Members of the U.S. military, foreign service and intelligence communities have another year to purchase a home and claim the home buyer tax credit.
Any service member who is or has been on extended duty for 90 days or more between Jan. 1, 2009 to April 30, 2010, has until April 30, 2011, to sign a sales contract and until June 30, 2011, to close on the property. Both the $8,000 first-time and the $6,500 repeat home buyer tax credits are included in the extension.
The rule that requires buyers to repay the credit if they move out of their home within three years has also been waived for qualified service members if they receive government orders to move.
Source: The National Association of Home Builders (04/26/2010)
Lead-Safe Remodeling
Effective April 22, 2010 remodeling work on homes built before 1978 must be performed only by contractors certified by the U.S. Environmental Protection Agency. Homeowners should assume lead paint is present and only hire certified contractors. Certified remodelers are required to display their EPA-certified certificate to home owners.
Contractors It is a misdemeanor for a person to engage in the business or act in the capacity of a contractor without having a license. This new law increases the penalties for acting as a contractor without a license.
This law makes a first conviction punishable by a fine not exceeding $5,000 or by imprisonment in a county jail for no more than 6 months, as specified, or both. The fine for a 2nd conviction is the greater of 20% of the contract price, 20% of the aggregate payments made to, or at the direction of, the unlicensed contractor, or $5,000. In addition, a 3rd or subsequent conviction is punishable by both a fine and imprisonment in a county jail, as specified, and requires that the fine be no less than $5,000 and no more than the greater of $10,000, 20% of the contract price, or 20% of the aggregate payments made to, or at the direction of, the unlicensed contractor.
A person who used the services of an unlicensed contractor is a victim of crime and eligible for restitution for economic losses, regardless of whether that person had knowledge that the contractor was unlicensed.
Amends Sections 7028 and 7028.16 of the CA Business and Professions Code.
Who must be licensed as a contractor? All businesses or individuals who construct or alter any building, highway, road, parking facility or other structure in CA must be licensed by the Contractor's State License Board if the total cost including labor and materials is $500 or more.
Contractors It is a misdemeanor for a person to engage in the business or act in the capacity of a contractor without having a license. This new law increases the penalties for acting as a contractor without a license.
This law makes a first conviction punishable by a fine not exceeding $5,000 or by imprisonment in a county jail for no more than 6 months, as specified, or both. The fine for a 2nd conviction is the greater of 20% of the contract price, 20% of the aggregate payments made to, or at the direction of, the unlicensed contractor, or $5,000. In addition, a 3rd or subsequent conviction is punishable by both a fine and imprisonment in a county jail, as specified, and requires that the fine be no less than $5,000 and no more than the greater of $10,000, 20% of the contract price, or 20% of the aggregate payments made to, or at the direction of, the unlicensed contractor.
A person who used the services of an unlicensed contractor is a victim of crime and eligible for restitution for economic losses, regardless of whether that person had knowledge that the contractor was unlicensed.
Amends Sections 7028 and 7028.16 of the CA Business and Professions Code.
Who must be licensed as a contractor? All businesses or individuals who construct or alter any building, highway, road, parking facility or other structure in CA must be licensed by the Contractor's State License Board if the total cost including labor and materials is $500 or more.
Housing Analyst says 'Worst Is Over'
Housing has slowed to the point where demand is again outstripping supply, says Metrostudy founder Mike Castleman.
Metrostudy, which researches the housing industry, says demand is forcing up prices in some markets, including Washington, D.C. and Indianapolis, but it remains stagnant in Houston, Naples, Fla., Charlotte, and Denver.
Overall, Metrostudy and Castleman believe the worst is over. "The good news is that builders will need to build a lot more houses than last year to keep up with demand. That will help the economy by creating jobs," Castleman says.
Source: Fortune, Shawn Tully (04/26/2010)
Metrostudy, which researches the housing industry, says demand is forcing up prices in some markets, including Washington, D.C. and Indianapolis, but it remains stagnant in Houston, Naples, Fla., Charlotte, and Denver.
