Thursday, October 29, 2009
Progress towards reversing HVCC
We are making progress in reversing HVCC. As most of you know HVCC has been a mess. Its caused so much difficulty dealing with appraisals, home values and has slowed the escrow process. Amendment 3126 will end HVCC. It still has to pass the House, the Senate and be signed off by the President. So, if you believe H...VCC should be reversed and you haven't signed this petition...please do so now. Its so critical to protect our industry and to benefit our clients. Here's the website. http://www.hvccpetition.com/
Article from CNN about the $8000 tax credit
$8,000 home credit still in play
Negotiations about whether and how to extend and expand the tax credit for homebuyers are moving quickly. Here are the latest developments.
NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.
The Obama administration wants the credit extended for a "limited period," Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan said Thursday. They did not elaborate.
What's on the table now: There appears to be a compromise deal that falls between the most and least generous proposals that have been put forth so far.
"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. (CNN: Senate compromise may be in the works.)
To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($225,000 for married couples filing jointly).
In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.
"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
What critics say: Though extending the credit has bipartisan support, it is not without its critics.
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.
By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.
In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory.
"When [they] purchase a new home, they simultaneously put their current home up for sale. As a result, there is no net effect on supply or demand in the housing market."
Timing on a vote: An amendment to extend and expand the credit could be attached to a bill that would extend unemployment benefits and which could pass the Senate by next week.
However, there's a chance the housing credit will be dealt with separately.
The credit could be attached to another piece of legislation or put in a standalone bill with other proposals to extend tax breaks.
Negotiations about whether and how to extend and expand the tax credit for homebuyers are moving quickly. Here are the latest developments.
NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.
The Obama administration wants the credit extended for a "limited period," Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan said Thursday. They did not elaborate.
What's on the table now: There appears to be a compromise deal that falls between the most and least generous proposals that have been put forth so far.
"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. (CNN: Senate compromise may be in the works.)
To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($225,000 for married couples filing jointly).
In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.
"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
What critics say: Though extending the credit has bipartisan support, it is not without its critics.
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.
By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.
In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory.
"When [they] purchase a new home, they simultaneously put their current home up for sale. As a result, there is no net effect on supply or demand in the housing market."
Timing on a vote: An amendment to extend and expand the credit could be attached to a bill that would extend unemployment benefits and which could pass the Senate by next week.
However, there's a chance the housing credit will be dealt with separately.
The credit could be attached to another piece of legislation or put in a standalone bill with other proposals to extend tax breaks.
Senators agree to extend homebuyer tax credit
Senators agree to extend homebuyer tax credit
By STEPHEN OHLEMACHER (AP) –
1 hour agoWASHINGTON —
Senators agreed Wednesday 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-time homebuyers but is set to expire at the end of November.Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.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, said a congressional aide, who spoke on condition of anonymity because he was not authorized to publicly discuss the deal.Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.Majority Democrats have refused to add the amendments.Copyright © 2009 The Associated Press. All rights reserved.
By STEPHEN OHLEMACHER (AP) –
1 hour agoWASHINGTON —
Senators agreed Wednesday 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-time homebuyers but is set to expire at the end of November.Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.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, said a congressional aide, who spoke on condition of anonymity because he was not authorized to publicly discuss the deal.Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.Majority Democrats have refused to add the amendments.Copyright © 2009 The Associated Press. All rights reserved.
Thursday, October 22, 2009
letter to me from Congressman Duncan Hunter regarding the tax credit extension
Dear David:
Thank you for contacting me with your support for extending the homebuyer tax credit. I welcome the opportunity to respond to you on this issue.
I agree with you that the current $8,000 tax credit for first time buyers has had a positive effect on the housing market this year. You will be pleased to know that I am a cosponsor of the Homebuyer Tax Credit Act of 2009, which would, in an effort to stimulate the nation's declining housing market, extend this credit and offer an increased $15,000 credit to all home purchases through 2010.
Like you, I believe that we must be aggressive in addressing the challenges in our housing market and I support providing tax credits for new homes. I agree with you, that stimulating the housing market is one of the best ways Congress can help accelerate the recovery of the economy. A tax credit for individuals to purchase new homes not only contributes to the real estate industry, but also stimulates the construction industry and creates jobs.
