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Linda Pell
Serving the Greater Grand Rapids and Lake Shore Communities of Michigan
National Association of Realtors and Lowe’s Donate Relief Aid to Haiti
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RISMEDIA, January 25, 2010—The National Association of Realtors® and Lowe’s, a partner in NAR’s Realtor Benefits® Program, are coming together to contribute relief to Haiti and the victims of the country’s recent earthquake.
NAR and Lowe’s will each contribute $100,000 to the REALTORS® Relief Foundation (RRF), which will distribute the money to charities aiding Haitian victims. RRF directors have already approved a donation of $50,000 of that money to The Harvest of Haiti, founded by a 2007 winner of REALTOR® Magazine’s Good Neighbor Awards, Patrick Moore. Moore’s humanitarian outreach program supports orphans, delivers clean water, and provides medical care in Haiti, treating close to 3,500 people a year. Lowe’s is a sponsor of the Good Neighbor Awards.
Moore, a sales associate with JoAnn Wine & Associates in Fort Gratiot, Mich., is planning his 64th trip to Haiti on Jan. 29. While in Haiti, Moore and his team will deliver six months’ worth of food to an orphanage in Anse Rouge as well help residents in communities in and around Port-au-Prince.
“Patrick and The Harvest of Haiti represent the spirit of volunteerism,” says Mark Malone, vice president of Consumer Marketing at Lowe’s. “Lowe’s is proud of our association with the Good Neighbor Awards and we hope this support for Realtors providing relief in Haiti can help make a difference.”
Realtors are being encouraged to donate to Haitian victims through the Realtors® Relief Foundation. All contributions will flow through the Foundation, and no Foundation money will go to NAR administrative costs. NAR members and others who wish to make a donation should go to the RRF portion of Realtor.org and complete the contribution form.
Lowe’s and NAR have partnered to bring Realtors exclusive benefits to help build relationships with their customers, build referrals and build their client base. The benefits program is featured on the company’s Realtor benefits website.
For more information, visit www.realtor.org or www.lowes.com.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com
FHA Announces Policy Changes to Address Risk and Strengthen Finances
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RISMEDIA, January 22, 2010—Federal Housing Administration (FHA) Commissioner David Stevens announced a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes are the latest in a series that Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.
The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions from 6% to 3%; and implement a series of significant measures aimed at increasing lender enforcement. U.S. Housing and Urban Development Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January.
“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” said Commissioner Stevens. “When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”
Announced FHA Policy Changes Include:
1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
-The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
-If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
-This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
-The initial up-front increase will go into effect in the spring.
2. Update the combination of FICO scores and down payments for new borrowers.
-New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
-This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
-This change will be posted in the Federal Register in February 2010 and, after a notice and comment period, will go into effect in the early summer.
3. Reduce allowable seller concessions from 6% to 3%
-The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
-This change will be posted in the Federal Register in February 2010, and after a notice and comment period, will go into effect in the early summer.
4. Increase enforcement on FHA lenders
-Publicly report lender performance rankings to complement currently available Neighborhood Watch data will be available on the HUD website on February 1.
-This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
-Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
-Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
-This change is included in a Mortgagee Letter that was released on January 21, 2010, and is effective immediately.
-Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
-Specifications of this change will be posted in March 2010, and after a notice and comment period, will go into effect in early summer.
-HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes: Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite; Legislative authority permitting HUD maximum flexibility to establish separate “areas” for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches.
For more information, visit www.hud.gov.
For more real estate related stories on RISMedia.com, be sure to check out:
4 Tips to Improve Your Odds for Short Sale Success
Communicating with Your Prospects – When Is the Best Time to Send Marketing Emails to Your Database?
FHA approved lenders are now prohibited from accepting appraisals prepared by FHA Roster appraisers who ARE SELECTED, RETAINED or COMPENSATED in any manner by a mortgage broker-lender or any member of a lender’s staff.
This change can be a major problem:
• If utilities are not operational, the appraiser may have to be sent to the property more than one time, resulting in higher fees.
• Lenders will have no contact with appraisers, which many times helps in letting the appraiser know about the home and the surrounding area and current sales and pending sales. The hope was to convey true facts for a more accurate home value: this is now prohibited.
• Appraisers assigned to do an appraisal might not be familiar with the county and neighborhoods they are requested to appraise. Said appraisers, might unknowingly use foreclosure sales when retail, non- REO comparisons are available.
There is no confirmation about the ability of an assigned appraiser, his or her work ethics and knowing if they take their work importance seriously. On the other hand, an assigned appraiser might be very inflexible and be extremely picky in the area of repairs.
If the buyer is planning to use FHA financing, their new home must meet the HUD minimum safety and functionality standards. Below are some of the items an appraiser is looking for and would note on their appraisal report:
• Roof leaking with visible water spots on the ceiling
• Chipped exterior siding paint
• A furnace that does not work, bad electrical and plumbing or gas leaks
• A wet basement
• Foundation problems including walls that bow and walls with major cracks
• Broken windows
• Costs of repairs to the home that exceed $500
Our new year will continue to challenge all of us in the world of real estate. With knowledge, continued reading and networking, it is our professionalism and partnerships that will get us through any difficult situations and on to many successful transactions! My warmest wishes for finding the home of your dreams.
