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Bob Elzner
814 Arion Pky, Suite 408,
San Antonio, TX 78216
Office: 210-490-3948
Cell: 210-744-3505
Email: relzner@satx.rr.com
Realtor

Rob Elzner Blog!
NOW IS THE TIME TO BUY
Posted - 04/07/2011

NOW IS THE TIME TO BUY A HOME

NEW & PROPOSED REAL ESTATE LOANS @ A GLANCE

Fewer loans from the federal lending programs popularly know as Fannie Mae and Freddie Mac.

Higher fees for Fannie Mae and Freddie Mac loans

Gradually increasing the required down payments for Fannie Mae & Freddie Mac loans to 10%.

Higher mortgage insurance payments on FHA loans

Higher credit scores required to qualify for the FHA's most favorable loan terms

Longer disclosure forms.








How a Real Estate Agent Can Help You? (First Time Home Buyer
Posted - 09/27/2010 3 comments

If you are currently in the market in San Antonio for your first home, you may be curious as to how a Real Estate Agent can help you. You are about to make an important decision for your future, a great investment of both money and time.

Buying a home for the first time can be overwhelming. Don't go it alone. Work with a professional Real Estate Agent! Here are 10 Ways a Real Estate Agent Can Help You.

A real estate professional can...

01 | Help establish a plan for a home that fits your needs, HUD or resale

02 | Help you find a good mortgage consultant to have you pre-approved

03 | Guide you through the entire process

04 | Help you research neighborhoods and houses

05 | Find the right home for you

06 | Help you gauge market values

07 | Help you write up offer and negotiate the best terms and price for you

08 | Provide you with a list of professionals (e.g., real estate attorneys, home inspectors, pest

       inspectors, etc.), and can help arrange inspections.

09 | Help you feel comfortable with the closing process and go with you to closing

10 | Follow up with you after the sale

These are just some ways that a quality real estate agent can help you in your journey towards buying your very first home. I have a wealth of experience helping first time buyers like you make sound, informed decisions. For more information or assistance with your first home purchase, please contact me.




San Antonio New Home Buyers are Happier Now
Posted - 09/17/2010 1 comments
There may be fewer new-home buyers in the San Antonio market these days, but they're generally happier with their purchases, according to a new study from J.D. Power and Associates.

Overall customer satisfaction and opinions about new-home quality rose in San Antonio last year.

Locally, the J.D. Power study ranked the Houston-based David Weekley Homes first for customer satisfaction, with a score of 892 out of 1,000.

It was followed by KB Home, Ryland Homes and Pulte Homes, which all outscored the San Antonio market average of 804.

In the new-home quality category, Fieldstone Communities ranked highest with San Antonio buyers with a score of 888.

Fieldstone was followed David Weekley Homes and Centex Homes, which also outperformed the San Antonio market average of 830.

Both the overall customer satisfaction and quality numbers rose slightly for San Antonio.

Builders included in the survey completed at least 150 homes in Bexar, Comal, Guadalupe and Kendall counties.

Nationally, J.D. Power surveyed about 16,400 new-home buyers in 17 of the largest real estate markets and found that a buyer's market has made new-home buyers a more satisfied bunch than they were at the height of the real estate boom.

"When they're building fewer homes, there is just that little bit extra time, and that can make all the difference in the world," said Dale Haines, senior director of the real estate and construction industries practice at J.D. Power.

Adapting to the downturn and the intense competition for customers has made builders focus more on quality control and customer relationships, Haines said.

"Most builders have had to trim their staff quite a bit," he said. "More often than not, the folks that are retained are the high talent folks in terms of serving customers and delivering a quality product. The same is true for trades and subcontractors. The ones that are staying in business are the top performers."

In an effort to trim costs, builders also have done things such as streamline the number of options and upgrades available to buyers, which often means a more timely delivery with fewer mistakes, Haines said.

"These are the kinds of structural and cultural changes in the industry that we see having a long-term positive effect for the construction industry," Haines said.

