AZ News

A New Year Tradition

2008-12-29T00:56:00-07:00

For years now, our family has given new year's gifts to our special family and friends. I thought I'd include it here in case any of you would like to begin your own tradition. It beats having to bake cookies or bread during the busy weeks before Christmas. Why does it matter if your friends think you are ungrateful at Christmas? You will surprise them on New Year's Eve with this unusual surprise.

Ingredients:

1 bag of black-eyed peas (you can use any type of bean, but black-eyed peas are traditional)

1 bag of sweets (ideas to follow)

1 shiny new quarter (get them at the bank and attach with double-stick tape on the card)

The Card:

Our wish for you and your family:

Black-eyed Peas - That you may have luck and prosperity in the coming year.

Sweets - That your success this year will be sweet.

Quarter - That you may not begin the year penniless.

About.com had the best explanation of the black-eyed pea tradition: If you are planning to celebrate the New Year in the Southeast, it is most likely that you will be offered black-eyed peas in some form, either just after midnight or on New Year's Day. From grand gala gourmet dinners to small casual gatherings with friends and family, these flavorful legumes are traditionally, according to Southern folklore, the first food to be eaten on New Year's Day for luck and prosperity throughout the year ahead.

The practice of eating black-eyed peas for luck is generally believed to date back to the Civil War. At first planted as food for livestock, and later a food staple for slaves in the South, the fields of black-eyed peas were ignored as Sherman's troops destroyed or stole other crops, thereby giving the humble, but nourishing, black-eyed pea an important role as a major food source for surviving Confederates.

I usually make two different sweets. Hershey's Cocoa Kiss Cookies are melt-in-your mouth delicious, with a surprise, melty chocolate kiss in the center. The recipe is on this blog. You can find it by clicking on the Phoenix Quicktime Recipes in the lefthand column of thus page. The other recipe is for Chinese Fried Walnuts and is a little work-intensive but absolutely worth it. I've included the recipe below.

Chinese Fried Walnuts

6 cups     water
4 cups     walnuts
½ cup      sugar
¾ cup      oil
1/8 tsp     salt

In large saucepan, boil water. Add walnuts and bring to a boil again. Cook an additional minute then rinse under hot water and drain. While walnuts are still hot but dry, toss them with the sugar. Heat half of the oil and fry half of the walnuts until golden (5 minutes). Do not overcook in the oil or they will be bitter. Remove with slotted spoon. Place in coarse sieve to drain. Sprinkle with salt, toss to keep walnuts from sticking. Transfer to waxed paper or flat pan to cool. {Do NOT try to drain them on paper towels because they will stick to the paper as they cool and be a mess to remove.} Repeat with the remainder of oil and walnuts. Store in tightly covered container. You can also add a little pepper (to taste) when you add the salt to make them spicier.

Our Best To You...

2008-12-23T17:29:21-07:00

With thanks to our loyal readers, clients, investors and personnel, we wish you Happy Holidays and a Prosperous 2009!

Angela McDonald and The AZ Real Estate News Team

Interest Rates Dropping

2008-12-07T19:32:23-07:00

Interest Rates have dropped over a half of a percentage point in the past week and a half. A borrower can pay no points and get a 30 Year Fixed Rate Mortgage at 5.5%!!!!!!!   The Treasury and Federal Reserve announced that they will buy hundreds of Billions of dollars in Fannie/Freddie Mortgage Bonds. This move increases the demand for Mortgage Bonds. Lenders then lower interest rates to produce more Mortgages to satisfy this increased demand. It’s an incredible time to get a low interest rate on a great priced home in our market. I would also be more than happy to do your refinance!

As of 12/5/2008 based on a 200k Primary Residence Purchase (or a no cash out refinance), 720+ Credit, Full Documented Income Verification, paying no discount points and no origination fee.

Ease-In to Your New Home

2008-12-01T08:45:11-07:00

AND

Ease-in to your monthly payment!

Ease-In is a payment reduction feature for FHA loans where the seller can pay up to 6 months of interest on the buyer's payments!



