The Atlantic hurricane season starts June 1 – 30 days from now. Since flood insurance takes 30 days to become effective after a homeowner applies, today marks Floridians last chance to get flood insurance by the June 1 debut.
“Past hurricane seasons have shown that storms can form as early as the beginning of June, so property owners can’t afford to wait to buy flood insurance,” says Ed Connor, acting federal insurance administrator and acting assistant administrator, FEMA Mitigation Directorate.
Many homeowners still wrongly believe that their property insurance policy will cover all damage from a hurricane.
“Homeowners insurance doesn’t cover flood damage and, without flood insurance, property owners may have to absorb the financial losses on their own,” says Connor. “Just a few inches of water can cost thousands of dollars in repairs and, in this economy, few can afford that potential drain on their savings.”
Flood insurance is available through about 85 insurance companies in approximately 20,600 participating communities nationwide. National flood insurance is available to renters, business owners and homeowners, even if it is not required by the terms of a mortgage. While the average flood insurance policy costs about $540 a year, homeowners can protect their properties in moderate-to low-risk areas with lower cost Preferred Risk Policies (PRPs) that start at just $119 a year.
Individuals can learn how to prepare for floods, how to purchase a flood insurance policy and the benefits of protecting their properties against flooding by visiting Floodsmart.gov (http://www.floodsmart.gov) or calling (800) 427-2419.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Thursday, April 30, 2009
Tuesday, April 28, 2009
U.S. Consumer Confidence Is Up In April
Hopeful signs that the worst may be over for the economy boosted Americans’ moods in April, sending a closely watched barometer of sentiment to the highest level since November.
The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest level since November’s 44.7 and well surpasses economists’ expectations for 29.5.
The consumer confidence survey showed a substantial improvement in consumers’ short-term outlook, including even their assessment of the job picture.
Some encouraging news in areas like retail sales and housing have helped fuel a recent stock rally. Earlier Tuesday, a housing index showed that home prices dropped sharply in February, but for the first time in 25 months the decline was not a record – another sign the housing crisis could be bottoming.
Economists closely monitor consumer sentiment because consumer spending accounts for more than two-thirds of economic activity.
The huge jump in confidence follows a small increase in March, following a freefall in February. Still, the index remains well below year-ago levels of 62.8.
The April gains were fueled by “a significant improvement in the short-term outlook,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.
She added that the index measuring how shoppers feel now, which posted a moderate gain, offered “a sign that conditions have not deteriorated further and may even moderately improve in the second quarter.”
The Present Situation rose slightly to 23.7 from 21.9 last month. The Expectations Index, which measures how shoppers feel about the economy over the next six months, skyrocketed to 49.5 from 30.2 in March.
That sharp increase – which marked the largest jump since a 13-point gain in November 2005 when the economy was recovering from Hurricanes Katrina and Rita – suggests that people believe the economy is nearing a bottom, Franco said. Still, she noted that the index remains well below the level associated with strong economic growth.
“It looks like the worst is behind us, but clearly we are not out of the woods,” said Franco.
With companies continuing to lay off workers, a major fear is that people will cut back their spending even more, and that could plunge the economy further into a downward spiral. Economists expect the unemployment rate – now at 8.5 percent and the highest since late 1983 – will hit 10 percent by the end of the year and keep climbing next year before it starts coming down.
Meanwhile, investors are becoming more unsettled by the possibility of a major swine flu outbreak, which could stall economic recovery — particularly in regions that depend on travel and tourism. Adam York, an economist at Wachovia Securities, said such a development could dampen confidence levels for May, but it’s still early to tell.
The consumer confidence survey showed that those anticipating business conditions will worsen over the next six months declined to 25.3 percent from 37.8 percent, while those expecting conditions to improve increased to 15.6 percent from 9.6 percent in March.
The employment outlook was also considerably less pessimistic. The percentage of consumers anticipating fewer jobs in the months ahead declined to 33.6 percent from 41.6 percent, while those expecting more jobs increased to 13.9 percent from 7.3 percent.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 The Associated Press
The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest level since November’s 44.7 and well surpasses economists’ expectations for 29.5.
The consumer confidence survey showed a substantial improvement in consumers’ short-term outlook, including even their assessment of the job picture.
Some encouraging news in areas like retail sales and housing have helped fuel a recent stock rally. Earlier Tuesday, a housing index showed that home prices dropped sharply in February, but for the first time in 25 months the decline was not a record – another sign the housing crisis could be bottoming.
Economists closely monitor consumer sentiment because consumer spending accounts for more than two-thirds of economic activity.
The huge jump in confidence follows a small increase in March, following a freefall in February. Still, the index remains well below year-ago levels of 62.8.
The April gains were fueled by “a significant improvement in the short-term outlook,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.
She added that the index measuring how shoppers feel now, which posted a moderate gain, offered “a sign that conditions have not deteriorated further and may even moderately improve in the second quarter.”
The Present Situation rose slightly to 23.7 from 21.9 last month. The Expectations Index, which measures how shoppers feel about the economy over the next six months, skyrocketed to 49.5 from 30.2 in March.
That sharp increase – which marked the largest jump since a 13-point gain in November 2005 when the economy was recovering from Hurricanes Katrina and Rita – suggests that people believe the economy is nearing a bottom, Franco said. Still, she noted that the index remains well below the level associated with strong economic growth.
“It looks like the worst is behind us, but clearly we are not out of the woods,” said Franco.
With companies continuing to lay off workers, a major fear is that people will cut back their spending even more, and that could plunge the economy further into a downward spiral. Economists expect the unemployment rate – now at 8.5 percent and the highest since late 1983 – will hit 10 percent by the end of the year and keep climbing next year before it starts coming down.
Meanwhile, investors are becoming more unsettled by the possibility of a major swine flu outbreak, which could stall economic recovery — particularly in regions that depend on travel and tourism. Adam York, an economist at Wachovia Securities, said such a development could dampen confidence levels for May, but it’s still early to tell.
The consumer confidence survey showed that those anticipating business conditions will worsen over the next six months declined to 25.3 percent from 37.8 percent, while those expecting conditions to improve increased to 15.6 percent from 9.6 percent in March.
The employment outlook was also considerably less pessimistic. The percentage of consumers anticipating fewer jobs in the months ahead declined to 33.6 percent from 41.6 percent, while those expecting more jobs increased to 13.9 percent from 7.3 percent.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 The Associated Press
Monday, April 27, 2009
Home Value Insurance Coverage
With the fear of declining residential values keeping many would-be homeowners from entering the market, Move Inc. Chairman Joe Hanauer believes he has come up with a solution to get buyers off the fence: insurance policies that offer some protection in the event of home depreciation.
“If you want to restart home sales, you have to deal with the biggest factor impacting sales today, which is the erosion of home values,” explains Hanauer, who is circulating the concept to different administration officials on Capitol Hill. “The avalanche of falling home prices continues to bury consumers in fear, uncertainty and doubt.”
Home-value coverage might be structured to charge buyers a premium of 1 percent to 3 percent of their purchase price, with the insurance kicking in if the property is sold at a loss after three or more years. Such policies are already in play in the private sector, but they are relatively new; and Hanauer declares that these carriers are not equipped to handle the problem, anyway.
“The federal government, simply because of the scope and scale and the kind of muscle that would be needed, would have to do it,” he insists.
The cost to administer the program could be anywhere from $20 million to $150 million, he estimates, based on how much of the insurance would be underwritten by the U.S. government, how much consumers are responsible for, and how much real estate values drop.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 INFORMATION, INC. Bethesda, MD (301) 215-4688
“If you want to restart home sales, you have to deal with the biggest factor impacting sales today, which is the erosion of home values,” explains Hanauer, who is circulating the concept to different administration officials on Capitol Hill. “The avalanche of falling home prices continues to bury consumers in fear, uncertainty and doubt.”
Home-value coverage might be structured to charge buyers a premium of 1 percent to 3 percent of their purchase price, with the insurance kicking in if the property is sold at a loss after three or more years. Such policies are already in play in the private sector, but they are relatively new; and Hanauer declares that these carriers are not equipped to handle the problem, anyway.
“The federal government, simply because of the scope and scale and the kind of muscle that would be needed, would have to do it,” he insists.
The cost to administer the program could be anywhere from $20 million to $150 million, he estimates, based on how much of the insurance would be underwritten by the U.S. government, how much consumers are responsible for, and how much real estate values drop.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 INFORMATION, INC. Bethesda, MD (301) 215-4688
Friday, April 24, 2009
Beware Of Chinese Drywall Repair Scams
In every crisis, a handful of unsavory characters will take advantage of worried homeowners. Yesterday, Florida Attorney General Bill McCollum issued a consumer advisory against “experts” offering help with Chinese drywall problems.
At least two types of fraudulent activity involving the defective drywall have been reported to the Florida Attorney General Bill McCollum’s Office by individuals in the building industry: bogus tests to determine the presence of the product and quick cure remedies that falsely claim to remove the corrosive properties of the drywall.
According to reports, defective Chinese drywall in a home causes black corrosion to appear on copper air conditioner coils and non-insulated copper wiring. If the air conditioner coils are corroded black, there is a strong likelihood that defective imported drywall is present in the home. Most homes that contain defective imported drywall were built between 2004 and 2008. Other homes probably do not have Chinese drywall.
McCollum says there are two easy ways to find out if defective Chinese drywall was used in a home: Ask the homebuilder or have a qualified professional air conditioner technician conduct a visual inspection.
However, the presence of defective imported drywall cannot be determined by “testing” the air in the home. Additionally, if the toxic version of drywall is found during a visual inspection, it cannot be remedied with a spray or an ozone generator. McCollum says those products can actually make the problem worse.
