The FAR Office of Public Policy has been getting a lot of questions from across the state regarding downpayment assistance for those who qualify for the federal first time homebuyer tax credit. Given that there is a state downpayment plan and a federal downpayment plan (and at least one special exemption) it definitely gets confusing, and details have been slow to emerge. Many of you are finding that local housing authorities just don't have all of the information they need to move forward and some are reporting that bankers are steering clear of the downpayment assistance programs. We have some brand new information for you tonight (see bold).
The state program was passed during the recent legislative session as part of the 2010 budget. That bill takes effect July 1, 2009 (tomorrow). The downpayment assistance program that is specific to Florida is the Florida Homebuyer Opportunity Program (FLHOP). The federal program is through FHA.
The state program, FLHOP, is intended to help Floridians maximize the $8,000 federal first-time homebuyer tax credit by allowing local housing authorities to make "bridge loans" to consumers.
If the local housing authority is the originator of the loan this tax credit may be used as part of the downpayment. In fact, Florida Housing Finance Corporation has received word from FHA that borrowers who access the $8,000 tax credit through a state or local government program may use it to make up the required 3.5% downpayment. Those who access through any other FHA-approved lender must (as with any standard FHA loan) provide the 3.5% themselves which you can read more about below.
For local housing authorities this program is very similar to SHIP - with one major difference - the income limits. Currently, SHIP uses Area Median Income (AMI) and those are typically lower, and calculated differently, than the federal tax credit limit of $75,000. The $75,000 for a single income tax filer, and $150,000 limit for joint filers, will be used for this program.
Florida Housing Finance Corporation (FHFC) insists they are training the local administrators on how to proceed with this program. Local housing authorities will have the ability and flexibility to amortize this $8,000 loan, and include penalties if need be, and restructure the repayment option. Most importantly, local governments and housing authorities should know that when repaid, the money stays with the locals as SHIP money that they may use according to standard procedure. This is a win/win for them. Also, the local government gets the standard 10% off the top for administration of this program. If you are getting push back from your local housing administrator at this point it is likely because they still don't quite understand the program themselves.
While we are anxious to get word of this program to our members, one problem that may be unavoidable is that money may not be "out the door" until the first week of August. Given that the new fiscal year begins July 1st new monies (via doc stamps) must be collected before they can be distributed. Even though FHFC appealed to the Chief Financial Officer, they say there was no way to get around this technical issue. We know it'll take time to close on a house anyway so it is not too soon for our members to start talking about this program to potential buyers who qualify. In fact, SHIP administrators should be taking applications NOW for the advance on the tax credit. Some may even have unspent money as part of their SHIP program from last year that could be used until the new money is available.
Now, on to the federal downpayment assistance that is being offered. NAR has provided information on how FHA is going to allow buyers to "advance" the tax credit. FHA-approved lenders have received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront.
FHA-approved private lenders can develop these bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent. The loans cannot be used to cover the minimum 3.5 percent needed for a downpayment on an FHA loan except in the special circumstance I mentioned above where the state or local government is the loan originator and there is not a private lender involved.
Good resources for you are the "Homebuyer Center" on our website and NAR's dedicated page to the First Time Homebuyer Tax Credit. As more information becomes available, we will certainly send updates and include them in Earlybird.
I hope this is helpful and answers some of your questions as the program gets off to a slow start.
John M. Sebree
Vice President - Public Policy
Florida Association of REALTORS®
P.O. Box 1853
Tallahassee, FL 32302
850-224-1400 (Office)
This message sent to cityrentals305@gmail.com by news@miamidaderealtors.
Wednesday, July 1, 2009
Tuesday, June 16, 2009
Home inventories poised to rise
South Florida Business Journal - by Brian Bandell
The sales agents dealing with South Florida’s huge inventory of available properties might feel like they’re running on a giant treadmill powered by foreclosures.
And they’d better be ready to keep running.
Although a recent spike in sales has cut the inventory of homes for sale, there’s a glut of tens of thousands of foreclosure lawsuits pending against properties that are not listed for sale.
Until bank repossessions wane and mortgages become more widely available, property values might start stabilizing, but they won’t recover, said Keith Fleischer, a broker at the Weston office of Keith Owen REO Collection, a Re/Max International subsidiary that helps banks sell repossessed homes.
