November 6, 2009 HOMEOWNER TAX CREDIT IS EXTENDED

First-Time Homebuyer Credit

Updated Nov. 6, 2009, to reflect new legislation

New Legislation:

New legislation, the Worker, Homeownership and Business Assistance Act of 2009, which was signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts.

The new law:
Extends deadlines for purchasing and closing on a home.
Authorizes the credit for long-time homeowners buying a replacement principal residence.
Raises the income limitations for homeowners claiming the credit.
Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.

For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.

People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after Nov. 6, 2009. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers. The existing MAGI phase-outs of $75,000 to $95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov. 6, 2009.

General Information
Homebuyers who purchased a home in 2008 or 2009 may be able to take advantage of the first-time homebuyer credit.

The credit: Applies only to homes used as a taxpayer's principal residence.
Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.
Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
The credit is claimed using Form 5405, which you file with your original or amended tax return.

For 2008 Home Purchases
The Housing and Economic Recovery Act of 2008 established a tax credit for first-time homebuyers that can be worth up to $7,500. For homes purchased in 2008, the credit is similar to a no-interest loan and must be repaid in 15 equal, annual installments beginning with the 2010 income tax year.

For 2009 Home Purchases
The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1.
For home purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer's main residence within a three-year period following the purchase.
First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2008 tax return, due April 15, 2009, or a 2009 tax return, due April 15, 2010. The credit may not be claimed before the closing date. But, if the closing occurs after April 15, 2009, a taxpayer can still claim it on a 2008 tax return by requesting an extension of time to file or by filing an amended return.

IN ORDER TO KEEP THE INFORMATION POSTED HERE TODAY AS ACCURATE AS POSSIBLE, I WENT DIRECTLY TO THE GOVERNMENT WEBSITE TO OBTAIN THE INFORMATION SHARED HERE TODAY. http://www.irs.gov/newsroom/article/0,,id=204671,00.html

KIM DUCLOS COLDWELL BANKER WARDLEY LAS VEGAS, NV http://www.callkim.net/

CLARIFICATION OF THE NEW RESPA ACT

Are you in the market for a new home? Thinking of obtaining a mortage on that purchase? It is imperitive to work with a lender that can accomplish your goals while providing the best and honest service with competitive rates. Call me and we can get the process started! Some new changes in Lending provided below.

http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm

Recent changes in the Truth in Lending laws as of 7/30/09

CLARIFICATION OF NEW RESPA ACT

Changes to the Truth in Lending Act: What You Need to Know!
Regulation Z of The Truth in Lending Act (TILA) has undergone important changes that you need to know about in order to set expectations when looking for a loan. These changes take effect for all new applications taken on July 30, 2009 and after, apply to ALL types of mortgage loans (except investor loans and HELOC's) and could impact the overall time line of the mortgage process.

Here are four key parts you need to know:

Initial Disclosures: Under the new rules, initial disclosures must be provided to the borrower for all loans within three (3) business days of when an application is taken.

Initial disclosures include: the Good Faith Estimate (GFE), Truth in Lending Statement (TIL).
Collection of Up-front Fees: The new regulations prohibit lenders from ordering and collecting many up-front fees (ie: appraisal) prior to the new waiting period.

If the loan application is face-to-face, there is no waiting period.

Otherwise lenders have a 3 day waiting period before fee services can be ordered.

TBD properties: Are not considered actual applications per RESPA - once a property is identified and application is made - the waiting period would start from that day. So, if we did a pre-qual for someone today and a week later the property is identified, the disclosures would need to be signed and/or mailed on that day, and the waiting period begins.

Re-disclosures: If there are changes to a borrower's Annual Percentage Rate (APR) that INCREASES more than .125%, the lender must re-disclose to the borrower, and the 3 day waiting period starts over again.

Timing of Loan Closings: Business days are considered Monday-Saturday excluding legal public holidays. Closings cannot be scheduled until at least seven (7) business days after the initial disclosures are received by the borrower. If re-disclosures are needed because of changes to the loan program, terms or APR, the loan closing cannot be scheduled until after the re-disclosures are received by the borrower.

Please contact me for all of your real estate needs @ (702) 521-3939

Kim Duclos - Coldwell Banker Wardley

Pending Homes Sales are up for 5th Straight Month

QUESTIONS ON TODAY'S MARKET ACTIVITY? Follow me!

August 5, 2009-

Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6% to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7% above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.
Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” he said. ”Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.”
The Pending Home Sales Index in the Northeast rose 0.4% to 81.2 in June and is 5.8% above a year ago. In the Midwest the index increased 0.8% to 89.9 and is 11.6% above June 2008. The index in the South jumped 7.1% to 100.7 in June and is 8.9% higher than a year ago. In the West the index rose 2.9% to 100.4 but is 0.2% below June 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, is hopeful that a recently elevated level of contract cancellations will ease. “Last month, Freddie Mac and Fannie Mae clarified that appraisals should be done by professionals with clear local expertise,” he said. “This should mitigate the situation of many valuations done by out-of-area appraisers coming in below the price negotiated between buyers and sellers. Hopefully, in the months ahead, we’ll see an even closer relationship between contract activity and closed transactions.” McMillan said NAR is continuing to press the appraisal issue. “We have asked Congress and the Federal Housing Finance Agency to immediately implement an 18-month moratorium on the new appraisal rules to further address unintended consequences of the new guidelines,” he said.
NAR’s Housing Affordability Index (HAI) remains very favorable. The affordability index stood at 159.2 in July, down from record peaks in recent months but it remains 36.6 percentage points above a year ago. Under these conditions the typical family would devote 15.7% of gross income to mortgage principal and interest, well below the standard allowance of 25%. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.
“A monthly rise in home prices and somewhat higher mortgage interest rates led to a modest decline in affordability in June, but it was still the sixth highest index on record dating back to 1970,” Yun said. “Because housing is so affordable in today’s market, job security and the first-time buyer tax credit are bigger factors in influencing home sales.”
A median-income family, earning $60,700, could afford a home costing $289,100 in June with a 20% downpayment, assuming 25% of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80% of what a median-income family can afford. The affordable price was much higher than the median existing single-family home price in June, which was $181,600.
Yun expects existing-home sales to gradually rise over the balance of the year, with conditions varying around the country. “It appears home sales are on a sounder footing and inventory is gradually being absorbed.”
For more information, visit http://www.realtor.org/.

RISMEDIA