Homeowner Tax Credit Extended

Samuel Gibson Jr NV-MLD 3080 Branch Manager

Senators have agreed to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.

 

The tax credit provides up to $8,000 to first homebuyers but is set to expire at end of November. A spokeswoman from Senator Majority Leader Harry Reid said senators agreed Wednesday to extend the existing tax credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years.

 

A congressional aide said the tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes. WASHINGTON (AP)

 

Truth In Lending Act

Samuel Gibson Jr NV-MLD 3080 Branch Manager

In 2008 the Housing and Economic Recovery Act prompted changes in several laws effecting residential lending. Truth In Lending received extensive overhauling with the introduction of MDIA in July, 2009.

Effective with loan applications dated on or after October 1, 2009, the second phase of TIL changes are ushered in which require specific loans to be tested to see if they are Higher Priced Mortgage Loans (HPML’s) or Section 35 loans.

Higher Priced Mortgage Loans (HPML) are those that meet the following criteria:

• Owner occupied, principal dwelling
• Purchase and refinance transactions
• The APR on the 1st lien loan is greater than 1.55 over the Average Prime Offered Rates as quoted by the FFIEC on their website. Separate rate tables exist for fixed and adjustable rate transactions.

Average Prime Rates means an annual percentage rate that is derived from average interest rates, points, and other loan pricing terms currently offered to consumers by a representative sample of creditors for mortgage transactions that have low-risk pricing characteristics. The Board of Governors of the Federal Reserve publishes average prime offer rates for a broad range of transactions in a table updated at least weekly.

Effective Date:

The rules are effective with all loan applications dated on or after October 1, 2009 or all mortgage applications with a note date on or after January 1, 2010 regardless of the application date.

I would encourage everyone to learn the requirements under HERA. HERA guidance can be found at http://edocket.access.gpo.gov/2009/pdf/E9-11567.pdf.

Direct Access Lending NV – Broker #405

650 White Dr #200

Las Vegas,  NV 89119

o: 702.617.9900 x1106

f: 702.425.9426

c: 702.205.7409

e: samuel.gibson@dalusa.com

 

Effective Jan. 1st new FHA rules

John Le Francois NV-MLD #40102

The Federal Housing Administration (FHA) today announced several significant policy changes that are intended to improve their exposure to risk.  The changes, effective January 1, include:

• Modification of Procedures for Streamline Refinance Transactions
• Adoption of Home Valuation Code of Conduct Guidelines (some not all)
• Updated Appraisal Validity Period
• New Appraisal Portability Regs
• New Requirement of Lenders to Submit of Audited Financial Statements for Review
• Adjustments to the Approval Process for Participation in FHA Loan Origination
• Increased Net-Worth Requirements for Lenders

Grabbing the attention of mortgage professionals was FHA’s decision to adopt language from HVCC appraisal guidelines. The HVCC, which has been the subject of heated debate within the industry, was implemented by Fannie Mae and Freddie Mac on May 1, 2009. At that time the FHA decided not to adhere to the policy. This undoubtedly increased demand for FHA loan products as originators quickly learned of the multitude of problems associated with HVCC. The new requirements will prohibit any commissioned based lender staff member from ordering an FHA appraisal.

FHA will not require the use of AMCs or other third party organizations for appraisal ordering, if lenders do use AMCs and/or other third party organizations FHA-approved lenders must ensure that:

• FHA Appraisers are not prohibited by the lender, AMC or other third party, from recording the fee the appraiser was paid for the performance of the appraisal in the appraisal report.
• FHA Roster appraisers are compensated at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised.
• The fee for the actual completion of an FHA appraisal may not include a fee for management of the appraisal process or any activity other than the performance of the appraisal.
• Any management fees charged by an AMC or other third party must be for actual services related to ordering, processing or reviewing of appraisals performed for FHA financing.
• AMC and other third party fees must not exceed what is customary and reasonable for such services provided in the market area of the property being appraised.