Banks often contact REO Collection about selling a home shortly before or shortly after it is seized through foreclosure. The company gets its name from the acronym banks have for their foreclosed property – real estate owned.
While REO Collection has a pretty decent amount of active listings, it has a huge board of pre-listings set for the market, Fleischer said.
“We’re going to see an increase in available new REO listings on the market,” he said.
Statistics seem to follow that logic, as banks are filing foreclosure actions faster than they are taking back homes and putting them on the market.
According to court data analyzed by Bal Harbour-based Condo Vultures Realty, there were 7,311 property repossessions in South Florida in the first quarter and 25,263 new foreclosure filings.
A study by the Mortgage Bankers Association suggests the state may be only halfway through the mess. Of the more than 3.5 million mortgages the MBA tracks in Florida, 10.6 percent were in the foreclosure process and an additional 10.7 percent were past due on March 31.
Dealing with the backlog
“The inventory of homes for sale will substantially increase. All you need to do is look at how many pending foreclosures there are,” said Bill McCaughan, an attorney with K&L Gates in Miami who represents banks in foreclosures. “There’s no question that the volume itself causes a time lag to list properties.”
Even if it’s clear that a property will become bank-owned, the backlogged South Florida courts and the bank employees overloaded with these cases make it a lengthy process, McCaughan said. Regulations, such as the mandatory inspections before REO home sales required by Miami-Dade County, only slow it down further, he said.
Condo Vultures principal Peter Zalewski said some banks are purposely delaying the foreclosure process because they don’t want to take ownership of homes and pay to maintain them while the market is near the bottom.
“Banks want to hold back on inventory to let the inventory be depleted so they can get higher pricing,” he said. “We’re seeing inventory being depleted because not all of the foreclosures are on the market.”
Much of the pain has already played out in the subprime mortgages, but several other factors continue pushing people into foreclosure. Unemployment is near a record high, and every percentage-point increase in the unemployment rate increases the probability that people will become seriously delinquent on their mortgage by 10 percent to 20 percent, according to a research paper published in May by the Federal Reserve Bank of Atlanta.
Payment option ARM issues
Add to that more toxic mortgages. Nationwide, there are about $500 billion in outstanding payment option adjustable-rate mortgages (ARM), where borrowers can pay only a portion of the monthly interest and let the size of the mortgage grow. When the value balloons by 15 percent or 25 percent – and the borrower is under water – the loan resets and requires both interest and principal payments, which can double the monthly payments.
A report issued in April by Credit Suisse predicted that these resets would start accelerating in the spring of 2010 until they reach a peak of $14 billion in option ARMs resetting in September 2011. They would not taper off until near the end of 2012.
The delinquency rates on those loans are so high that it helped push several option ARM-heavy banks, such as BankUnited FSB and Washington Mutual, into failure.
While the initial wave of defaults of subprime mortgages put many modest and lower-tier homes and condos on the market, the next wave of foreclosures from option ARMs and unemployment will include more top-shelf homes, said Bradley Hunter, director of the South Florida market for real estate analysis firm Metrostudy in West Palm Beach. That will give buyers more attractive targets.
Hunter believes that the median housing price could rise when those nicer homes start getting sold off by the banks, but it would be a false positive. The average sales price might increase because larger homes are getting sold more often, but the discounts based on past sales would remain – or even widen, he said.
“The downward pressure on prices continues and will continue well into next year,” Hunter said. “We are most of the way through the price adjustment. We probably only have another 10 percent [decline] more to go.”
Condo associations troubled
REO Collection’s Fleischer said single-family homes prices have nearly stabilized and will remain around this level for the next few years, but condo prices could fall further because of the crippling effects missed association dues are having on condo associations. The ailing condition of some condo associations makes the Federal Housing Administration and most banks rule out lending in those complexes, Fleischer said.
The sales agents dealing with South Florida’s huge inventory of available properties might feel like they’re running on a giant treadmill powered by foreclosures.
And they’d better be ready to keep running.
Although a recent spike in sales has cut the inventory of homes for sale, there’s a glut of tens of thousands of foreclosure lawsuits pending against properties that are not listed for sale.
Until bank repossessions wane and mortgages become more widely available, property values might start stabilizing, but they won’t recover, said Keith Fleischer, a broker at the Weston office of Keith Owen REO Collection, a Re/Max International subsidiary that helps banks sell repossessed homes.