Overall, Metrostudy and Castleman believe the worst is over. "The good news is that builders will need to build a lot more houses than last year to keep up with demand. That will help the economy by creating jobs," Castleman says.
Source: Fortune, Shawn Tully (04/26/2010)
Economy Forces Homeowners to Live Large Less Outdoors in 2010
Spring has sprung and while snow still lingers on lawns, patios and backyards, thoughts are turning to the great outdoors -- around the home.
However, those thoughts of leaving in-house hibernation behind are edged with economic concerns as homeowners take a less lavish look at how to move indoor living outside.
Buzzwords are "low" and "less" as low-maintenance landscaping, low-frill entertaining, even less technology are common in outside home improvement plans homeowners will undertake this year, according to the American Society of Landscape Architects (ASLA).
"Homeowners want to create a sense of place for their family, friends, and neighbors to enjoy outside, but an uncertain economy means many will dial back some of the extra features we've seen in past years," said Nancy Somerville, executive vice percent and CEO of ASLA.
From Jan. 25 to Feb. 12, when the ASLA surveyed 182 residential landscape architects about the popularity of various design elements for 2010 they found homeowners were avoiding more expensive, elaborate items in favor of more essential ones.
Given most outdoor living spaces are an extension of the kitchen, ASLA, not surprisingly, found the most popular kitchen features was an outdoor grill (94.4 percent) and counter space (73.5 percent).
More elaborate outdoor refrigerators (52.8 percent) and sinks (50 percent) were much less popular.
For entertainment purposes, instead of stereo systems (57.2 percent), wireless/Internet connectivity (44.1 percent), outdoor heaters (43.9 percent) and TVs (35.5 percent), there was much greater interest in more utilitarian seating/dining areas (95.6 percent), installed seating like benches and seat walls (90.6 percent) or weatherized outdoor furniture (77.1 percent). However, the fire pit/fireplace (94 percent) remained popular.
This year homeowners are also looking to go 'green' outside to save time and money on upkeep.
Popular landscaping elements include low-maintenance landscapes (94 percent); drip/water-efficient irrigation (85.2 percent); native/adapted drought tolerant plants (85.2 percent); and less sprawling lawn (73.9 percent).
Other popular features include fountains/water features (87.8 percent) and, taking a cue from the First Lady, Michelle Obama, food/vegetable gardens (78.5 percent).
Among the more expensive outdoor architectural features that remain popular were spas (hot tub, Jacuzzi, whirlpool, indoor/outdoor sauna; 79.1 percent); decks (83 percent), porches (76.4 percent) and swimming pools (72.4 percent).
Among the least popular items were sleeping spaces (5.6 percent); geothermal-heated pools (28.2 percent); outdoor cooling systems (36.5 percent); outdoor heaters (43.8 percent); solar-powered lights (49.4 percent); and sports/recreational spaces (tennis courts, bocce ball, etc.; 47 percent).
Published: April 22, 2010
However, those thoughts of leaving in-house hibernation behind are edged with economic concerns as homeowners take a less lavish look at how to move indoor living outside.
Buzzwords are "low" and "less" as low-maintenance landscaping, low-frill entertaining, even less technology are common in outside home improvement plans homeowners will undertake this year, according to the American Society of Landscape Architects (ASLA).
"Homeowners want to create a sense of place for their family, friends, and neighbors to enjoy outside, but an uncertain economy means many will dial back some of the extra features we've seen in past years," said Nancy Somerville, executive vice percent and CEO of ASLA.
From Jan. 25 to Feb. 12, when the ASLA surveyed 182 residential landscape architects about the popularity of various design elements for 2010 they found homeowners were avoiding more expensive, elaborate items in favor of more essential ones.
Given most outdoor living spaces are an extension of the kitchen, ASLA, not surprisingly, found the most popular kitchen features was an outdoor grill (94.4 percent) and counter space (73.5 percent).