Home quality in the San Antonio market has improved slightly, up by three points from the previous year.

When homebuyers do report problems, the most common San Antonio complaints were landscaping issues, driveway and foundation cracks, and wall or ceiling cracks.

Customer satisfaction marketwide rose eight points from 2009.




Appliance Maintenace: Water Heaters
Posted - 08/23/2010 3 comments

Depending on a homeowner's water quality in San Antonio, a hot water heater can be expected to last eight to 12 years, says Frank Czeronka, a licensed master plumber and Mr. Rooter franchise owner. Completing the following routine maintenance schedule, however, can greatly extend the unit's lifespan.

Here's a list of maintenance tips to keep your water heater running efficiently and reliably:

  • Always adjust the thermostat to 120 degrees to avoid the risk of scalding.
  • Always maintain 2 feet of clearance around the appliance unless the manual specifically states otherwise.
  • Annually, flush the heater to remove the sediment and debris in the bottom of the tank. Hook up a garden hose to the drain valve and run until the water is clear. This also makes the unit operate more quietly.
  • Annually, test the temperature-pressure relief valve by quickly discharging it two or three times. Following the testing, keep an eye out for small leaks from the valve.
  • Every three to five years, examine the sacrificial anode rod by loosening the hex head screw and removing it. If more than six inches of the core steel wire is exposed, replace the rod for abut $20.
  • Insulate older units with a fiberglass jacket to improve efficiency, being careful to avoid contact with the flue. Newer units already are optimized for peak energy efficiency.
  • When leaving town, adjust the thermostat on gas heaters to "Vacation" setting, which maintains the pilot light without heating the water.



7 Homeowner Tax Advantages
Posted - 08/09/2010 3 comments

When you're evaluating how much home you can afford in San Antonio, make sure you factor in the tax advantages of homeownership. You can claim some tax deductions if you work from home, but be sure you're entitled to them before taking them. Image.  Owning your home not only allows you to build wealth through appreciation, but it can also reduce the amount of income tax you pay every year.

Here are seven tax benefits for homeowners.

1. Homebuyer tax credits

If you purchase your first home before April 30, 2010, you're entitled to a tax credit of up to $8,000. If you currently own a home, but sell it to purchase another home before April 30, 2010, you're eligible for a federal tax credit of up to $6,500.

2. Deductions for loan fees

Typically, you can deduct the "prepaid interest" you paid when you got your mortgage loan. That includes points, loan origination fees, and loan discount fees listed on your settlement statement, even if the seller paid those fees for you. Each time you refinance your home, you can deduct prepaid interest fees.

However, you must meet certain requirements to take the prepaid interest deductions when you purchase or refinance your home. Check with your accountant to be sure you're following the rules.

3. Property tax deductions

In the year you purchase your home, you're entitled to deduct the real estate taxes you paid at the closing table. You can continue to deduct the property taxes you pay each year.

4. The mortgage interest deduction

Every year, you can deduct the amount of interest and late charges you pay on your mortgage and home equity loans, though there are limitations. If you're required to purchase private mortgage insurance (PMI) because you made a downpayment of less than 20% on your home, you can also deduct those premiums as mortgage interest expenses.

5. Home office expenses

If you have a home office you use only for business, you may be eligible to deduct the prorated costs of your mortgage, insurance, and other expenses related to that space. The government scrutinizes home-office deductions closely. Be sure you're entitled to the deductions before claiming them.

6. The costs of selling your home

In the year you sell your home, you can deduct the costs of selling it, including real estate commissions, title insurance, legal fees, advertising, administrative costs, and inspection fees. You can also deduct decorating or repair costs you incur in the 90 days before you sell your home.

7. The gain on your home

If you lived in your home for at least two of the previous five years before you sell it, the government lets you to take up to $250,000 of profit on the sale of your home tax free. That amount is doubled for married couples. This deduction isn't available on rental or second homes.