Banks often contact REO Collection about selling a home shortly before or shortly after it is seized through foreclosure. The company gets its name from the acronym banks have for their foreclosed property – real estate owned.
While REO Collection has a pretty decent amount of active listings, it has a huge board of pre-listings set for the market, Fleischer said.
“We’re going to see an increase in available new REO listings on the market,” he said.
Statistics seem to follow that logic, as banks are filing foreclosure actions faster than they are taking back homes and putting them on the market.
According to court data analyzed by Bal Harbour-based Condo Vultures Realty, there were 7,311 property repossessions in South Florida in the first quarter and 25,263 new foreclosure filings.
A study by the Mortgage Bankers Association suggests the state may be only halfway through the mess. Of the more than 3.5 million mortgages the MBA tracks in Florida, 10.6 percent were in the foreclosure process and an additional 10.7 percent were past due on March 31.
Dealing with the backlog
“The inventory of homes for sale will substantially increase. All you need to do is look at how many pending foreclosures there are,” said Bill McCaughan, an attorney with K&L Gates in Miami who represents banks in foreclosures. “There’s no question that the volume itself causes a time lag to list properties.”
Even if it’s clear that a property will become bank-owned, the backlogged South Florida courts and the bank employees overloaded with these cases make it a lengthy process, McCaughan said. Regulations, such as the mandatory inspections before REO home sales required by Miami-Dade County, only slow it down further, he said.
Condo Vultures principal Peter Zalewski said some banks are purposely delaying the foreclosure process because they don’t want to take ownership of homes and pay to maintain them while the market is near the bottom.
“Banks want to hold back on inventory to let the inventory be depleted so they can get higher pricing,” he said. “We’re seeing inventory being depleted because not all of the foreclosures are on the market.”
Much of the pain has already played out in the subprime mortgages, but several other factors continue pushing people into foreclosure. Unemployment is near a record high, and every percentage-point increase in the unemployment rate increases the probability that people will become seriously delinquent on their mortgage by 10 percent to 20 percent, according to a research paper published in May by the Federal Reserve Bank of Atlanta.
Payment option ARM issues
Add to that more toxic mortgages. Nationwide, there are about $500 billion in outstanding payment option adjustable-rate mortgages (ARM), where borrowers can pay only a portion of the monthly interest and let the size of the mortgage grow. When the value balloons by 15 percent or 25 percent – and the borrower is under water – the loan resets and requires both interest and principal payments, which can double the monthly payments.
A report issued in April by Credit Suisse predicted that these resets would start accelerating in the spring of 2010 until they reach a peak of $14 billion in option ARMs resetting in September 2011. They would not taper off until near the end of 2012.
The delinquency rates on those loans are so high that it helped push several option ARM-heavy banks, such as BankUnited FSB and Washington Mutual, into failure.
While the initial wave of defaults of subprime mortgages put many modest and lower-tier homes and condos on the market, the next wave of foreclosures from option ARMs and unemployment will include more top-shelf homes, said Bradley Hunter, director of the South Florida market for real estate analysis firm Metrostudy in West Palm Beach. That will give buyers more attractive targets.
Hunter believes that the median housing price could rise when those nicer homes start getting sold off by the banks, but it would be a false positive. The average sales price might increase because larger homes are getting sold more often, but the discounts based on past sales would remain – or even widen, he said.
“The downward pressure on prices continues and will continue well into next year,” Hunter said. “We are most of the way through the price adjustment. We probably only have another 10 percent [decline] more to go.”
Condo associations troubled
REO Collection’s Fleischer said single-family homes prices have nearly stabilized and will remain around this level for the next few years, but condo prices could fall further because of the crippling effects missed association dues are having on condo associations. The ailing condition of some condo associations makes the Federal Housing Administration and most banks rule out lending in those complexes, Fleischer said.
Wednesday, June 3, 2009
HUD Guidance on Monetizing the Tax Credit
I want to take just a few minutes to update you on some important developments on the regulatory front and highlight two excellent new member benefits.