HUD to Provide Temporary Relief to Homeowners Facing Problem Drywall
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RISMEDIA, December 28, 2009—The U.S. Department of Housing and Urban Development announced that FHA-insured families experiencing problems associated with problem drywall may be eligible for assistance to help them rehabilitate their properties. In addition, HUD’s Community Development Block Grant (CDBG) Program may also be a resource to help local communities combat the problem.
FHA is reminding its approved lenders that they are to offer special foreclosure for borrowers confronted with the sudden effects of damaging drywall products in their homes including the financial hardship associated with related home repairs.
“We’re instructing our FHA mortgage lenders nationwide to extend temporary relief to allow these families time to remove problem damaging drywall and repair their homes,” said FHA Commissioner David Stevens. “We want to remove additional pressures for these families as they find solutions to allow them to return to a safe, decent and sanitary home.”
FHA Type 1 Special Forbearance (noted in Mortgagee Letter 2002-17) provides relief that is not typically available under an informal forbearance or repayment plan. This relief provided can include one or more of the following:
-suspension or reduction of payments for a period sufficient to allow the borrower to recover from the cause of default;
-a period during which the borrower is only required to make their regular monthly mortgage payment before beginning to repay the arrearage; or
-a repayment period of at least six months.
HUD is instructing lenders that no late fees are to be assessed while the borrower is making timely payments under the terms of the Special Forbearance plan. The total arrearage for a Type 1 Special Forbearance cannot exceed 12 months of delinquent payments. Lenders can review borrower applications and make a determination as to the most appropriate loss mitigation tool including loan modification, partial claim, or FHA HAMP. Any questions or clarification regarding the Type 1 Special Forbearance should be directed to the HUD National Servicing Center at 888-297-8685.
HUD’s CDBG Program is another resource to help states and local communities address the rehabilitation expenses associated with problem drywall. Historically, CDBG has helped to support local efforts to rehabilitate homes through grants, loans, loan guarantees, and other means. In addition, CDBG may also support the following activities:
-Code enforcement.
-Acquisition
-Clearance and remediation activities
-Relocation
All CDBG-assisted activities must meet one of the program’s three national objectives: Provide benefit to low- and moderate-income persons; Eliminate slums or blighting conditions; or address an immediate threat to the health or welfare of the community.
The Consumer Product Safety Commission (CPSC) reports that more than 2,360 homeowners in 35 states and the District of Columbia (primarily in Florida, Louisiana, and Virginia) have filed complaints of possible drywall-related problems including damage to electrical wiring, plumbing, utilities, and a variety of health concerns. The drywall emits sulfur gases. One of these, hydrogen sulfide, which corrodes copper, was found at higher levels in homes with the drywall. Copper sulfide corrosion damage has been found on wiring, pipes, and household appliances in homes with the drywall. In addition, the Centers for Disease Control and Prevention (CDC) is examining possible health consequences related to this drywall.
Last June, as part of the National Day of Service, HUD Secretary Shaun Donovan welcomed a New Orleans family back to their home after the installation of problem drywall had further delayed their return following Hurricane Katrina. Then, in October, Donovan toured another home in Boyton Beach, Florida to see for himself the effects of problem drywall. The family’s air conditioner condenser coils were corroded, the home smelled of sulfur, and the family’s 16-month-old daughter suffered from allergies and upper respiratory problems, which the family believed were associated with home’s drywall.
CPSC, in partnership with the CDC, the Environmental Protection Agency (EPA), U.S. Customs and Border Protection and HUD is coordinating the federal government’s response into which particular drywall products pose a risk to human safety and health and structural integrity.
For more information, visit www.hud.gov.
First-Time Homebuyer Credit: Scenarios
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S1. If a single person (Taxpayer A) qualifies as a first-time homebuyer at the time he/she purchases a home with someone (Taxpayer B) that is not a first-time homebuyer and then later that year they marry each other, is the credit still allowed?
A. Eligibility for the first-time homebuyer credit is determined on the date of purchase. If Taxpayer A, a first-time homebuyer, buys a house and then later that year marries Taxpayer B, not a first-time homebuyer, the credit is allowable to Taxpayer A. Taxpayer A may take the maximum credit.
S2. Taxpayer A is a single first-time home buyer. Taxpayer B (parent) cosigns for A and does not qualify. Both names are on the mortgage. Can Taxpayer A claim the credit and, if so, how much?
A. Yes. Taxpayer B is not a first-time homebuyer and cannot claim any portion of the credit, but A may claim the entire credit ($7,500 for purchase in 2008; $8,000 for purchase in 2009), if the home was purchased as Taxpayer A's primary residence.
S3. A taxpayer owned her principal residence. Several years ago, she decided to relocate to a rented apartment, but did not sell the former residence. Instead, she rented it out to tenants. Now the taxpayer plans to buy another house and make it her new principal residence. Does she qualify for the first-time homebuyer credit?