Please be assured that I will keep your specific thoughts in mind as we continue to discuss this issue in Congress. Thank you again for contacting me. If you have any further questions or concerns, please do not hesitate to let me know.
Sincerely,
Duncan Hunter
Member of Congress
Please visit my website at hunter.house.gov to sign up for my e-newsletter and receive electronic updates.
Thank you for contacting me with your support for extending the homebuyer tax credit. I welcome the opportunity to respond to you on this issue.
I agree with you that the current $8,000 tax credit for first time buyers has had a positive effect on the housing market this year. You will be pleased to know that I am a cosponsor of the Homebuyer Tax Credit Act of 2009, which would, in an effort to stimulate the nation's declining housing market, extend this credit and offer an increased $15,000 credit to all home purchases through 2010.
Like you, I believe that we must be aggressive in addressing the challenges in our housing market and I support providing tax credits for new homes. I agree with you, that stimulating the housing market is one of the best ways Congress can help accelerate the recovery of the economy. A tax credit for individuals to purchase new homes not only contributes to the real estate industry, but also stimulates the construction industry and creates jobs.
Please be assured that I will keep your specific thoughts in mind as we continue to discuss this issue in Congress. Thank you again for contacting me. If you have any further questions or concerns, please do not hesitate to let me know.
Sincerely,
Duncan Hunter
Member of Congress
Please visit my website at hunter.house.gov to sign up for my e-newsletter and receive electronic updates.
Tuesday, October 20, 2009
Response from Senator Feinstein about tax credit
I filled out the form on NAR's website in order to send my represenatives my belief that the tax credit should be extended. Just got an emailed reply from Senator Feinstein. Here it is:
Dear Mr. Cummins:
Thank you for contacting me to express your support for expanding the first-time homebuyer tax credit. I appreciate the time you took to write and welcome the opportunity to respond. In July 2008, the Housing and Economic Recovery Act of 2008 (Public Law 110-289) provided first-time homebuyers with a tax credit, equivalent to an interest-free loan, worth up to $7,500. The tax credit applied to homes purchased between April 9, 2009 and July 1, 2009. As the housing situation worsened in the fall of 2008, additional action was taken to prevent further declines in home values. Congress included in the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), a more robust first-time homebuyer tax credit. Specifically, the tax credit was increased to $8,000 for homes purchased in 2009 and will not have to be repaid. I understand your belief that the first-time homebuyer tax credit should be increased and expanded further. As you know, on June 10, 2009, Senator Johnny Isakson (R-GA) introduced the "Home Buyer Tax Credit Act of 2009" (S. 1230), which would increase the credit to up to $15,000, remove income eligibility limits, and expand it to include homebuyers purchasing homes other than their first. S. 1230 has been referred to the Senate Finance Committee, of which I am not a member. Please know that I will keep your support for this legislation in mind should it come before the full Senate. Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
Sincerely yours,
Dianne Feinstein
United States Senator
Further information about my position on issues of concern to California and the Nation are available at my website http://feinstein.senate.gov/public/. You can also receive electronic e-mail updates by subscribing to my e-mail list at http://feinstein.senate.gov/public/index.cfm?FuseAction=ENewsletterSignup.Signup.
Dear Mr. Cummins:
Thank you for contacting me to express your support for expanding the first-time homebuyer tax credit. I appreciate the time you took to write and welcome the opportunity to respond. In July 2008, the Housing and Economic Recovery Act of 2008 (Public Law 110-289) provided first-time homebuyers with a tax credit, equivalent to an interest-free loan, worth up to $7,500. The tax credit applied to homes purchased between April 9, 2009 and July 1, 2009. As the housing situation worsened in the fall of 2008, additional action was taken to prevent further declines in home values. Congress included in the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), a more robust first-time homebuyer tax credit. Specifically, the tax credit was increased to $8,000 for homes purchased in 2009 and will not have to be repaid. I understand your belief that the first-time homebuyer tax credit should be increased and expanded further. As you know, on June 10, 2009, Senator Johnny Isakson (R-GA) introduced the "Home Buyer Tax Credit Act of 2009" (S. 1230), which would increase the credit to up to $15,000, remove income eligibility limits, and expand it to include homebuyers purchasing homes other than their first. S. 1230 has been referred to the Senate Finance Committee, of which I am not a member. Please know that I will keep your support for this legislation in mind should it come before the full Senate. Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
Sincerely yours,
Dianne Feinstein
United States Senator
Further information about my position on issues of concern to California and the Nation are available at my website http://feinstein.senate.gov/public/. You can also receive electronic e-mail updates by subscribing to my e-mail list at http://feinstein.senate.gov/public/index.cfm?FuseAction=ENewsletterSignup.Signup.