As you know, NAR held our first-ever Real Estate Summit during the Midyear Legislative Meetings in May. The event was a resounding success. Please take a few minutes to watch the video and listen to what top government officials and industry experts had to say about the challenges we are facing.
http://www.realtor.org/meetings_and_expo/midyear_and_trade_expo/real_estate_summit
As a direct result of our Summit, we have made progress on two critical issues: improving the short-sale process and HUD’s efforts to monetize the first-time homebuyer tax credit. My latest podcast includes updates on both topics. Please listen and send to your fellow members.
http://www.realtor.org/about_nar/presidents_report/_podcast_archive/mcmillan_hudguidlines_20090602
As you know, NAR held our first-ever Real Estate Summit during the Midyear Legislative Meetings in May. The event was a resounding success. Please take a few minutes to watch the video and listen to what top government officials and industry experts had to say about the challenges we are facing.
http://www.realtor.org/meetings_and_expo/midyear_and_trade_expo/real_estate_summit
As a direct result of our Summit, we have made progress on two critical issues: improving the short-sale process and HUD’s efforts to monetize the first-time homebuyer tax credit. My latest podcast includes updates on both topics. Please listen and send to your fellow members.
http://www.realtor.org/about_nar/presidents_report/_podcast_archive/mcmillan_hudguidlines_20090602
Thursday, May 21, 2009
HUD: Homebuyer Tax Credit Loans Still on Track
News reports that the federal government is backing away from its plan to permit eligible borrowers to monetize the first-time homebuyer tax credit are off the mark, a spokesperson for the U.S. Department of Housing and Urban Development says.
"The technical details are still being finalized and will soon be published in a mortgagee letter and posted on our Web site," Lemar Wooley, a HUD spokesperson, told REALTOR® Magazine Wednesday afternoon.
Under the guidance that's under development, state agencies and other HUD-approved entities would be able to provide short-term bridge loans that households could use to help with their downpayment. The loans would be repaid with the proceeds from the households' federal tax credit.
The loans were announced on the opening day of NAR's 2009 Midyear Legislative Meetings in Washington, D.C., last week. In his announcement, HUD Secretary Shaun Donovan said guidance would be issued shortly.
When the guidance is released, it is expected to cover eligible lenders and set parameters for loan terms and repayment.
Source: REALTOR® Magazine Online
"The technical details are still being finalized and will soon be published in a mortgagee letter and posted on our Web site," Lemar Wooley, a HUD spokesperson, told REALTOR® Magazine Wednesday afternoon.
Under the guidance that's under development, state agencies and other HUD-approved entities would be able to provide short-term bridge loans that households could use to help with their downpayment. The loans would be repaid with the proceeds from the households' federal tax credit.
The loans were announced on the opening day of NAR's 2009 Midyear Legislative Meetings in Washington, D.C., last week. In his announcement, HUD Secretary Shaun Donovan said guidance would be issued shortly.
When the guidance is released, it is expected to cover eligible lenders and set parameters for loan terms and repayment.
Source: REALTOR® Magazine Online
Saturday, May 16, 2009
Uniform Short-Sales Guidelines in the Works
Extensive delays in the short-sale process has caused many buyers to go elsewhere and have left would-be sellers with no option but foreclosure. But the picture is improving.
This week the U.S. Treasury announced that it would be providing incentives for borrowers and mortgage services to pursue short sales and other foreclosure alternatives. The program includes a standard short-sales process flow, minimum performance timeframes, and standard documentation, the U.S. Treasury says.
(More information is available on the Treasury Web site and in this PDF document posted at REALTOR.org.)
The incentives and process guidelines are part of a larger initiative called Making Home Affordable, which helps home owners refinance to avoid losing their home.
“NAR is pleased that the government is stepping in to help prevent foreclosures by streamlining the short-sale and deeds-in-lieu process,” NATIONAL ASSOCIATION OF REALTORS® President Charles McMillan said in a statement. “NAR has been calling for uniform short sales procedures and other initiatives that will help today’s home owners in challenging economy.”
More Collaboration Needed
A panel of experts at the 2009 REALTORS® Midyear Legislative Meetings this week agreed with NAR's position that more needs to be done to streamline short sales.
“It’s hard to find the right person to talk to, you send in multiple forms multiple times, you’re not sure if the forms were received or processed correctly,” said Marcel Bryar, deputy general counsel and vice president at Fannie Mae.
To reach a set of standards that suits everyone, the government should collaborate with lenders, the real estate industry, and advocacy groups, he said.
“The process is going to take a while," said David Knight, head of the short sales division at Wells Fargo. "Getting them all to understand what we can all live and deal with is not going to be easy, but that is exactly what’s going to have to happen.”
