Category Archives: legislation

Tax Credit Extended for California

I don’t know if everybody knows that the state of California has extended the first time home buyer and re-beat buyer tax credit.  New applications will be available on May 1st, 2010.  The federal governments tax credit will expire April 30, 2010.    There are a few difference with the State credit and the federal credit.

The state credit will have a budget of $100 million for first time home buyers and $100 million for re-beat buyers. The major difference with a budget, is you can run out of funding and the program ends.  They plan to on the $100 million cap for New Home Credit will be reduced by 70% of tax credit allocated to each buyer.  The $100 million cap First Time Home Buyer credit will be reduced 57% of the tax credit allocated as well.  This is because the state feels that many buyer will not be able to use the whole credit within 3  years.  These credit will be served on a first come basis.  Another difference is this is a credit.  That means it goes against what you owe in your taxes.  You have to use this tax over a three year period ($3,333 per year).  This tax cannot reduce regular tax below your Tax Minimum Credit (TMT).  You cannot get a refund for the amount you do not use.

The taxpayers who are first time home buyers need to purchase (close escrow) on or after May 1, 2010 and before January 1, 2011 in order to get this credit.  Repeat buyers going for the New Home Credit need to purchase on or after December 31, 2010 and before August 1, 2011

There are a few regulations on who will be aledgeable for these two credits.  Please go to the government website and too read all the rules and updates as they become available.   http://www.ftb.ca.gov/individuals/New_home_Credit.shtml

Brokers being Fined for Adding on Fees

I don’t know if any of you read the article in the Union Tribune this Sunday about how the HUD is cracking down on what realtors charge for extra.  The rule behind this is that if you are being paid a commission and that is negotiated with the seller that is all you should be paid.  They (HUD) are finding that a lot of realtor tack on extra fees above and beyond their real estate commission.  If the fees are for services that should be done to close the deal the HUD feels their is no reason the client should be paying more.  So when an agent tacks on a fee for a transaction cordinator or signage or advertising any of these fees the HUD could fine the broker for gauge their client.

They feel that advertising, paperwork, adminstrative, puting the sign on the property, and flyers need to be done in order to sale the home and should be included in the commission or flat rate negotiated at the beginning.  When I first started real estate in the Bay Area I saw a lot of agents charging their clients for things I felt were all part of the transaction.  It will be curious to see if brokers abide by the new law.

Any thoughts…..

FDIC and OneWest Bank Loan Modifications

I saw this clip the other day on the internet on how the FDIC is handling the losses on one bank…  According to this clip, the FDIC bailed out IndyMac and shut its doors back in July of 2008.  In March of 2009, the FDIC sold all the bad loans to OneWest Bank for 70% of their value and HELOC’s (helocs are lines of credit) at 50% of their value.

When watching this video, my blood begin to boil! This is the same public rip-off that we have been watching for years.  Whether we have a republican/democrat in office, it’s all the same old story! OneWest Bank is owned by private investors with ties to the US treasury department.  This means they did not have to sign up for the loan modification program that Obama passed a few months back — that program helps consumers in danger of foreclosure by modifying the terms of their loan.  OneWest Bank has no incentive to help homeowners, and in fact, it has a lot of incentive to foreclose on the homeowners. 

Here is a link to the article I am referencing:  http://www.thinkbigworksmall.com/mypage/archive/1/32274.  Please watch the video, read the blogs, and tell me what you think.  I just don’t understand how we can get the housing market back on track if we don’t get the government out of the housing market.

Is the Bailout going to help the Real Estate Market???

Ever since the government passed the legislation on the bailout, the stock market has gone down and the interest rates have gone up.  I am no genious, but this is really hurting the real estate market.  I was starting to see people join the real estate market, and now we are seeing signs of a slow down again. 

I read an article from the president of the National Association of Realtors that I thought had some good points to get the real estate market jumping. 

The National Association of Realtors® will offer a four-point legislative plan to reinvigorate the housing market, calling on Congress to act during a lame-duck session. NAR believes the plan will give a boost to the economy and help to calm jittery potential homebuyers.

We are asking Congress to act right away.”

NAR recommends Congress pass new housing stimulus legislation that includes the following priorities:

1. Remove the requirement in the current law that first-time homebuyers repay the $7,500 tax credit, and expand the tax credit to apply not only to first-time buyers but also to all buyers of a primary residence.