The Florida Attorney General’s Office has had the following specific complaints so far:
• Sale of bogus test kits. These can be expensive, often costing thousands of dollars, and are generally ineffective. The presence of defective imported drywall can only be determined through visual inspection.
TALLAHASSEE, Fla. – April 24, 2009 – In every crisis, a handful of unsavory characters will take advantage of worried homeowners. Yesterday, Florida Attorney General Bill McCollum issued a consumer advisory against “experts” offering help with Chinese drywall problems.
At least two types of fraudulent activity involving the defective drywall have been reported to the Florida Attorney General Bill McCollum’s Office by individuals in the building industry: bogus tests to determine the presence of the product and quick cure remedies that falsely claim to remove the corrosive properties of the drywall.
According to reports, defective Chinese drywall in a home causes black corrosion to appear on copper air conditioner coils and non-insulated copper wiring. If the air conditioner coils are corroded black, there is a strong likelihood that defective imported drywall is present in the home. Most homes that contain defective imported drywall were built between 2004 and 2008. Other homes probably do not have Chinese drywall.
McCollum says there are two easy ways to find out if defective Chinese drywall was used in a home: Ask the homebuilder or have a qualified professional air conditioner technician conduct a visual inspection.
However, the presence of defective imported drywall cannot be determined by “testing” the air in the home. Additionally, if the toxic version of drywall is found during a visual inspection, it cannot be remedied with a spray or an ozone generator. McCollum says those products can actually make the problem worse.
The Florida Attorney General’s Office has had the following specific complaints so far:
• Sale of bogus test kits. These can be expensive, often costing thousands of dollars, and are generally ineffective. The presence of defective imported drywall can only be determined through visual inspection.
• Solicited home inspections costing thousands of dollars by “experts” with no apparent qualification. Homeowners should beware of cold calls and door-to-door solicitors.
• Sale of sprays and applications that claim to miraculously cure the corrosion problem. Not only are these products ineffective, but moisture could accelerate the corrosion.
• Sale of ozone generators. Ozone will actually increase the chemical reaction between the drywall and copper and accelerate corrosion.
Consumers can file a complaint about scams by calling the Attorney General’s fraud hotline at (866) 966-7226 or by filing a complaint online at http://myfloridalegal.com.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 FLORIDA ASSOCIATION OF REALTORS®
At least two types of fraudulent activity involving the defective drywall have been reported to the Florida Attorney General Bill McCollum’s Office by individuals in the building industry: bogus tests to determine the presence of the product and quick cure remedies that falsely claim to remove the corrosive properties of the drywall.
According to reports, defective Chinese drywall in a home causes black corrosion to appear on copper air conditioner coils and non-insulated copper wiring. If the air conditioner coils are corroded black, there is a strong likelihood that defective imported drywall is present in the home. Most homes that contain defective imported drywall were built between 2004 and 2008. Other homes probably do not have Chinese drywall.
McCollum says there are two easy ways to find out if defective Chinese drywall was used in a home: Ask the homebuilder or have a qualified professional air conditioner technician conduct a visual inspection.
However, the presence of defective imported drywall cannot be determined by “testing” the air in the home. Additionally, if the toxic version of drywall is found during a visual inspection, it cannot be remedied with a spray or an ozone generator. McCollum says those products can actually make the problem worse.
The Florida Attorney General’s Office has had the following specific complaints so far:
• Sale of bogus test kits. These can be expensive, often costing thousands of dollars, and are generally ineffective. The presence of defective imported drywall can only be determined through visual inspection.
TALLAHASSEE, Fla. – April 24, 2009 – In every crisis, a handful of unsavory characters will take advantage of worried homeowners. Yesterday, Florida Attorney General Bill McCollum issued a consumer advisory against “experts” offering help with Chinese drywall problems.
At least two types of fraudulent activity involving the defective drywall have been reported to the Florida Attorney General Bill McCollum’s Office by individuals in the building industry: bogus tests to determine the presence of the product and quick cure remedies that falsely claim to remove the corrosive properties of the drywall.
According to reports, defective Chinese drywall in a home causes black corrosion to appear on copper air conditioner coils and non-insulated copper wiring. If the air conditioner coils are corroded black, there is a strong likelihood that defective imported drywall is present in the home. Most homes that contain defective imported drywall were built between 2004 and 2008. Other homes probably do not have Chinese drywall.
McCollum says there are two easy ways to find out if defective Chinese drywall was used in a home: Ask the homebuilder or have a qualified professional air conditioner technician conduct a visual inspection.
However, the presence of defective imported drywall cannot be determined by “testing” the air in the home. Additionally, if the toxic version of drywall is found during a visual inspection, it cannot be remedied with a spray or an ozone generator. McCollum says those products can actually make the problem worse.
The Florida Attorney General’s Office has had the following specific complaints so far:
• Sale of bogus test kits. These can be expensive, often costing thousands of dollars, and are generally ineffective. The presence of defective imported drywall can only be determined through visual inspection.
• Solicited home inspections costing thousands of dollars by “experts” with no apparent qualification. Homeowners should beware of cold calls and door-to-door solicitors.
• Sale of sprays and applications that claim to miraculously cure the corrosion problem. Not only are these products ineffective, but moisture could accelerate the corrosion.
• Sale of ozone generators. Ozone will actually increase the chemical reaction between the drywall and copper and accelerate corrosion.
Consumers can file a complaint about scams by calling the Attorney General’s fraud hotline at (866) 966-7226 or by filing a complaint online at http://myfloridalegal.com.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 FLORIDA ASSOCIATION OF REALTORS®
Thursday, April 23, 2009
Foreclosure Help
The following groups are available to help at-risk homeowners:
• HUD at (800) 569-4287, (877) 483-1515, or
www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm
• HOPE NOW, HUD mortgage counselors & lenders to assist homeowners:
(888) 995-HOPE or www.hopenow.com
• NeighborWorks America:
www.nw.org/network/home.asp
• Federal mortgage modification and refinancing programs: www.makinghomeaffordable.gov
• The Controller of the Currency's consumer information site for banking-related questions: www.helpwithmybank.gov
• OCC Customer Assistance Group:
www.occ.gov/customer.htm
• Federal Trade Commission:
www.ftc.gov/bcp/edu/pubs/consumer/homes/rea04.shtm
• Federal Reserve Board: www.federalreserve.gov/pubs/foreclosurescamtips/default.htm
• HUD at (800) 569-4287, (877) 483-1515, or
www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm
• HOPE NOW, HUD mortgage counselors & lenders to assist homeowners:
(888) 995-HOPE or www.hopenow.com
• NeighborWorks America:
www.nw.org/network/home.asp
• Federal mortgage modification and refinancing programs: www.makinghomeaffordable.gov
• The Controller of the Currency's consumer information site for banking-related questions: www.helpwithmybank.gov
• OCC Customer Assistance Group:
www.occ.gov/customer.htm
• Federal Trade Commission:
www.ftc.gov/bcp/edu/pubs/consumer/homes/rea04.shtm
• Federal Reserve Board: www.federalreserve.gov/pubs/foreclosurescamtips/default.htm
Wednesday, April 22, 2009
First Time Home Buyer Market
Experts say it’s a first-time homebuyer’s market. Low interest rates and falling housing prices are good news for renters ready to make a move, and one local group aims to help such buyers through the process – from securing a mortgage to coming up with the cash to make a downpayment on the home of their dreams.
The Realtors Care Foundation, a nonprofit arm of the Greater Tampa Association of Realtors, was established in 2007 to provide educational and housing programs and services to Hillsborough County residents.
The group recently launched a downpayment assistance program to help prospective first-time homebuyers.
“People who want to purchase a home in Hillsborough County need to be aware that we are here to help,” said Jim Selvey, foundation president.
To qualify for the program, applicants – first-time homebuyers or those who have not owned a home in the past three years – must purchase a single-family house, condominium or townhouse and meet income limits established by the U.S. Department of Housing and Urban Development.
Applicants also must agree to remain current on property taxes and homeowner association fees and certify that they will remain owners for a minimum of five years.
“The goal is to help as many as we can,” Selvey said.
For information about the Realtors Care Foundation or down-payment assistance grants, call (813) 879-7010 or go to www.realtorscareofgtar.org.
2009 Tampa Tribune
The Realtors Care Foundation, a nonprofit arm of the Greater Tampa Association of Realtors, was established in 2007 to provide educational and housing programs and services to Hillsborough County residents.
The group recently launched a downpayment assistance program to help prospective first-time homebuyers.
“People who want to purchase a home in Hillsborough County need to be aware that we are here to help,” said Jim Selvey, foundation president.
To qualify for the program, applicants – first-time homebuyers or those who have not owned a home in the past three years – must purchase a single-family house, condominium or townhouse and meet income limits established by the U.S. Department of Housing and Urban Development.
Applicants also must agree to remain current on property taxes and homeowner association fees and certify that they will remain owners for a minimum of five years.
“The goal is to help as many as we can,” Selvey said.
For information about the Realtors Care Foundation or down-payment assistance grants, call (813) 879-7010 or go to www.realtorscareofgtar.org.
2009 Tampa Tribune
Monday, April 20, 2009
Buying A Foreclosure? Read This First
Many home buyers looking for bargains are turning to foreclosures and discovering that the toughest challenge is not finding the property, but dealing with the banks that repossessed the homes. Although most banks are quick to accept a bid and write a contract, some buyers report that as closing approaches, issues, such as liens and rights to the property, arise.
Here's what you should know:
Purchasing a home from a bank is much different than buying from a homeowner. If a problem is found during the home-buying process, it may take the bank longer to resolve the issue than it would a homeowner. As with short sales, home buyers need to be aware that foreclosures can take longer because most banks are overwhelmed with properties and do not have enough qualified staff to handle all requests.
