First Time Homebuyer Tax Credit Q & A

First-Time Homebuyer Tax Credit Q & A

*Is the program available to all first-time homebuyers? Yes - the program is available now until December 1, 2009 for qualifying first-time homebuyers. For more information on the tax credit and qualifications click here . The National Association of REALTORS® is actively working to extend the credit through 2010 and permit all purchasers to utilize it.

*Does Idaho have a way for a homebuyer to access the funds for a down payment? Yes - With ACARs encouragement, The Idaho Housing and Finance Association implemented the Tax Credit Advance Loan to access funds at the time of closing. Idaho is one of 10 states offering the advance.

*In Idaho will the REALTOR® Associations pay off interest on the tax credit advance loan? Yes - To help encourage home ownership, REALTORS® Associations in Idaho created the Welcome Home Idaho program. REALTORS® in Idaho have offered to pay off the interest on the tax credit loans to individuals who pay off the loan by the due date of July 1st 2009. The availability of the payoff is on a first come first served basis until the contributed funds are gone.

*Can lenders is Idaho access the tax credit advance loan? Yes - According to IHFA, “any lender making that statement they will not utilize the credit is doing so based on an internal company policy. There is no reason that every approved IHFA lender cannot offer the Tax Credit Advance right now. In fact nearly 800 Idahoans have applied for it since it was introduced in March.” For a list of IHFA approved lenders go to www.ihfa.org

For more information contact:

Miguel Legarreta, Director of Public Policy 208-947-7226 mlegarreta@adacounty-realtors.com
Marc Lebowitz, Executive Officer 208-947-7229 mlebowitz@adcounty-realtors.com

Tax Credit Loans - Finally Answered Once and For All

Greetings all…

In his speech at the National Association of REALTORS® Housing Summit on May 12, 2009, US Department of Housing and Urban Development (HUD) Secretary Shaun Donovan announced a program that allows borrowers to use the first-time homebuyer tax credit for a down payment or closing costs on a FHA-insured mortgage. The Secretary said “We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit.”

The details of the program were announced today in Mortgagee Letter 2009-15. Government entities and instrumentalities of government may provide a second mortgage. Currently, 10 state housing finance agencies offer a product buyers can use that will effectively monetize the tax credit for down payment purposes. These states are Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee Get information on these programs at http://www.ncsha.org/section.cfm/3/34/2920.. State Associations are encouraged to work with their respective housing finance agency to implement similar programs. The 3.5 percent down payment may also be a gift from a family member, employer or nonprofit, charitable organization.

The original guidance permitted lenders and HUD-approved nonprofits and lenders to offer bridge loans via second lien financing or short term loans. Guidance released today allows lenders to offer the monetized tax credit for down payments in excess of 3.5 percent, closing costs and interest rate buy downs. Mortgage industry leaders have indicated that this type of product may not be immediately available to consumers. Lenders will need some time to develop documentation for what will effectively be personal loans to the home buyer.

Miguel Legarreta and I met with Susan Semba at IHFA yesterday afternoon to try to understand why some lenders were continuing to insist that the Idaho program is not viable. For instance, we’ve heard that Wells Fargo and Bank of America are saying that they will not “participate’ in the First Time Home Buyer Tax Credit Advance. According to IHFA, “any lender making that statement is doing so based on an internal company policy. There is no reason that every approved IHFA lender cannot offer the Tax Credit Advance right now. In fact nearly 800 Idahoans have applied for it since it was introduced in March.” For a list of IHFA approved lenders go to www.ihfa.org .

Read the HUD Mortgagee Letter at http://portal.hud.gov/pls/portal/docs/PAGE/FHA_HOME/LENDERS/MORTGAGEE_LETTERS/2009_MORTGAGEE_LETTERS/09-ML-15%20USING%20FIRST-TIME%20HOMEBUYER%20TAX%20CREDITS.PDF


For information on FHA contact Jerry Nagy at 202.383.1233, jnagy@realtors.org.

For information on the IRS contact Ken Trepeta at 202.383.1294, ktrepeta@realtors.org.