A. A taxpayer who owned rental property within the past three years is still eligible for the credit. The taxpayer cannot have owned and used a home as his or her principal residence within the last three years.
S4. If husband and wife wanted to sell the home that the wife owned when they got married, and the husband had not owned a home within the past three years, could he qualify as a first-time homebuyer for the credit even though the wife would not qualify?
A. No. The purchase date determines whether a taxpayer is a first-time homebuyer. Since the wife had ownership interest in a principal residence within the prior three years, neither taxpayer may take the first-time homebuyer credit. Section 36(c)(1) of the Internal Revenue Code requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the prior three years from the date of purchase. The husband may not take the credit even if he filed on a separate return.
S5. Taxpayer purchased a home on April 24, 2008, while she was separated from her husband. Later in the year, they reconciled and were living together at the end of 2008. She has not owned a home since 2004 but he owned one which he sold in 2006. They remained married the entire time. Is the taxpayer eligible for the first-time homebuyer credit?
A. No. The purchase date determines whether a taxpayer is a first-time homebuyer. Since the husband had ownership interest in a principal residence within the prior three years, and the taxpayers were legally married, neither taxpayer may take the first-time homebuyer credit. Section 36(c)(1) requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the prior three years from the date of purchase. While individuals do not have to be married to get the credit, marriage (and legal separation) imputes ownership of a previous home upon the other spouse. The wife may not take the credit even if she filed on a separate return.
S6. I have been estranged from my spouse for over three years and file married filing separate. I don’t know if my spouse has owned a main home in the last three years, but I have not. If I buy a house in 2009 that otherwise qualifies for the first-time homebuyer credit, can I claim the credit?
A. Section 36(c)(1) requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the three years prior to the date of purchase. While individuals do not have to be married to get the credit, marriage (and legal separation) imputes ownership of a previous home upon the other spouse. If your spouse has not owned a main home in the last three years, then you may claim the credit.
S7. I am separated from my spouse and considered unmarried, and qualify for the unmarried head of household filing status. My spouse has owned a main home in the last three years, but I have not. If I buy a home on May 1, 2009, that otherwise qualifies, can I claim the first-time homebuyer credit?
A. No. Section 36(c)(1) requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the three years prior to the date of purchase. While individuals do not have to be married to get the credit, marriage (and legal separation) imputes ownership of a previous home upon the other spouse. The taxpayer may not take the credit even if filed on a separate return.
S8. A qualifying taxpayer bought a home in August 2008 that needed a lot of work before occupying. They finished the renovations and moved in the home in January 2009. Can they claim the $8,000, since they did not occupy the home until 2009?
A. No. Taxpayers who purchase an existing home and renovate the property before moving in are eligible for the first-time homebuyer credit based on the date of purchase, not the date of occupancy.
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The FHA Section 203k program is specifically designed to rehabilitate and repair single-family homes. The 203k is a single mortgage loan that provides funds to purchase a home and make repairs and improvements.
In many cases, homes that would qualify for the 203k loan are in nice areas but have aesthetic problems. This program, because the home improvements are built into the loan, opens the whole market to the average home buyer.
Our spring buying market begins on January 4, 2010. Meet with your lender to discuss this mortgage option. With the resources of all major home improvements centers at our finger tips, this may be your answer to the purchase of your next home! The American Dream just got better: a new home that is fully improved and ready to be enjoyed and lovingly cared for, for many years to come!
For more reading, please go to "Archived Articles" in the left side navigation of my website.
Keller Williams Realty News
This year, Keller Williams Realty had more brokerages — based on closed transactions and closed volume — on both lists than any other real estate franchise. We also outranked all others on the reports in terms of number of agents added and total closed transactions.
On RISMedia’s Power Broker Survey, Keller Williams Realty again had the largest majority on the list — accounting for 35 percent of all the brokerages listed — 57 percent higher than any other real estate company.
Contact Me!
People don't talk about it a lot. But finding the right real estate agent can be the difference between a happy, stress-free home buying or selling experience, and an unhappy, stressful experience.
First, you'll want an agent ready and able to make a full-time commitment to you. As your American Dream Expert, I can and will do that.
Second, With my years of experience serving people in Ada, Caledonia, Grand Rapids, Grandville, Lowell, Rockford, along with the Lake Shore communities of Holland, Grand Haven and Muskegon, you'll want an agent with the experience needed to know the local neighborhoods, schools, market conditions, ordinances, etc. I have the expertise and track record of success you need.
Third, you'll want an agent who embraces the convenience of technology without losing the personal touch. You'll love the resources available on my website and the e-mail alerts that I send, but these will never replace the time I spend with you, serving as your personal guide through this exciting process.
Let's get together and talk about your home buying and/or selling plans. Please call me or send me an
EMAIL
and we'll set-up a time that is easy and convenient for you to meet.
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Today's Rates:
| 30-yr Fixed | 4.97% | 5.13% | | 15-yr Fixed | 4.33% | 4.56% | | 1-yr Adj | 4.27% | 5.3% |
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