Up to $18,000 in Tax Credits Available for CA Buyers (for short time)

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take full advantage of both tax credits a first-time homebuyer must have an accepted contract for a home they plan on moving into before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they have lived in their existing homes for 5 years as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law. (contact me for more details)

This is a huge opportunity for those buyers out there to take advantage of some HUGE incentives. Keep in mind these are not deductions but actual credits!!! Use them for buying new appliances, a small remodel, or stash them away for a rainy day. But don't miss out on this opportunity if you are thinking of buying a home.

I'm here to help so please let me know how I can best do that for you!!!

$200 Million in Tax Credits for CA Buyers!!!

I’m glad to report that Gov. Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law.

AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).

CA Extended $10,000 First Time Buyer Credit

California lawmakers have voted to extend a $10,000 tax credit for first-time homebuyers. The credit will apply to first-time buyers who purchase new or existing homes between May 1 and Dec. 31 of this year. It is for 5 percent of the purchase price, or up to $10,000. The bill received bipartisan support in the Assembly and Senate on Monday and will be sent to Gov. Arnold Schwarzenegger. The governor, who proposed the extended tax credit as part of his job-creation initiative, is expected to sign the bill.

I will post more information as it becomes available so stay tuned!!!!

Avoid Foreclosure!!! HAFA Program Can Provide Help

Some of the highlights of the program:
- Allows borrowers to receive pre-approved short sale terms before listing the property.
- Requires borrowers to be fully released from future liability for the first mortgage debt and, if the subordinate lien holder receives an incentive under HAFA, that debt as well (no cash contribution, promissory note, or deficiency judgment is allowed).
- Uses a standard process, uniform documents, and timeframes/deadlines.
- Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to a $1,000 match for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders.
- Allows at least 120 days to sell the home (extensions permitted up to one year)
- Within 10 business days the lender must approve or deny the offer!!!!

If you are facing a foreclosure or are behind in your payments the important thing to realize is that YOU HAVE OPTIONS. Short Sales are less harmful to your credit and allow you to sell you home respectfully with a "SOLD" sign in the front yard!!! Please contact me if you have any questions.

Important Tax Info for CA Short Sellers!!!

Legislators Vote to Extend CA State Tax Exemption on Cancellation of Debt Income. This is very important if you are involved in a Short Sale - the amount forgiven is normally to be included as income on your tax return as Cancellation of Debt Income (CODI). Federal Taxes are currently exempt from CODI through 2012 under the Mortgage Debt Forgiveness Act. CA homeowners are NOT yet exempt from CODI on their 2009 state taxes if they lost their home due to a short sale in 2009 (2008 and 2007 sellers are exempt). Write your governor if this is important to you!!!

CLICK HERE TO READ SAC-BEE ARTICLE

(I am not a tax professional - please consult your tax specialist or CPA for further information specific to your situation)

New Foreclosure Alternative - A Plan that Pays Owners

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. The administration is trying a new approach - offering incentives for some of them to leave.

This latest program, which allows a short sale in exchange for a little spending money, is one of the administration’s most aggressive attempts to work on a problem that has defied solutions.

More than five million households are behind on their mortgages and modification plans have helped only a small percentage of them - much more needs to be done. There is also the concern that millions of foreclosures could delay or even reverse the economy’s slow recovery.

Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.

Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”

Should the incentives prove successful, the short sales program could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.

For the borrowers, there is the likelihood of suffering less damage to credit ratings by doing a short sale instead of a foreclosure. And as part of the transaction, they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.

For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighboring homes.

Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.

It is a step in the right direction and can offer help for many. There is a lot of work in a short sale for all involved so please make sure you qualify your agent first as the quality of the agent has a lot to do with the possibility of acceptance.

Please contact me for more information or if I can help in ANY way.

Fed Announces: Interest Rates to Remain Low

Investors and potential buyers breathed a sigh of relief Wednesday when Federal Reserve Chair Ben Bernanke told Congress that interest rates are likely to remain low for an extended period. The economy, he said, "still requires support for recovery."

Investors see these low rates as a boon to a recovery of employment and business. Buyers obviously see this as a continued opportunity to lock in a great rate on a fixed loan which creates a stable payment for an extended period of time; essential for creating a financial plan for the future.

Bernanke’s announcement also helped soften the edge on the news that housing sales were down in January. With holiday spending, travel plans and modified banking hours I'm not sure this was unexpected, but hopefully not a trend.

I think a very telling indicator will be how the market reacts after the Homebuyer's Tax Credits expire on April 30th. We shall wait and see......