In previous years, when home prices were increasing, banks didn’t have to keep foreclosed homes on their books long. Often, investors would purchase the foreclosures through court auctions. However, as home prices declined, especially in the past two years, many investors decided to delay purchasing new properties. Banks then had to concentrate their efforts on selling to the general public, which often takes longer.
When a bank repossesses a home, it typically engages a lawyer to determine whether there are other claims on the property. Generally, the lawyer only is paid to look at the time from when the owners took out the mortgage to the time the bank repossessed the house. Any pre-existing problems, or new ones, usually surface at closing time, when a more thorough search is performed. IMPORTANT: Buyers need to be aware that any pre-existing or new problems are only found through the buyers inspections. The bank (not living on the propery) has no idea what condition the house is in and therefore will not disclose any problems. Buyers should be very certain that their inspections are done thoroughly and by licensed inspectors.
Buyers should be aware that banks usually sell homes in an “as-is” condition, and on their own terms. Meaning that the banks usually will not mend any problems found during inspections. Although buyers are informed prior to beginning the home-buying process, some are unwilling to agree to the bank’s terms when it’s time to finalize the deal and sign addendums to the contract.
Here's what you should know:
Purchasing a home from a bank is much different than buying from a homeowner. If a problem is found during the home-buying process, it may take the bank longer to resolve the issue than it would a homeowner. As with short sales, home buyers need to be aware that foreclosures can take longer because most banks are overwhelmed with properties and do not have enough qualified staff to handle all requests.
In previous years, when home prices were increasing, banks didn’t have to keep foreclosed homes on their books long. Often, investors would purchase the foreclosures through court auctions. However, as home prices declined, especially in the past two years, many investors decided to delay purchasing new properties. Banks then had to concentrate their efforts on selling to the general public, which often takes longer.
When a bank repossesses a home, it typically engages a lawyer to determine whether there are other claims on the property. Generally, the lawyer only is paid to look at the time from when the owners took out the mortgage to the time the bank repossessed the house. Any pre-existing problems, or new ones, usually surface at closing time, when a more thorough search is performed. IMPORTANT: Buyers need to be aware that any pre-existing or new problems are only found through the buyers inspections. The bank (not living on the propery) has no idea what condition the house is in and therefore will not disclose any problems. Buyers should be very certain that their inspections are done thoroughly and by licensed inspectors.
Buyers should be aware that banks usually sell homes in an “as-is” condition, and on their own terms. Meaning that the banks usually will not mend any problems found during inspections. Although buyers are informed prior to beginning the home-buying process, some are unwilling to agree to the bank’s terms when it’s time to finalize the deal and sign addendums to the contract.
Unpaid Real Estate Taxes in Tampa Bay Area Hit $332M
A record number of property tax bills remain unpaid across the Tampa Bay area this year, one more casualty of tough economic times.
In April, 114,000 properties had overdue bills totaling $332.1 million in taxes in Pinellas, Hillsborough, Pasco and Hernando counties.
Final warnings to property owners for unpaid real estate taxes spiked 10 percent this March on top of record high delinquencies in 2008.
The unpaid taxes come in a year when declining property values and state-mandated tax relief measures lowered many bills.
"I'm afraid it's a sign of the times,'' Hernando County Commission Chairman Dave Russell said. "There are certainly a lot of folks under financial duress right now, and I believe this is a significant indicator of that.''
It's not just homeowners, who have a third of the properties with overdue bills in Pinellas and Hillsborough counties. Big-name developers and businesses also haven't paid. Apartments. Marinas. The Tampa Bay Lightning.
The tax bills — lifeblood of local government and schools — are big.
Osprey SP Properties, owner of First Central Tower in downtown St. Petersburg, owes almost $495,000, the biggest unpaid bill for a parcel in Pinellas, according to the Tax Collector's Office.
Wendy Giffin, president of the company's real estate management arm in St. Petersburg, said Friday that the company recently sent payment that should clear today or Tuesday.
The tower has a 47 percent vacancy rate, though the company remains financially fine overall, Giffin said. But in tough times, tenants are seeking short-term leases there.
Of the county's nearly 34,000 overdue property bills in April, she said: "That's amazing."
Tax bill disputed
In Hillsborough, the biggest overdue bill is owed by a corporation linked to the financially troubled Metro Development Group, according to the Tax Collector's Office. The company owes $665,000 in taxes for land near U.S. 301 and State Road 674 in Wimauma. In fact, the county says Forest Brooke/Hillsborough LLC owes an additional $715,000 from last year's taxes.
Company officials dispute the bill, saying Hillsborough has vastly overvalued the land, ignoring its current agricultural use. They are due to make an appeal this year, and have paid $30,000 — their accounting of the bill — for 2008 pending the challenge, spokesman John Heagney said.
The Tampa Bay Lightning — which slashed staff recently — owes nearly $440,000 through affiliates for two downtown Tampa lots that are among the highest unpaid tax bills.
And while the city of St. Petersburg fights to annex 18 acres of Tierra Verde, the county tax collector awaits at least $505,000 in combined taxes from two companies that own much of that land.
The companies, Tierra Verde Marina Holdings and A&S Tierra Verde Ventures, agreed to the annexation, despite objections by some residents and Pinellas County.
Richard Fabrizi, president of Tierra Verde Marina Holdings, did not return a message seeking comment. But employee Melisa Jones said Thursday that the company's accountant prepared and sent the payment.
On Friday, the Pinellas Tax Collector's Office still listed $274,000 in unpaid taxes for the company's three seaside properties in Tierra Verde. Taxes were due by March 31.
Steve Sembler, president of A&S Tierra Verde Ventures, did not return a message about $231,000 owed in late taxes and penalty at the marina, one of the county's largest unpaid bills on a single property. Taxes on parcels of several other companies are also overdue.
The surge in warnings and overdue bills is biggest in Pinellas. Carlos Thomas, the chief deputy tax collector, said homeowners pressed for money by insurance and other bills are willing to pay late to stretch finances.
Russell, the Hernando commissioner, said that with the penalty on a late tax bill totaling 3 percent, "some folks may be weighing that and saying, perhaps I'm better off paying down my credit card debt at 18 percent interest."
"I hope it's a matter of prioritizing what bills get paid'' rather than people in dire straits, he said.
Even with overdue bills, counties reported 90 percent or more of tax bills have been paid. The increased delinquency represents a small fraction of the tax base.
Delinquent bills
Tax notices arrive in November. In May, counties prepare a list of parcels with delinquent bills, which are later advertised for tax certificate sales to investors.
In such a sale, an investor pays the tax owed to the county in exchange for a lien on the property. The investor then charges interest to the homeowner on the overdue tax bill until it's paid. Those certificate sales help the government recover late payments and give late taxpayers incentive to pay their bills.
"I've got to tell you, in years past people were even a little more sensitive to seeing their name and address advertised," Thomas said.
Tax collectors, and local governments, are closely watching how the next few months play out to see if bills are paid and investors come calling. While the dearth of credit may limit certificate buyers, there's also a cache of investors trying to score at the bottom of the market, said Howard Liggett, executive director of the National Tax Lien Association in Pensacola.
Will there be enough investors out there to pay the bill of unpaid taxes for local governments?
"The answer is we don't know," he said.
St. Pete Times
In April, 114,000 properties had overdue bills totaling $332.1 million in taxes in Pinellas, Hillsborough, Pasco and Hernando counties.
Final warnings to property owners for unpaid real estate taxes spiked 10 percent this March on top of record high delinquencies in 2008.
The unpaid taxes come in a year when declining property values and state-mandated tax relief measures lowered many bills.
"I'm afraid it's a sign of the times,'' Hernando County Commission Chairman Dave Russell said. "There are certainly a lot of folks under financial duress right now, and I believe this is a significant indicator of that.''
It's not just homeowners, who have a third of the properties with overdue bills in Pinellas and Hillsborough counties. Big-name developers and businesses also haven't paid. Apartments. Marinas. The Tampa Bay Lightning.
The tax bills — lifeblood of local government and schools — are big.
Osprey SP Properties, owner of First Central Tower in downtown St. Petersburg, owes almost $495,000, the biggest unpaid bill for a parcel in Pinellas, according to the Tax Collector's Office.
Wendy Giffin, president of the company's real estate management arm in St. Petersburg, said Friday that the company recently sent payment that should clear today or Tuesday.
The tower has a 47 percent vacancy rate, though the company remains financially fine overall, Giffin said. But in tough times, tenants are seeking short-term leases there.
Of the county's nearly 34,000 overdue property bills in April, she said: "That's amazing."
Tax bill disputed
In Hillsborough, the biggest overdue bill is owed by a corporation linked to the financially troubled Metro Development Group, according to the Tax Collector's Office. The company owes $665,000 in taxes for land near U.S. 301 and State Road 674 in Wimauma. In fact, the county says Forest Brooke/Hillsborough LLC owes an additional $715,000 from last year's taxes.
Company officials dispute the bill, saying Hillsborough has vastly overvalued the land, ignoring its current agricultural use. They are due to make an appeal this year, and have paid $30,000 — their accounting of the bill — for 2008 pending the challenge, spokesman John Heagney said.
The Tampa Bay Lightning — which slashed staff recently — owes nearly $440,000 through affiliates for two downtown Tampa lots that are among the highest unpaid tax bills.
And while the city of St. Petersburg fights to annex 18 acres of Tierra Verde, the county tax collector awaits at least $505,000 in combined taxes from two companies that own much of that land.
The companies, Tierra Verde Marina Holdings and A&S Tierra Verde Ventures, agreed to the annexation, despite objections by some residents and Pinellas County.