For information on state issues contact Bill Gilmartin at 202.383.1102, wgilmartin@realtors.org.

Young Professionals Happy Hour!

The Young Professionals are planning a Happy Hour get together for May! Join us for drinks at the Flatbread Pizza Co in Meridian on Wednesday, May 27th!

We'll be there from 4pm to around 6pm, getting drinks and getting to know each other! Expand your network!

For more information, find us on Facebook! http://www.facebook.com/home.php#/event.php?eid=83741538462&ref=nf

Hypothetically Speaking...

Short Sale Case Study

A new listing is entered into IMLS. The box “Potential Short Sale” is checked. The listing offers 5% to cooperating brokers. The agent remarks include: “Commission to be paid will be half of whatever listing agent receives.”

The REALTOR® Code of Ethics Article 3 requires the Listing Agent (LA) to provide notice to co-op broker of any change in compensation before the Buyer's Agent (BA) presents an offer to purchase.

Consider the following sequence:

Property is listed for $100,000

BA1 submits offer to LA of $95,000. LA presents to third party lien holder; who counters with “will accept, but only with a reduction in total commission paid to 2%.

BA1 withdraws. On the same day that BA1 withdraws offer, BA2 calls listing agent and says “I am bringing you an offer.”

Question – Should LA tell BA2 that the third party lien holder has rejected paying the full commission on a less than full price offer?

Question – What should LA do regarding current offer of compensation?

Question – What if BA1’s offer was full price?

Question – How should LA counsel Seller?

What advice would you give to the Listing Agent?

Highlights from NAR Real Estate Summit

NAR's Real Estate Summit brought together real estate professionals in the residential and commercial sectors, opinion leaders, economists, academic leaders, members of the media, and current and former government officials to engage REALTORS in a comprehensive conversation about how to revitalize, regenerate and renew real estate markets across the nation.

Keynote speakers included Former Representative Harold Ford, Jr. (D-Tenn.); political commentator Patrick Buchanan; Dr. Robert Reich, former U.S. Secretary of Labor; Shaun Donovan, U.S. Secretary of Housing and Urban Development; Dr. Alan Greenspan, Former Chairman of the Federal Reserve Board; and Sheila Bair, Chairman of the Federal Deposit Insurance Corporation.

NAR has posted the video from the summit (divided into short segments).

Follow the link to see the Summit replayed

Buyer Tax Credit Loan Guidance Coming Soon

Detailed guidance on the federal government's plan to provide short-term loans to borrowers using the First-Time Homebuyer Tax Credit is expected to be out shortly, but a spokesperson from the U.S. Department of Housing and Urban Development, which is writing the guidance, couldn't give a firm release date.

HUD policy staff are "still working out the details on it," HUD spokesperson Lamar Wooley told REALTOR® Magazine today. "So we expect it to be published shortly."

The short-term loan program, which would effectively monetize the first-time homebuyer tax credit by permitting eligible lenders to make bridge loans collateralized by the borrower's expected tax credit, was announced by HUD Secretary Shaun Donovan at the Real Estate Summit NAR hosted on the opening day of its 2009 Midyear Legislative Meetings in Washington last week.

At the summit, Donovan said the loans would enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash could be used as a downpayment. "FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to 'monetize' the tax credit through short-term bridge loans," Donovan said. "We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit.

FHA will be publishing the details shortly."It's unclear at this point what shape the guidance will take and whether authorization for the loans will be available across the board or only in states in which the state housing finance agency already has a tax credit bridge-loan program in place.

There are 10 states today that have such a loan program, according to the National Council of State Housing Agencies: Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee. You can access details of these loan programs on the NCSHA's Web site, "First-Time Homebuyer Tax Credit Loan Programs."

When it's released, the guidance is expected to be issued as a HUD Mortgagee Letter and will likely discuss which federal, state, and local governmental agencies and nonprofit organizations will be permitted to make the loans, and whether lenders such as FHA-approved mortgagees will be permitted to make the loans. The guidance could also cover how loan amounts will be limited, what happens if repayment problems occur, and what repayment terms would look like. REALTOR® Magazine will be checking with HUD regularly on the status of the guidance and will report its availability as soon as it's issued.

