When you buy an owner occupied home that is owned by Fannie Mae and the HomePath loan program is used, you will have the option to receive 3.5% credit toward closing costs or your choice of appliances.  The sale must close by May 1st, 2010 to qualify.

This is part of the ongoing effort to help stabilize the market.  Perhaps it’s also due to the bad press Fannie Mae is getting, about being in bad shape.  Maybe they really need to clear off some inventory.  In the end though, who cares?  If it helps the buyer and Fannie Mae, I’m happy.

Matt Steinmetz

I heard the Tavern on the Green in Central Park is or has just closed. Here is a picture I took while there last September. Many people remember this place by the manicured animal shapes like this one.

The Fed says that the Fed’s Mortgage Backed Securities purchase program (see previous post), will end March 31st.  Overall this news was taken bad as rates got a little worse yesterday.

Also in a previous post, I commented on FHA changes.  Well it looks like the date for the increase in up front mortgage insurance (UFMIP) is April 5th.  The increase, just days after the Fed stops buying MBS’s, takes the UFMIP from 1.75% of the loan amount to 2.25%.  If you look at a $300,000 purchase price, and use FHA with the minimum 3.5% down, after April 5th your UFMIP will be $1,582 higher!  This is can be a problem for a lot of people.  I know, because I see how people struggle to save just enough for a down payment and closing costs.

It is true that UFMIP can be, and usually is financed into the loan amount, how ever that means higher payments.  While the impact to payments is low, those buyers who are already on the border for qualifying will be affected.

At some point the cap for seller credits will come into play as well.  Currently a seller can credit 6%, but FHA will shrink that to 3% sometime soon.

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Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine

2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
Fax 925-940-9639

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In an effort to have purchasers put more skin in the game, many ideas were discussed, including raising the down payment minimum from 3.5% to 5 %.  It would appear the insurance premium was the victor instead…  For now!

Other changes include limiting seller concessions, like paying closing costs to 3% instead of the current 6%.  Once again requiring more skin in the game from the buyer.

The reason for these changes?  FHA has become so popular over the last year that it insures thousands of loans per day.  With that it’s foreclosure rate has increased, which means its insurance payouts have also increased.  Not to mention that there are minimum requirements for reserves as compared to the amount of insurance FHA issues.  The FHA has been said to have fallen below these requirements and needs cash.

In addition, FHA will attempt to hold lenders more accountable by reporting each lenders FHA performance rating to the public.  The belief is that a borrower will want to go through a lender with a positive rating.

These changes will leave many borrowers out of the market, as they will not be able to save for the additional insurance premium and additional 3% in closing costs, that can now be paid by the seller.

Whether you believe this is a bad idea, since some would be home buyers will be left out, or a good idea, as it keeps FHA in a good position for future use, this is the reality of changes to come.

I did not see a specific date as of yet, but read “this summer” in one article.

Click here to go to the FHA site and read the press release.

Thank you,
Matt Steinmetz

Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-A2 Salvio St.
Concord, CA 94520

Phone 925-671-9501 x119
msteinmetz@envoymtg.com

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
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From what I’ve been reading, the experts believe that foreclosures and short sales will continue to drag house values down by about 5-10% in 2010.  Some areas have begun to creep up in values due to low supply and high demand, though the belief is that supply will be on the rise this year.

  Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

The fed planned to spend 1.25 trillion dollars buying mortgage backed securities, which are really just bundles of loans, like yours, that are sold on a secondary market, like stocks and bonds.  They have spent over 1 trillion and with only 12 weeks remaining will be winding down this program.  Why should you care?

Since the secondary market is like any other and responds to supply and demand, when there is less demand, investors will need to be enticed to buy.  How do you do that?  With larger returns.  In this case returns are created by the interest rates, so you can see that higher rates will be needed.  This is of course passed on to the consumer, meaning home loan rates are expected to go up. 

If you or anyone you know has been on the fence, to buy or refinance, time is running out.  We may or may not see one more dip before the 12 weeks is up, but rest assured that unless the Fed extends the program, rates will go up.

Couple higher rates with foreclosures and short sales, we can expect a slight loss in the (small) gains we saw late last year in housing prices.  As rates go up the buyers lose purchasing power and are less likely to buy higher priced homes. 

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

For example, let’s say a lender put a $400 fee for an appraisal and later that fee is really $450.  Basically the lender is stuck paying the difference as they had only disclosed $400.  Adding up the amount of fees that this can happen to means the lender could potentially be responsible for thousands.  I don’t need to tell you that lenders will not want to do this and therefore will be padding fees from the start.  Expect this as a new norm, at least until several loans are under the belt and lenders get used to the changes.

All lenders are undergoing training on this form and I have as well, with a 2nd session next week.  Though the above is already a conclusion taken by most lenders.  Leave it to the Government to take a 1 page form and turn it into a 3 page form, in order to make it easier, but only to make it more convoluted.  *sense the sarcasm*

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
msteinmetz@envoymtg.com

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Apply for a loan online

 FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Tax Credit Versus Tax Deduction

It’s important to remember that the tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!

Higher Income Caps

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to  $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

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Remember, the new tax credit program includes a number of details and qualifications. For more information or answers to specific questions, please call or email me today.

In addition, you may be able to benefit from additional housing related provisions, including the following:

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Tax Incentives to Spur Energy Savings and Green Jobs

This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings

This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing

This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance

This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

As always, if you have any questions about your specific situation or would like to discuss how you may benefit from this program, please call or email me. I’ll be happy to sit down with you.

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-A2 Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages

For 1st time buyer’s or those who have not owned a home in the last 3 years, the tax credit is $4,000 for singles and $8,000 for couples, with income restrictions maxing out at $125,000 for singles and $225,000 for couples.

Current homeowners, who have owned a home for 5 of the previous 8 years, can now also get a credit of $3,250 for singles and $6,500 for couples with the same income restrictions. 

Purchase agreements must be signed by 4/30/2010 and close by 6/30/2010

Those in the armed forces, stationed outside of the U.S. on official duty for 90 days during the period of 1/1/2009 – 5/1/2010 have an extended time frame for signed purchase agreements to 5/1/2011 and closing to 6/1/2011.
 

Thank you,
Matt Steinmetz
Envoy Mortgage- Voted Top 25 Tech Savvy Lenders by Mortgage Technology Magazine
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119

Visit my blog for my most recent mortgage related update.

Learn When to Pay Points
Information about the $8,000 First Time Buyer Tax Credit
Information about the $10,000 New Home Tax Credit in CA
Apply for a loan online

FHA* VA * CALPERS * CALVET * FHA 203K Rehabilitation Loans * Energy Efficient Mortgages