Saturday, October 17, 2009
$8000 tax credit extension?
Let me preface this with a quick disclaimer. I am not a tax professional and I am not giving tax advice here….
As we near the November 30 deadline for the $8000 tax credit the looming question as to whether it will be extended is, well looming. With the possibility of an extension is also the idea of an "expansion" that would open it to buyers beyond the "first time" buyer. It seems that everyone wants their name on the bill that will extend the credit and so there are plenty out there trying. Both Obama and Congress are talking about it as the deadline approaches.
It has made a difference in our market. The feeding frenzy that started in about July/August I believe was due to the fact this deadline was driving buyers out. This assumption is based purely on the simple fact that every call, since mid-summer, I have received from a new buyer wanting to be pre-qualified for a home loan mentioned, "I need to buy before Nov 30" or "I want that tax credit". It's driving buyers to get in the game. And why not? Where else are you going to pick up a quick $8000? Most of these first time home buyers are used to getting a little a tax refund at the end of the year but this is a significant amount of money. The buyers I know plan to use the money to fix the house up, (as many of these foreclosures, need a little work) or they plan to replace their savings. Imagine you buy something for $300,000.00. Going FHA, you put down 3.5% ($10,500) of your hard earned money. Now imagine by using that money to buy a house you could potentially put 75% of it back in the bank? It's a great incentive to buy…now. Truth be told if you're not in escrow by this weekend your chances to get that credit are getting slim. So will they extend it? The house has unanimously passed an extension that would give buyers who served overseas in the military a 6 month extension, (measure H.R. 3590). It still needs to go to the senate. And the National Association of Realtors, (NAR) testified last Wednesday to the US House of Small Business Committee that an extension was critical in reducing the amount of inventory the housing market currently has. They also are suggesting an expansion on the tax credit. They even posted a video on You Tube.
NAR's website also has a quote from House Speaker Pelosi (D-CA), on October 8th, where she said, "Yes, there is under consideration whether we extend the first time homeowners credit. And the question is, would that be just first time homeowners or would you open it up to other purchasers of homes?"
The California Association of Realtors, (CAR) put out this "call to action" on their website: "The federal tax credit for first-time homebuyers is set to expire November 30, 2009. Since its inception earlier this year, the tax credit has brought 1.2 million new buyers into the market nationwide, according to NAR. In California, nearly 40 percent of first-time homebuyers reported they would not have purchased a home without the tax credit, according to a C.A.R. survey."
The website further explains CAR's views and gives you step by step instructions on how to contact your congressional representative.
So, while the Feds are going to keep us on the edge of our seats possibly right up to end, there are things you can do to help the cause. If you believe the tax credit should be extended check out the CAR or NAR websites to see how you can help.Get more information about the current 2009 tax credit from NAR here. And, you can get more information about buying a home or getting pre-approved by emailing me at davejcummins@gmail.com. You can also get daily updates by becoming a fan here on FaceBook too
As we near the November 30 deadline for the $8000 tax credit the looming question as to whether it will be extended is, well looming. With the possibility of an extension is also the idea of an "expansion" that would open it to buyers beyond the "first time" buyer. It seems that everyone wants their name on the bill that will extend the credit and so there are plenty out there trying. Both Obama and Congress are talking about it as the deadline approaches.
