Robin Anderson's Real Estate Blog

Still on the fence Buyers??  Here is a reason to buy now!!!   Effective 4/15/2010 the upfront mortgage insurance premium is increasing by 50%. Although interest rates are still low, they are expected to increase Spring/Summer.   The flip rule is gone, Buyers can now purchase a home that has been sold within the 90 day period. First time home buyers are still eligible for the $8,000. tax credit, as long as you are ,in escrow by 4/30/2010.  Additionally, the 3.5% down payment requirement will be increasing for Buyers with less than stellar credit and seller credits, the amount credited back to Buyers by Sellers for recurring and non-recurring fees or closing costs, may be ending down the road. Obviously buying just because of the aforementioned incentives is never a good thing, but if you were already in the market to purchase, take advantage of all of these perks while you can!

So you were one of the numerous Property Owners/Sellers who had to go through a foreclosure, initiate a short sale or perform a Deed In Lieu? Okay..say whichever process is signed, sealed and delivered and you are onto the next phase of your life..trying to put the pieces back together and get on even footing so to speak. Good for you.

WATCH OUT!!

If you only “thought” you had negotiated properly..but did not get anything in writing..did not obtain from the bank that owned your note that they RELEASED you from the deficiency debt..you may be in trouble.  A lot of Buyers assumed that the deficiency amount was part of the negotiation proceedings and were shocked to find out that they were on the hook for those deficiency amounts and, as it what you had already gone through in losing your home wasn’t bad enough..now you may face a potentially large bill and perhaps have to do a bankruptcy.  Good news is that California is a “Non-Recourse” state and does not allow deficiency judgements..but read the fine print…you may still owe money.  If you refinanced your ORIGINAL note..you may be liable for the difference in those amounts.   Also be aware that they are looking at your financial records to see if you have any assets that could offset this deficiency. 

They can come after you years after you thought you had put it all behind you. For those currently facing a Short Sale or a Foreclosure proceeding or considering doing a Deed In Lieu..PLEASE PLEASE..make sure you get something binding in writing that absolves you from them coming after you down the road.  It is so important..I would pay the money to have an attorney look any documents/agreements over that you have made with your lender.  Do not rely on your Realtor to advise you on these life altering decisions..please consult an attorney and tax professional.  Tax professionals will be able to advise you on whether or not you will have to pay taxes on amounts you received but did not pay back in whichever process you went through.

Good luck out there!!

As of this day 02-01-2010, the 90 day flip rule imposed by HUD has been waived for one year.  The government decided to waive this rule for numerous reasons. They had found that while this rule was in place foreclosures had increased rapidly. For instance, FHA now owns numerous homes and is in need of getting them sold.  Allowing the old flipping  may help that.

This is a fantastic opportunity for the banks to put the distressed foreclosed homes on the market without having to wait that 90 day period enabling investors to buy at low prices then repair a home to make it habitable, and not have to wait another 90 days to offer it out there for sale to a Buyer.

For those of you that are Buyers who are banking on being eligible for the federal housing tax credits here is some information you may find helpful!!

The $8,000 tax credit is for first-time homebuyers only. For the tax credit program, the IRS defines a first-time homebuyer as someone who has not owned a principal residence in the last three years.  

This first-time home buyer tax credit is not a loan, it does not have to be re-paid.  This credit applies to homes priced below $800,000.  This tax credit applies sales that occur before April 30, 2010, however, if you have a binding purchase contract by April 30, 2010, and have a successful close of escrow BY June 30, 2010, you will still be eligible for the first-time home buyer credit.  The escrow must be recorded and closed by that date.  There are income limits on this tax credit, single tax payers cannot make over $125,000 and married couples cannot make over $225,000 in order to qualify for the full tax credit. Additionally, this tax credit is equal to 10% of the homes purchase price but no more than $8,000.

The $6,500. Move Up/Repeat Home Buyer Tax Credit is someone who has owned and lived in their previous home for five consecutive years out of the last eight years.  Again, this tax credit is not a loan anddoes not have to be re-paid.  This tax credit is equal to 10% of the homes purchase up to $6,500.  The tax credit applies only to homes $800,000 or less.  This tax credit also has the same time limit requirements as the first-time home buyers credit. You must have completed your escrow by April 30, 2010, or have a binding purchase contract and close escrow by June 30, 2010.  The income limits for the Move Up/Repeat Home Buyer Tax Credit is the same as the First-Time Home Buyers credit.

I know that we all hear different bits of information that their will be a flood of REO/Bank Owned properties coming on the market.  I have personally heard this many times for the past year, that it is coming. I haven’t seen it. I did see a bunch of REO/Bank Owned properties hit one specific area recently but that was about it.  The inventory of these types of properties seems to have dwindled recently.  While Buyers wait for this “flood” of REO/Bank Owned properties the interest rates could go up. I say “could” because you hear grumblings about it now and again. Additionally, with the new FHA regulations coming down the pike, it may not behoove a Buyer to wait for this potentially phantom flood of homes for the Buyer may face stiffer reguirements in obtaining a loan, pay a higher interest rate and could possibly miss the time limit for the tax credits.  My advice to Buyers, if you are on the fence, get off it and start looking.  Find a no-pressure Realtor who will show you everything that may suit your criteria, that way you will be familiar with what the prices are in the different locations..what is out there.  You will be much better prepared to make that big decision to purchase as you will be armed with knowledge.