Richard Fabrizi, president of Tierra Verde Marina Holdings, did not return a message seeking comment. But employee Melisa Jones said Thursday that the company's accountant prepared and sent the payment.
On Friday, the Pinellas Tax Collector's Office still listed $274,000 in unpaid taxes for the company's three seaside properties in Tierra Verde. Taxes were due by March 31.
Steve Sembler, president of A&S Tierra Verde Ventures, did not return a message about $231,000 owed in late taxes and penalty at the marina, one of the county's largest unpaid bills on a single property. Taxes on parcels of several other companies are also overdue.
The surge in warnings and overdue bills is biggest in Pinellas. Carlos Thomas, the chief deputy tax collector, said homeowners pressed for money by insurance and other bills are willing to pay late to stretch finances.
Russell, the Hernando commissioner, said that with the penalty on a late tax bill totaling 3 percent, "some folks may be weighing that and saying, perhaps I'm better off paying down my credit card debt at 18 percent interest."
"I hope it's a matter of prioritizing what bills get paid'' rather than people in dire straits, he said.
Even with overdue bills, counties reported 90 percent or more of tax bills have been paid. The increased delinquency represents a small fraction of the tax base.
Delinquent bills
Tax notices arrive in November. In May, counties prepare a list of parcels with delinquent bills, which are later advertised for tax certificate sales to investors.
In such a sale, an investor pays the tax owed to the county in exchange for a lien on the property. The investor then charges interest to the homeowner on the overdue tax bill until it's paid. Those certificate sales help the government recover late payments and give late taxpayers incentive to pay their bills.
"I've got to tell you, in years past people were even a little more sensitive to seeing their name and address advertised," Thomas said.
Tax collectors, and local governments, are closely watching how the next few months play out to see if bills are paid and investors come calling. While the dearth of credit may limit certificate buyers, there's also a cache of investors trying to score at the bottom of the market, said Howard Liggett, executive director of the National Tax Lien Association in Pensacola.
Will there be enough investors out there to pay the bill of unpaid taxes for local governments?
"The answer is we don't know," he said.
St. Pete Times
Sunday, April 19, 2009
Beware Of Foreclosure Scams
Like many homeowners facing foreclosure, Sandi Stewart says she'll do just about anything to keep her Lakeland home.
So in February, when she saw a television commercial from a California lawyer advertising help with mortgage loan modifications, she called. The company agreed to take on her case - as soon as she gave them a credit card payment of $3,500.
"Because it was an attorney, I thought it was more secure," said Stewart, who paid all of it upfront. "I know now it doesn't sound very smart, but I didn't know what else to do."
Company representatives, she says, tell her they've had no luck so far. Stewart is still hoping they come through, but she's starting to wonder whether she wasted money she could have spent on mortgage payments.
She'll find out soon, but the most alarming part of the story is the fee.
It's against the law in Florida to charge upfront fees for foreclosure help. The law was passed a year ago, but many companies still won't begin work until they get the money. And an increasing number of them aren't doing anything in return. Florida's attorney general has called the situation a "state of emergency."
Does the law have a loophole?
Federal and state authorities are investigating, prosecuting and shutting down companies that violate the law. But some have found what they think is a loophole in the law: Florida attorneys are exempt from the ban on charging upfront fees.
When Stewart questioned the fees, she says she was told it was legal because she was hiring an attorney.
However, she had no correspondence with the lawyer and spoke only to the "loan modification department." Plus, the lawyer, Christian M. Dillon, is not licensed in Florida.
Repeated phone calls to representatives for the company, uFirst Direct, and for Dillon himself, were not returned.
The attorney defense for charging upfront fees is not an isolated case.
Another reader called recently about a Chicago company, American Homeowners Alliance. It asked for $1,500 up front.
When reached by phone, the company president, Jim Hamilton, told me he was aware of Florida's law but that it doesn't apply to him because his company is based in Illinois.
Furthermore, he said, his company is exempt from Illinois' law against upfront fees because he has an attorney on staff.
"This is how I do business because I've been beat out of $3,000 in the past by people not paying," Hamilton said. "Two of those homeowners were in Florida."
"Would you do this kind of work without getting paid for it first?" he asked.
That point is understandable.
The attorney general has not received complaints about Hamilton's company. However, the attorney defense for charging upfront fees just doesn't hold up, according to regulators.
Offices for the attorneys general in Florida and Illinois say companies operating in Florida must obey local laws, no matter where their home office is.
"Merely having an attorney on staff, even assuming he is licensed to practice in Florida, is not enough to qualify for the exemption, said Sandi Copes, communications director for the Florida attorney general. "There must be an attorney-client relationship established before the exemption applies."
Make sure you get what you pay for
St. Petersburg lawyer Matt Weidner said many of his clients have been to foreclosure rescue firms before hiring him.
"I had two clients recently that each paid $1,500 to a company that said they could make the foreclosure go away," he said. "The companies ended up coming back and asking for more money."
Some clients have also received advice from firms that ended up making it more difficult to work with lenders, Weidner said.
The bottom line is this: Seek out free help from local nonprofit groups before agreeing to pay for help. And if your situation requires more work than offered for free, do your research.
If you hire a rescue company, don't pay a dime until you actually get what you're paying for.
If you think you've been a victim of foreclosure rescue fraud, call the Florida attorney general's hot line at 1-866-966-7226 or go to http://myfloridalegal.com/ mortgagefraud, which provides complaint forms and tips to identify and avoid fraud.
To find HUD-certified housing counselors - who work for free - call 1-888-995-HOPE.
So in February, when she saw a television commercial from a California lawyer advertising help with mortgage loan modifications, she called. The company agreed to take on her case - as soon as she gave them a credit card payment of $3,500.
"Because it was an attorney, I thought it was more secure," said Stewart, who paid all of it upfront. "I know now it doesn't sound very smart, but I didn't know what else to do."
Company representatives, she says, tell her they've had no luck so far. Stewart is still hoping they come through, but she's starting to wonder whether she wasted money she could have spent on mortgage payments.
She'll find out soon, but the most alarming part of the story is the fee.
It's against the law in Florida to charge upfront fees for foreclosure help. The law was passed a year ago, but many companies still won't begin work until they get the money. And an increasing number of them aren't doing anything in return. Florida's attorney general has called the situation a "state of emergency."
Does the law have a loophole?
Federal and state authorities are investigating, prosecuting and shutting down companies that violate the law. But some have found what they think is a loophole in the law: Florida attorneys are exempt from the ban on charging upfront fees.
When Stewart questioned the fees, she says she was told it was legal because she was hiring an attorney.
However, she had no correspondence with the lawyer and spoke only to the "loan modification department." Plus, the lawyer, Christian M. Dillon, is not licensed in Florida.
Repeated phone calls to representatives for the company, uFirst Direct, and for Dillon himself, were not returned.
The attorney defense for charging upfront fees is not an isolated case.
Another reader called recently about a Chicago company, American Homeowners Alliance. It asked for $1,500 up front.
When reached by phone, the company president, Jim Hamilton, told me he was aware of Florida's law but that it doesn't apply to him because his company is based in Illinois.
Furthermore, he said, his company is exempt from Illinois' law against upfront fees because he has an attorney on staff.
"This is how I do business because I've been beat out of $3,000 in the past by people not paying," Hamilton said. "Two of those homeowners were in Florida."
"Would you do this kind of work without getting paid for it first?" he asked.
That point is understandable.
The attorney general has not received complaints about Hamilton's company. However, the attorney defense for charging upfront fees just doesn't hold up, according to regulators.
Offices for the attorneys general in Florida and Illinois say companies operating in Florida must obey local laws, no matter where their home office is.
"Merely having an attorney on staff, even assuming he is licensed to practice in Florida, is not enough to qualify for the exemption, said Sandi Copes, communications director for the Florida attorney general. "There must be an attorney-client relationship established before the exemption applies."
Make sure you get what you pay for
St. Petersburg lawyer Matt Weidner said many of his clients have been to foreclosure rescue firms before hiring him.
"I had two clients recently that each paid $1,500 to a company that said they could make the foreclosure go away," he said. "The companies ended up coming back and asking for more money."
Some clients have also received advice from firms that ended up making it more difficult to work with lenders, Weidner said.
The bottom line is this: Seek out free help from local nonprofit groups before agreeing to pay for help. And if your situation requires more work than offered for free, do your research.
If you hire a rescue company, don't pay a dime until you actually get what you're paying for.
If you think you've been a victim of foreclosure rescue fraud, call the Florida attorney general's hot line at 1-866-966-7226 or go to http://myfloridalegal.com/ mortgagefraud, which provides complaint forms and tips to identify and avoid fraud.
To find HUD-certified housing counselors - who work for free - call 1-888-995-HOPE.
Saturday, April 18, 2009
Florida To Begin Testing Air Quality In Homes With Chinese Drywall
Florida officials will soon begin air-quality tests in homes to determine whether fumes emitted from Chinese-made drywall can make people sick, the state Health Department said Friday.
Agency spokesman Doc Kokol said the tests, which he hopes will begin in several weeks, are complex and have never been done before.
"This is new science; nobody has tested drywall like this," he said.
An Associated Press review of shipping records found more than 540 million pounds of plasterboard was imported from China between 2004 and 2008 to meet U.S. demand during the national housing boom. Hundreds of people nationwide are now complaining that the material emits fumes that make them sick. They claim it also corrodes copper pipes, blackens jewelry and silverware and ruins air conditioners.
Estimates indicate the drywall may be in more than 100,000 homes, more than 35,000 in Florida alone. The state Health Department has logged 265 complaints so far. Lawsuits against the Chinese manufacturers, builders and suppliers have been filed in several states, including Florida, Mississippi, Alabama and Louisiana.
