Notes from Charlotte County, Florida

Real Estate Related Provisions of the Homeowner Affordability and Stability Plan    - by Bill Richardson

FROM THE HOUSING BILL

Fannie Mae and Freddie Mac (the government sponsored enterprises, or GSEs) will refinance the mortgages for 4-5 million homeowners with loans owned or guaranteed by the GSEs. The streamlined refinancing program is designed to help borrowers with loan-to-value ratios above 80 percent up to 105 percent.

$75 Billion Homeowner Stability Initiative to Reach up to 3 to 4 Million At-Risk Homeowners - The goal of the 3-year Homeowner Stability Initiative is to reduce the monthly payment of homeowners to affordable levels using $75 billion from TARP and the GSEs. The program will be available for home owner-occupants “at risk of imminent default” even if they are current in making mortgage payments, as well as those already delinquent. It will only apply to mortgages at or below the GSE conforming loan limits.

Bill Richardson is a District Sales Manager with The Keyes Company’s Boca Blue Lake Office.  He is a former President of the Realtor’s Association, a former Realtor of the Year, and currently a Director of both the Realtor’s Association of the Palm Beaches and The Florida Association of Realtors.

With questions or comments

call Mike Federau or Curt mellon.

- Your MLS Detectives Team -

www.MLSDetectives.com

How can one tell if a home has Chinese drywall? It's a simple question with a not so simple answer.

The Florida Department of Health has set up a page on it's web site devoted to this alarming problem.  The site is kept updated as more information becomes available.

Since it helps to understand what kind of damage this tainted drywall can cause, one of the sections on this site is entitled "Case Definition with Pictures," and includes photographs of pipes, wiring and other household items which can help identify the existence of problem drywall.

The web site also explains how the state plans to deal with the problem and includes details on how to file a complaint. For more info, visit the site HERE.

SHORT-SALE FORGIVENESS

In the not-so-distant past, a short sale meant the lender forgave part of the home seller's debt, but the home seller, many times to his or her surprise, had to pay federal taxes on the forgiven amount because the IRS treated it like income.

Under new tax rules, however, the lender sends a 1099-C, Cancellation of Debt, to the home seller in most cases. The forgiven debt does not have to be included in taxable income, and it gets reported instead on Form 982. To be eligible for debt cancellation, the mortgage must have been a primary one on a principal residence; the cancellation occurred between 2007 and 2012; and the mortgage's principal balance must be less than $2 million ($1 million if filing separately). As with any tax matter, home sellers should keep all paperwork to back up their claim in case it's questioned. It's also a good idea to consult a tax attorney on any tax issue. For more information, go to www.irs.gov.

With questions or comments

call Mike Federau or Curt mellon.

- Your MLS Detectives Team -

www.MLSDetectives.com

A summary of the Real Estate Related Provisions of the American Recovery and Reinvestment Act of 2009 - by Bill Richardson

FROM THE STIMULUS BILL

Homebuyer Tax Credit – The bill provides for an $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser. A “first time” homebuyer is defined as anyone that has not owned a home in the last 3 years.

FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e. an area smaller than a county.

The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.

Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be usedto assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income.

Energy Efficient Housing Tax Credits & Grants - The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation.

Bill Richardson is a District Sales Manager with The Keyes Company’s Boca Blue Lake Office.  He is a former President of the Realtor’s Association, a former Realtor of the Year, and currently a Director of both the Realtor’s Association of the Palm Beaches and The Florida Association of Realtors.

With questions or comments

call Mike Federau or Curt mellon.

- Your MLS Detectives Team -

www.MLSDetectives.com