More elaborate outdoor refrigerators (52.8 percent) and sinks (50 percent) were much less popular.
For entertainment purposes, instead of stereo systems (57.2 percent), wireless/Internet connectivity (44.1 percent), outdoor heaters (43.9 percent) and TVs (35.5 percent), there was much greater interest in more utilitarian seating/dining areas (95.6 percent), installed seating like benches and seat walls (90.6 percent) or weatherized outdoor furniture (77.1 percent). However, the fire pit/fireplace (94 percent) remained popular.
This year homeowners are also looking to go 'green' outside to save time and money on upkeep.
Popular landscaping elements include low-maintenance landscapes (94 percent); drip/water-efficient irrigation (85.2 percent); native/adapted drought tolerant plants (85.2 percent); and less sprawling lawn (73.9 percent).
Other popular features include fountains/water features (87.8 percent) and, taking a cue from the First Lady, Michelle Obama, food/vegetable gardens (78.5 percent).
Among the more expensive outdoor architectural features that remain popular were spas (hot tub, Jacuzzi, whirlpool, indoor/outdoor sauna; 79.1 percent); decks (83 percent), porches (76.4 percent) and swimming pools (72.4 percent).
Among the least popular items were sleeping spaces (5.6 percent); geothermal-heated pools (28.2 percent); outdoor cooling systems (36.5 percent); outdoor heaters (43.8 percent); solar-powered lights (49.4 percent); and sports/recreational spaces (tennis courts, bocce ball, etc.; 47 percent).
Published: April 22, 2010
CA Governor Signs New $10,000 Home Buyer's Credit Bill
California homeowners might be seeing another $10,000 tax credit offer soon. Despite the economic woes of the state, the governor has signed a bill offering this tax credit to home buyers.
Is this sound business judgment? California has a $20.7 billion deficit in the general fund budget over the next 16 months and owes $8.8 billion in short-term loans that have to be paid off by June. There is an additional $120-plus billion in outstanding bonds and interest that will be paid over decades. The state’s pension fund, CalPers, has $16.3 billion more in liabilities than assets plus California also faces a $51.8 billion for the health and dental benefits of state retirees and future retirees.
The bottom line for California, is that it has the lowest credit rating of any state in the nation, just above junk bond status. One major problem is the rise in California’s debt-service ratio (DSR). That is, the ratio of annual general fund debt–service costs to annual general fund revenues and transfers.
This is often used as one indicator of the state’s debt burden. The higher it is and more rapidly it rises, the more closely bond raters, financial analysts, and investors tend to look at the state’s debt practices, and the more debt–service expenses limit the use of revenues for other programs. Debt servicing is projected to comprise 9% of general fund revenues by the end of 2014-15. According to Bloomberg News, the market believes a developing country like Kazakhstan, with about 15.7 million people, is less likely to default on its debt than California, which is the eighth largest economy in the world.
Despite the economic woes of the state, the new (some say extension of the 2009 new home credit) bill, AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes.
The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and closes the sale before Aug. 1, 2011, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Purchasers will be required to live in the home for at least two years or forfeit -repay the credit. (Before acting on this preliminary information for the tax credit, one should first consult your legal/tax professional.)
Published: April 19, 2010
Number of Delinquent Mortgages Declines
The number of delinquent mortgages declined 8.6 percent in March, says LPS Applied Analytics, which tracks the performance of loans for investors. Totals also declined in February.
The biggest decline was in loans more than 30 days past due, which are now at about the same level as they were in spring 2008.
"We're not out of the woods, but this appears to be a turning point," says LPS Applied Analytics President Ted Jadlos. "This is the first time we've seen improvement across all stages of mortgage delinquency."
Source: The Wall Street Journal, Ruth Simon (04/19/2010)
The biggest decline was in loans more than 30 days past due, which are now at about the same level as they were in spring 2008.
"We're not out of the woods, but this appears to be a turning point," says LPS Applied Analytics President Ted Jadlos. "This is the first time we've seen improvement across all stages of mortgage delinquency."
