From Realtor Magazine Online, Daily Real Estate News July 25, 2008
Under a California initiative aimed to help prospective homeowners with modest means, lenders including Wells Fargo, HomeEq, CitiMortgage, and Fannie Mae will price their foreclosed properties at 12 percent below market value.
The California Housing Finance Agency will offer 30-year loans at a fixed interest rate of 5.5 percent to first-time home buyers who purchase the foreclosed properties through the Community Stabilization Home Loan Program.
"This is a starting point to try to get some of these foreclosures off the market in some of the hardest-hit communities in the state," says Ken Giebel, marketing director for the California Housing Finance Agency. He expects more lenders to join the program.
Source: San Francisco Chronicle, Carolyn Said (07/22/08)
Friday, July 25, 2008
30-Year Mortgage Rates Rise Again
From Realtor Magazine Online, Daily Real Estate News July 25, 2008
Freddie Mac reports a more than 0.25-percentage point gain in the 30-year fixed mortgage rate to 6.63 percent during the week ended July 24 from the prior week, marking the highest level since it reached 6.68 percent last August.
The 15-year fixed mortgage rate also increased, climbing to 6.18 percent from 5.78 percent.
Meanwhile, the five-year hybrid adjustable mortgage rate rose to 6.16 percent from 5.80 percent; and the one-year ARM surged to 5.49 percent from 5.10 percent.
Freddie Mac chief economist Frank Nothaft attributes the jump to "market concerns about rising inflation, further weakness in the housing market and greater probability that the Federal Reserve will raise short-term rates this year."
Source: Wall Street Journal (07/25/08
Freddie Mac reports a more than 0.25-percentage point gain in the 30-year fixed mortgage rate to 6.63 percent during the week ended July 24 from the prior week, marking the highest level since it reached 6.68 percent last August.
The 15-year fixed mortgage rate also increased, climbing to 6.18 percent from 5.78 percent.
Meanwhile, the five-year hybrid adjustable mortgage rate rose to 6.16 percent from 5.80 percent; and the one-year ARM surged to 5.49 percent from 5.10 percent.
Freddie Mac chief economist Frank Nothaft attributes the jump to "market concerns about rising inflation, further weakness in the housing market and greater probability that the Federal Reserve will raise short-term rates this year."
Source: Wall Street Journal (07/25/08
Thursday, July 24, 2008
Little-Known Loans for Buyers
From Realtor Magazine Online, Daily Real Estate News July 24, 2008
Just because low- and no-down-payment conventional loans are hard to come by doesn’t mean home buyers with little cash can’t get a deal.
Two lesser-known federally-sponsored mortgage programs are still available for home buyers with steady jobs, but no savings.
The U.S. Department of Agriculture's Rural Development program will lend up to 102 percent — maybe more — on a property in a community with a population that is less than 10,000 and non-metro communities with populations between 10,000 and 25,000. Eligible areas are surprisingly close to urban centers. For instance, parts of Washington, D.C.’s bedroom counties qualify. There are also income and debt limitations, but the caps are fairly generous. Selected banks nationwide handle the loans.
The second attractive mortgage plan is the Streamline K, a faster version of the Federal Home Administration’s home-rehabilitation loan, the 203(k). The Streamline K allows borrowers to get an extra $35,000 to improve the property they are buying, including replacing or repairing the roof, gutters and downspouts, HVAC, plumbing and electrical systems, flooring, siding, well and septic. Buyers or sellers also can use the money to paint inside and out, buy new appliances, and add or redo windows, doors, waterproofing and weatherproofing.
Source: United Features Syndicate, Lew Sichelman (07/17/2008)
Just because low- and no-down-payment conventional loans are hard to come by doesn’t mean home buyers with little cash can’t get a deal.
Two lesser-known federally-sponsored mortgage programs are still available for home buyers with steady jobs, but no savings.
The U.S. Department of Agriculture's Rural Development program will lend up to 102 percent — maybe more — on a property in a community with a population that is less than 10,000 and non-metro communities with populations between 10,000 and 25,000. Eligible areas are surprisingly close to urban centers. For instance, parts of Washington, D.C.’s bedroom counties qualify. There are also income and debt limitations, but the caps are fairly generous. Selected banks nationwide handle the loans.
