BofA Struggles With Loan Modifications

Bank of America could collect about $6 billion if it meets the deadline set by the federal government to help struggling borrowers for the Making Home Affordable program.

But the Treasury Department released a report last week that showed that only 11 percent, about 95,000, of Bank of America’s delinquent borrowers who are potentially eligible for the program have been given a loan modification. That puts Bank of America at the bottom of the list of major banks involved in the program.

"We're sure working hard," said Ken Scheller, senior vice president for home retention at Bank of America, when asked about his company's low success rate. "We don't want to be down there."

There appear to be multiple problems, not the least of which is that many of the employees handling the modifications are completely new to the business. Angry investors complicate the issue, with 15 percent of them demanding that the bank get their approval for every single case.

Source: Washington Post, Renae Merle (10/12/2009)

Getting the Tax Credit Extended: Outlook

Courtesy of Robert Freedman, senior editor, REALTOR® Magazine




What are the chances of getting the first-time home buyer tax credit extended, particularly before its expiration Dec. 1?

No one can know that, of course, but what’s clear is that the leadership in Congress wants it extended -- and if you have the leadership on board, you’re in a strong position.

Yet with health care reform consuming Congress’ attention, even the leadership faces a challenge ensuring the tax credit gets the consideration it deserves.

After sitting down with Linda Goold, NAR’s director of tax policy, and Samuel Whitfield, an NAR legislative representative, I learned the tax credit has really been the economic recovery’s workhorse.

The IRS says 1.4 million households have used the credit. What’s more, a number of independent looks at the credit, including one by Economy.com (owned by Moody’s) and Campbell Surveys, estimate that between 350,000 and 400,000 home purchases would not have happened without the credit. NAR has come up with a similar estimate.

Goold and Whitfield say there’s bipartisan support for extension, and NAR is on Capitol Hill daily reminding lawmakers that the clock is running. But it’s coming down to the wire.

$8000 First-Time Homebuyer Tax Credit Ending Soon

The cash for clunkers program got a lot of publicity about its end date. However, there is a great government program that few people know about that is still available.

Yes, we are talking about the $8,000 first time homebuyer tax credit.

This great program begun under the last days of the Bush administration's Stimulus plans as a repayable $7,500 credit.

With a changing economy and market, it grew into a $8,000 non-repayable credit. The homebuyer tax credit is one of 10 key provisions of the American Recovery and Reinvestment Act signed by President Obama into law on Feb. 17, 2009.

That’s right: First Time Homebuyers - FREE MONEY, JUST FOR YOU!

Who Qualifies?

First-time home buyers who purchase homes between Jan. 1, 2009 and Dec. 1, 2009.

To qualify as a “first-time home buyer,” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?

The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

Why bring this up now? Well, with the end of the year fast approaching - in a few weeks we will be well into the last quarter of the year - and transactions taking many times longer to close than usual (sometimes due to financing delays) there is little time left for first-time homebuyer’s to purchase a property and be eligible for the credit.

(With the average short sale or bank owned transaction taking around three months to close the time really is now!)

FHA financing will even allow this credit to be used as downpayment funds. The IRS has published a helpful flyer about the program available here.

Why Buy? Lifestyle. Why Else?

David Curry, a realtor from Wisconsin, wrote this on his blog:

So if we're in the market, why buy? Do you believe the market bulls or bears? Do you focus on Mary's 5 positive signs, or are you negative and you prefer to side with the cons?

Go right ahead and rent for the rest of your life, and maybe, just maybe your landlord will let you paint a white wall tan. If you ask nicely.

What if you just let the 5 reasons to buy and the 5 reasons to wait cancel each other out, and buy for lifestyle. Housing bull? No thanks. Call me a lifestyle bull. A lifestyle bull in a confidence sapped china shop.

Buy because that house you grew up admiring just came on the market. Buy because you‘re confident in your job status, and that new development just slashed their prices 35%.

Buy because your neighbor cuts his grass at 7 am on Saturday mornings.

