Good News. The Senate voted unanimously to pass the Homebuyer Assistance and Improvement Act. The last minute vote on Wednesday afternoon extends the closing deadline until September 30th for people who have already qualified for the homebuyer tax credit. The original deadline was June 30th.

The National Association of Realtors has estimated that as many as 180,000 buyers who signed contracts by April 30th may have missed the June 30th closing deadline due to delayed closings.

The bill, already passed by the House on Tuesday, will now head to President Barack Obama, who is expected to sign it into law.

The GOOD news is -
Tuesday, June 29th, the House of Representatives voted 409 to 5 to delay the closing deadline to Sept. 30. This would give homebuyers three more months to close on their home purchase loans and secure up to an $8,000 federal income tax credit.

The BAD news is -
the Senate must still approve the bill and they better act fast – the deadline is currently Wednesday, June 30th. As it stands now, if you don’t close your loan by the end of today, you won’t get the tax credit.

This bill only changes the deadline for closing or finalizing your loan to qualify for the tax credit (your sales contract had to be signed by April 30th).  It doesn’t help anyone currently shopping for a home or who signed a sales contract after April 30th.

Most borrowers know that when you apply for a mortgage or other loan, the lender will pull your credit report. What you may not know is that this allows credit bureaus to sell your credit information to third party vendors for firm offers. But you have the right to “Opt-Out” and prevent the four national consumer credit reporting companies from providing your credit file information to third party vendors for Firm Offers. To “Opt-Out” you should register your information at Opt Out Prescreen. This will stop the four credit reporting companies (Equifax, Experian, Innovas, and Trans Union) from selling your name as a trigger lead for a period of five years.

Other steps you can take to prevent unwanted solicitations:

• Register your home & wireless phone numbers on the National Do Not Call list. Your phone numbers will remain on this list indefinitely.
• Register your home & wireless phone numbers on the Texas No Call list. Your phone numbers will remain on this list for a period of three (3) years.
  
• Cut down on postal junk mail by registering your name & address at DirectMail.com.

Hope this helps you control your personal information and prevent unwanted solicitations.

Surprise!
Hidden in the pages of the new 2,409 page Health Care bill is a requirement that, starting Jan. 1, 2012, all companies must issue a 1099 to any individual or corporation that they buy more than $600 in goods or services from in a tax year. Yes, if that new computer you buy costs more than $600, you will have to send a 1099 to the store you bought it from and submit a copy to the IRS. In addition, companies will have to provide their customers with their employer ID and other necessary info so they can complete the necessary 1099′s.

This should kill a lot of the trees. Where else are we going to get enough paper to comply with this requirement.

Check out this article on CNNMoney.com by Neil deMause that explains in more detail the Health care laws massive, hidden tax change.

It’s day three since the Fed stopped buying Mortgage-backed securities and current mortgage rates are continuing to rise. MBS prices, which drive mortgage rates in the opposite direction are down -10/32 this morning. The decline in MBS prices is helping to push interest rates higher.

The current VA 30-yr fixed rate is actually 1/8 lower than conventional rates at 4.875.

The cost of securing FHA financing will rise tomorrow when the upfront mortgage insurance cost, a premium charged at closing as a percentage of the loan amount, is boosted to 2.25% from 1.75%.

The benchmark 10-yr T-Note yield has now moved over 4%, which many economists predicted it’s peak for this year would be.

We expect rates to continue to rise…

The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. The purposes of RESPA are to help consumers become better shoppers for settlement services and to eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services.

RESPA requires that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers.

RESPA also prohibits certain practices that increase the cost of settlement services. Section 8 of RESPA prohibits a person from giving or accepting any thing of value for referrals of settlement service business related to a federally related mortgage loan. It also prohibits a person from giving or accepting any part of a charge for services that are not performed. Section 9 of RESPA prohibits home sellers from requiring home buyers to purchase title insurance from a particular company.

RESPA covers loans secured with a mortgage placed on a one-to-four family residential property. These include most purchase loans, assumptions, refinances, property improvement loans, and equity lines of credit. HUD’s Office of RESPA and Interstate Land Sales is responsible for enforcing RESPA.

For additional information regarding RESPA, please visit the HUD website here.

Click on the video link.  This video focuses on IndyMac Bank, the FDIC, and OneWest Bank.  Bankers and the FDIC will have more explaining to do:  Short Sale Provides Big Profit for Bank

For those who don’t feel like taking notes, it is a study on the sweetheart deal they cut, complete with an example of a bad $478,000 loan with six months of missed payments purchased at 70% for $334,600. The borrower is forced into a short sale on property at $ 241,000, so the loss on the original loan is $244,200. The FDIC pays 80% of the loss calculated from the original price, not the reduced 70% reduced price, bringing the loss payment to the purchaser to it to $195,360. So the short sale proceeds plus the FDIC guarantee totals $436,360. Already the profit for the purchaser is $241,000+$195,360 – $334,600 = $101,760, and on top of this, the original borrower was forced to sign a promissory note for $75,000.

If you are the seller on one of these deals, make sure you are not being taken advantage of by the bank holding the loan.  Also, a good thing to remember is that when you go to buy another home, the lender/underwriter can treat this short sale just like a foreclosure. Your credit scores can be impacted the same way as well. You will have to wait 3-5 years under current guidelines before you are able to purchase again.

If you purchased your home after November 6th, 2009, you may or may not have discovered there is a problem with filing for your tax credit with the IRS. Seems the IRS has not issued the official form required to file for this latest homebuyer tax credit. It was supposed to be ready the beginning of January. Hopefully it won’t take too much longer for them to revise the old form and issue it. In the mean time, you’ll just have to wait to file for your tax credit. 

It’s been reported that the IRS is having so much trouble with fraudulent claims for the original $8000 first time homebuyer tax credit that ended November 30th, 2009 that they are now requiring proof that you actually did buy a new home. Hard to believe they weren’t smart enough to ask for the “proof of purchase” from the beginning. Isn’t that how ALL rebates work?

President Obama signed the Homebuyer Tax Credit extension into law today. See the article below for more details.

GREAT NEWS FOR HOME BUYERS!!!

The house voted today to extend the $8000 first time home buyers tax credit. President Obama is expected to sign the bill tomorrow morning, 11/06/09.

A new provision for a $6500 tax credit to borrowers who have lived in their current home for at least 5 consecutive years out of the past 8 years and wish to purchase a new home was also passed.

Example:
You purchased a home in 2002, lived there for 5 years as your primary home, moved out in 2007, and turned that home into a rental property. If you decide to buy a new primary residence today, you would qualify for the $6,500 tax credit based on the fact that you lived in the same residence as your primary home for at least five consecutive years out of the past eight.

Both credits apply to contracts signed by April 30, 2010 and that close by June 30, 2010. These credits are only available for purchasing a principal residence priced at $800,000 or less.

The bill would raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

Firsttime homebuyers are defined as someone who has not owned a residence within the past 3 years.

NOTES:
- If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit.

- For married couples, both spouses must qualify for the credit.

- The credit applies even if you have co-signers on your mortgage loan.