Source: The Wall Street Journal, Ruth Simon (04/19/2010)
Number of Delinquent Mortgages Declines
The number of delinquent mortgages declined 8.6 percent in March, says LPS Applied Analytics, which tracks the performance of loans for investors. Totals also declined in February.
The biggest decline was in loans more than 30 days past due, which are now at about the same level as they were in spring 2008.
"We're not out of the woods, but this appears to be a turning point," says LPS Applied Analytics President Ted Jadlos. "This is the first time we've seen improvement across all stages of mortgage delinquency."
Source: The Wall Street Journal, Ruth Simon (04/19/2010)
The biggest decline was in loans more than 30 days past due, which are now at about the same level as they were in spring 2008.
"We're not out of the woods, but this appears to be a turning point," says LPS Applied Analytics President Ted Jadlos. "This is the first time we've seen improvement across all stages of mortgage delinquency."
Source: The Wall Street Journal, Ruth Simon (04/19/2010)
Lenders Unload Mortgages to Collection Agencies
Lenders are selling second mortgages and home-equity lines in default to collection agencies that have the right to collect this money potentially for decades.
"It's a big business, and investors are coming out of the woodwork," says Sylvia Alayon, a vice president for Consumer Mortgage Audit Center, which analyzes mortgage documents for lenders, advocacy groups, and attorneys.
Real estate professionals will be doing their short-sale clients a big favor if they urge them to get professional advice before they sign agreements, Alayon says.
A new government short-sale program, which takes effect Monday, aims to prevent banks from reselling this debt. Sellers covered under the program will receive notice that secondary lien holders have received part of the proceeds of the sale "in exchange for release and full satisfaction of their liens."
Source McClatchy/Tribune News, Jim Wasserman (04/19/2010)
"It's a big business, and investors are coming out of the woodwork," says Sylvia Alayon, a vice president for Consumer Mortgage Audit Center, which analyzes mortgage documents for lenders, advocacy groups, and attorneys.
Real estate professionals will be doing their short-sale clients a big favor if they urge them to get professional advice before they sign agreements, Alayon says.
A new government short-sale program, which takes effect Monday, aims to prevent banks from reselling this debt. Sellers covered under the program will receive notice that secondary lien holders have received part of the proceeds of the sale "in exchange for release and full satisfaction of their liens."
Source McClatchy/Tribune News, Jim Wasserman (04/19/2010)
No Need to Hit the Panic Button Yet – Added Jobs Push Mortgage Rates Up
For those worried the end of government mortgage-backed securities purchasing could spell a dramatic increase in home loan rates, there's no need to hit the panic button just yet. A slight rise (+0.125) in long term interest rates Friday was more the product of a Labor Department report showing that the US added 162,000 jobs in March, the biggest monthly gain in three years, than it was a direct effect of the March 31st Fed MBS exit.
Mortgage-backed securities prices, which drive mortgage rates in the opposite direction, have dropped twice in the past 10 days each time pushing conforming 30-yr fixed rates up 1/8, once before and once after March 31st.
Reports depicting the up-tic in rates as the end of an era of low fixed mortgage rates are unfounded. While in a doomsday scenario it's speculated the Fed exit from MBS buying could leave a void in MBS markets big enough that demand and prices plummet causing long term fixed rates to skyrocket, fed officials suggest private buyers are ready to step in and take their place.
According to FreeRateUpdate.com conventional 30-yr fixed mortgages are available today at 5 percent to well qualified consumers paying a standard .07 to 1 point origination. 15-yr fixed mortgages are now available at 4.375 percent, up from 4.25. Today's 5/1 ARM rates are at 3.75 percent, up from 3.625. Despite the sub 4 percent 5/1 ARM rate, data shows borrowers are choosing fixed loans over adjustable loans at a record ratio and have been for several months (96 percent of new mortgages are fixed - Freddie Mac).
