Mardi Boettcher's Blog

Fannie Mae has announced a new Deed for Lease™ program.  The new program allows borrowers to voluntarily transfer their property back to the lender and then lease back the house at market rate.  The lease period is for up to 12 months, with month-to-month contract extensions after that period.  The program is designed for borrowers who do not qualify for or have not been able to obtain other loan-workout solutions, such as loan modifications.  

To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance also may be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31 percent of their gross income.

Homeowners thinking of participating in the Deed for Lease™ program should visit Fannie Mae’s loan look-up Web site at http://loanlookup.fanniemae.com/loanlookup/ to see whether their loan is owned or guaranteed by Fannie.  Mortgages backed by the Federal Housing Administration and other government agencies are not eligible for the Deed for Lease ™ program.

 To read the full story, please click here.

Many of you have had questions about the new Tax Credit Laws, so I thought it would be helpful to post these links to two excellent Q & A documents for you from http://www.federalhousingtaxcredit.com/

Be sure you check with your tax professional before making any final decisions.

Enjoy!

Click here for a list of frequently asked questions.

Click here for information specifically about the eligibility requirements for existing homeowners.

The Federal Housing Administration has set new standards for housing counselors who want to work with seniors taking out FHA-insured reverse mortgages. To provide these services, counselors have to pass an AARP-approved examination and apply to be on FHA’s new roster for Home Equity Conversion Mortgage counselors. “Only those counselors on the HECM roster can provide HECM counseling to potential HECM borrowers,” according to FHA mortgagee letter 2009-47.  FHA created the HECM roster in response to criticism that some counseling sessions are pro forma – conducted by counselors that are not knowledgeable about the product. The Government Accountability Office identified problems and Congress directed FHA to take corrective action. Darryl Hicks, a spokesman for the National Reverse Mortgage Lenders Association, noted that the new standards and roster have been a work in progress for the past two years. “We think it is great for the industry because it will establish a higher bar for counseling,” Mr. Hicks said.

This is good news because reverse mortgages were getting a bad reputation due to the lack of good counseling.  Reverse mortgages are not for everyone, but I have clients who have done them and are extremely happy.  If you would like a referral to a trustworthy reverse mortgage consultant, just let me know.  I’m always delighted to help.

Here is the great news we’ve all been hoping for!  Following the Senate’s favorable vote yesterday, the U.S. House of Representatives just voted 403 to 12 to extend the homebuyer tax credit, expanding the parameters to include existing homeowners and not just first-time buyers.  The California Association of Realtors (C.A.R) and the National Association of Realtors (N.A.R.) have worked for months urging Congress and the Senate to extend and expand this crucial piece of legislation.  We expect President Obama to sign the legislation in short order.

As it now stands, the federal tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline.  First-time homebuyers will continue to be eligible for a tax credit of up to $8,000, while existing homeowners will be eligible for a reduced credit of up to $6,500.  To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years.  The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively.  The purchase price of the home is capped at $800,000 in both instances.

Under additional provisions included in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns.  The legislation maintains the provision that homebuyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

Nationwide, more than 1.4 million first-time homebuyers were given the opportunity to become homeowners as a result of the Federal Tax Credit for First-time Home Buyers.  We expect that number to increase dramatically in the months ahead with this new legislation in place.  Thank you to my fellow members of C.A.R. and N.A.R.  We called, wrote, and e-mailed our congressional representatives and voiced our support for the homebuyer tax credit.  Our voices were heard and today’s vote is a direct result of our actions and involvement.

I have heard that U.S. Senate leaders might have moved closer to an agreement about replacing the expiring $8,000 tax credit for first-time homebuyers with a smaller one that expands access to more borrowers.  The existing credit is due to end Nov. 30.

 The proposed legislation would reduce the size of the tax credit to 10 percent of the sale’s price and cap it $7,290.  This tax credit would be available on home purchases that would go into contract by April 30th, and borrowers would have an additional 60 days to close the sale.

 The new agreement, if passed, would expand the credit to “step-up” borrowers who have lived in their current home for at least five years.  The income eligibility for first-time homebuyers would remain the same at $75,000 for individuals and $150,000 for couples.  The income criteria for step-up buyers would be $125,000 for individuals and $250,000 for couples.  The credit would be limited to homes costing $800,000 or less.

I think this is a great plan and believe it will relieve the current gridlock in the middle price range market.  Keep your fingers crossed!

At the time, my clients sign their documents, I explain that their loan may very well be sold.  In fact, that is why we are having such challenges with underwriters right now.  In order to sell the loan, they have to be sure that all the “t”s are crossed and the “i”s dotted.  In most cases this is a common practice and not a problem, but occasionally there are issues.  Here is an excellent article from The California Association of Realtors (CAR) which explains all the details:

Approximately half of all mortgage loans are sold from one lender to another, often because the original lender is not equipped to collect payments, manage escrow accounts, pay taxes and insurance, respond to questions, and prepare payoff statements when the home is sold or refinanced.  Some borrowers may receive letters in the mail alerting them of the sale of their loan a few days after closing, while others may not receive a notice for years.