2. Revise the FHA, Fannie Mae and Freddie Mac 2008 stimulus loan limit increases to make them permanent. The Economic Stabilization Act, enacted in February, made loan limit increases temporary, and subsequent legislation reduced the loan limits and made them permanent. This has broad implication for homebuyers in high cost areas.

3. Urge the government to use a portion of the allotted $700 billion that was provided to purchase mortgage-backed securities from banks to provide price stabilization for housing. The Treasury department should be required to use the newly enacted Troubled Assets Relief Program to push banks to:

• Extend credit down to Main Street, making credit more available to consumers and small businesses;

• Expedite the process for short sales;

• Expedite the resolution of banks’ real estate owned (REOs) properties.

4. Make permanent the prohibition against banks entering real estate brokerage and management, further protecting consumers and the economy.

What do you think of these ideas?  Do you think congress should do something to help the American People from losing their life savings.

Writing on a Short Sale (Part II)

Well the last time I blogged on writing on a short sale the client waited all summer to see if they could get this home with no results.  Last week we decided to revisit the home to see if we wanted to make the offer higher to get the bank to talk to us.  However when we called the seller to make an appointment to show the property he informed me than the home was no longer on the market he is trying to work something out with the bank.  It still showed active on the market for another week and half before the agent took it off the MLS.  That is just so Wrong in the eye of the Buyer!!!

Short Sale part II……As of last friday we presented an offer on a home in the same area for the amount of $410,000.  this home is a short sale (lucke us).  One week later, we are still waiting on a response from the bank.  According to the agent it has been put in front of somebody at the bank and the BPO (Brokers Price Opinion) or CMA should be ordered for next week.  The bank is going to take two weeks to get back to an offer, it just doesn’t seem right.  There is never any negotiating they come back with a price and that is what we are suppose to pay.  The funny part is the realtor states that the banks are acting a lot quicker ever since the bailout legislation got passed.  They have a different meaning of quick.

The Government Bailout

Well congress signed the $700 billion bailout bill and put the government in charge of stopping this economic crisis.  This document started as a 3 page legislation and now is over 400 pages long!  This legislation gives Paulson wide latitude to buy any assests, from any firms, and at any price.  Essentially, this allows him to decide which companies will be rescued and which will be left to flounder.

The money will be released in segments, with $250 billion available immediately and $100 billion more released upon White House certification that it is necessary. Congress wil be given 15 days to object before Paulson or his successor receives the next $350 billion.

The senate also tacked on a separate measure that extends or renews dozens of tax breaks for businesses and consumers, including a provision to prevent the alternative minimum tax from adding thousands of dollars to the tax bills of more than 20 million households next April.  It is unclear how the program will affect the the federal deficit, which is already approaching record leveles.  Because the money will be used to buy assets that can theoretically be sold for a profit, the nonpartisan congressional budget office has conculded that it was impossible to judge the program’s costs.

What do you think about this Government Bailout? Is this going to help our declining home sales?  I have been so busy with buyers entering the market, I am having a hard time seeing the economy as bad as the government paints the picture.

The Government has Stepped In!

There is a bill that is going to the senate today to assist those facing foreclosure. The bill will include an incentive property tax deduction of $1,000 for couples and $500 individuals. This is suppose to help the 28.3 million taxpayers who do not itemize on there tax returns.  The bill is also planned to give:

  • $10 billion to local housing agencies to refinance subprime loans and provide new mortgages for first time home buyers.  
  • $4 billion in grants for local governments to buy foreclosed properites.
  • $100 million to expand counseling for homeowners at risk of defaulting on thier loans.

The officials have stated that this new bill would cost taxpayers $15 to $20 billion. This bill has been written to extend a helping hand to the many homeowners who are caught in bad mortgages.  My question to you is:

Should the government get involved?  If so, how much?  Is it our government’s job to counsel and support people that over extended themselves?

 It’s a tough situation, but we need the government to invest in more jobs, not more government departments.It’s time for the banks to take care of their own financial problems.

What do you think?     Catherine BardenReal Estate Consultant(760) 815-38662146 Encinitas BlvdEncinitas, CA  92024 To search the local MLSwww.encinitasproperties.net