FHA 30-yr fixed mortgages are available at 4.875 percent today, an 1/8 lower than conventional loans. Securing FHA financing means a higher APR, despite the note rate and origination being the same, MI and other FHA fees charged on FHA loans drive up the cost. Increasing those costs yesterday was a boost to MI from 1.75 to 2.25 percent of the loan amount. The increase (+0.50) in the premium (MI) charged to borrowers at closing is part of an effort to help the Federal Housing Administration guard against losses from record high loan default rates.
Jumbo mortgages remain available at a 30-yr fixed rate of 5.625, the same as last week.
The benchmark 10-yr treasury yield, a leading indicator for fixed mortgage rates, is near a 1 year high.
Rates mentioned in this article are available to well-qualified consumers paying a standard .07 to 1 point origination as verified by FreeRateUpdate.com research of over two dozen wholesale lenders' rate sheets. Conventional: Conforming Freddie Mac and Fannie Mae insured mortgages. FHA loans are backed by the Federal Housing Administration.
Today's Mortgage Rates:
30 yr fixed rate - 5.000%
15 yr fixed rate - 4.375%
5/1 ARM rate - 3.750%
FHA 30 yr fixed rate - 4.875%
FHA 15 yr fixed rate - 4.500%
FHA 5/1 ARM rate - 3.750%
VA 30 yr fixed rate - 5.000%
Jumbo 30 yr fixed rate - 5.625%
Jumbo Conforming 30 yr fixed rate - 5.250%
Mortgage-backed securities prices, which drive mortgage rates in the opposite direction, have dropped twice in the past 10 days each time pushing conforming 30-yr fixed rates up 1/8, once before and once after March 31st.
Reports depicting the up-tic in rates as the end of an era of low fixed mortgage rates are unfounded. While in a doomsday scenario it's speculated the Fed exit from MBS buying could leave a void in MBS markets big enough that demand and prices plummet causing long term fixed rates to skyrocket, fed officials suggest private buyers are ready to step in and take their place.
According to FreeRateUpdate.com conventional 30-yr fixed mortgages are available today at 5 percent to well qualified consumers paying a standard .07 to 1 point origination. 15-yr fixed mortgages are now available at 4.375 percent, up from 4.25. Today's 5/1 ARM rates are at 3.75 percent, up from 3.625. Despite the sub 4 percent 5/1 ARM rate, data shows borrowers are choosing fixed loans over adjustable loans at a record ratio and have been for several months (96 percent of new mortgages are fixed - Freddie Mac).
FHA 30-yr fixed mortgages are available at 4.875 percent today, an 1/8 lower than conventional loans. Securing FHA financing means a higher APR, despite the note rate and origination being the same, MI and other FHA fees charged on FHA loans drive up the cost. Increasing those costs yesterday was a boost to MI from 1.75 to 2.25 percent of the loan amount. The increase (+0.50) in the premium (MI) charged to borrowers at closing is part of an effort to help the Federal Housing Administration guard against losses from record high loan default rates.
Jumbo mortgages remain available at a 30-yr fixed rate of 5.625, the same as last week.
The benchmark 10-yr treasury yield, a leading indicator for fixed mortgage rates, is near a 1 year high.
Rates mentioned in this article are available to well-qualified consumers paying a standard .07 to 1 point origination as verified by FreeRateUpdate.com research of over two dozen wholesale lenders' rate sheets. Conventional: Conforming Freddie Mac and Fannie Mae insured mortgages. FHA loans are backed by the Federal Housing Administration.
Today's Mortgage Rates:
30 yr fixed rate - 5.000%
15 yr fixed rate - 4.375%
5/1 ARM rate - 3.750%
FHA 30 yr fixed rate - 4.875%
FHA 15 yr fixed rate - 4.500%
FHA 5/1 ARM rate - 3.750%
VA 30 yr fixed rate - 5.000%
Jumbo 30 yr fixed rate - 5.625%
Jumbo Conforming 30 yr fixed rate - 5.250%
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