Builders known to have installed the drywall include Lennar, Taylor Morrison, WCI, Transeastern, Ryland and Standard Pacific, plaintiffs attorneys said.
Gov. Charlie Crist and Gov. Bobby Jindal in Louisiana, where the drywall turned up in some homes rebuilt after Hurricane Katrina, have asked for assistance with chemical testing from the Environmental Protection Agency and the Centers for Disease Control and Prevention.
Agency spokesman Doc Kokol said the tests, which he hopes will begin in several weeks, are complex and have never been done before.
"This is new science; nobody has tested drywall like this," he said.
An Associated Press review of shipping records found more than 540 million pounds of plasterboard was imported from China between 2004 and 2008 to meet U.S. demand during the national housing boom. Hundreds of people nationwide are now complaining that the material emits fumes that make them sick. They claim it also corrodes copper pipes, blackens jewelry and silverware and ruins air conditioners.
Estimates indicate the drywall may be in more than 100,000 homes, more than 35,000 in Florida alone. The state Health Department has logged 265 complaints so far. Lawsuits against the Chinese manufacturers, builders and suppliers have been filed in several states, including Florida, Mississippi, Alabama and Louisiana.
Builders known to have installed the drywall include Lennar, Taylor Morrison, WCI, Transeastern, Ryland and Standard Pacific, plaintiffs attorneys said.
Gov. Charlie Crist and Gov. Bobby Jindal in Louisiana, where the drywall turned up in some homes rebuilt after Hurricane Katrina, have asked for assistance with chemical testing from the Environmental Protection Agency and the Centers for Disease Control and Prevention.
Friday, April 17, 2009
Shopping For A House?
After more than a year of free-falling sales and prices, Central Florida’s battered housing market is getting support from both first-time home buyers and investors taking advantage of record foreclosures and distress sales across the region.
With mortgage-interest rates at record lows and an $8,000 tax credit for buyers who haven’t owned a home for at least the past three years, existing-home sales in the region have started rising again compared with a year ago. And half the deals involve bank-owned foreclosures or “short sales” – properties for which the bank has agreed to take less than the amount owed on the mortgage.
Who’s buying them? Anecdotal reports and a few surveys indicate that first-time home buyers, who don’t have to worry about selling an existing property, and investors venturing into the second-home market for the first time or searching for bargains to add to their inventory, are responsible for most of the sales.
Bulk auctions of both homes and condominiums are creating buzz in the local market, and bankers are saying yes more often to short sales, which spare them the expense of a full-blown foreclosure.
Lenders are becoming more responsive. Short-sales still remain slower and more cumbersome than a regular, open-market sale between a willing seller and a qualified buyer.
HouseHunt Inc. noted that 48 percent of sellers nationally are now getting multiple purchase offers for a single property, nearly double the 25 percent rate during the same period last year.
If you are considering purchasing a home, the time is looking sooooo right !!!
Please get in contact with me so we can discuss your housing needs.
With mortgage-interest rates at record lows and an $8,000 tax credit for buyers who haven’t owned a home for at least the past three years, existing-home sales in the region have started rising again compared with a year ago. And half the deals involve bank-owned foreclosures or “short sales” – properties for which the bank has agreed to take less than the amount owed on the mortgage.
Who’s buying them? Anecdotal reports and a few surveys indicate that first-time home buyers, who don’t have to worry about selling an existing property, and investors venturing into the second-home market for the first time or searching for bargains to add to their inventory, are responsible for most of the sales.
Bulk auctions of both homes and condominiums are creating buzz in the local market, and bankers are saying yes more often to short sales, which spare them the expense of a full-blown foreclosure.
Lenders are becoming more responsive. Short-sales still remain slower and more cumbersome than a regular, open-market sale between a willing seller and a qualified buyer.
HouseHunt Inc. noted that 48 percent of sellers nationally are now getting multiple purchase offers for a single property, nearly double the 25 percent rate during the same period last year.
If you are considering purchasing a home, the time is looking sooooo right !!!
Please get in contact with me so we can discuss your housing needs.
Thursday, April 16, 2009
U.S. Foreclosures Up 24 Percent In First Quarter
The number of American households threatened with losing their homes grew 24 percent in the first three months of this year and is poised to rise further as major lenders restart foreclosures after a temporary break, according to data released Thursday.
The big unknown for the coming months, however, is President Barack Obama’s plan to help up to 9 million borrowers avoid foreclosure through refinanced mortgages or modified loans. The Obama administration expects its plans to make a big dent in the foreclosure crisis. But it remains to be seen whether the lending industry will fully embrace it, despite $75 billion in incentive payments.
The faltering economy is causing the housing crisis to spread. Nationwide, nearly 804,000 homes received at least one foreclosure-related notice from January through March, up from about 650,000 in the same time period a year earlier, according to RealtyTrac Inc., a foreclosure listing firm.
In March, more than 340,000 properties were affected, up 17 percent from February and 46 percent from a year earlier.
Foreclosures “came back with a vengeance” last month and are likely to keep rising, said Rick Sharga, RealtyTrac’s senior vice president for marketing.
Nearly 191,000 properties completed the foreclosure process and were repossessed by banks in the quarter. While the number was down 13 percent from the fourth quarter of last year, it is expected to rise through the summer and then possibly taper off.
Fannie Mae and Freddie Mac, the big mortgage finance companies, together with many banks had temporarily halted foreclosures in advance of Obama’s plan. Now armed with the details about which borrowers can qualify, the mortgage industry has begun foreclosing on ineligible borrowers.
The Treasury Department has signed contracts with six big loan servicing companies – including Citgroup, Wells Fargo and JPMorgan Chase. Many have already started processing loans as part of the government’s “Making Home Affordable” plan.
“We need to get the long-term solutions for these folks,” Shaun Donovan, Obama’s housing secretary, said in an interview.
In the coming months, Donovan said, there are still likely to be increased foreclosures, especially from vacant houses, second homes and those owned by speculators. None of those properties will qualify for a loan modification. However, he remained optimistic that overall foreclosures could start to decrease this summer.
But even industry executives who emphatically support the plan emphasize that it’s success isn’t guaranteed.
“The effectiveness of the plan overall obviously is going to depend on the level of industry participation,” said Paul Koches, general counsel of Ocwen Financial, which collects loan payments on subprime loans.
Many borrowers and consumer groups claim the modifications offered by the lending industry don’t do enough to help cash-strapped homeowners, despite more than a year of public prodding from regulators. Fewer than half of loan modifications made at the end of last year actually reduced borrowers’ payments by more than 10 percent, data released last month show.
Plus, the lending industry has been swamped by the unprecedented wave of calls from distressed borrowers. “You can’t wave a magic wand and make the loans suddenly modified,” Sharga said. “They’re all individual transactions.”
In RealtyTrac’s report, Nevada, Arizona, California and Florida had the nation’s top foreclosure rates. In Nevada, one in every 27 homes received a foreclosure filing, while the number was one in every 54 in Arizona. Rounding out the top 10 were Illinois, Michigan, Georgia, Idaho, Utah and Oregon.
The big unknown for the coming months, however, is President Barack Obama’s plan to help up to 9 million borrowers avoid foreclosure through refinanced mortgages or modified loans. The Obama administration expects its plans to make a big dent in the foreclosure crisis. But it remains to be seen whether the lending industry will fully embrace it, despite $75 billion in incentive payments.
The faltering economy is causing the housing crisis to spread. Nationwide, nearly 804,000 homes received at least one foreclosure-related notice from January through March, up from about 650,000 in the same time period a year earlier, according to RealtyTrac Inc., a foreclosure listing firm.
In March, more than 340,000 properties were affected, up 17 percent from February and 46 percent from a year earlier.
Foreclosures “came back with a vengeance” last month and are likely to keep rising, said Rick Sharga, RealtyTrac’s senior vice president for marketing.
Nearly 191,000 properties completed the foreclosure process and were repossessed by banks in the quarter. While the number was down 13 percent from the fourth quarter of last year, it is expected to rise through the summer and then possibly taper off.
Fannie Mae and Freddie Mac, the big mortgage finance companies, together with many banks had temporarily halted foreclosures in advance of Obama’s plan. Now armed with the details about which borrowers can qualify, the mortgage industry has begun foreclosing on ineligible borrowers.
The Treasury Department has signed contracts with six big loan servicing companies – including Citgroup, Wells Fargo and JPMorgan Chase. Many have already started processing loans as part of the government’s “Making Home Affordable” plan.
“We need to get the long-term solutions for these folks,” Shaun Donovan, Obama’s housing secretary, said in an interview.
In the coming months, Donovan said, there are still likely to be increased foreclosures, especially from vacant houses, second homes and those owned by speculators. None of those properties will qualify for a loan modification. However, he remained optimistic that overall foreclosures could start to decrease this summer.
But even industry executives who emphatically support the plan emphasize that it’s success isn’t guaranteed.
“The effectiveness of the plan overall obviously is going to depend on the level of industry participation,” said Paul Koches, general counsel of Ocwen Financial, which collects loan payments on subprime loans.
Many borrowers and consumer groups claim the modifications offered by the lending industry don’t do enough to help cash-strapped homeowners, despite more than a year of public prodding from regulators. Fewer than half of loan modifications made at the end of last year actually reduced borrowers’ payments by more than 10 percent, data released last month show.
Plus, the lending industry has been swamped by the unprecedented wave of calls from distressed borrowers. “You can’t wave a magic wand and make the loans suddenly modified,” Sharga said. “They’re all individual transactions.”