In the mortgage-industry, this is called a “transfer of servicing,” and is a common practice.  Borrowers should not be concerned about these changes, as the majority of lenders transfer their servicing rights to loans.  Generally, the selling of a mortgage loan from one lender to another is a smooth transition and does not impact the borrower.  Every so often though, there is a misstep by either the loan buyer or the loan seller.

Under the National Affordable Housing Act, when a mortgage loan is sold, the borrower is required to receive a “goodbye” letter from their current servicers at least 15 days before their next payment is due.  The letter must state the name, address, and telephone number of the new servicer; the date the old company will stop collecting payments; and the date the new company will start accepting them.  Under the Helping Families Save Their Homes Act, signed by President Obama on May 20, the new owner of the loan—which may or may not be the servicer—also must notify the borrower of the transfer within 30 days, known as the “hello” letter.

The “hello” letter should outline the same information as the “goodbye” letter sent from the former loan servicing company.  Borrowers should be cautious if they receive a “hello” letter without receiving a “goodbye” letter, as they may be the intended victim of a scam by someone who is hoping to unlawfully receive the monthly mortgage payments.  Concerned borrowers should contact their current loan servicer to verify if their loan has been transferred.  If it hasn’t, authorities should be notified immediately.

In most cases, a mortgage payment sent to the old servicer automatically will be forwarded to the new servicer for a brief amount of time, typically 60 days.  However, if payments are not sent to the correct servicer, they could become lost, and the homeowner may incur late fees.

People are always asking me how the market is doing, and for quite some time, I’ve been saying that I think we have hit bottom and that the market is headed back up.  The news media (who unwittingly control the economy) have reported positive gains, but often the national statistics do not apply to our local area.  Here are the latest and greatest stats from my California Association and it is truly good news. 

It’s also interesting to note that the Tax Credit has fueled the rally with a whopping 40% of buyers who said they wouldn’t have bought without it.  There is talk of extending the deadline beyond the Dec 1^st deadline, but with the national debt skyrocketing, I think it may not happen.  If you want to take advantage of it, you had better be in contract by October 15^th to ensure you can close in time.  Loan underwriters are slammed and approvals are taking up to an extra two weeks.

I’ve highlighted the main points for you, in case you are in a hurry.

Home sales increased 12 percent in July in California compared with the same period a year ago, while the median price of an existing home declined 19.6 percent, C.A.R. reported yesterday.  “The federal tax credit for first-time buyers played a critical role in the purchase decision of many buyers,” said C.A.R. President James Liptak.  “Nearly 40 percent of first-time buyers said they would not have purchased a home if the tax credit was not offered.  Because the tax credit has helped so many first-time buyers become homeowners, it is critical that Congress extends the credit beyond the Dec. 1 deadline, and includes all buyers, not just first-timers.”

Closed escrow sales of existing, single-family detached homes in California totaled 553,910 in July at a seasonally adjusted annualized rate.  Statewide home resale activity increased 12 percent from the revised 494,390 sales pace recorded in July 2008.  Sales in July 2009 increased 8.1 percent compared with the previous month.  The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the July pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during July 2009 was $285,480, a 19.6 percent decrease from the revised $355,000 median for July 2008, C.A.R. reported.  The July 2009 median price rose 3.9 percent compared with June’s $274,740 median price.

“July marked the fifth consecutive month of month-to-month increases in the median price,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “This was the largest increase on record for the month of July based on statistics dating back to 1979.  The yearly decline in July also was the smallest in the past 19 months.”

The legal department of the California Association of Realtors had infomed me that, starting July 30, 2009, if the APR on an initial Good Faith Estimate is no longer accurate (within a 0.125% range) at close of escrow, a lender must generally provide a residential borrower with a new disclosure and a three-day right to rescind before consummating the loan.  This new rule has the has the potential of delaying funding of the loan and close of escrow if a lender does not comply in a timely manner.  This new requirement is part of the Mortgage Disclosure Improvement Act (MDIA) implementing new loan procedures to protect borrowers and foster greater transparency in mortgage lending.  

Get Up To $8000 in Free Money From The Federal Government To Buy A Home In 2009

You get 10% of the value of the home you purchase, up to a maximum of $8000

In order to claim your $8000 – you must:

1. Have not owned a home in the last 3 years.

2. Make less than $75,000 as a single tax filer — or less than

$150,000 as a couple.

3. Buy a home before November 30th, 2009.

To get a FREE Tax Credit Guide, just call 1-888-275-5165 x 302 for a

24 hr. Recorded Message — or go to www.TaxCreditGuide.com