The government also allows you to subtract from your home sale profit any amounts you spend on improvements, such as window replacement, siding, or a kitchen remodel. Those deductions are in addition to the tax credits you can receive in 2010 for making energy-saving upgrades. Money invested for routine maintenance and repairs doesn't count.



Read more: http://buyandsell.houselogic.com/articles/7-homeowner-tax-advantages/#ixzz0w7vzZhGx



Home Inspection Resource: House Detective
Posted - 07/21/2010 3 comments
Have you come across a tricky home inspection issue recently? A quick search of Barry Stone's website, "House Detective" may turn up some helpful answers. From the website:

"Known today as "America's House Detective," Barry advises readers from coast to coast about home inspection and real estate disclosure, providing honest clarity, fresh wit, consumer protection, and even-handed fairness in his responses to real estate questions."

A great educational resource for both you and prospective homeowners, "House Detective" has archives spanning all the way back to January, 2007. If you think you've heard it all when it comes to problems discovered through an inspection, think again!

Visit House Detective online:
http://www.housedetective.com




Our Heritage - 4th of July
Posted - 07/03/2010
This July 4th we celebrate our nation's birth, but in a deeper sense we also celebrate the birth of The American Dream: The promise of freedom that allows each of us to realize our own vast potential. American Dreams have been built on the bedrock of faith, freedom, hard work and sacrifice since 1776. As a proud member of the industry that has brought The American Dream of Homeownership to so many, we stand proudly beside you and shout - "Happy 234th Birthday America!"



Dealing with loan modification companies
Posted - 04/16/2010 3 comments
Reprint from the San Antonio ExpressNews-April 4th

We got a call earlier this week from a mortgage broker telling us about a phone conversation he'd had with a person calling himself a "forensic mortgage loan auditor."

The "auditor" wanted to know if the broker had clients who had been declined for loan modifications and whether he could call them up to see if he could offer them his services.

What exactly are the services this gentleman provides? And what does he charge?

The person claimed to be able to review the loan documentation originally signed by the borrower and that he could find errors made by the original lender in the disclosures.

Once he uncovers these errors in the disclosure, he said, he sues the lender for violation of mortgage lending laws.

For all this, he only wanted a sizable amount of money up front to work with this mortgage broker's clients. The mortgage broker decided not to work with him, but the incident shows the rapid changes afoot in the real estate landscape and indicates how careful consumers, brokers, lenders and others involved in the industry need to be.

Call it the bust cycle of real estate services - and it's booming with scammers, con artists and those who claim to be able to solve the world's problems but can't.

First, loan modification companies promised results upon the payment of a fee.

Loan mod businesses have proliferated despite lenders saying that they do not give preferential treatment to loan modification applications that come through this door. But because millions of consumers have applied for loan modifications but very few permanent modifications have been granted, borrowers have become discouraged - and loan modification businesses are preying on that discouragement.

Loan modification angst is understandable, given the fact that the federal Home Affordable Modification Program (HAMP) has been in place about a year but has produced uneven results, at best, in making temporary loan modifications permanent.

Some big banks have fallen woefully behind. Bank or America, which absorbed Countrywide's loan portfolio, moved to address the problem this week by starting an invitation-only program for Countrywide borrowers that would reduce the principal balance on the loans in order to bring the loan value roughly to current market value.

It's about time. Lenders have been reluctant to cut the principal on these loans, just as they have been reluctant to grant loan modifications.

Banks are feeling some angst as well. They have invested millions of dollars to create new software, train tens of thousands of people and basically start up a loan modification program that didn't exist.

But consumers have more to worry about. The banks initially said (and the OCC confirmed) that consumers' credit history would not be dinged during the trial loan modification phase. Yet, from the first day, lenders have reported the trial loan modification payments as "partial" payments, tanking borrowers' credit scores.

All this angst makes a fertile ground for mortgage modification scams. The company that called claims to be a "loan auditors." If you give them permission, they will comb through your original loan documents to find issues with the documents that supposedly will save your home from foreclosure.

