Straight from the Top!

Besides the current low mortgage rates you now have another great incentive to buy a home. The Senate has voted to expand and extend the first time home-buyer tax credit that was due to expire at the end November 2009. The House is expected to vote and pass it later today.

For first time home-buyers which includes anyone who hasn’t owned a home in the past three years the $8,000 tax credit has been extended to April 30, 2010. You have to sign a sales contract by April 30 and close on the home by June 30, 2010.

The credit has been expanded to include a $6,500 tax credit for home-buyers who have owned their home for at least five years. The tax credit is only for a home purchase that will be your primary home and costs $800,000 or less.

The credit is also phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000. If you’re in the military serving outside The United States for at least 90 days the tax credit is extended for another year.

Contact us today and we will put you in contact with a top notch agent that will help you take full advantage of this great opportunity.

 Well folkes we knew the 2009 hurricaneseason was just being too quiet! In the span of only 3 days we saw the emergance of 3 named storms. Thank goodness that we also dodged 3 bullets.

This does bring to mind though the special issues that the hurricane season bring when you are trying to Buy or Sell a home. I am talking about home owners insurance. The problem is that all insurance companies that write policies in the sunshine state suspend writing of any NEW business when a storm threatens Florida.There are two ways insurance companies determine when to temporarily suspend issuing new coverage: 

1.    When the National Hurricane Center issues a tropical storm or hurricane watch or warning.
2.    When a tropical storm or hurricane enters a company’s “storm box.”

A storm box is literally a box drawn on a map around a large geographical area.  Years ago, companies placed the entire state of Florida inside a box stretching from the Atlantic Ocean to the Gulf of Mexico.  That meant that companies would stop writing policies as soon as a storm entered the area within the box. 

An obvious shortcoming of this option is that a storm entering one end of the boxed-in area would cause issuance of new policies to cease in the complete opposite end of the box drawn around the state.  For example, a storm entering the box east of Key West, would cause not only issuance of policies to be suspended in the southeastern part of Florida, but also as far to the north and west as Pensacola.

That’s why most companies now rely upon the National Hurricane Center’s issuance of a tropical storm or hurricane watch and they suspend writing only in those areas covered by the watch.   The watch areas are generally smaller geographical areas, and more precisely cover areas that are most likely to be affected by a storm.

Exception To The Rule

One major exception to this rule is the state-run Citizens Property Insurance Corporation. Citizens, the state’s insurer of last resort, is now the largest hurricane insurer in the state and when a hurricane or tropical storm threatens any part of Florida, it suspends writing throughout the state. Citizens officials have cited the unpredictability of hurricanes and the likelihood that tornadoes could be spawn hundreds of miles away from the area of major impact.

Here is the Citizens policy:

“No application for new, or endorsement for increased coverage may be bound, written, or issued,  or monies received, regardless of effective date, when a Tropical Storm or Hurricane Watch or  Warning has been issued by the National Weather Service for any part of the State of Florida.”

Reporters and consumers should contact Citizens or access the Citizens Internet site:

http://www.citizensfla.com/

to determine when Citizens has suspended new writings and when it has resumed them.

At Century 21 Shaw we like to keep our clients informed and aware of drastic changes to the real estate market. On July 30, 2009 one of those changes came in the form of The Housing and Economic Recovery Act (HERA) regulations. This new Federal Law designed to protect the consumer, could cause closing delays for both Buyer and Seller if not managed properly.

Like most laws, HERA is intended to protect, but the consequences can cause unforeseen challenges….especially as the industry adjusts to the new requirements and changes. The purpose of the new HERA regulation is to prevent deceptive lending practices in home mortgages by allowing the consumer to have more control.. HERA requires significant changes to how we handle closings and could cause delays in closing if not handled properly. Communication and flexibility will be even more critical on transactions after July 30.

HERA’s what you need to know!

1. The appraisal can not be paid for by the borrower or ordered by the lender until 4 business days after the initial Truth in Lending Disclosure (TIL) has been provided to the borrower by the end investor. Why? Well, investors will be looking for documentation to prove that the fees were not collected early due to a $4,000 civil fine per loan.

Keep in mind, the new HERA law is in addition to the new HVCC rule governing appraisals. HVCC requires that lenders must now go through an appraisal management company to order appraisals. The appraiser is assigned from a pool of approved appraisers which can lead to delays in this step as well. HVCC also restricts the lender from having direct contact with the appraiser.

2. The borrower must be provided with a copy of his or her appraisal a minimum of 3 business days prior to closing. The appraisal is considered “received” 3 business days after mailing.

3. If the Annual Percentage Rate (APR) changes more than 1/8%, a new Truth in Lending Disclosure must be provided to the borrower. This means, the loan can not close until the 6 business days have passed from the date the lender mailed the corrected TIL to the borrower. The law requires 3 business days for mail and an additional 3 business days for the borrower to review before they can close.

4. There are a wide number of things which could cause the APR to increase and require a new TIL be provided. Some of the more common causes of required re-disclosure and delayed closing time are:

• Change to the sales price
• Change to the loan amount
• Change to the closing date
• Change in the interest rate
• Change to the loan program
• Borrower locks the loan after the initial disclosure and APR changes
• Re-inspection or multiple inspections by appraiser for completion or repairs

Note: HERA is a Federal Law that impacts ALL mortgage lenders nationwide. You need to allow ample time for closing in sales contracts as a result of this new law.

Sales of newly-constructed single-family homes rebounded 11 percent from May to June, to a seasonally adjusted annual rate of 384,000, the U.S. Census Bureau reported on Monday.

That's the fastest pace of new-home sales since November 2008 but represents a 21.3 percent decline from a year ago. At that rate, it would take 8.8 months for the 281,000 new homes on the market at the end of June to be sold, when six months of inventory is considered a more healthy balance between supply and demand.

As you all know HUD made an announcement on May 12 that they were going to allow homeowners to use the $8000 tax credit as down payment monies by empowering state agencies, non profits and HUD approved Mortgagees to lend the monies to home buyers. HUD drafted HUD Mortgage Letter (2009-15), however, the letter was never officially released. HUD has since reversed their position on allowing the monetization of the tax credit over concerns that the proposal too closely resembles the now illegal practice of seller funded down payment assistance programs. IRS officials were also concerned that the proposal could create income tax issues.

The government may continue to seek other alternatives associated with boosting affordability and circumventing the 3.5% down payment requirement, but until further notice they have apparently killed this initiative.

To Be Proud of:

· We have raised almost $2,000 in the last couple weeks for Easter Seals. As you know, Century 21 has been the #1 contributor both nationally and locally. The bids to hit Jeff Labudde and Jeff Shaw in the face with a pie were a big hit, you might say we got creamed!

· We are currently ranked #2 in the state with CENTURY 21 Mortgage!

· CENTURY 21 ranked #2 in our region in closed sale volume, and in the Top 50 in the entire nation!

Back to Business:

We recently received word that we have been selected to represent a very large international company for their group move to Tampa, which could result in sales approaching $10,000,000. We are working on representing another group where the buyer coming in could far exceed that amount!

Focus:

Providing more and better educational material to our clients to help them understand the intricacies of the current real estate market and be able to make the best decision possible in their real estate transaction; whether it be buying, selling, investing, foreclosures, short sales, or the $8,000 tax credit that is currently available.