Here is an example of how it would work:

Purchase Price $    140,000.00

6% Max Seller Contribution $        8,400.00

Seller-paid Closing Costs & Pre-paids $        4,800.00

Total Seller Interest Paid $        3,600.00

Total Payment PITI @ 6.25% $        1,059.00

Seller-paid Interest Reduction for 6 months $            600.00

Buyer's Payment for the First 6 Months $            459.00

For more information on this program and other real estate issues, contact Angela McDonald - 602-369-6409.

FDIC: Plan could help 1.5 million keep homes

2008-11-17T20:01:42-07:00

From the Arizona Republic and The Associated Press comes the following article about current real estate foreclosures and FDIC money to help...

WASHINGTON - Publicly breaking with the Bush administration's official stance, the Federal Deposit Insurance Corp. proposed Friday to use $24 billion in government funding to help 1.5 million American households avoid foreclosure.

Where to find that money, though, is in dispute. FDIC officials want to use part of the $700 billion bailout of the financial industry to pay for it. But the Treasury Department is opposed to that idea.

Testifying on Capitol Hill Friday, Neel Kashkari, the Treasury Department's assistant secretary for financial stability, said the aim of the $700 billion plan was to make investments with the hope of getting the money back. That he said, was “fundamentally different from just having a government spending program” that would disburse money with no chance of ever seeing any returns.

With the Bush administration adamantly opposed, Congressional Democrats could take up the FDIC's plan when they return for a lame-duck session next week. Or the plan could set the stage for a new foreclosure prevention initiative once President-elect Barack Obama takes office in January.

At Friday's hearing, lawmakers complained that the Bush administration is ignoring the will of Congress and slighting homeowners on the verge of foreclosure in its latest approach to spend $700 billion in economic rescue money.

Congressional dissatisfaction is especially significant because Congress can block the release of the second half of the money, $350 billion, or put new conditions on its use. Democrats are pushing for funds to help the auto industry and distressed homeowners alike.

There is intense speculation in Washington that the FDIC's chairman, Sheila Bair, is positioning herself for a role in the Obama administration. “My assumption is that she's angling for a promotion,” said Bert Ely, a banking industry consultant in Alexandria, Va. and an FDIC critic.

The agency's plan, posted on its Web site Friday, would guarantee 2.2 million modified loans — mainly risky loans made to borrowers with weak credit or small down payments — through the end of next year. Borrowers would get reduced interest rates or longer loan terms to make their payments more affordable.

“If we can avoid those foreclosures, then you will get more stability in the housing market,” said Michael Krimminger, a senior adviser to Bair in an interview Thursday.

The FDIC says the government's backing will make the lending industry more willing to modify loans because taxpayers will absorb half of the losses if the borrower defaults again. Also, loan servicing companies, which collect and distribute mortgage payments, would be paid $1,000 for each loan they modify.

Even if a third of borrowers default again on their modified loans, 1.5 million homes would still be saved, the FDIC says. Under the agency's plan, monthly payments shouldn't total more than 31 percent of homeowners' pretax monthly income.

The FDIC says its plans should apply to an estimated 4.4 million loans that are likely to become delinquent though the end of next year. That estimate excludes loans held by mortgage finance companies Fannie Mae and Freddie Mac, which on Tuesday launched their own loan modification program modeled after the FDIC's effort at failed IndyMac Bank.

The agency has been an aggressive proponent of efforts to alleviate the foreclosure crisis. FDIC officials sounded early warnings about a rise in defaults among risky loans, and have repeatedly reaped praise from Congressional Democrats.

After taking over failed IndyMac Bank of Pasadena, Calif over the summer, the FDIC launched a loan modification plan in which borrowers receive interest rates of about 3 percent for five years. That plan was used as a model for a loan modification plan announced Tuesday by mortgage finance companies Fannie Mae and Freddie Mac.

Both of those plans reduce interest rates so borrowers aren't paying more than 38 percent of their pretax income on housing expenses.

GOOD NEIGHBOR NEXT DOOR PROGRAM

2008-11-10T22:37:56-07:00

GOOD NEIGHBOR NEXT DOOR PROGRAM

·       HUD offers a substantial incentive in the form of a discount of 50% from the list price of a home to law enforcement officers, pre-Kindergarten through 12^th grade teachers and firefighters/emergency medical techs.