In RealtyTrac’s report, Nevada, Arizona, California and Florida had the nation’s top foreclosure rates. In Nevada, one in every 27 homes received a foreclosure filing, while the number was one in every 54 in Arizona. Rounding out the top 10 were Illinois, Michigan, Georgia, Idaho, Utah and Oregon.
Wednesday, April 15, 2009
Affordability Not Improving For Renters Nationwide
Jeffrey Myers can’t make the rent – by himself. He works part-time at UPS and as a freelance photographer, but the $2,200 he pulls in a month isn’t enough to afford an apartment in Orange County, Calif., without a roommate.
“It’s hard to meet people who live by themselves. Most people have roommates,” said Myers, 31.
For homebuyers, affordability is the best it’s been for decades, but for millions of renters, coast-to-coast affordability is still getting worse, according to a study released Tuesday.
As the recession forces more Americans out of work, working-class tenants are bearing the brunt of the cuts. Record foreclosures, at the same time, mean more people are competing for low-cost rentals. And rents in many expensive cities still haven’t budged because so few apartments were built in recent years.
A renter earning the nation’s minimum wage of $6.55 could not afford a one-bedroom apartment in any county in the nation.
“It’s a very dire situation,” said Dean Baker, co-director for the Center for Economic and Policy Research. “And it’s likely to get worse in the two years ahead,” as unemployment climbs and businesses cut worker hours and pay.
A renter needs to earn $17.84 an hour to cover the monthly rent on the average $928 two-bedroom apartment, if they don’t want to spend more than 30 percent of their income on housing. But the median hourly wage for an American renter is $14.69, more than $3 short of what’s needed, according to the study by the National Low Income Housing Coalition.
“So what’s going to happen is a lot, unfortunately, will be out on the streets,” said Edward Wolff, an economist at New York University.
The lowest-income renters stand to get hit hardest. The unemployment rate is at a 25-year high of 8.5 percent, but that percentage was even higher – 12.6 percent – for those without a high school degree. Some of the worst layoffs have come from industries that employ low-income workers like construction, retail and manufacturing.
Families displaced by foreclosures are also flooding the apartment market, increasing competition for affordable rentals.
“It’s likely they’re income-constrained or don’t have credit or savings” for costlier apartments, said Rachel Drew, a research analyst at Harvard University’s Joint Center for Housing Studies.
And while rents are falling in some individual markets, many cities are showing little signs of softness because demand for apartments remains high. Renters in Seattle, Los Angeles, San Francisco and Portland, Ore., all traditionally strong markets, won’t see many rent cuts.
Even renters in beleaguered apartment markets like Phoenix, Atlanta, Las Vegas and Florida likely won’t enjoy the deals in their areas because the local economies are reeling.
“Even when rents are dipping slightly, it’s because more people are out of work,” in that area, Baker said. “Affordability only improves when wages increase in proportion with rent.”
The most expensive metropolitan area, according to the report, is Stamford, Conn. A renter must earn $32.75 an hour to afford a two-bedroom apartment there. San Francisco ranked second at $31.88 per hour, followed by Honolulu at $31.37, Westchester County, N.Y., at $30.96 and Santa Cruz, Calif., at $30.58 per hour.
Florida Association of Realtors
“It’s hard to meet people who live by themselves. Most people have roommates,” said Myers, 31.
For homebuyers, affordability is the best it’s been for decades, but for millions of renters, coast-to-coast affordability is still getting worse, according to a study released Tuesday.
As the recession forces more Americans out of work, working-class tenants are bearing the brunt of the cuts. Record foreclosures, at the same time, mean more people are competing for low-cost rentals. And rents in many expensive cities still haven’t budged because so few apartments were built in recent years.
A renter earning the nation’s minimum wage of $6.55 could not afford a one-bedroom apartment in any county in the nation.
“It’s a very dire situation,” said Dean Baker, co-director for the Center for Economic and Policy Research. “And it’s likely to get worse in the two years ahead,” as unemployment climbs and businesses cut worker hours and pay.
A renter needs to earn $17.84 an hour to cover the monthly rent on the average $928 two-bedroom apartment, if they don’t want to spend more than 30 percent of their income on housing. But the median hourly wage for an American renter is $14.69, more than $3 short of what’s needed, according to the study by the National Low Income Housing Coalition.
“So what’s going to happen is a lot, unfortunately, will be out on the streets,” said Edward Wolff, an economist at New York University.
The lowest-income renters stand to get hit hardest. The unemployment rate is at a 25-year high of 8.5 percent, but that percentage was even higher – 12.6 percent – for those without a high school degree. Some of the worst layoffs have come from industries that employ low-income workers like construction, retail and manufacturing.
Families displaced by foreclosures are also flooding the apartment market, increasing competition for affordable rentals.
“It’s likely they’re income-constrained or don’t have credit or savings” for costlier apartments, said Rachel Drew, a research analyst at Harvard University’s Joint Center for Housing Studies.
And while rents are falling in some individual markets, many cities are showing little signs of softness because demand for apartments remains high. Renters in Seattle, Los Angeles, San Francisco and Portland, Ore., all traditionally strong markets, won’t see many rent cuts.
Even renters in beleaguered apartment markets like Phoenix, Atlanta, Las Vegas and Florida likely won’t enjoy the deals in their areas because the local economies are reeling.
“Even when rents are dipping slightly, it’s because more people are out of work,” in that area, Baker said. “Affordability only improves when wages increase in proportion with rent.”
The most expensive metropolitan area, according to the report, is Stamford, Conn. A renter must earn $32.75 an hour to afford a two-bedroom apartment there. San Francisco ranked second at $31.88 per hour, followed by Honolulu at $31.37, Westchester County, N.Y., at $30.96 and Santa Cruz, Calif., at $30.58 per hour.
Florida Association of Realtors
Tuesday, April 14, 2009
Foreclosure Sales Stalled By Red Tape
Anxious to meet the bank’s demands for quick action, Andrew Garcia and his fiancée, BethAnne Hoffmann, rushed to find financing to buy a foreclosed-on house in a lovely tree-lined Baltimore neighborhood.
That was in January.
A month later, the bank that’s selling the house broke its own closing deadline. The couple has been in limbo since. In frustration, they turned to their congressman’s office for help. Only then did they receive an apologetic call and a new proposed closing date of April 24 – but still no signed paperwork.
“It’s unbelievable. With all we hear about all the homes out there that need to be sold, I have to call my congressman in order to purchase a house,” Garcia said. “If that’s the process, there’s no way we’re going to clear all these foreclosures.”
As bargain hunters turn their attention to foreclosures, many are discovering the toughest challenge is dealing with the banks that repossessed the homes. These banks are usually quick to accept a bid and write a contract. But the closer buyers get to the settlement table, the greater the potential for bureaucratic bungling and the chance the buyers will give up.
The housing market stands little chance of recovering until the foreclosures are sold. Distressed properties make up roughly a quarter of U.S. homes for sale. Moving them would go a long way toward stabilizing home prices. But working with the banks, which are typically based far from the homes they’re selling, is not as simple as buying from a regular homeowner.
“Things go wrong, and it takes the bank a lot longer to deal with them,” said Vivianne Couts, a Virginia real estate agent. “There are a lot more people involved, many more layers. The Realtor can’t always call the bank and say, ‘What’s going on here?’”
Garcia and Hoffman, both first-time home buyers, realize that now.
When their closing date passed and no one could explain the delay, they started digging into court records. They learned that days after the bank had repossessed the home, the previous owner had filed for bankruptcy protection. Garcia said all the bank needed to do was submit paperwork to the court confirming that it had foreclosed on the house prior to the bankruptcy filing. But that letter didn’t materialize until their congressman, Rep. John Sarbanes (D-Md.), intervened.
The bank, CitiFinancial Mortgage, declined to comment on the case. But Mark Rodgers, a spokesman for Citi, said the company tries to handle closings expeditiously. “If and when there is a delay, we regret any inconvenience to the customer,” he said.
Garcia and Hoffman feel stressed. The lease on their apartment runs out this month. They do not understand why the bank didn’t jump to unload the property, especially because they offered nearly $5,000 more than the $170,000 asking price.
“I can’t believe we had to bring this [bankruptcy] to everyone’s attention,” Garcia said. “It’s as if no one did their homework on this property and when they found out there was a problem, they were like, ‘We’ll get to it. We’ll get to it.’”
By all accounts, banks are overwhelmed by the record foreclosure volume. In the Washington region, there were 217 foreclosures as of April 1 for every 10,000 properties, up from 16 about two years ago, according to George Mason University’s Center for Regional Analysis.
Dennis King, a lawyer who handles foreclosures for banks, said that when home prices were climbing, the banks never had to keep houses long. Investors would snap them up in auctions on the courthouse steps.
But in the past two years, with prices plummeting, investors are no longer interested. So banks must try to sell to the general public, which takes longer.
“The more time that lapses between a home getting foreclosed on and the sale of the property to the next buyer, the more problems that can crop up,” King said. “Maybe the property taxes were up to date when the house was on the market, but they’re not up to date anymore.”
When a bank repossesses a home, it typically hires a lawyer to check whether there are other claims on the property, such as a mechanic’s lien. But the lawyer is paid to look only at the time from when the owners took out the mortgage to the time they lost the house. Any pre-existing problems – or new ones – usually surface at closing time, when a more thorough search is done.
If the bank goes under, that creates more hassles. Also, in states that require court approval of the foreclosure, including Maryland, there can be a disconnect between the legal procedure and the sale. A house can be on the market before the foreclosure is approved. The buyers may be left waiting for the court.
“So in other words, I’m the happy home buyer and I’ve got my furniture in the truck, and I find out that the foreclosure is not ratified and nobody knows for sure when it’s going to get ratified,” said Jeffrey Fisher, a foreclosure lawyer in Upper Marlboro who works for banks. “That’s a cold slap in the face and a financial hardship.”
