New loan Modification - Qualification

The Treasury Department recently released a report, which include eligibility requirements to determine which homeowners qualify for relief under the plan. Following are the eligibility requirements as specified in the guidelines:

Mortgage must have originated on or before January 1, 2009.
Home must be an owner-occupied primary residence (verified with tax return, credit report, and other documentation such as a utility bill) – this program is not designed for investor-owned properties.
Home must be a single family 1-4 unit property (including condominium, cooperative, and manufactured home affixed to a foundation and treated as real property under state law).
Home may not be vacant or condemned.
Borrowers in bankruptcy are not automatically excluded from consideration.
Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.
First lien loans must have an unpaid principal balance (prior to capitalization of arrearages) equal to or less than:
1 Unit: $729,750
2 Units: $934,200
3 Units: $1,129,250
4 Units: $1,403,400
Foreclosure actions are suspended during the trial period or while borrowers are considered for alternative foreclosure prevention options. If homeowners fail to qualify, foreclosure proceedings may resume.
No minimum or maximum LTV ratio for eligibility purposes.
Loans are eligible for only one loan modification under the program.
Subordinate liens (such as second mortgages or home equity loans or lines of credit) are not included in the Front-End DTI calculation, but they are included in the Back-End DTI calculation.
Servicers should follow any existing express contractual restrictions with respect to solicitation of borrowers for modifications.
Applicants will be accepted into the program until December 31, 2012 (the program expiration date), but incentive payments will continue up to five years after the date of entry into the Home Affordable
Modification Program. Monitoring will continue through the life of the program. Keep in mind that these eligibility requirements are simply government guidelines. Consult a loan modification specialist who works with lenders on a daily basis to review your situation and determine whether you are likely to qualify. Top priority is to submit a loan application to determine whether you qualify.

New Construction Grant!!!

It is a $6000 Grant on all New Construction homes:

-It will be limited to the first 1,600 people who apply and qualify!
-Only applies to 30 yr fixed mortgages. Meaning no arms, or interest only. Not like those really exist anymore anyway.:)
-An individual can not make more than $75,000 a year or combined income with significant other of $150,000.
-Home has to be new construction, defined as a home that has never been lived in. There are many homes in the Salt Lake valley that have been for sale for 2 years but never been lived in so they would also qualify for the Grant.

The important part that everyone should be aware of is the total amount is $10 million. Once the money is gone, its gone. First come first serve basis. So you need to act fast. If you are buying a new construction home in Utah right now you need to get on the list right away. The money is going to be available immediately. We can get you on the list so you will receive your free $6000 New Construction Grant for your new home. I am so proud of the State legislature for this idea. This is a great way to help the consumer

There are so many hot housing and mortgage issues being added into the legislative hopper in Washington every week that it makes your head spin. Last week the Obama administration proposed the first significant cutback in years for the mortgage interest deduction. In his budget outline, the president called for limiting current deductions, including the mortgage interest writeoff for upper-income households. The plan would cap deductions at a 28 percent tax rate, even if the taxpayer is paying taxes at a 35 percent marginal rate.

To illustrate: Say you spend $8,000 a year on mortgage interest. At a 35 percent marginal bracket, you currently can write off $2,800. Under the Obama proposal -- even though you pay federal taxes at a 35 percent rate, your mortgage deductions would be restricted to a 28 percent bracket write off -- $2,240.

That's a one-fifth reduction, but would only be imposed on households with income of $250,000 a year and up. Now, you may not be directly affected by this revenue-raising concept. But keep this in mind: There's the real possibility that this would be just the first step in a longer-range campaign to limit the mortgage interest writeoff for home owners in general. Asked by Realty Times for comment, Lawrence Yun, chief economist for the National Association of Realtors, said any limitation on mortgage deductions in the higher-cost segments of the market inevitably would have negative impacts on property values in every segment. “This will hurt not just the top two percent (of owners),” he said, “but the 75 million home owners” in the middle and lower-income brackets as well.

Still another major housing issue generating heat: Do you qualify for the Obama administration's refinancing program for certain home owners -- roughly four to five million borrowers with mortgages owned by Fannie Mae or Freddie Mac, whose property values have declined to the point where they can't refinance? Or are you effectively locked out because you have a jumbo loan, you live in a high-cost area, or your mortgage didn't otherwise fit into Fannie's or Freddie's conventional purchase menu?