Panel participants applauded the Obama administration’s efforts to streamline the short sales process, and encouraged the real estate industry to get more involved in formulating this standard.
“It’s going to take some thorough intervention,” said Boyd Campbell, a Washington, D.C.-area REALTOR®. “That’s why I think it’s so important for RPAC to get involved and make sure NAR has the resources to go in and help resolve this problem. This doesn’t just impact us as practitioners. It also impacts all of our homes and communities.”
—Brian Summerfield, REALTOR® Magazine
This week the U.S. Treasury announced that it would be providing incentives for borrowers and mortgage services to pursue short sales and other foreclosure alternatives. The program includes a standard short-sales process flow, minimum performance timeframes, and standard documentation, the U.S. Treasury says.
(More information is available on the Treasury Web site and in this PDF document posted at REALTOR.org.)
The incentives and process guidelines are part of a larger initiative called Making Home Affordable, which helps home owners refinance to avoid losing their home.
“NAR is pleased that the government is stepping in to help prevent foreclosures by streamlining the short-sale and deeds-in-lieu process,” NATIONAL ASSOCIATION OF REALTORS® President Charles McMillan said in a statement. “NAR has been calling for uniform short sales procedures and other initiatives that will help today’s home owners in challenging economy.”
More Collaboration Needed
A panel of experts at the 2009 REALTORS® Midyear Legislative Meetings this week agreed with NAR's position that more needs to be done to streamline short sales.
“It’s hard to find the right person to talk to, you send in multiple forms multiple times, you’re not sure if the forms were received or processed correctly,” said Marcel Bryar, deputy general counsel and vice president at Fannie Mae.
To reach a set of standards that suits everyone, the government should collaborate with lenders, the real estate industry, and advocacy groups, he said.
“The process is going to take a while," said David Knight, head of the short sales division at Wells Fargo. "Getting them all to understand what we can all live and deal with is not going to be easy, but that is exactly what’s going to have to happen.”
Panel participants applauded the Obama administration’s efforts to streamline the short sales process, and encouraged the real estate industry to get more involved in formulating this standard.
“It’s going to take some thorough intervention,” said Boyd Campbell, a Washington, D.C.-area REALTOR®. “That’s why I think it’s so important for RPAC to get involved and make sure NAR has the resources to go in and help resolve this problem. This doesn’t just impact us as practitioners. It also impacts all of our homes and communities.”
—Brian Summerfield, REALTOR® Magazine
Homes May Be Undervalued Today
After dropping for two years, home prices appear to be bottoming out, and any further declines would be an overcorrection, NAR Chief Economist Lawrence Yun told thousands of practitioners at the REALTORS® Midyear Legislative Meetings in Washington, D.C., on Thursday.
The median national home price today is about $169,000, down almost 14 percent from a year ago and an estimated 30 percent from its peak. Today’s prices are justified by the fundamentals of the economy and may even represent an undervaluation, Yun said.
Lender Policies Hinder Recovery
Distressed sales, which today comprise about 50 percent of transactions nationwide, are creating market distortions in otherwise stable neighborhoods. “We’re only capturing transaction prices,” he said, and those prices might be 20 percent to 25 percent below actual values. For that reason, it’s possible that widely cited projections that a third or more of homeowners are underwater might be off the mark, he said.
The consequences of these missed projections could be huge. Lenders, shying away from refinancing mortgages of troubled owners, exacerbate the downward spiral of homeowners’ financial position and that, by extension, hurts the broader economy.
Contributing to the problem is the lack of reasonably priced financing for higher-cost homes at a time when declining prices, low rates, and the home buyer tax credit are helping the entry-level market.
Indeed, while housing overall is at a 9.5 month supply, down from double digits not that long ago, homes above $729,750—the threshold for jumbo loans—face a 40-month supply.
Key Test
By summer, all of the incentives that have been put into place by the government will have had several months to work, Yun said. If sales start picking up significantly, then prices should stabilize and trigger a broader economic recovery.
If sales don’t show a significant response, then the federal government might have to look at another big injection of funds into the economy, something no one has an appetite for.
Yun’s forecast reflects the brighter scenario: “My projection is home sales will be 10 to 20 percent higher the second half of this year than last year and we will come out of this recession in 2010,” he said.