The second attractive mortgage plan is the Streamline K, a faster version of the Federal Home Administration’s home-rehabilitation loan, the 203(k). The Streamline K allows borrowers to get an extra $35,000 to improve the property they are buying, including replacing or repairing the roof, gutters and downspouts, HVAC, plumbing and electrical systems, flooring, siding, well and septic. Buyers or sellers also can use the money to paint inside and out, buy new appliances, and add or redo windows, doors, waterproofing and weatherproofing.
Source: United Features Syndicate, Lew Sichelman (07/17/2008)
Good Credit Is Step One for Buyers
From Realtor Magazine Online, Daily Real Estate News July 22, 2008
Potential home buyers inevitably must confront their credit scores.
Here’s a primer for those who have never faced this issue before:
A credit score, commonly known as a FICO score, is derived from a history of taking on debt and paying it off.
FICO scores range between 300 and 850, with the highest reflecting the best credit risk. The median FICO score nationally is around 720-723, according to Fair Isaac, the company for which FICO scores are named.
Except for a first-time buyers or those who have a large down payment, lenders will want to see a FICO score of 680 or higher, says Robert Satnick, chairman of the California Mortgage Bankers Association.
To get their FICO score, potential home buyers can go to Myfico.com, a unit of Fair Isaac. Obtaining a FICO score and a credit report from one of the three credit bureaus that collect this history costs $15.95; the combination of all three scores and the FICO report costs $47.85.
The credit factors that determine the score are: a person's payment history (35 percent of the score), how much they owe (30 percent), the mix of credit and installment loans they have (10 percent), the length of their credit history (15 percent), and whether they have applied for new credit recently (10 percent).
Source: The Associated Press, Alex Veiga (07/21/2008)
Potential home buyers inevitably must confront their credit scores.
Here’s a primer for those who have never faced this issue before:
A credit score, commonly known as a FICO score, is derived from a history of taking on debt and paying it off.
FICO scores range between 300 and 850, with the highest reflecting the best credit risk. The median FICO score nationally is around 720-723, according to Fair Isaac, the company for which FICO scores are named.
Except for a first-time buyers or those who have a large down payment, lenders will want to see a FICO score of 680 or higher, says Robert Satnick, chairman of the California Mortgage Bankers Association.
To get their FICO score, potential home buyers can go to Myfico.com, a unit of Fair Isaac. Obtaining a FICO score and a credit report from one of the three credit bureaus that collect this history costs $15.95; the combination of all three scores and the FICO report costs $47.85.
The credit factors that determine the score are: a person's payment history (35 percent of the score), how much they owe (30 percent), the mix of credit and installment loans they have (10 percent), the length of their credit history (15 percent), and whether they have applied for new credit recently (10 percent).
Source: The Associated Press, Alex Veiga (07/21/2008)
Friday, July 18, 2008
IRS Gets Picky About Who's a Real Estate Pro
From Realtor Magazine Online, Daily Real Estate News July 18, 2008
The Internal Revenue Service (IRS) is taking a closer look at income tax statements submitted by individuals claiming to be real estate professionals, given that the agency has released new guidelines regarding this tax status.
Licensed real estate agents and brokers do not always qualify for real estate professional status under the new rules, which mandate that individuals spend no less than 750 hours on qualified real estate activities: developing, redeveloping, constructing, reconstructing, acquiring, converting, renting, operating, managing, leasing, or selling property.
This means that those with full-time jobs elsewhere cannot claim to be real estate professionals.
Additionally, the IRS says losses tied to real estate activities are either passive or materially participating passive, with passive losses deductible only from passive income and materially participating passive losses deductible from other income.
Those who use limited partnerships to hold property are not considered to be materially participating, and the agency is increasingly targeting limited partnerships for auditing.
The IRS also is looking to make sure those claiming material participation either work 500 hours per property or aggregate the properties into one 500-hour period, and they are cracking down on those who do not meet this benchmark.
Real estate investors are eligible for $25,000 in deductions from passive income up to $100,000 in taxable income; while real estate professionals do not have dollar or income limits, making the distinction ever-important to the tax planning process.
Source: Realty Times, Diane Kennedy (07/17/08)
The Internal Revenue Service (IRS) is taking a closer look at income tax statements submitted by individuals claiming to be real estate professionals, given that the agency has released new guidelines regarding this tax status.