Some states have put statutes on their books that say you should avoid paying anybody upfront on the promise that they can save your home from foreclosure.

While there are many legitimate companies out there, including those that rightfully audit mortgage loans, there are many community groups, state agencies and nonprofit companies that will work with borrowers for free.

For those homeowners who have seen their dreams come crashing down and have been turned down for a loan modification or have received a trial loan modification but can't get the lender to commit to a permanent loan modification, the idea of getting even with the lender might be quite appealing.

But there is one rule in real estate: Buyer beware!




Home sellers beware: Fee might be hidden
Posted - 03/30/2010 3 comments

By Jennifer Hller - Express-News

Here's a new concept in real estate: Buy a house, and when you go to sell it years later, owe the original developer or builder 1 percent of the sales price.

Freehold Capital Partners, a company started in Texas, is selling developers across the country on a plan that would attach a private transfer fee to homes, allowing developers to profit for generations.

The fee, written into neighborhood restrictions, would encumber the property for 99 years and throw 1 percent of the sale price back to the developer - or his or her estate or another investor - and Freehold each time the home changes hands.

It's an idea that's drawn the attention of some state legislatures and real estate trade organizations, which are fighting to stop the transfer fees from gaining a spot in the market.

Critics say such fees could taint entire neighborhoods, making it difficult to sell homes, and could complicate title records for decades. If the fee is not paid by the seller, a lien is placed on the property and the title becomes muddy.

And then there's the basic question: "What it comes down to is, 20 years later, why is the developer still profiting?" asked Jeremy Yohe, director of communications with the American Land Title Association, the national association for title companies.

Freehold, which started in Austin, compares the transfer fees to mineral rights and calls land development a creative process on par with writing a book.

"Just like authors who write books and musicians who write songs that will be enjoyed for generations to come, those who improve property are also engaged in the creative process, and the economics of the transaction should reflect that reality," a Freehold brochure says.

Freehold says it has signed up developers, including many across Texas, who hold more than $500 billion in residential and commercial property - but it will not name any of them.

Because courthouse property records are filed by owner name, it's difficult to track the company's activities in Texas and know which developers have signed on to the program.

Title companies that have been watching Freehold say it's possible that a homeowner could have a transfer fee in a neighborhood covenant and not realize it until he or she resells a home. Even if a transfer fee were to turn up in a title search, few people read all the neighborhood covenants and restrictions before signing.

A spokesman for Freehold says the company favors clearly disclosing private transfer fees in a standalone document. But in Texas, there's no legal requirement to do so. And under the standard real estate contract in Texas, home buyers agree to accept any restrictions that are common to the subdivision.

Freehold founder Joe Alderman refused requests for an interview, and spokesman Curtis Campbell would only answer questions by e-mail.

In response to the company's sales pitch, Texas lawmakers have passed restrictions on private transfer fees, but they are not banned. Some other states have banned such fees outright.

The American Land Title Association and the National Association of Realtors wrote model legislation banning private transfer fees that members can present to legislators. And last week, the trade groups asked the U.S. Housing and Urban Development Department to clarify that it prohibits the use of private transfer fees on government-insured mortgages.

"It's a limit on property. If you don't pay the fee, the property doesn't transfer, and you don't have clear title," said Gerry Allen, community outreach manager with the National Association of Realtors. "There's nothing to say that anybody who owns a home can't attach this to their property. You could have a whole chain of these."

Legislative effort

Florida, Oregon, Missouri and Kansas have banned transfer fees in recent years. This month, Utah legislators banned them, and a bill to do the same is pending in Louisiana.

Texas law restricts private transfer fees but says some groups can collect them, including charities, property owner associations or governmental entities.

Freehold has interpreted this to mean that if a slice of the transfer fee - 5 percent - goes to charity, the developer and Freehold can collect the rest.