Obama Administration Announces Financial Incentives and Uniform Process for Short Sale

On May 14, 2009, the Obama Administration announced its Foreclosure Alternatives Program (FAP) providing incentives and uniform procedures for short sales and deeds-in-lieu of foreclosure under the Making Home Affordable Program.

NAR had urged the Treasury Department, the Federal Housing Finance Agency, Fannie Mae, and Freddie Mac to take action to improve the short sales process, urging transparent and uniform procedures. Eligible borrowers are those who meet minimum requirements under the Home Affordable Modification Program but do not qualify for a modification or do not maintain payments under a modified loan.

Under FAP, servicers, borrowers (homeowners losing their homes), and second lien holders may qualify for incentive payments. Other program features include standardized documentation, valuation based on either appraisals or broker price opinions (BPOs), timelines, and limits on commission reductions. The program terminates at the end of 2012. The Administration also released a Making Home Affordable Progress Report. More than 75 percent of all loans in the nation are covered by the 14 servicers that to date have agreed to participate.

Paint the Town...you can do it!

Are you looking for a visible way to get involved in your community while promoting your profession? Join us on Saturday, June 13th, as we paint 8 homes during the 27th annual Paint the Town!

Since the program began in 1983, more than 76,000 volunteers have painted 2,718 homes for senior and disabled homeowners. Paint the Town is a great Treasure Valley tradition and the Ada County Association of REALTORS Community Foundation is proud to provide financial support and manpower every year. So grab your ladder and a paint brush...we provide the paint! Contact Judy McLaughlin at 947-7230 if you'd like to join one of our great REALTOR teams!

Watch for Legal Traps in Distressed Sales

Short sales and bank-owned properties represent one of the best opportunities to grow your business today. Yet they can expose you to serious legal liability if you’re not careful, legal experts said Wednesday at the 2009 REALTORS® Midyear Legislative Meetings in Washington, D.C.

Here are their tips for steering clear of trouble:

* Be wary of calling yourself an expert. Almost overnight, companies have sprung up offering you the chance to become “certified” as a specialist in short sales or REOs. Although some of the programs might provide good training, you can invite trouble if you go overboard and market yourself as an expert,” said Chuck Kasky, director of legal affairs for the Maryland Association of REALTORS®.

* Read the fine print. Some certification companies have an indemnification clause that puts legal costs on your shoulder if they’re included in any lawsuit against you. “Read their disclaimers,” Kasky said.

* Don't engage in unauthorized practice of law. Other increasingly common practices, such as broker price opinions, negotiations with lenders in short sales, and giving advice to homeowners about seeking a loan modification before they try a short sale, are all practices that might be challenged as either unauthorized practice of law or otherwise outside the scope of sales associates’ license. Even accepting a fee for broker price opinions—in states where they’re allowed—might raise trouble for sales associates who accept fees directly rather than through their broker, Kasky said.

* Check your E&O coverage. If you help home owners navigate a loan modification, be aware that your E&O policy might not cover your actions if you’re sued, said Michelle Lind, general counsel of the Arizona Association of REALTORS®. Providing such help is considered the business of housing counseling agencies, not brokerages, she said. Similarly, if you handle REOs for a lender, be sure your E&O policy covers property management activity, she said. Many of your tasks in selling REO properties are property management functions: getting utilities turned on, keeping the property secure if it’s vacant, even evicting people.

* Watch out for flippers. Be on the lookout for the growing practice of investors buying short sales and then flipping them, she said. Depending on how they’re structured, the transactions might raise legal issues, and sellers might look to you if they’re unhappy with what they got for their property.

—Robert Freedman, REALTOR® Magazine

Pat Zaby Low-to-No-Cost Marketing

Don't miss out on finding the latest on Low-to-No- Cost Marketing!

