What's going on in the Real Estate & Mortgage Industry?

NAR: The National Association of Realtors® supports legislation that would change the current law that forces individuals to pay an income tax when they have had a part of a mortgage loan forgiven or have been forced to foreclose because of their inability to pay their mortgage.  Some homeowner's have no choice but to sell their home and in our current market with stagnant or declining property values can cause homeowner's to fall short of paying off the full mortgage (short sale).  "Clearly, it is unfair to tax people on a phantom income, particularly right at the time they have experienced a serious economic loss and probably have no cash with which to pay the tax," said Combs. 

The Andrews-Lewis bill would ensure that any debt forgiven on disposition of a principle residence will not be taxed.

Our mortgage industry has gone through many changes in the past few months.  Many investors have gone out of business.  Loan programs have been eliminated and/or credit score requirements have increased which has made finding a loan for buyers more challenging.  We do now have a loan which allows for 100% financing on ARMs, Fixed and Interst Only loan types with credit scores as low as 580.  Other great loan options are the FHA, VA and HUD 184 loans.  With homes prices coming down to a more realistic range and interest rates being as good as they are, now is the time to buy.  Getting seller paid closing costs up to 3% in our "buyer's market" is very likely. 

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This HUD rule spells out very clearly that it eliminates seller funded nonprofit down-payment assistance programs such as Ameridream, Partners in Charity and Genesis Program. HUD has tried for a long time to get outside assistance by Congress and the IRS to help them eliminate these groups but has had little in getting any group to move fast enough for their
agenda. HUD has now decided to step up to the plate themselves with
this rule which eliminates nonprofit down payment assistance groups
themselves. With the adoption of this rule, this would make the nonprofit
seller funded source not an acceptable source of down payment funds.

HUD believes that the the Nonprofit down payment source is more of an inducement to buy from the seller since many times the purchase price is increased for the amount being given to the buyer.  HUD views this as a 100% financing rather than a down-payment source.

This does apply to all VA, FHA and the HUD 184 loans.  At this time we are looking into a source of down payment similar to Ameridream and others like it being from a government source.  If this is one that can be used, this Blog will be updated with that information.