·       In return the borrower must commit to live in the property for 36 months.

·       Eligible SFR homes are HUD REOs located in HUD determined "revitalization areas". To search for HUD listings click the following link: http://www.mcbreo.com/st_azmain.htm . Click on "City" next to "View All Available Properties".

·       HUD requires that the borrower sign a second mortgage note for the discount amount. No interest or payments are required on this "silent second" provided that the borrower fulfills the 3 year occupancy requirement.

·       You may use FHA, VA or conventional financing.

·       The purchase contract must indicate that the property is eligible for the GNND Program.

If you are eligible for this terrific program or know someone who is, please call Angela McDonald at (602)369-6409.

Tips for First Time Home Buyers

2008-11-04T19:23:19-07:00

Bill Chenier at iMortgage, sent us this information on first time home buyers...

Amount of the Home Buyer Tax Credit The full amount of credit is available for individuals with AGI (adjusted gross income) of no more than
$75,000 ($150,000 on a joint return). The credit is phased out for individuals with MAGI (modified
adjusted gross income) between $75,000 and $95,000. For married couples filing a joint return, the
phase out range is $150,000 to $170,000. To determine if the tax credit is reduced or eliminated by
the income phase-out range, individuals will need to determine their modified adjusted gross income.
If income falls between the above ranges, we recommend a consultation with a tax professional.

The tax credit is 10% of the purchase price of the home, with a maximum credit of $7,500. The credit is limited to $3,750 for married couples filing separate returns. The credit is also limited to the same $7,500 maximum for unmarried persons who purchase a residence together. The credit has a very limited life-span. The home purchase must occur on or after April 9, 2008 and before July 1, 2009.

Qualifying as a First-Time Home Buyer

For the purpose of this tax credit, a first-time home buyer is defined as someone who has not owned
a primary residence within the three-year period prior to the date of the purchase of the home. For
married taxpayers, both must qualify as first-time home buyers. Ownership of a vacation home or
investment property that is not used as a principal residence does not disqualify them as a first-time
home buyer!

Income Limits

When to Claim & Repay the First-Time Home Buyer Credit

The credit is fully refundable, meaning taxpayers will be able to obtain an additional federal tax refund
of up to $7,500 even if they have no other tax liabilities. Taxpayers will be able to claim the credit on
their 2008 tax return for homes purchased in 2008. For homes purchased in 2009, the IRS will allow
the purchasers to file an amended 2008 return to claim the credit.

The credit must be repaid without interest in equal installments over 15 years, or at the time of sale of
the property. The homeowner does not have to begin making repayments on the credit until 2 years
after the credit is claimed. When the homeowner sells the house the remaining credit is due from the
profit on the sale. If there is insufficient profit, then the remaining credit payback would be forgiven.
The credit will be disallowed if a taxpayer sells the house before the end of the same year in which the
house was purchased. The credit also needs to be repaid in full if the property is no longer the taxpayer's primary residence.

Arizona Prop 100 - Vote YES!

2008-10-27T01:41:00-07:00

From Ballotpedia comes the following concise and factual information on Arizona Propsition 100:

Arizona Proposition 100, known by its supporters as the Protect Our Homes Act, will be on the November 4, 2008 ballot as a citizen-initiated constitutional amendment. If enacted, it amends Article IX of the Arizona Constitution.

The sponsor's statement describes the measure this way: "this Initiative prohibits the government from charging any new tax on the sale or transfer of real property in Arizona. Currently, there are no real property sales or transfer taxes in Arizona. However, the government could enact a real property sale or transfer tax at any time. This Initiative would prohibit the enactment of any new real property sales or transfer tax by a constitutional amendment."

Real estate transfer taxes are imposed on the sale or transfer of real property. According to a 2006 study from the Federation of Tax Administrators, thirty-five states plus D.C. impose a real estate transfer. Tax rates range from a low of 0.01 percent in Colorado to a high of 2.2 percent in D.C. In about 2/3 of the states imposing the tax, the rate is below 0.5 percent of the value of the transfer. Nationwide this raised approximately $7 billion for state and local governments in fiscal year 2004.