New Limited Health Insurance Available to REALTORS from NAR

More than one out of every four Realtors® have no health insurance, according to a recent NAR survey, and only 17 percent of real estate firms offer health care coverage for independent contractors, who are the largest segment of real estate agents.

Realtors® without health insurance now have an affordable, guaranteed-issue, option for coverage through a new REALTOR Benefits® partner program. Through REALTORS® Core Health Insurance, the National Association of Realtors® is helping make limited medical insurance available for Realtors®, many of whom may not have access to quality, affordable health insurance.

RCHI is available to NAR members under age 65. Acceptance is guaranteed – no eligible member will be turned down. Though the plan is available throughout most of the country, Smart and Simple insurance development (SASid) and United States Fire Insurance Company are currently working with the departments of insurance to gain approval in a few states where it is not currently available. Read the Full Article

Top 7 Tips to Connect with Blog Comments

Top 7 Tips To Connect with Blog Comments

Do you want to kick your blogging up a notch? One key to successful blogging is listening. When you listen by reading a blog post you need to treat that time as you would if you were sitting across the table from a prospective client.

To listen you need to make a commitment to unplug from your other tasks at hand. There's a lot of hearing that gets done online, but listening is in a class all its own. If you truly listen you set yourself up for great connections and true business opportunities. Add commenting to your blogging goals and try these commenting tips:

Top 7 Tips to Connect with Comments

1. Read the Full Post- It's common for people to skim posts online. Try to choose blogs that you can regularly visit that are chock full of great content and interesting subjects that keep you on your toes.

2. Read the Comment Thread- A great discussion can ensue on a blog post and even slightly change the direction of the original blogger's post by adding in another consideration, factor, question, or even an opposing view. Take the time to read the original post and the comments that follow.

3. Read Local Bloggers- Do a simple blog search on Google and type in keywords related to your geographic area. Check out what local bloggers have to say and start making connections with them to build your blogging community on a hyperlocal level.

4. Read Bloggers from Other Professions- Reading other real estate blogs is important for making solid connections. Make sure to step outside of your industry and also read the blogs of complementing industries: sales, marketing, customer service.

Read the full blog post on ActiveRain

Updated Free Stuff From NAR

As part of the "Right Tools. Right Now." campaign, NAR is constantly updating the list of free or at cost items available to members.

Find out more about the new offers here.

When I look back now over my life and call to mind what I might have had simply for taking and did not take, my heart is like to break. ~William Hale White

Some Good News For New Homes in Idaho

The average cost for a new home started in Idaho rose above year-previous prices in March.
According to numbers from Wells Fargo’s Idaho Construction Report, the valuation climbed from an average of $176,309 in March 2008 to an average of $200,207 in March 2009, a difference of 14 percent.

Meanwhile, the number of new home starts in Idaho climbed substantially between February and March 2009, but the number is still well below last year’s building level.

Contractors pulled permits for 222 new single-family homes in March of 2009, 74.8 percent more than they pulled in February but 50.1 percent fewer than they pulled the previous March.
Non-residential construction in March totaled $33.9 million, up 163 percent from February 2009, but down 54 percent from March 2008.

For the first time since October 2008, the valuation for alterations and repairs around the state climbed over year-previous totals, up 29.9 percent to $59 million.

Making Home Affordable Program Expanded to Permit Modification of Second Mortgages

On April 28, 2009, the Treasury Department announced expansion of the Making Home Affordable Program to help reduce payments on second mortgages.

The Obama Administration took this action because as many as 50% of all at-risk borrowers have second mortgages and without modifying them the borrowers remain at a higher risk of default.

Under the Second Lien Program, if the servicer initiates a Home Affordable Modification on the first mortgage, participating servicers will automatically reduce payment on the second lien in accordance with complex, but uniform, program criteria.

As an alternative, servicers may extinguish the second lien in exchange for receiving a lump sum payment.Treasury Department Press Release on Modifying Second Mortgages under the Making Home Affordable Program >Second Lien Program Fact Sheet >Second Lien Program Case Examples >Contacts: Jeff Lischer, 202-383-1117 Contacts: Tony Hutchinson, 202-383-1120