Buy because the city heat is just about to make your head explode, and cool lake breezes are better than warm alley breezes any day of the week. Buy because you’ll walk a little taller if you live on that street where the Maples high overhead reach across the street and shake hands with each other.

Above all, buy because you want a better lifestyle for you, for your friends, and for your family, and the purchase you’re contemplating allows you to more easily obtain that lifestyle.

If you need fundamentals to buy, realize that interest rates are unbelievably low and inventory is monumentally high. Realize that whether or not the market creates an identifiable bottom, you're not going to know when it does.

If you're hoarding cash hoping for market bottom balloons to be released from the pink unicorns soaring in the sky, I hope you have fun swimming and boating in your money vat like a decidedly uncartoonish Scrooge McDuck. Just buy because of the 320 months of summer we're all hoping for out of life, way too many of them have already been wasted worrying about 5% market swings, and 5% interest rates.

First-Time Buyer Tax Credit Extension Possible

Bills to extend the maximum $8,000 tax credit for first-time home buyers, which expires Nov. 30, are pending in both the U.S. House and the Senate.

Sen. Christopher J. Dodd, a Connecticut Democrat and chairman of the Senate Banking, Housing, and Urban Affairs Committee, is co-sponsor of a bill with Georgia Republican Sen. Johnny Isakson that would raise the credit amount to a maximum of $15,000.

Senate Majority Leader Harry M. Reid of Nevada favors an extension of the current credit. He was quoted by the Las Vegas Sun saying, "It's something we can get done."

Odds are that the credit will be extended and broadened to cover all buyers next year, but the chances of the amount increasing aren’t as good, observers say.

Source: Washington Post Writers Group, Kenneth R. Harney (08/22/2009)

Uptrend Continues in Pending Home Sales

Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to NAR.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6 percent to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7 percent above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.

Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices, and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” he said.

“Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30,” Yun said.

Yes, You Can Knock Down Walls at One Rincon

Not afraid to get her hands dirty, Mary Ann Schicketanz, of Carver + Schicketanz, prepares to knock down some walls at One Rincon Hill.



I did not know this was allowed in One Rincon's CC&R's. Thanks, CH+D!

New Rules for Mortgage Brokers

Fed announce proposed rules for mortgage lenders and brokers, effective July 30, 2009.



Some key highlights to consider:

• Mortgage brokers/lenders to provide good faith estimate (GFE) within three days,
• Less junk fees and more transparency/explanation of charges,
• Slowing down the closing process to a seven-day period.

All these changes are being implemented to allow the consumer to "digest" the terms of their loans and what they are exactly agreeing to.

New Federal Rules Protect Mortage Applicants

A new set of consumer-protection rules take effect July 30, including requiring lenders to provide consumers with initial disclosures of the estimated mortgage costs within three business days of the loan application; prohibiting lenders from collecting any fees prior to the consumer receiving the loan-cost disclosures; and prohibiting quickie closings on loans.

Traditionally, many mortgage brokers and lenders collected fees covering appraisal, credit, and other charges at the time of application. The new rules eliminate this practice and prohibit lenders from collecting any fees until the consumer has received the truth-in-lending disclosures and an annual percentage rate (APR) calculation of the loan costs.

The new rules also require lenders to deliver a copy of the real estate appraisal to the home buyer three business days before the scheduled closing on the loan. Previously, federal regulations guaranteed that consumers could request and obtain a copy of the appraisal, but many home buyers were not aware of this right.

Additionally, the rules prohibit quickie closings on loans by requiring a seven-day waiting period after applicants are handed their early disclosures or the disclosures are mailed. This provides applicants a week to think about the transaction and to decide whether it is right for them. Final truth-in-lending disclosures are due three business days before closing.

More from The LA Times.

To view additional articles which also may be of interest to clients in the market for a new home loan, loan refinance, or loan modification, please visit the following:

FTC, state go after alleged loan scammers: To read the full story, please click here.

Administration weighs more foreclosure aid: To read the full story, please click here.

U.S. mortgage rates rise to 5.2%, Freddie Mac says: To read the full story, please click here.