Licensed real estate agents and brokers do not always qualify for real estate professional status under the new rules, which mandate that individuals spend no less than 750 hours on qualified real estate activities: developing, redeveloping, constructing, reconstructing, acquiring, converting, renting, operating, managing, leasing, or selling property.
This means that those with full-time jobs elsewhere cannot claim to be real estate professionals.
Additionally, the IRS says losses tied to real estate activities are either passive or materially participating passive, with passive losses deductible only from passive income and materially participating passive losses deductible from other income.
Those who use limited partnerships to hold property are not considered to be materially participating, and the agency is increasingly targeting limited partnerships for auditing.
The IRS also is looking to make sure those claiming material participation either work 500 hours per property or aggregate the properties into one 500-hour period, and they are cracking down on those who do not meet this benchmark.
Real estate investors are eligible for $25,000 in deductions from passive income up to $100,000 in taxable income; while real estate professionals do not have dollar or income limits, making the distinction ever-important to the tax planning process.
Source: Realty Times, Diane Kennedy (07/17/08)
Investors With Cash Are Kings in Today's Market
From Realtor Magazine Online, Daily Real Estate News July 18, 2008
Some are calling this the best market for investors since real estate tanked in the early 1980s.
Investors, alone and in groups, are negotiating volume deals as they purchase whole subdivisions and bundles of 10 to 50 defaulted loans for pennies on the dollar.
"What we're seeing today dwarfs [the 1980s] by five or 10 times," says Bob Leonetti, president of SMI Funding, an Austin, Texas, company that originates and acquires private and conventional mortgages. "There are huge opportunities for investors."
"People who have cash positions now are going to do very well," says Central Florida real estate practitioner Mike Norvell of Developers Capital Realty in Leesburg, Fla. "It's just crazy the prices you can buy for right now for cash."
Source: Investor’s Business Daily, Kathleen Doler (07/07/08)
Some are calling this the best market for investors since real estate tanked in the early 1980s.
Investors, alone and in groups, are negotiating volume deals as they purchase whole subdivisions and bundles of 10 to 50 defaulted loans for pennies on the dollar.
"What we're seeing today dwarfs [the 1980s] by five or 10 times," says Bob Leonetti, president of SMI Funding, an Austin, Texas, company that originates and acquires private and conventional mortgages. "There are huge opportunities for investors."
"People who have cash positions now are going to do very well," says Central Florida real estate practitioner Mike Norvell of Developers Capital Realty in Leesburg, Fla. "It's just crazy the prices you can buy for right now for cash."
Source: Investor’s Business Daily, Kathleen Doler (07/07/08)
Wednesday, July 2, 2008
Mortgage Applications Rise
From Realtor Magazine Online, Daily Real Estate News July 2, 2008
Mortgage applications rose 3.6 percent last week on a seasonally adjusted basis to 477.7 from 461.3, according to the Mortgage Bankers Association weekly survey.
On an unadjusted basis, the index increased 3.2 percent compared to the previous week, but it was down 22.8 percent compared with the same week last year.
The refinance index increased 4.7 percent and the purchase index rose 2.8 percent, at least in part because mortgage rates declined slightly after hitting yearly highs earlier in the month.
Mortgage rates were mixed last week:
* 30-year fixed-rate mortgages decreased to 6.33 percent from 6.39 percent
* 15-year fixed-rate mortgages decreased to 5.9 percent from 5.95 percent
* 1-year ARMs increased to 7.14 percent from 7.09 percent.
Source: Mortgage Bankers Association (07/02/2008)
Mortgage applications rose 3.6 percent last week on a seasonally adjusted basis to 477.7 from 461.3, according to the Mortgage Bankers Association weekly survey.
On an unadjusted basis, the index increased 3.2 percent compared to the previous week, but it was down 22.8 percent compared with the same week last year.
The refinance index increased 4.7 percent and the purchase index rose 2.8 percent, at least in part because mortgage rates declined slightly after hitting yearly highs earlier in the month.
Mortgage rates were mixed last week:
* 30-year fixed-rate mortgages decreased to 6.33 percent from 6.39 percent
* 15-year fixed-rate mortgages decreased to 5.9 percent from 5.95 percent
* 1-year ARMs increased to 7.14 percent from 7.09 percent.
Source: Mortgage Bankers Association (07/02/2008)
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