The ballot measure is backed by the Arizona Association of REALTORS, Arizona Cattlemen's Association, Arizona Farm Bureau, NAIOP-AZ Chapter, the Arizona Contractors Association, and the Arizona Chamber of Commerce.

Supporting Arguments

Governments already collect taxes on your property based on the property's value. This new tax would unfairly cause a second tax to impact your home or property.

Since the tax is assessed against the total value including the amount you owe on your mortgage(s), the overall equity earned by the seller is decreased.

In the current slow market, a transfer tax would make it more difficult for people to buy or sell homes. Once a transfer tax is put in place, it can be raised at any time. This costs people buying or selling their homes even more money.

A home is often the biggest and most important asset a person has in life. A transfer tax reduces the equity people have worked hard building. People already pay multiple taxes and fees on their homes. This tax will layer on one more significant closing cost you will have to pay.

This tax imposes the higher tax burden on lower income households that typically spend a larger percentage of their income on their home.

Proposition 100 would prohibit state and local governments from imposing a tax when a home or other property is bought, sold, or transferred. The “Protect Our Homes” measure would guard against future efforts to pass a tax on property transfers.

We encourage you to vote YES on AZ Prop 100. On the sale of a $600,000 home at 1.97% the transfer tax would be $11,820! That comes directly out of the seller's equity! So, we, as Realtors, are on the side of our clients and are promoting a YES vote on Proposition 100.

So, please, vote YES on Prop 100! Thank you.

Phoenix Real Estate Market News

2008-10-24T01:33:48-07:00

On the news tonight, it was announced that 1/4 of all the homes sold in the Phoenix area this month, are homes that were foreclosed upon this year. They also reported that it will take 3 to 5 years for the real estate market to come back. Of course, this was a news report, not a report from Realtors or loan officers, etc. Here is a report we received from Fidelity National Title Company with statistics they have accumulated. We consider it a little more current and realistic. We hope this gives you some encouragement. For information or help, call Angela McDonald at (602) 369-6409.

The Bailout Plan and You

2008-10-22T11:34:59-07:00

From Foreclosure.com comes the following information about the bailout plan and the affect it could have on those who want to invest in real estate or who already have...

U.S. lawmakers have finally agreed on a $700 billion plan to bail out the struggling U.S. economy.

For months now, real estate investors have been able to take advantage of the financial opportunities created by the mortgage crisis. Of course, a strong economy is in everyone's best interest, but how will Bush's latest rebound strategy affect American investors?

It depends on the camp you're in.

Some economists believe the U.S. is headed for a serious recession — even a depression — despite the $700 billion economy rescue plan. If they're right, investors will be able to find lots of dirt-cheap properties. However, they'll also have to be able to carry them for as long as it takes to ride out the storm.

That means quick flips and overnight windfalls are unlikely.

That's not to say there's no money to be made. On the contrary, properties in many parts of the nation are so cheap right now that if you can afford even three or four hundred extra dollars a month, you'd be able to hang onto the property until the economy rebounds, which could literally mean hundreds of thousands of dollars of profit when it sells in a few years. If you're able to rent the property out, you may even see a modest income in the interim.

If the more optimistic economists are correct, we might be looking forward to a quick 180-degree economic turn. More families would keep their homes, more mortgages would be renegotiated and more people would avoid bankruptcy.

If the crisis ends soon, it means that the time of thousands of property steals could rapidly be coming to a close. A strong economy is generally associated with strong property values, and appropriately- (or over)-valued homes don't leave a lot of room for healthy investor profits.

What's the lesson?

Buy while you still can. These days property values are so low, you can get in on the real estate investment game with extremely little startup cash. If you've got that undiscovered gem, you'll be set whether the economy rebounds tomorrow or — knock on wood — 10 years from now.

Now is definitely the perfect time to roll out your investment career.

Purchase Price	$ 140,000.00
6% Max Seller Contribution	$ 8,400.00
Seller-paid Closing Costs & Pre-paids	$ 4,800.00
Total Seller Interest Paid	$ 3,600.00
Total Payment PITI @ 6.25%	$ 1,059.00
Seller-paid Interest Reduction for 6 months	$ 600.00

Buyer's Payment for the First 6 Months	$ 459.00