—Robert Freedman, REALTOR® Magazine
The median national home price today is about $169,000, down almost 14 percent from a year ago and an estimated 30 percent from its peak. Today’s prices are justified by the fundamentals of the economy and may even represent an undervaluation, Yun said.
Lender Policies Hinder Recovery
Distressed sales, which today comprise about 50 percent of transactions nationwide, are creating market distortions in otherwise stable neighborhoods. “We’re only capturing transaction prices,” he said, and those prices might be 20 percent to 25 percent below actual values. For that reason, it’s possible that widely cited projections that a third or more of homeowners are underwater might be off the mark, he said.
The consequences of these missed projections could be huge. Lenders, shying away from refinancing mortgages of troubled owners, exacerbate the downward spiral of homeowners’ financial position and that, by extension, hurts the broader economy.
Contributing to the problem is the lack of reasonably priced financing for higher-cost homes at a time when declining prices, low rates, and the home buyer tax credit are helping the entry-level market.
Indeed, while housing overall is at a 9.5 month supply, down from double digits not that long ago, homes above $729,750—the threshold for jumbo loans—face a 40-month supply.
Key Test
By summer, all of the incentives that have been put into place by the government will have had several months to work, Yun said. If sales start picking up significantly, then prices should stabilize and trigger a broader economic recovery.
If sales don’t show a significant response, then the federal government might have to look at another big injection of funds into the economy, something no one has an appetite for.
Yun’s forecast reflects the brighter scenario: “My projection is home sales will be 10 to 20 percent higher the second half of this year than last year and we will come out of this recession in 2010,” he said.
—Robert Freedman, REALTOR® Magazine
Tuesday, May 12, 2009
Tax Credit Can Be Used for Down Payment !
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.
Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.
“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at "The Real Estate Summit: Advancing the U.S. Economy," at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..
He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
Other Solutions for Today's Market
During his address at the summit, Donovan went on to say that the Obama administration plans to further stabilize the housing market. “I do think we have some early signs that the market overall is stabilizing,” Donovan says. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
The morning session included a panel discussion that was moderated by CNBC’s Ron Insana. Panelists examined cutting-edge solutions necessary to promote and preserve homeownership and real estate development, stimulate the economy, and protect the nation’s taxpayers. They also shared their ideas on what the role and responsibility of the federal government is in the revitalization effort.
“Right now the Federal Reserve is the market,” said panelist Jay Brinkman, chief economist for the Mortgage Bankers Association. “What will be the effect when the Fed stops buying?” Brinkman explained that an exit strategy must be planned for the long-term; the federal government cannot continue to support the mortgage markets indefinitely.
“We are thrilled that so many high-caliber individuals were able to join us today at this important meeting to promote stability in the housing market and the U.S. economy,” said NAR President Charles McMillan. “We look forward to an ongoing dialogue and action toward this goal, during our midyear meetings this week and beyond.”
The real estate summit is part of the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo. During the week ending May 16, more than 8,500 REALTORS® will attend meetings, visit lawmakers and inspire action on Capitol Hill.
Source: NAR
Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.
“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at "The Real Estate Summit: Advancing the U.S. Economy," at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..
He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
Other Solutions for Today's Market
During his address at the summit, Donovan went on to say that the Obama administration plans to further stabilize the housing market. “I do think we have some early signs that the market overall is stabilizing,” Donovan says. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
The morning session included a panel discussion that was moderated by CNBC’s Ron Insana. Panelists examined cutting-edge solutions necessary to promote and preserve homeownership and real estate development, stimulate the economy, and protect the nation’s taxpayers. They also shared their ideas on what the role and responsibility of the federal government is in the revitalization effort.
“Right now the Federal Reserve is the market,” said panelist Jay Brinkman, chief economist for the Mortgage Bankers Association. “What will be the effect when the Fed stops buying?” Brinkman explained that an exit strategy must be planned for the long-term; the federal government cannot continue to support the mortgage markets indefinitely.
“We are thrilled that so many high-caliber individuals were able to join us today at this important meeting to promote stability in the housing market and the U.S. economy,” said NAR President Charles McMillan. “We look forward to an ongoing dialogue and action toward this goal, during our midyear meetings this week and beyond.”
The real estate summit is part of the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo. During the week ending May 16, more than 8,500 REALTORS® will attend meetings, visit lawmakers and inspire action on Capitol Hill.
Source: NAR
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