"This industry felt like they could create a nonprofit and get around it," said Trent Thomas, chief of staff for state Rep. Drew Darby, R-San Angelo. Darby owns a title company and has sponsored legislation to try to further restrict private transfer fees.

After the California Association of Realtors learned about transfer fees, the trade group took the issue to state lawmakers in 2007.

"I could put one in my deed that would require every future (seller) to pay a fee to me personally," said Alex Creel, senior vice president of government affairs for the group. "We used to joke that you could create a college fund."

But developers aligned with environmental groups and affordable housing advocates, promising that a percentage of the fee would help set aside open space or create affordable housing. It proved an unbeatable coalition, and CAR settled for a law that requires clear disclosure of transfer fees.

"We had 210,000 members at the time, we have a big PAC, lots of money, lots of resources, four lobbyists. We have a very sophisticated operation. We couldn't beat it," Creel said. "We couldn't believe it. It just seemed like such a bad idea."

The largest private transfer fee Creel has seen was 1.75 percent in a community where homes sell in the range of $800,000 to the low millions - meaning homeowners will have to pay a fee of around $17,500 when they sell their homes.

Patent pending?

Freehold was based in Austin before moving its headquarters to New York this year to be at the "heart of the financial markets."

While the company says it has a patent pending, the U.S. Patent and Trademark Office denied the patent last year and lists the application as "abandoned."

Company spokesman Campbell said by e-mail that Freehold has filed a continuation patent to pick up the claims of the first patent.

The company name makes reference to English law - "freehold" essentially means outright property ownership.

A few years ago, a predecessor company called Freehold Licensing tried to sell individual homeowners, as well as builders and developers, on the idea of transfer fees.

"Maybe you planted a tree, added on a room or rehabbed a home," the Web site said in 2007. "Fifty years from now, when a family is enjoying the property that you improved, and making a profit by selling the property you improved, why shouldn't you benefit? Of course you should."

Founder Alderman put a transfer fee on his own nine-bedroom home in Round Rock in 2005, according to public records. He took it off in 2009 when the home was listed for sale.

An e-mail from Campbell said the timing was coincidental. But, he said, "one of the things we like about our program, and which resonates well with developers, is that they can terminate the instrument if they decide to do so."

Today, Freehold markets to large landholders - not individuals - and says it will create a secondary market for selling the rights to transfer fees.

The idea is that developers would get money upfront from investors, who would get a 99-year income stream.

The pitch

The Freehold pitch sounds good to many in the industry who need money now to finance a project.

"It's a phenomenal plan," said Greg Blume, a Houston-based developer who plans to use transfer fees in the Savannah Plantation development in Brazoria County. "It's just one more way of trying to finance and fund any type of real estate project."

Selling transfer fee rights to investors would mean a developer could add more amenities to a neighborhood or sell for less than the competition - or both. "It just makes sense," Blume said. "You can do more for the project and have less debt."

Blume said developers in all the state's major markets are signing up with Freehold. There's no cost to sign up, but because there's no secondary market, no one has seen any money.

San Antonio subdivision developer Norman Dugas talked to Freehold representatives a few years ago. But he decided such fees would create too much of a marketing hurdle.

"The guy across the street, the competition, is going to say, 'Those guys are sticking you with this transfer fee,'" Dugas said. "I just don't quite think it's going to go over. For the fee to work, it would have to be so desirable or attractive a property that people just had to get in there."




Legislation to Remove Home Buyer Tax Credit Marriage Penalty
Posted - 03/23/2010 2 comments

RISMEDIA, March 22, 2010-The National Association of Exclusive Buyer Agents (NAEBA) expressed support for legislation recently introduced by Representative Eliot Engel (D-NY17) that would amend the Internal Revenue Code of 1986 eliminating the so called "marriage penalty" from the Home Buyer Tax Credit.

The current guidelines require both spouses to have the same exact ownership history in order to claim the tax credit, a standard that does not apply to unmarried couples, effectively penalizing married home buyers.