John Le Francois

Direct Access Lending NV-Broker # 405

650 White Drive #200

Las Vegas, NV. 89119

Office: 702-2-617-9900 Ext. 1165

Fax: 702-617-9970

Mobile: 702-271-2659

Website

E-Mail: john.lefrancois@dalusa.com

 

Ways to Improve a Credit Score

Samuel Gibson Jr NV-MLD 3080 Branch Manager

With identity theft on the rise, consumers are becoming increasingly aware of the importance of reviewing their credit reports. However, their thoughts about credit and its long-term impact upon their financial future typically end there until it’s time to apply for a home loan. A credit score is used to evaluate how likely a borrower is to repay their loan. There are several actions a person can take to impact their score. Here are a few to keep in mind.

If someone has a credit card which has a high balance, while their remaining credit cards have low or zero balances, it’s best to distribute the debt across the cards in order to change the ratio of debt to available credit.    

  

Many consumers believe that they should close an existing credit card account if the card is inactive. It’s better to keep the account open and use it periodically in order to take advantage of its contribution to their long-term credit history.

With the flood of credit card offers that come in the mail, it may be tempting to open new accounts. However, these “pre-approved” offers are not approved until the companies run a credit report which will temporarily impact the applicant’s credit score. In addition, experts recommend that a person maintain between two to five credit card accounts, total, so it’s best to avoid accumulating too many.

There are several factors that contribute to a credit score. But by observing the tips above, as well as making payments on time and keeping balances as low as possible, a consumer is sure to achieve superior results.

Direct Access Lending NV-Broker #405

650 White Dr #200

Las Vegas NV 89119

o: (702) 617-9900 X1106

f: (702) 425-9426

c: (702) 205-7409

e: samuel.gibson@dalusa.com

 

New $8,000 Tax Credit for First Time Home Buyers

Samuel Gibson Jr NV-MLD 3080 Branch Manager

Great news for first time home buyers in 2009! Qualified first time home buyers are eligible for an $8,000 tax credit when buying a primary residence. If you haven’t owned a home in the three years prior to closing, congratulations! You are eligible.

Remember, a tax credit is much more valuable than a tax deduction. A tax credit reduces dollar for dollar the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable. Here are two examples of how tax credit works. You paid $4,000 in taxes. Qualify for the full credit and you get $4,000 back, plus another $4,000. If you paid no taxes, you get the full $8,000 back in cash and you don’t have to pay it back!

Eligible buyers may qualify for a tax credit of up to 10% of the purchase

NV-MLD Broker #405

 price or $8,000, whichever is less. To qualify for the full credit, the buyer’s modified adjusted gross income must be less than$75,000 for single taxpayers and $150,000 for married taxpayers filing  a joint return. A partial credit is available for incomes under $95,00 (single) or $170,000 (married).

In order to qualify, the $8,000 tax credit is available for qualifying home purchases made before December 1, 2009. This is not a typo. If  your closing occurs December 2nd or later, you lose.

Want one more reason to act now? Qualified home buyers can apply the credit to either their 2008 or 2009 tax return. To get the credit for 2008, see your tax professional about filing an amended return.

Direct Access Lending NV-Broker #405

650 White Dr. #200

Las Vegas, NV 89119

Office: (702) 617-9900 x1106

Fax:     (702) 425-9426

Cell:     (702) 205-7409

email: samuel.gibson@dalusa.com

 

Las Vegas housing sales set records in June.

Article by John Le Francois NV-MLD #40102

It has been widely reported in the news that Las Vegas is the foreclosure capital and getting the notorious distinction as #1 of all  foreclosure cities with more then 1 in 58 homes going into foreclosures.  Yet there are signs that Las Vegas foreclosed homes are slowing and might be in a very quick recovery based on current data. What Data you asked? In June the Greater Las Vegas Association of Realtors reported that Las Vegas had set a record with more then 4,702 single family homes, town houses and condominiums were sold in the month of June, 2009. The record that was broken went all the way back to June 2004 with 4,414 sales. This represents a 9.3% increase from  the record that was presumably in the height of the housing bubble. Most of these home sold last month were existing homes, but there were some new homes as well.

