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The average US citizen looks at NAR (National Association of Realtors) as nothing more than another lobbying group that spends its' days and nights telling buyers that every day is the "right time to buy."

What people (this includes Realtors themselves) don't realize is that they are doing a CRITICAL work for the country in getting legistation passed that benefits us all. So what did they do this time? Nothing besides creating an opportunity for 1st-time home buyers to get $8000.00 of FREE MONEY from the government!

Yes, FREE, so long as you hold the home for at least 3 years. That is pretty easy since I am counseling ALL of my clients to buy for the long-term.

Many thanks to one of my lending partners, Blake Bench of Countrywide Home Loans, for this timely breakdown of how the latest ("latest implying one of MANY bailouts...) multi-GAZILLION dollar (gazillion with a "g") bailout legislation.

This sign is posted on the doors of Congress....

The information is not only timely, but downright critical to not only those of us either working in the industry, or trying to buy or sell real estate right, but the greater populiation at large. Until we get the real estate markets more healthy, there will be major financial pain worldwide.

The only thing most of us hear about the bailout package is that GM and others want taxpayers to pick up the tab on a few million transmissions.....good to know, but not relevant to real estate. Here it is:

  • Tax Credit: The tax credit for first time home buyers has gone up from $7,500 to $8,000. I also understand that this new amount doesn't have to be repaid. I have been helping buyers see that they could use this money to repay a gift from a relative. Maybe then they can come up with a down payment. (I wish that they had passed the $15,000 credit for any homebuyer but sometimes when you wish upon a star your dreams don't come true.) I have to add the disclaimer for all buyers to talk to their accountant or tax advisor about this since I am not licensed to give that type of advice.  Here is a breakdown of the tax credit:

 

Still not making sense? Here is a step-by-step explanation: 2009 Tax Credit Explained

  • Help for struggling home owners: Many borrowers from the last few years put nothing down or very little down toward the purchase of their home. With home values now lower many are upside down and can't refinance. New legislation may allow them to refinance with LTV's up to 105% of the homes current value if they have stayed current on their payments. I am going to call all of my database and see if I can help them lower their payments.
  • Modifications: Billions of dollars are set aside to help people modify their loans without refinancing. They do not have to have missed payments to qualify for this.
  • Keeping Interest Rates Low: Bear in mind that current interest rates are "artificial" in nature and WILL NOT stay this low for ever. (This subject merits its' own discussion) These "artificial" rates are part of the government's plan to "prop up" the ailing economy. Treasury and Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities to ensure stability and liquidity. The Treasury will also provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down

Departing from Blake's starter course on the bailout, let me add the following advice: Make sure you completely understand the rules, regulations and consequences (good and bad) of things like tax credits and local "grants" for home buyers.

In the meantime, chime in with any key information or ideas you have on this bailout business!

Hoosiers amongst those doing "mods" to avoid foreclosure

by Jeremy Larkin

Not more than 1 year ago they would take your home from you 180 days to the day from your first missed payment.

Now it is typically taking MUCH longer and in many cases, the banks are coming up with all sorts of creative "loan modifications" to avoid taking back any more property and to allow the homeowner to stay put.

Call it a "band-aid" if you will.......

This is a bit of a throwback to a piece I wrote on Nov 11th about "at risk" borrowers. I found this piece today through who knows what channels. I think it is interesting because it is specific to one geographic area, but tells the story of what is going on nationwide.

Check it out here and share your opinion freely!

http://www.indystar.com/article/20090111/LOCAL18/901110400/1195/LOCAL18

 

Big Lenders Deciding to assist "At-Risk" Borrowers

by Jeremy Larkin

I know what you're thinking....."Hey I'm an at-risk borrower!" Aren't we all?

That said, with defaults mounting, big-time lenders including Citigroup, JPMorgan and Bank of America, have also become more aggressive about modifications to mortgage agreements.

What took them so long? Most likely optimism....the hope and assumption (based on historical data) that it would all just "get better."

From the article on Yahoo: Citigroup says it is imposing a moratorium on most foreclosures as part of a series of initiatives aimed at helping at-risk borrowers remain in their homes — making Citi the latest big bank to announce sweeping efforts to try to curtail losses from souring mortgages.

Citi said late Monday it won't initiate a foreclosure or complete a foreclosure sale on any eligible borrower who seeks to stay in a home if it is the borrower's principal residence, the homeowner is working in good faith with Citi and has sufficient income to make affordable mortgage payments.

So let's have some fun and I will translate for you some of the comments made by Citi Executives and PR people:

Sanjiv Das, chief executive of CitiMortgage, said, "It is in our interest that borrowers stay in their homes and actually make the payments."

Translation: "If we take on another foreclosure while hiring new people to process it we are going to go broke"

Das also said: "There is a huge amount of anxiety among borrowers," he said. "We will reach out to them before they become delinquent."

Translation: I'd like to THUMP these people for screwing up my vacation, yacht and 7th  home plans...can't they just pay their "&$@#* mortgages?

Steve Curnette, President of InsBank Mortgage in Nashville, TN said: "It's nearly an insurmountable undertaking. The number of bad loans that they can modify using their resources is being quickly outstripped by the number of new loans that need to be modified."

Translation: I wonder if Costco is hiring?........"

All joking aside, I am VERY pleased to see this happening. Homeowners need it, the banks need it, the ENTIRE COUNTRY needs it. It is all fun and games to see the foreclosed homes hit the market and figure out a plan to buy them for investment purposes, but at some point it will bankrupt the very institutions we rely on for credit.

 Additionally, (and I may get in trouble with homeowners), we all like to beat up on the big banks but when you truly understand the situation you see that THEY are the biggest losers. The average home-owner ruins their credit, feels stupid around their neighbors, then moves on to an equal or better home for LESS money as a rental.

I'd like to get some opinions from you people out there in OR out of my industry as to whether you like the idea of loan "workouts" or not. 

In the meantime PLEASE contact us if you or someone else you know is in a "bad spot" with their house. We work full-time with these issues and may be able to propose or find a solution to the problem. 

Carry on!

 

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Photo of Jeremy Larkin - The Larkin Group Real Estate
Jeremy Larkin - The Larkin Group
Keller Williams Realty
50 E 100 S, Suite 300
St. George UT 84770
435.767.9886
Fax: 435-359-5085

St. George Real Estate - Your premier destination for St. George,Utah Real Estate Listings, Home Values, MLS Search, REO/Foreclosure Info &  St. George Real Estate Statistics.  Serving St. George, Santa Clara, Ivins, Washington, Hurricane, LaVerkin, Toquerville & more! Specializing in REO/foreclosure properties, frustrated Sellers, First-Time home buyers, and Investors. Looking for the most LOCAL St. George, Utah real estate information available? Your search is over!