"We applaud Representative Engel's leadership on this issue and fully support this legislation that will make the current home buyer tax credit section of the Internal Revenue Code of 1986 more equitable for all potential home buyers," said Benjamin Clark, 2010 President of NAEBA.

The Worker, Homeownership, and Business Assistance Act of 2009 provides a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence and a tax credit of up to $6,500 for repeat home buyers who have owned a home for five consecutive years out of the prior eight years. The tax credit is available for eligible purchasers who are in contract by April 30, 2010 and close by June 30, 2010.

H.R. 4701, introduced by Representative Eliot Engel (D-NY17), would provide relief to certain married couples who would otherwise be ineligible for the first-time home buyer credit. The bill provides that married individuals filing a joint return would qualify for the appropriate credit even where one spouse is ineligible. For example, if one spouse is a first-time home buyer and the other is ineligible, the couple would be treated as first-time home buyers. However, such a couple could qualify for up to $4,000 as opposed to the full $8,000 tax credit. The bill has recently been Introduced in the House of Representatives.

For more information, visit www.naeba.org.




Your CLUE Insurance Report Matters
Posted - 02/24/2010 3 comments

A tree falls on the roof of your house. You file an insurance claim with your agent, collect a settlement from the insurer, and fix your roof. End of story, right? Not quite. Every claim you make on your homeowners insurance is recorded in a widely used insurance industry database called CLUE, short for Comprehensive Loss Underwriting Exchange.

Almost all insurance companies use CLUE to check on the claims history of prospective policyholders. The CLUE insurance report also includes claims made on your home before you even bought it. A-PLUS is another company that maintains a loss-history database. What's inside these reports can affect your insurance premiums, or even prevent you from getting coverage.

Your claims history lives on in CLUE

The CLUE Personal Property report, which pertains to homeowners insurance, is divided into two parts: your personal record of claims ("Claims for the Subject") and the claims on your home ("Claims History for Risk"). The number of claims in either section will affect whether you can get insurance for your home, how much coverage you can get, and how much you'll pay in premiums. If you're turned down for homeowners insurance because of information in your CLUE report, your insurance company is required to let you know why you were rejected.

Since the database is used by most insurance companies, your claims history follows you from one insurer to another. Actual claims, as opposed to inquiries, remain in the CLUE database for seven years from the date you filed them. Both ChoicePoint, the owner of CLUE, and A-PLUS advise insurance carriers not to report loss information just because you called to ask a question about whether your policy will cover a particular loss. Individual insurance companies may keep a record of inquires, though.

How insurers use CLUE

Insurance companies rely on CLUE reports because statistics show that if you've filed a claim in the past, you're more likely to file one in the future, says Dick Luedke, a spokesperson for State Farm Insurance. The amount of a claim is less important than how often you've filed, he says. "We aren't trying to make up for past losses, but to predict the risk of future claims."

Each insurance company has its own formula for calculating how much a claim will affect your premium, according to the Insurance Information Institute, a trade group that provides information to consumers. Suffice it to say the fewer the claims the less you'll likely be charged. State Farm gives a 5% discount if you haven't filed a claim in the last five years, says Luedke. That's $40 off an average annual premium of $804. Ask your agent if a claim-free discount is available.

Claims aren't all that count

Knowing what's on your CLUE report will give you a sense of whether you'll need to pay extra for homeowners insurance, or even if you run the risk of rejection. Unfortunately, even a pristine report doesn't mean you can be sure of getting homeowners insurance at a great price. That's because the claims on your CLUE report aren't the only things that affect your overall insurance risk.

Insurance companies also consider your credit score, which is based on such things as how much debt you carry, whether you pay your bills on time, and so forth. According to the Insurance Information Institute, studies show that how people manage their finances is a good indicator of whether they'll file an insurance claim. The more likely you are to file a claim, the bigger risk you are to the insurance company. And more risk means a higher premium or denial of coverage. Other factors insurers consider include the location of your home and its type of construction.

