.

Link below for FHA mortgagee letters

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/

This theoretical program is now off the table…….and cannot NOT be used until there is a real concept of how to offer borrowers with real answers as to where the money might come from.

Before this happens there will need to be:

1. State agencies approved who have funds for the down payment . Note – Texas is working on this currently and we will probably have more information by June 1, 2009.

2. A Change to the HUD guidelines on the time frame that is allowable for a bridge loan as current guidelines state that loans must be amortized over 10 years with no balloon so this would have to be revised.

3. A change to the IRS guidelines allowing the refund to be assigned to a state or non-profit entity.

It is also important to know that some mortgage companies in the area have already closed loans in which they allowed the buyer to use the $8000 as their down payment. The problem is that those loans cannot now get insured or securitized. As of right now (today), buyers cannot close an FHA or Conventional loan using the $8000 as a down payment

From Doug Martin DFW Mtg

[1]RISMEDIA, May 19, 2009-(MCT)-Value-conscious, first-time buyers have become key to the housing market’s recovery, and they are snapping up priced-right foreclosures despite the warts-and-all, sold-as-is condition of the properties. Half of the sales made in the year’s first quarter were to first-time buyers and almost half of all these sales were distressed properties, the National Association of Realtors reported. Distressed properties include foreclosures and short sales, which are private transactions in which a homeowner sells the property for less than the amount owed on a mortgage.

The glut of foreclosures has pushed down home values, so heightened interest in buying them benefits the immediate neighborhood and the overall housing market.

“It’s a very good first step,” said Lance Ramella, a principal at RW Real Estate Advisors in Oakbrook Terrace. “The first step is selling the most value-conscious units and those are the foreclosures. We’re not going to see any real sustainable price appreciation until we move the foreclosures off the inventory list.”

Moving homes off the foreclosure inventory list may take a while though. With the lapse of several industrywide foreclosure moratoriums, lenders nationwide are initiating foreclosure proceedings again. Government-led efforts to refinance or modify troubled loans can’t help the rising number of people unable to pay their mortgages because they’ve lost their jobs.

In Illinois, more than 7,300 homes became bank-owned during the year’s first quarter, according to RealtyTrac. It’s impossible to determine how many of them are listed for sale, or sold, at any one time because the area’s real estate listing service doesn’t require a property to be listed as a foreclosure.

To capture new interest in home sales thanks to lower interest rates and a first-time-buyer tax credit, a growing number of lenders and asset management companies that own foreclosed homes now appear more willing to drop prices. Banks used to hold fast on pricing and held back properties so they didn’t flood the market, but that has changed, said Susan Sirles Fidler, an agent at Re/Max 10 in Oak Lawn who works with lenders.

Attractive pricing is causing a noticeable increase in multiple offers. In just the past two weeks, a two-bedroom, two-bath Lincoln Park condo listed at $289,000 garnered 60 showings in two days and 20 offers; it sold for just over $330,000. A vandalized East Village penthouse that needed at least $80,000 in repairs was listed at $159,000 and sold for $245,000. In Northbrook, a foreclosed home listed at $719,000 received multiple offers and sold for $730,000.

A bidding battle on a foreclosure with potential “is not the exception,” said Henry Torn, a buyer’s agent at Chicago Realty Partners.

The uptick in interest is encouraging to lenders as well. “That’s what gives us hope,” said Sanjiv Das, chief executive of CitiMortgage. “It’s positive, healthy activity. We’re actively lending to that end of the market, the owner-occupant.”

Finding diamonds in the rough can be a test of stamina, determination and an ability to hold one’s breath. There can be evidence of vandalism, water damage, multicolor mold and squatters who didn’t have access to bathroom facilities because the plumbing fixtures were stolen.

“This is not for the faint of heart,” said Marki Lemons, an agent with Rubloff Residential Properties, who carries a flashlight into properties and keeps paper masks in her car. “You have to be patient, be non-judgmental and have some vision. You have to decide if you can stomach this.”

Others are in decidedly better shape, in part either because companies are offering departing homeowners cash for keys and a clean property or they are sprucing up the properties before they put them on the market.

“These asset managers are at a point where they’re writing checks and trusting the Realtor to get the work done and put it on the market,” said Dean Rouso, owner of Prime Property Partners in La Grange. “We’re helping the neighborhoods because instead of having this comparable property out there for $99,000, we now have a comp for $150,000.”

Not all buyers, however, find themselves on the winning end of foreclosure deals, and that is causing them to look for value in the traditional market.

For homes for sale in New Jersaey- www.centralnewjerseyhomes.com