- Market Update: The Cromford Report - 7/28/09
- Home Buyer Tax Credit
- Mortgage Disclosure Improvement Act (MDIA)
CROMFORD REPORT
Thanks to Mike Orr for providing this update on the Phoenix Metro real estate market:
When reading the chart, remember that GREEN is GOOD!
Buying activity is still strong for lender owned properties although we see some easing in the rate of price increases.
The supply situation is unchanged - extremely tight under $350,000 and over-abundant above $500,000.
No big changes are appearing on the foreclosure front. It looks as though July’s counts of Trustee Sales and Foreclosure Notices will both come in close to the June numbers.
All told, July is proving to be a relatively uneventful month compared with the fireworks in the second quarter.
- Mike Orr
HOME BUYER TAX CREDIT
The following information regarding The American Recovery and Reinvestment Act of 2009, which authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009, comes from the National Association of Home Builders. The link below provides basic information about the tax credit. If you have more specific questions, you are encouraged to consult a qualified tax advisor or legal professional about your unique situation.
http://www.
It is important to note that there may be a change coming in the current Home Buyer Tax Credit which could increase the amount of the credit, extend the time for applying, and make it available to more people, not just "first-time" buyers. The following article (dated 6/10/09) regarding the proposed changes comes from Bloomberg.com.
Senators Want Homebuyer Tax Credit to Rise to $15,000 (Update2)
June 10 (Bloomberg) -- Lawmakers are pushing to revive legislation in the Senate that would almost double an $8,000 tax credit for first-time homebuyers and expand the program to all borrowers.
Senator Johnny Isakson, a Georgia Republican, introduced a bill today that would increase the tax credit to $15,000 and remove income and other restrictions on who can qualify, according to his spokeswoman, Sheridan Watson. The Treasury Department declined to comment on the proposal.
The legislation, co-sponsored by Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, would extend the homebuyer credit to multifamily properties used as the borrower’s primary residence. It would also eliminate income caps of $75,000 and $150,000 on individuals and couples seeking to claim the credit.
“The housing market continues to be a drag on the economy, John Castellani, president of the Washington-based Business Roundtable, said in a telephone interview today. “We believe that if we don’t stabilize this vital sector, we can’t turn the tide on the recession.”
The Business Roundtable represents more than 100 chief executive officers including General Electric Co.’s Jeffrey Immelt and Exxon Mobil Corp.’s Rex Tillerson. The group and the National Association of Realtors are pushing to expand the tax credit and to lower mortgage rates to revive the housing market.
For All Borrowers
“One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can,” Isakson said in a statement. Isakson said his legislation would spur demand in the housing market by giving homeowners the incentive to trade up to a more expensive home.
The bill would extend the tax credit, which now applies to homes purchased from Jan. 1 to Dec. 1, 2009, to one year after the new measure is signed into law, according to Watson. Isakson’s bill would make the credit available to all borrowers, not only borrowers who haven’t owned a home in the previous three years as is the case under current law. It would also let borrowers divide the credit over two years. The legislation wouldn’t be applied retroactively to purchases completed before the date of enactment, Watson said.
The bill is co-sponsored by Republican Senators Lamar Alexander of Tennessee, Saxby Chambliss of Georgia, David Vitter of Louisiana, James Risch of Idaho, Lisa Murkowski of Alaska, John Ensign of Nevada and Jim Bunning of Kentucky, according to a statement from Isakson.
Senator Joseph Lieberman, a Connecticut independent, has also signed on to the bill, according to the statement.
(The section of the article regarding mortgage rates has been removed, as it is no longer current.)
To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net.
Last Updated: June 10, 2009 18:09 EDTMORTGAGE DISCLOSURE IMPROVEMENT ACT (MDIA)
Thanks to Rob Kanyur of NOVA HOME LOANS - SCOTTSDALE for sharing the following information regarding the new Mortgage Disclosure Improvement Act (MDIA) that became effective July 30, 2009.
- The new MDIA rules apply to both purchase and refinance loans.
- A lender must provide a borrower with an "early" Good Faith Estimate / TIL within three business days of receiving the borrower's loan application.
- A lender cannot collect upfront fees from the borrower until the borrower has received the "early" disclosures in person or, if mailed, three business days after the early disclosures are mailed.
- A lender must wait seven business days after providing the early disclosures before the borrower can sign closing documents.
- If the final Annual Percentage Rate (APR) on the closing documents varies more than 0.125% (up or down) from the initial APR on the "early" disclosures, the lender must provide the borrower with a corrected disclosure and wait three business days before the borrower can sign the closing documents. Clarification - the borrower cannot sign closing documents until three business days after the borrower receives the corrected disclosure in person. If the corrected disclosure is mailed, the borrower is deemed to have received it three business days after it is placed in the mail.