In the last several months Las Vegas housing sales has been slowly creeping up on the record that was set in June 2004, but this strong sales only shows the resiliency of Las Vegas economy. While the sales record is impressive we are seeing also a bottoming of the median price of homes single family homes at $140,000 the same as May. This is the first time that Las Vegas housing median prices have not declined in consecutive months since August 2007. It is important to have stability in the median prices of these homes especially when most of the homes were bank owned.

REO

Who is buying these Homes?

First time buyers are the primary purchasers as it is reported that the investors are slowly retreating to the sidelines as a glut of rental properties is lowering attainable rents that the investors can get. In the Las Vegas Sunday paper rental homes listings in the wanted ads are now up to three pages and has been growing each month while rents have decreased. People that were renting single family homes are now able to pay less for a mortgage payment then for rent. This is the first time in several years that this is possible due to low interest rates, lower housing prices while the first time buyers being able to collect the $8,000.00 tax credit that is set to expire November 30th, 2009.

John Le Francois

Direct Access Lending NV-Broker # 405
650 White Drive #200

Las Vegas, NV. 89119

Office: 702-2-617-9900 Ext. 1165

Fax: 702-617-9970

Mobile: 702-271-2659

Website

Customer Ratings

E-Mail: john.lefrancois@dalusa.com

 

When Is Bankruptcy The Answer

Samuel Gibson Jr NV-MLD 3080

Filing for bankruptcy becomes a viable option when an individuals cash flow is “upside down” with no reversal in sight. But before proceeding, it’s important to first look at the structure of one’s assets and liabilities. For many homeowners, an experienced and qualified mortgage professional may be able to help them restructure debt and avoid bankruptcy altogether.

If this isn’t possible, then it’s critical not to let negative cash flow go on for too long. Instead, quickly seek references for a reputable bankruptcy attorney and a credit counselor. One of the worst mistakes consumers make is to borrow more money in an attempt to pay off debts.

When declaring bankruptcy, it is important to be very accurate and honest in ones filing, especially when it comes to any recent changes in income. Remember, a bankruptcy hearing is a federal proceeding, complete with courts, judges, and representatives who coordinate with the Department of Justice, the FBI, and the IRS.

During the proceeding, homeowners should develop a budget and try to live below their means. They should use this time to save cash as well as examine the causes of their bankruptcy. Also, they should keep organized, saving all their paperwork and taking note of their discharge date. Having this information on hand will prove extremely useful in the future.

Once the bankruptcy is final, it’s time to begin rebuilding credit. Secured credit cards are an excellent place to start. This is also a good time to hire a reputable credit repair specialist who can offer advice regarding the best ways to re-establish credit. There is definitely life (and credit) after bankruptcy. The trick is to get the help and advice you need from professionals you trust.

Direct Access Lending NV-Broker #405

650 White White Dr #200

Las Vegas, NV 89119

Office: (702) 617-9900 x1106

Fax:     (702) 425-9426

Cell:     (702) 205-7409

Email: samuel.gibson@dalusa.com

 

Colonial Bank Warehouse closes it doors

Article by John Le Francois NV-MLD #40102

Friday 14^th, 2009 the Federal regulators announced the shut down of Colonial Bank Corp. (CNB) with its corporate offices in Montgomery, Alabama and it will be taken over by BB&T (Branch Banking and Trust). Colonial Bank had over 25 Billion dollars in Assets before going into Federal Deposit Insurance Corp receivership (FDIC), while BB&T will take over all of its branches and assets.