How to review your CLUE report

If you do decide to check you CLUE Personal Property report, it's a relatively easy process. Under federal law, you get one free CLUE report a year. You can contact ChoicePoint by telephone at 800-456-6004. You can also register online to gain access to an electronic copy of your report for 30 days. Request a form to receive a Property Loss report from A-PLUS by calling 800-709-8842. There's a charge of $9 to have the report mailed to you, according to the company's website.

Your CLUE report will have:

  • Your name, home address, birth date, and Social Security number;
  • The number assigned to the report;
  • The name of your insurance company;
  • The type and number of the insurance policy;
  • The type of loss-fire, water, etc.-for each claim and the claim number;
  • The date of the loss and the amount of each claim;
  • The status of each claim: closed, pending, etc.

The report also tells you how to dispute any errors you find. Because risk calculations vary by insurance company, it's impossible to say exactly how a claim on your CLUE report will affect your premium. That makes it tough to decide just how much value checking your CLUE yields. Still, taking less than an hour once a year to order and review your report could pay off, especially if you find an error.

Mariwyn Evans has spent 25 years writing about commercial and residential real estate. She's the author of several books, including "Opportunities in Real Estate Careers," as well as too many magazine articles to count.




BUYING NOW SAVES MONEY
Posted - 01/27/2010 3 comments

Those Who Wait Will Pay Thousands More This Spring

Waiting a few extra days or weeks to purchase a home this spring could cost buyers thousands of extra dollars as the office of Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA).

Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board's mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.

Here are a few reasons why:

On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.

Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these "seller concessions" can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.

There is only one way to avoid being affected by all of these costly changes that lie ahead - submit all FHA mortgage applications by the last week of March.

If I can answer any questions you may have about how these changes could impact you, call or email me.




Revised Investor Home Buying
Posted - 01/22/2010 3 comments

HUD Secretary Shaun Donovan has announced a temporary policy that will expand access to Federal Housing Administration (FHA) mortgage insurance for the purchase of foreclosed homes. Donovan says the move will accelerate the sale of REO properties to turn vacant homes into occupied residences and help bring stability to home values in communities where foreclosure activity is high.

FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. But in today's foreclosure-ravaged marketplace, FHA research has shown that acquiring, rehabilitating, and reselling these properties often takes less than 90 days.

FHA Commissioner David H. Stevens said prohibiting the use of FHA mortgage insurance for a resale within 90 days of acquisition adversely prevents FHA borrowers - particularly first-time buyers who often opt for government-backed financing - from buying affordable, distressed properties. Sellers of such homes are usually unwilling to consider contracts from potential FHA buyers because they will incur holding costs and the risk of vandalism by allowing a property to sit vacant over the 90-day period.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales without a mandated waiting period. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities, HUD explained in a statement.

"As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers," said Donovan. "FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization."

Donovan stressed that the change in policy is temporary and will include strict conditions and guidelines to assure that predatory practices are not exploited.

The waiver will take effect on February 1, 2010 and is effective for one year, unless extended or withdrawn by the FHA commissioner. To protect FHA borrowers against predatory practices of "flipping," where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following conditions:

. All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

. In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.

. The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

The temporary policy waiver is one of several steps HUD is taking to alleviate property vacancies and community blight. As DSNews.com reported last week, the federal agency has awarded another $2 billion in Neighborhood Stabilization Program (NSP) grants to local communities and nonprofit housing developers across the country to combat the effects of abandoned homes by turning foreclosed properties into affordable housing projects




First Time Home Buyer Expanded Credit
Posted - 12/13/2009 3 comments

Expanded First-Time Home Buyer Tax Credit Becomes Law

By Luke Mullins

In the hopes of sustaining the real estate market's recent momentum, Uncle Sam has made more than two-thirds of current homeowners and nearly all first-time buyers eligible for thousands of dollars in tax perks when they purchase a house. President Obama signed the Worker, Homeownership, and Business Assistance Act of 2009 into law Friday, a day after the House of Representatives approved it by a 403-to-12 vote. The legislation includes language that significantly expands the popular first-time home buyer tax credit that was enacted in February. The development represents a big victory for the real estate and home building industries, which had to overcome concerns about the measure's costs while rallying support for its enactment. Here are five things you need to know about the development:

1. For first-time home buyers: While the value of the credit remains as high as $8,000, the new law pushes back the deadline by which qualified first-time home buyers must make their transaction in order to claim it. (The legislation defines "first-time home buyers" as anyone who has not owned a principal residence in the three years prior to making the purchase.) Under the previous law that went into effect in February, buyers needed to close the transaction by Nov. 30. However, under the terms of the new law, home buyers must have a signed sales contract before May 1, 2010, but they have until the end of June to actually close the transaction. At the same time, the new law raises the annual income limits from $75,000 to $125,000 for singles and from $150,000 to $225,000 for married couples. The changes make nearly all first-time home buyers eligible for the credit, according to Goldman Sachs economist Alec Phillips.

2. For current home owners: In addition, the new law makes most current homeowners eligible for a tax credit of up to $6,500 when they purchase their next primary residence. Under the terms of the legislation, current homeowners must have lived in their home for five consecutive years over the previous eight to be eligible. Qualified home buyers can obtain the credit on homes purchased between Nov. 7 and the end of April 2010. That means they need a signed sales contract on a home before May 1, 2010, but they have until the end of June to close the sale. The income limits for current homeowners are the same as those for first-time home buyers. About 70 percent of current homeowners are now eligible for the credit, according to Phillips.

3. Additional specs: The credit can only be claimed on primary residences purchased for less than $800,000. And as long as they use the property as their primary residence for three or more years after the purchase, buyers don't have to pay it back. Furthermore, buyers can claim the credit on their 2009 taxes, even if the purchase was made in 2010 by filing an amended return.

4. Fighting fraud: The first-time home buyer tax credit became the subject of controversy in late October, when a Treasury Department inspector general told Congress that his office had identified hundreds of millions of dollars in questionable claims. The suspicious cases included taxpayers who claimed the first-time home buyer credit even though it appeared that they had owned residential property within the previous three years, as well as taxpayers who claimed the credit before actually purchasing the home. Hundreds of taxpayers younger than 18 years old-and at least one who was just four-also claimed the credit. And by expanding the initiative to include more than two-thirds of current homeowners, the potential for incorrect or fraudulent claims has only increased.

To that end, the new law includes measures designed to limit its abuse. Anyone claiming the credit must now provide documentation-such as a copy of their HUD-1 Settlement Statement-to prove that the sale has closed. In addition, it also bans anyone younger than 18 years old from claiming the credit.

5. Price tag: First-time home buyer tax credits have cost the government around $10 billion in lost revenue through Aug. 22. The expanded credit program is projected to cost an additional $10.8 billion or so. Amid mounting concern over massive government spending-the federal budget deficit for fiscal year 2009 was $1.4 trillion-some economists have questioned whether additional home buyer subsidies are really the best use of taxpayer cash. The financial blog Calculated Risk, for example, estimates that the February first-time home buyer tax credit cost the government roughly $43,000 for every additional home sale it generated.

Economists at Goldman Sachs have estimated that the February first-time home buyer tax credit would trigger an additional 200,000 sales by the end of the year. Mark Zandi, the chief economist at Moody's Economy.com, puts the figure closer to 400,000 by the end of November. Nevertheless, Goldman's Phillips argues that the new law won't have a game-changing impact on the housing market. That's because only 14 percent of first-time home buyers who had been ineligible for the credit can now participate thanks to the higher income limits. Meanwhile, the credit's expansion to current homeowners may increase sales activity. "However, these sales would not result in a reduction of the inventory on the market, since every buyer taking advantage of the move-up credit would necessarily be a seller (of their existing principal residence)," Phillips said in a report. Nevertheless, the expanded credit could boost home prices by about 1 percent, Phillips says




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