HOUSING RESCUE PROGRAM DETAILS RELEASED

March 6, 2009

– President Obama earlier this week unveiled details of his home loan aid plan designed to help millions of Americans who are at risk of losing their homes.

Administration officials say the Homeowner Affordability and Stability Plan could help nearly nine million households restructure or refinance their mortgages to avoid foreclosure.

The plan includes a $75 billion homeowner stability initiative that targets at-risk homeowners, many of whom have adjustable-rate mortgages that have increased house payments to as much as 50 percent of their monthly incomes.

This initiative offers cash incentives to lenders and borrowers for working out loan modification agreements that result in lower monthly mortgage payments and allow homeowners to keep their homes. Any bank that receives federal money under the Treasury Department’s $700 billion financial rescue program will be required to take part.

Another component of the plan is intended to help as many as five million responsible homeowners who took out conforming loans owned or guaranteed by Fannie Mae or Freddie Mac to refinance through those institutions.

To finance that effort, the Treasury is providing the two companies with up to $200 billion in capital on top of $200 billion that it had already pledged to them.

“This is not going to save every person’s home,” said White House spokesman Robert Gibbs. “The plan is not intended to . . . augment somebody’s loan for a house that they couldn’t afford under any economic situation, good or bad.”

According to the latest data from the Mortgage Bankers Association, nearly 12 percent of homeowners — a record 5.4 million — were at least one month late or in foreclosure at the end of last year.

New York Times/Associated Press


The American Recovery and Reinvestment Act of 2009, H.R. 1 – How does it affect you, the home buyer?

February 12, 2009

The Economic Stimulus Bill (The American Recovery and Reinvestment Act of 2009, H.R. 1.) has been reconciled by the House and Senate. The details of the legislation have not been finalized but we expect the legislation to include a number of important housing provisions, including the remedies for the housing crisis that NAR prescribed at the annual meeting in Orlando, Florida.

  • Homebuyer Tax Credit – a $7500 tax credit that will be available for qualified purchase of a principal residence by a first time homebuyer between January 1, 2009 and September 1, 2009.  The credit does not require repayment. Individuals who purchase in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit, as well.
  • FHA, Fannie and Freddie Loan Limits – Revised loan limits for FHA, Freddie Mac, and Fannie Mae.  Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the HUD Secretary.
  • Foreclosure Mitigation & Neighborhood Stabilization – Funding for states and local communities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized.

These elements of the American Recovery and Reinvestment Act of 2009 are the pillars of the NAR Housing Stimulus Plan presented to the 111th Congress.  Additionally we continue to work closely with the Department of Treasury and Secretary Timothy Geithner to implement a mortgage buy-down program. NAR also recommended that the Treasury Department expand the Term Asset-Backed Loan Facility (TALF) to include commercial mortgage-backed securities as eligible collateral.  The Treasury has approved this recommendation and this will encourage investment in the commercial real estate market.

The Economic Stimulus Bill (The American Recovery and Reinvestment Act of 2009, H.R. 1)
Additional Housing and Other Provisions of Interest to NAR

  • Rural Housing Service – Increased funding for the Rural Housing Service direct and guaranteed loan programs.
  • Low Income Housing Grants – Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
  • Tax Exempt Housing Bonds – Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT).  In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
  • Energy Efficient Housing – Grants for energy retrofits for federally assisted housing (section 8), funding for Energy Efficiency & Conservation Block Grants to states, and Increases in the residential tax credit through 2010 for certain energy efficient upgrades.
  • Transportation –   Spending for upgrades and repairs of road, bridges and transit facilities.  
  • Broadband Deployment – Grants to make broadband available in unserved communities

As the leading advocate for homeowners and the real estate industry, the National Association of REALTORS will continue to address the issues facing Americans who are trying to purchase a new home, protect their current home or preserve investment opportunities in residential and commercial properties.

NAR recognizes the efforts of the members of Congress and the Senate who understand that without a housing recovery, an overall economic recovery is impossible.

 


Real Estate prices across US – Great mapping tool

November 20, 2008

I just got this today and thought it was fascinating, and I think you will too.

You can move your mouse across most cities in the USA and by clicking on the little house you can then see the median price and the drop/gain in prices.  As you check on the median prices and the average increase or decline from the previous year, you will note that the Houston Market is very strong compared to the majority of the nation. Unfortunately, the Katy/West Houston area is not defined on this map but I will be happy to share that we have been in the # 1 and # 2 position for hottest markets in Houston for the majority of 2007 and 2008. Katy is still very strong and a wonderful place to purchase property and to raise a family.

To see the map click HERE.

As reported on my blog and in my newsletter, houses are being gobbled up now in some markets. In fact, many buyers are purchasing properties in depressed areas, sitting on them and waiting until the market conditions improve. This tells us that there is promise, after all we all need a place to live !

If you are sitting on a stagnant or decreasing IRA or 401K, did you know that you can move those funds (without penalty) into a Self-Directed IRA plan with a trustee/custodian and purchase real estate? Sound interesting? This a fabulous way to have more control over your retirement accounts as well as have the liquidity to move into the real estate market. I know, there are nay sayers who feel that the real estate market is too risky.  Well, have you seen your stock holdings lately? Risky is too soft a word for what happened to many of us. The interesting thing is while many stock holdings have lost up to 50% of their value, most real estate markets have held firm – with the exception of the speculative markets of California, Florida, Nevada and Arizona. These are markets that were unrealistically inflated by speculation and needed a correction – much like the dot com stocks several years ago. Of course, these are the only market we hear about in the news so everyone thinks the entire nation is up for a Fire Sale. Nothing could be farther from the truth.

When I speak about real estate investing, I am not speaking about speculation. That is a very risky enterprise and not a place to put your retirement funds. There are many solid real estate investments out there. In fact, the Warren Buffett’s and Donald Trump’s of the world are already adding to their portfolios. 

I am happy to share more information about Self-Directed retirement accounts and how you can take control of your nest egg. Good Luck and Happy Investing…


Fed Cuts Interest Rates Again

May 2, 2008

WASHINGTON (Associated Press) – The Federal Reserve cut its key interest rate by one-quarter percentage point to 2 percent Wednesday, bringing the rate to its lowest point in nearly four years.

In turn, the prime lending rate for millions of consumers and businesses fell by a corresponding amount, to 5 percent.

Following the Fed action, Wall Street investors drove the Dow Jones industrial average up more than 178 points, lifting it above 13,000 for the first time since early January. By the end of the day, though, the index was 11.81 points below where it started.

The Fed, which has been dropping rates since last fall, has not removed another reduction from the table. However, a growing number of economists believe the central bank is winding down its rate-cutting campaign.

“The Fed didn’t completely shut the door on rate cuts, but they closed it part way,” said Mark Zandi, chief economist at Moody’s Economy.com. “I think the overall message was they’ve done a lot already to help the economy and think this will be enough. But they stand ready to do more if that is needed.”