CNB for the last year has been plagued with insurmountable losses in souring real estate loans and had reported in the second quarter earnings report that it had $606 Million dollar loss. With the BB&T agreement and the FDIC, BB&T will be shielded from the toxic assets of CNB, and FDIC would absorb losses up to $15 Billion dollars.

How did this happen?

Last week the Wall Street Journal reported that Bank of America filed a restraining order against CNB to freeze $1 Billion dollars of it CNB assets, which CNB was trying to sell to stay in business. Bank of America was seeking its right as trustee of the $ 1 Billion dollars of assets it received from Freddie Mac to stop this sale. The US District Judge Jordan agreed with Bank of America and upheld the restraining order stating “If CNB were allowed to sell these assets it would amount to a $1 Billion dollar bank heist.”

Wall street hits Main street

Why is Colonial Bank so important?

What most people are unaware of is Colonial Bank had a subsidiary company, its warehouse lending business was under Federal Investigation and records were seized last week and during this investigation the FDIC decided that it was time to close the doors on the warehouse side as well.

Warehouse lending is a critical link in the mortgage lending chain, providing a short term funding for loans that are later sold on the secondary market to Fannie Mae, Freddie Mac, and Ginnie Mae. What is astounding that it is estimated that 41% of all residential mortgages and 55% of all FHA mortgages originate and use warehouse lending. It is believed that CNB was used in about 82% of all of these types of short term funding.

Since 2006 warehouse lending capacity has decreased by 90% to approximately $25 Billion dollars a year. This represent a $400 Billion dollars potential short fall caused by a lack of funds and this was before CNB closed!

What are the potential effects on mortgages?

Unless the Federal policy makers find an alternative funding source soon, we could see an increase in rates with tighter credit restrictions and longer processing times to fund loans. Colonial Bank follows the closing of Taylor Bean and Whitaker last week who was the sixth largest lender last year and the third largest lender for FHA loans.

John Le Francois

Direct Access Lending NV-Broker # 405
650 White Drive #200

Las Vegas, NV. 89119

Office: 702-2-617-9900 Ext. 1165

Fax: 702-617-9970

Mobile: 702-271-2659

Website

E-Mail: john.lefrancois@dalusa.com

 

HUD Suspend Taylor Bean and Whitaker from originating loans

Article by John Le Francois NV-MLD #40102

August 5, 2009  HUD who oversees the most popular home  loan program, the FHA loan, has suspended one of its major players Taylor Bean & Whitaker Corp.Taylor Bean & Whitaker last year alone originated and underwrote one third of all FHA loans. Taylor Bean and Whitaker corporate office is located in Ocala, Florida will be prevented from originating or underwriting any FHA insured mortgages. With this action from HUD the Government National Mortgage Association (Ginnie Mae) is also defaulting and terminating TBW as an issuer in its Mortgage-Backed Securities (MBS) program and is ending TBW’s ability to continue to service Ginnie Mae securities. TBW has originated and underwritten one sixth of all Ginnie Mae loans. This means that, effective immediately, TBW will not be able to issue Ginnie Mae securities, and Ginnie Mae will take control of TBW’s nearly $25 billion Ginnie Mae portfolio. All of TBW’s portfolio will be transfered to another servicer will be done seamlessly.

FHA and Ginnie Mae are imposing these actions because TBW failed to submit a required annual financial report and misrepresented that there were no unresolved issues with its independent auditor even though the auditor ceased its financial examination after discovering certain irregular transactions that raised concerns of fraud. FHA’s suspension is also based on TBW’s failure to disclose, and its false certifications concealing, that it was the subject of two examinations into its business practices in the past year.

FHA Commissioner David Stevens said, “TBW failed to provide FHA with financial records that help us to protect the integrity of our insurance fund and our ability to continue a 75-year track record of promoting, preserving and protecting the American Dream. We were also troubled that the Company not only failed to disclose it was a target of a multi-state examination and a separate action by the Commonwealth of Kentucky, but then falsely certified that it had not been sanctioned by any state. FHA won’t tolerate irresponsible lending practices.”