Michele and Timothy Bowden not only had their furniture packed, but also had their friends and family in tow when they drove this summer from their old home in Florida to their new one in Burke.
On closing day, the bank discovered it did not legally own the house because the necessary paperwork had not been done. The Bowdens were told they had to wait as the bank in California sorted through the mess with its foreclosure lawyer in Texas.
“So there we were, my husband and I, our two kids, grandma, grandpa, the dog, our friends. We had to live in hotel rooms for 10 days,” said Michele Bowden, who moved into the house in August. “Everyone had come down to help us move. …We calculated that between all of us, we incurred over $7,000 in costs for the hotel rooms, eating out for days on end, all the driving around and the moving company’s furniture storage fees. Then we had the waiting game.”
Buyers can cause delays, too, some real estate agents said. Banks generally sell homes as-is and on their own complicated terms. Buyers know that going in, but some are unwilling to accept it when it’s time to finalize the deal, especially when it’s time to sign a six-page addendum to the contract detailing the bank’s conditions.
“Some people see this, and they freak out,” said Barbara Newcomb, a Maryland real estate agent who sells homes for the banks. “I’ll get addendums back that are scratched through and changed and the banks won’t accept them – then the buyers get mad at me.”
On rare occasions, the mix-ups don’t end after the purchase, said Joy Siegel, a Bethesda lawyer who handles home-sale closings. Siegel recalled how one of her clients was shocked when she showed up at her house, a foreclosure she had purchased weeks earlier, and found the locks had been changed and a “no trespassing” sign was posted because of a miscommunication relating to the timing of the home’s sale.
“I called the bank immediately and the lady on the other end of the line responds like this, very calmly: ‘This happens in approximately 5 percent of our cases. We’ll send someone over to let her in,’” Siegel said.
washingtonpost.com.
That was in January.
A month later, the bank that’s selling the house broke its own closing deadline. The couple has been in limbo since. In frustration, they turned to their congressman’s office for help. Only then did they receive an apologetic call and a new proposed closing date of April 24 – but still no signed paperwork.
“It’s unbelievable. With all we hear about all the homes out there that need to be sold, I have to call my congressman in order to purchase a house,” Garcia said. “If that’s the process, there’s no way we’re going to clear all these foreclosures.”
As bargain hunters turn their attention to foreclosures, many are discovering the toughest challenge is dealing with the banks that repossessed the homes. These banks are usually quick to accept a bid and write a contract. But the closer buyers get to the settlement table, the greater the potential for bureaucratic bungling and the chance the buyers will give up.
The housing market stands little chance of recovering until the foreclosures are sold. Distressed properties make up roughly a quarter of U.S. homes for sale. Moving them would go a long way toward stabilizing home prices. But working with the banks, which are typically based far from the homes they’re selling, is not as simple as buying from a regular homeowner.
“Things go wrong, and it takes the bank a lot longer to deal with them,” said Vivianne Couts, a Virginia real estate agent. “There are a lot more people involved, many more layers. The Realtor can’t always call the bank and say, ‘What’s going on here?’”
Garcia and Hoffman, both first-time home buyers, realize that now.
When their closing date passed and no one could explain the delay, they started digging into court records. They learned that days after the bank had repossessed the home, the previous owner had filed for bankruptcy protection. Garcia said all the bank needed to do was submit paperwork to the court confirming that it had foreclosed on the house prior to the bankruptcy filing. But that letter didn’t materialize until their congressman, Rep. John Sarbanes (D-Md.), intervened.
The bank, CitiFinancial Mortgage, declined to comment on the case. But Mark Rodgers, a spokesman for Citi, said the company tries to handle closings expeditiously. “If and when there is a delay, we regret any inconvenience to the customer,” he said.
Garcia and Hoffman feel stressed. The lease on their apartment runs out this month. They do not understand why the bank didn’t jump to unload the property, especially because they offered nearly $5,000 more than the $170,000 asking price.
“I can’t believe we had to bring this [bankruptcy] to everyone’s attention,” Garcia said. “It’s as if no one did their homework on this property and when they found out there was a problem, they were like, ‘We’ll get to it. We’ll get to it.’”
By all accounts, banks are overwhelmed by the record foreclosure volume. In the Washington region, there were 217 foreclosures as of April 1 for every 10,000 properties, up from 16 about two years ago, according to George Mason University’s Center for Regional Analysis.
Dennis King, a lawyer who handles foreclosures for banks, said that when home prices were climbing, the banks never had to keep houses long. Investors would snap them up in auctions on the courthouse steps.
But in the past two years, with prices plummeting, investors are no longer interested. So banks must try to sell to the general public, which takes longer.
“The more time that lapses between a home getting foreclosed on and the sale of the property to the next buyer, the more problems that can crop up,” King said. “Maybe the property taxes were up to date when the house was on the market, but they’re not up to date anymore.”
When a bank repossesses a home, it typically hires a lawyer to check whether there are other claims on the property, such as a mechanic’s lien. But the lawyer is paid to look only at the time from when the owners took out the mortgage to the time they lost the house. Any pre-existing problems – or new ones – usually surface at closing time, when a more thorough search is done.
If the bank goes under, that creates more hassles. Also, in states that require court approval of the foreclosure, including Maryland, there can be a disconnect between the legal procedure and the sale. A house can be on the market before the foreclosure is approved. The buyers may be left waiting for the court.
“So in other words, I’m the happy home buyer and I’ve got my furniture in the truck, and I find out that the foreclosure is not ratified and nobody knows for sure when it’s going to get ratified,” said Jeffrey Fisher, a foreclosure lawyer in Upper Marlboro who works for banks. “That’s a cold slap in the face and a financial hardship.”
Michele and Timothy Bowden not only had their furniture packed, but also had their friends and family in tow when they drove this summer from their old home in Florida to their new one in Burke.
On closing day, the bank discovered it did not legally own the house because the necessary paperwork had not been done. The Bowdens were told they had to wait as the bank in California sorted through the mess with its foreclosure lawyer in Texas.
“So there we were, my husband and I, our two kids, grandma, grandpa, the dog, our friends. We had to live in hotel rooms for 10 days,” said Michele Bowden, who moved into the house in August. “Everyone had come down to help us move. …We calculated that between all of us, we incurred over $7,000 in costs for the hotel rooms, eating out for days on end, all the driving around and the moving company’s furniture storage fees. Then we had the waiting game.”
Buyers can cause delays, too, some real estate agents said. Banks generally sell homes as-is and on their own complicated terms. Buyers know that going in, but some are unwilling to accept it when it’s time to finalize the deal, especially when it’s time to sign a six-page addendum to the contract detailing the bank’s conditions.
“Some people see this, and they freak out,” said Barbara Newcomb, a Maryland real estate agent who sells homes for the banks. “I’ll get addendums back that are scratched through and changed and the banks won’t accept them – then the buyers get mad at me.”
On rare occasions, the mix-ups don’t end after the purchase, said Joy Siegel, a Bethesda lawyer who handles home-sale closings. Siegel recalled how one of her clients was shocked when she showed up at her house, a foreclosure she had purchased weeks earlier, and found the locks had been changed and a “no trespassing” sign was posted because of a miscommunication relating to the timing of the home’s sale.
“I called the bank immediately and the lady on the other end of the line responds like this, very calmly: ‘This happens in approximately 5 percent of our cases. We’ll send someone over to let her in,’” Siegel said.
washingtonpost.com.
Monday, April 13, 2009
FHA Key to Housing Rebound
The Federal Housing Administration (FHA) is a primary source of mortgage financing for millions of America’s families and plays a key role in helping bring stability to the housing market, the National Association of Realtors® told the Senate Appropriations Subcommittee Friday.
“Without FHA financing, families would be unable to purchase homes and communities would suffer from continued foreclosures and blight,” says Lennox Scott, a member of NAR’s Real Estate Advisory Board. In his testimony, Scott shared NAR’s belief in the importance of FHA, and he voiced concern for the safety and soundness of its programs due to its dramatic growth over a short period of time.
“We believe that FHA has done a good job stepping up to today’s market challenges. However, along with the dramatic growth in market share comes greater responsibility and the need for increased infrastructure and staff,” Scott says. Over the past 18 months, FHA has handled an increase in volume four times greater than 2007 levels, increasing its market share to over 30 percent.
NAR suggests a number of FHA improvements to help maintain safe and affordable FHA loan products, such as investment in staff and technology; increased oversight and risk management; technical correction to help implement FHA programs; and monetizing the $8,000 first-time homebuyer tax credit so buyers may apply it toward the downpayment.
“The U.S. Department of Housing and Urban Development has made a number of important and valuable changes to FHA over the years that have enabled it to stand up to the challenges of today’s mortgage market,” Scott says. “FHA is now a principal source of financing for millions of America’s families, and without it, the economic crisis would be significantly prolonged. This is why it is so important to invest in FHA improvements and advancements.”
NAR pledged to continue to work for FHA reforms that will ensure the continued success, availability and safety of FHA mortgage insurance programs.
2009 FLORIDA ASSOCIATION OF REALTORS®
“Without FHA financing, families would be unable to purchase homes and communities would suffer from continued foreclosures and blight,” says Lennox Scott, a member of NAR’s Real Estate Advisory Board. In his testimony, Scott shared NAR’s belief in the importance of FHA, and he voiced concern for the safety and soundness of its programs due to its dramatic growth over a short period of time.
“We believe that FHA has done a good job stepping up to today’s market challenges. However, along with the dramatic growth in market share comes greater responsibility and the need for increased infrastructure and staff,” Scott says. Over the past 18 months, FHA has handled an increase in volume four times greater than 2007 levels, increasing its market share to over 30 percent.