If you're one of the lucky ones who qualify, you might soon receive a new loan with a fixed rate in the low five percent range, even if you have negative equity. But if you took out a jumbo or an “Alt-A” nonconforming mortgage to buy your house, the president's plan -- at least in its current version -- offers you no relief.

Sincerely:
TedDee Payne
The Payne Real Estate Team
Prudential Utah Real Estate
Associate Broker, Salt Lake Board of Realtors Hall of Fame MBA,CRP,CRS,CSP,GRI,ABR,ePro
801 860-2468(cell)*866 706-1961(toll free)Thepayneteam.net

A Lifeline to Foreclosures

Today, President Barack Obama threw a $75 billion lifeline to millions of Americans on the brink of foreclosure, declaring an urgent need for drastic action. Not only to save their homes but to keep the housing crisis "from wreaking even greater havoc" on the broader national economy. The lending plan, a full $25 billion bigger than the administration had been suggesting, aims to prevent as many as 9 million homeowners from being evicted and to stabilize housing markets that are at the center of the ever-worsening U.S. recession.Government support pledged to mortgage giants Fannie Mae and Freddie Mac is being doubled as well, to $400 billion, as part of an effort to encourage them to refinance loans that are "under water". Meaning those in which market values have sunk below the amount the owners still owe. The goal is to lower many endangered homeowners' payments to no more than 31 percent of their income.

Additionally, a $75 billion Homeowner Stability Initiative would provide incentives to mortgage lenders to cut monthly payments in an effort to persuade them to help up to 4 million borrowers on the verge of foreclosure. The goal: cut monthly mortgage payments to sustainable levels, using money from the $700 billion financial industry bailout passed by Congress last fall.

I believe these are vital initiatives and all of which we should become aware of and help push to save not only the economy but the many people (people we know) facing foreclosure.

Annie Osburn

Optimistic About The Future

Though times are tough, there is plenty of good news to consider such as: Almost every bank in Utah's share value went up in the past 30 days (Zion's Bank alone went up over 15%). No Utah banks has provided additional bad news in the past 60 days - outside of what they already were aware of. The US creates 875,000 new families each year that need housing (and Utah gets their share on a per capita basis) Traffic at good affordable housing projects is still 65% of what it was just a year ago with more than 85% without agents. There is a "huge" pent up demand for housing while first time home buyers still live with parents or in rentals. The Bailout plan, which is about to pass, will have some implications to the future value of our money but have you considered the influx of buyers it will provide to the market if they feel secure in their decision to purchase that things may be going the right way. Rates are still hovering around 5% Feds have tax credits and additional incentives pending to offer buyers and the list goes on and on. Yes, we are in some rough times but lets try to be optimistic about the future.

Urgent message

Urgent Message from Dave Liniger. If you have been watching the news this week, you may have noticed that the debate in Washington has finally turned toward real stimulus for the housing industry. As a result, I believe that we could be on the brink of a substantial turn around in the real estate market. Now, it’s critical that we all join together and deliver a powerful message to our legislators that we support this stimulus.Last night, the Lieberman/Isakson Amendment was included in the senate version of the Economic Stimulus Bill by a unanimous voice vote. This amendment would provide a Tax Credit to all home buyers at the rate of 10% of the sales price up to a limit of $15,000. The credit would be available for a one year period to all purchasers of primary residences. Today, the senate expects to debate Amendment 353, a proposal by Senator John Ensign (R-NV) that would provide 30 year fixed financing at a rate of about 4%, for anyone purchasing a primary residence.If these two provisions survive in the final passage of a stimulus bill they could have a tremendous impact on our industry. If they are coupled together with provisions to ease the flow of credit and reduce foreclosures, we could see an immediate and dramatic turn-around in real estate.I feel that these provisions represent real economic stimulus. They will put money in the hands of millions of homeowners, increase sales, stabilize home values and add more revenues to local communities in the form of property taxes.I urge each of you to contact your senators and representatives to let them know that you believe these provisions are essential components of any stimulus bill. You can go to the official Senate and House web sites to locate the email and phone number of your legislators.This may be one of the most critical moments for the real estate industry in our time. Please pass this information on to anyone you might do business with. The outcome of this legislation will have a lasting impact on us all. I appreciate your assistance on this urgent matter.Thank you.