In conjunction with TBW’s suspension, HUD sent notices of proposed debarment to TBW’s Chief Executive Officer, Paul R. Allen, and TBW’s President, Ray Bowman. Mr. Allen’s proposed debarment alleges that he submitted false and/or misleading information to Ginnie Mae regarding TBW’s delay in submitting its audited financial reports for fiscal year ending on March 31, 2009. Mr. Bowman’s proposed debarment alleges that he submitted two false certifications to HUD on TBW’s Yearly Verification Report. Mr. Allen and Mr. Bowman have thirty days to contest the proposed debarment.

It should also be noted that the mortgage industry had been aware that some kind of issues with TBW must have been in play as the turn times for any new applications has grown from 2 weeks to over 45 days. The general consensus was that they could not fund any loans until they were sold on the secondary market and was the cause of the time delays.

With this action from HUD and Ginnie Mae against Taylor Bean and Whitaker has served notice to all lenders that the practices that caused the sub prime melt down will not be tolerated. While it is noted that this suspension is only temporarily until HUD completes its investigation it is very unlikely that TBW could survive from this action.

John Le Francois

Direct Access Lending NV-Broker # 405
650 White Drive #200

Las Vegas, NV. 89119

Office: 702-2-617-9900 Ext. 1165

Fax: 702-617-9970

Mobile: 702-271-2659

Website

E-Mail: john.lefrancois@dalusa.com

 

Greater Las Vegas July Housing Statistics

Article by John Le Francois NV-MLD #40102

Today it is not uncommon to hear from Realtors and clients the frustration that they are feeling when trying to buy a home in Las Vegas. With dwindling inventories and comparatively cheap housing from the highs that were seen in 2005 we are seeing a new land grab rush in the Greater Las Vegas area! Clients are making multiple offers on housing and offering $20,000 to $30,000 dollars more then the asking price to get their offer accepted. This practice of offering more money has been used before knowing that if the appraisal came in lower that most banks would lower the price to the appraised value to close the deal. This practice may not work any more as some banks are counter offering that if the appraisal is lower then contract price, then the buyer has to come in with the difference or lose their earnest money.

Fear is setting in for the first time home buyers of losing the tax credit of $8,000.00 that is set to expire in November 30th, 2009. Affordable housing in the Greater Las Vegas area has not been at this level since before 2001 which also is creating to the demand. We are going to see more activity as we get closer to the November dead line for the tax credit. I’ve personally seen a 75% increase in first time buyers applying for a loan in the last two weeks. When asked there motivation for wanting to purchase now, the number one answer was the tax credit and the second was the fear they will not be able to get a house.  Below is some interesting information and the latest numbers of pending sales and standing inventories of homes for the end of July.

The end of July listings of MLS home availability in the Greater Las Vegas area continues for the 19th week to decline to 12,939 which is 89 less units then the previous week. The decline of 9,400 units from the same period a year ago is nearly 41.2%. This is astounding turn around in the housing market and represents the high demand fro affordable housing! The inventories numbers of available homes has been at this level since August of 2005.  The total number of units that are contingent or pending sales is 13,650 which is double the prior year, and now out paces the number of available homes. Contingent homes are listed as short sales where some type of contractual requirement or lender approval is required represents 9,650 units or 65.2% of the 9,400 units pending sales. Short sales are challenging to get approval and is time consuming process, which can be more challenging when there is a first and second lender involved. The Pending number of customary closings numbers are 3,825 which also includes 446 short sales. The timing or viability of closing is not certain due to the nature of the short sales and pending negotiation that are required to complete the transactions.

Direct Access Lending NV-Broker #405

650 White Drive #200

Las Vegas, NV. 89147

Off: 702-617-9900

Fax: 702-617-9970

Mobile 702-271-2659

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