NAR suggests a number of FHA improvements to help maintain safe and affordable FHA loan products, such as investment in staff and technology; increased oversight and risk management; technical correction to help implement FHA programs; and monetizing the $8,000 first-time homebuyer tax credit so buyers may apply it toward the downpayment.
“The U.S. Department of Housing and Urban Development has made a number of important and valuable changes to FHA over the years that have enabled it to stand up to the challenges of today’s mortgage market,” Scott says. “FHA is now a principal source of financing for millions of America’s families, and without it, the economic crisis would be significantly prolonged. This is why it is so important to invest in FHA improvements and advancements.”
NAR pledged to continue to work for FHA reforms that will ensure the continued success, availability and safety of FHA mortgage insurance programs.
2009 FLORIDA ASSOCIATION OF REALTORS®
Sunday, April 12, 2009
RENTERS: Are You Renting a Foreclosed property?
Hundreds of thousands of renters nationwide are at risk of being evicted, even though they've never missed a rent payment.
Most don't find out until the police arrive to evict them after the home is lost in foreclosure.
So RealtyTrac, the California-based company that sells foreclosure information to investors, is launching a new system, RealtyTrac Renter Alerts. For $25 a year, a renter can have their address monitored.
Some landlords collect rent even though they're not paying the mortgage. Under RealtyTrac's system, as soon as the mortgage enters into default in the court system, the renter would be notified by e-mail.
The site also lets renters research properties to make sure they aren't already in foreclosure.
Company executives say states such as Florida could benefit the most from such a system because the foreclosure rate is so high.
The Sunshine State had the fourth-highest foreclosure rate among all states in February, and the Tampa Bay area ranked 28th among the country's metro areas for its filings, RealtyTrac said.
Florida's foreclosure activity - default notices, auction sale notices and bank repossessions - increased 43 percent from February 2008.
The company's renter Web site is at www.renter.realtytrac.com.
Most don't find out until the police arrive to evict them after the home is lost in foreclosure.
So RealtyTrac, the California-based company that sells foreclosure information to investors, is launching a new system, RealtyTrac Renter Alerts. For $25 a year, a renter can have their address monitored.
Some landlords collect rent even though they're not paying the mortgage. Under RealtyTrac's system, as soon as the mortgage enters into default in the court system, the renter would be notified by e-mail.
The site also lets renters research properties to make sure they aren't already in foreclosure.
Company executives say states such as Florida could benefit the most from such a system because the foreclosure rate is so high.
The Sunshine State had the fourth-highest foreclosure rate among all states in February, and the Tampa Bay area ranked 28th among the country's metro areas for its filings, RealtyTrac said.
Florida's foreclosure activity - default notices, auction sale notices and bank repossessions - increased 43 percent from February 2008.
The company's renter Web site is at www.renter.realtytrac.com.
Saturday, April 11, 2009
JUST LISTED - Brandon, FL $425,000
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Year Built: 2006
Gated Community
CUL-DE-SAC
3563 SQFT of living Area
Conservation Lot in a Lake setting
Oversized Lot: 85 x 145
3 Car Garage
4 Bedrooms 3 Bath
Bonus Room: Pre-wired for 6.1 Surrond Sound
Dining Room: W/Tray Ceiling, Crown Moulding
Deluxe Kitchen: Crown Moulding, Tile, Upgraded Cabinets
Den/Study
Wood Burning Fireplace
Please call for additional information:
Anthony Cruz Jr. (813) 842-1971
Signature Realty
www.anthonycruzjr.com
Friday, April 10, 2009
HOME BUYERS ARE COMING OUT
Thanks to record low mortgage rates and declining home prices, 55 million families – half of all U.S. households – can afford today’s $200,000 median-priced new home, according to figures released by the National Association of Home Builders (NAHB).“That’s an increase of 17 million households from conditions just two years ago, and the best housing affordability number we have seen in years,” says NAHB Chairman Joe Robson. “We are now seeing the first signs that buyers are returning to the marketplace.”
Based on data from the U.S. Census Bureau comparing home prices, mortgage rates and minimum income needed to purchase a median-priced home in February 2007 and February 2009, a typical family today can purchase a house with $20,000 less in household income as they save nearly $500 per month on principal, interest, taxes and insurance. The number of households that can afford to purchase a home today is 55.4 million, compared with 38.4 million two years ago, according to figures compiled by NAHB.
Single-family permits rose 11 percent in February; new and existing home sales also posted gains; and the huge inventory backlog is being slowly whittled down. In a survey for Century 21 Real Estate last month, a majority of prospective first-time home buyers – 78 percent – said that now is a good time to buy a home. Of those responding to the online poll, 68 percent said that now is a better time to buy than six months ago.
Another sign that consumers are considering jumping back into the housing market is the growing interest in the $8,000 FIRST TIME HOME BUYER tax credit included in the recently enacted economic stimulus package. During February and March, 1.5 million visitors logged on to NAHB’s consumer Web site, www.federalhousingtaxcredit.com, to learn more about the tax credit.
Further, a new survey commissioned by Move Inc. found that nearly 20 percent of those who plan to purchase a home this year are doing so to take advantage of the tax credit, which expires at the end of November.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Based on data from the U.S. Census Bureau comparing home prices, mortgage rates and minimum income needed to purchase a median-priced home in February 2007 and February 2009, a typical family today can purchase a house with $20,000 less in household income as they save nearly $500 per month on principal, interest, taxes and insurance. The number of households that can afford to purchase a home today is 55.4 million, compared with 38.4 million two years ago, according to figures compiled by NAHB.
Single-family permits rose 11 percent in February; new and existing home sales also posted gains; and the huge inventory backlog is being slowly whittled down. In a survey for Century 21 Real Estate last month, a majority of prospective first-time home buyers – 78 percent – said that now is a good time to buy a home. Of those responding to the online poll, 68 percent said that now is a better time to buy than six months ago.
Another sign that consumers are considering jumping back into the housing market is the growing interest in the $8,000 FIRST TIME HOME BUYER tax credit included in the recently enacted economic stimulus package. During February and March, 1.5 million visitors logged on to NAHB’s consumer Web site, www.federalhousingtaxcredit.com, to learn more about the tax credit.
Further, a new survey commissioned by Move Inc. found that nearly 20 percent of those who plan to purchase a home this year are doing so to take advantage of the tax credit, which expires at the end of November.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Thursday, April 9, 2009
FIRST TIME HOME BUYER PROGRAM
FIRST TIME HOMEBUYERS: How to get the $8,000 tax credit
How does a first-time homebuyer take advantage of the $8,000 tax credit? It comes with a few rules. According to the most recent analysis, the following rules will apply – though things could change as tax professionals weigh the details:
• The deduction is worth 10 percent of a home’s value up to $8,000, which means all homes worth more than $80,000 could qualify for the maximum amount.
• There is an income limit to qualify. A married couples’ modified adjusted gross income (MAGI) should be under $150,000 and single filers’ MAGI should be less than $75,000.
• Partial tax credits may be available for married couples with MAGI incomes over $150,000 but under $170,000, and single filers with incomes over $75,000 but under $95,000.
• If married couples file separately, they can both claim 5 percent of the home purchase ($4,000 each for a home over $80,000) on their tax returns.
• It’s a tax credit, not a deduction. That means the entire amount goes back to the first-time homebuyer unlike deductions, such as mortgage interest, that are subtracted from gross income before tax is calculated. If qualified for $8,000, the buyer gets $8,000, even if they would not owe that much in taxes otherwise.
• The tax credit applies to homes purchased from Jan. 1, 2009, through Nov. 30, 2009. • The tax credit does not have to be paid back, providing the homebuyer keeps the property for at least 36 months and resides in the home.
• To qualify as a first-time homebuyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer.
• If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009 but the owner does not take possession until 2010, the buyer would not qualify.
• The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that President Obama signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly.
The tax credit is not a downpayment, but it could be used toward a downpayment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund.
By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a downpayment. There is one caveat, however: Should they not buy a home in the qualifying period, they would still owe the IRS the money, and reducing their withholding amount could result in a high bill at tax time.
How does a first-time homebuyer take advantage of the $8,000 tax credit? It comes with a few rules. According to the most recent analysis, the following rules will apply – though things could change as tax professionals weigh the details:
• The deduction is worth 10 percent of a home’s value up to $8,000, which means all homes worth more than $80,000 could qualify for the maximum amount.
• There is an income limit to qualify. A married couples’ modified adjusted gross income (MAGI) should be under $150,000 and single filers’ MAGI should be less than $75,000.
• Partial tax credits may be available for married couples with MAGI incomes over $150,000 but under $170,000, and single filers with incomes over $75,000 but under $95,000.
• If married couples file separately, they can both claim 5 percent of the home purchase ($4,000 each for a home over $80,000) on their tax returns.
• It’s a tax credit, not a deduction. That means the entire amount goes back to the first-time homebuyer unlike deductions, such as mortgage interest, that are subtracted from gross income before tax is calculated. If qualified for $8,000, the buyer gets $8,000, even if they would not owe that much in taxes otherwise.
• The tax credit applies to homes purchased from Jan. 1, 2009, through Nov. 30, 2009. • The tax credit does not have to be paid back, providing the homebuyer keeps the property for at least 36 months and resides in the home.
• To qualify as a first-time homebuyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer.
• If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009 but the owner does not take possession until 2010, the buyer would not qualify.
• The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that President Obama signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly.
The tax credit is not a downpayment, but it could be used toward a downpayment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund.
By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a downpayment. There is one caveat, however: Should they not buy a home in the qualifying period, they would still owe the IRS the money, and reducing their withholding amount could result in a high bill at tax time.
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