It has made a difference in our market. The feeding frenzy that started in about July/August I believe was due to the fact this deadline was driving buyers out. This assumption is based purely on the simple fact that every call, since mid-summer, I have received from a new buyer wanting to be pre-qualified for a home loan mentioned, "I need to buy before Nov 30" or "I want that tax credit". It's driving buyers to get in the game. And why not? Where else are you going to pick up a quick $8000? Most of these first time home buyers are used to getting a little a tax refund at the end of the year but this is a significant amount of money. The buyers I know plan to use the money to fix the house up, (as many of these foreclosures, need a little work) or they plan to replace their savings. Imagine you buy something for $300,000.00. Going FHA, you put down 3.5% ($10,500) of your hard earned money. Now imagine by using that money to buy a house you could potentially put 75% of it back in the bank? It's a great incentive to buy…now. Truth be told if you're not in escrow by this weekend your chances to get that credit are getting slim. So will they extend it? The house has unanimously passed an extension that would give buyers who served overseas in the military a 6 month extension, (measure H.R. 3590). It still needs to go to the senate. And the National Association of Realtors, (NAR) testified last Wednesday to the US House of Small Business Committee that an extension was critical in reducing the amount of inventory the housing market currently has. They also are suggesting an expansion on the tax credit. They even posted a video on You Tube.
NAR's website also has a quote from House Speaker Pelosi (D-CA), on October 8th, where she said, "Yes, there is under consideration whether we extend the first time homeowners credit. And the question is, would that be just first time homeowners or would you open it up to other purchasers of homes?"
The California Association of Realtors, (CAR) put out this "call to action" on their website: "The federal tax credit for first-time homebuyers is set to expire November 30, 2009. Since its inception earlier this year, the tax credit has brought 1.2 million new buyers into the market nationwide, according to NAR. In California, nearly 40 percent of first-time homebuyers reported they would not have purchased a home without the tax credit, according to a C.A.R. survey."
The website further explains CAR's views and gives you step by step instructions on how to contact your congressional representative.
So, while the Feds are going to keep us on the edge of our seats possibly right up to end, there are things you can do to help the cause. If you believe the tax credit should be extended check out the CAR or NAR websites to see how you can help.Get more information about the current 2009 tax credit from NAR here. And, you can get more information about buying a home or getting pre-approved by emailing me at davejcummins@gmail.com. You can also get daily updates by becoming a fan here on FaceBook too
Friday, October 16, 2009
California Association of Realtors, (CAR) supports tax credit extension
Here's a post from C.A.R.'s facebook page:
The federal tax credit for first-time homebuyers is set to expire November 30, 2009. Since its inception earlier this year, the tax credit has brought 1.2 million new buyers into the market nationwide, according to NAR. In California, nearly 40 percent of first-time homebuyers reported they would not have purchased a home without the tax credit, according to a C.A.R. survey.
C.A.R. supports an extension of the federal tax credit through 2010 and to include all homebuyers—not just first-timers. Historically, housing has led the nation out of economic downturns, and can do so again.
As the expiration date for this successful program looms, it is imperative that all REALTORS® take action by contacting their congressperson and urging them to extend this vital home-buying incentive.
Call your congressional representative immediately!
1. Dial 1-800-961-3302.
2. Enter your NRDs i.d. to be directly connected to the office of your representative.
3. Ask your representative to vote for extending the first-time homebuyer tax credit.
see it here:
http://www.car.org/governmentalaffairs/federal/call4actiontaxcredit/
The federal tax credit for first-time homebuyers is set to expire November 30, 2009. Since its inception earlier this year, the tax credit has brought 1.2 million new buyers into the market nationwide, according to NAR. In California, nearly 40 percent of first-time homebuyers reported they would not have purchased a home without the tax credit, according to a C.A.R. survey.
C.A.R. supports an extension of the federal tax credit through 2010 and to include all homebuyers—not just first-timers. Historically, housing has led the nation out of economic downturns, and can do so again.
As the expiration date for this successful program looms, it is imperative that all REALTORS® take action by contacting their congressperson and urging them to extend this vital home-buying incentive.
Call your congressional representative immediately!
1. Dial 1-800-961-3302.
2. Enter your NRDs i.d. to be directly connected to the office of your representative.
3. Ask your representative to vote for extending the first-time homebuyer tax credit.
see it here:
http://www.car.org/governmentalaffairs/federal/call4actiontaxcredit/
Tuesday, October 6, 2009
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