Pending sales slows, from the NYT:

The National Association of Realtors said that its index of pending home sales plunged to 96 from a revised level of 114.3 in October. Analysts had predicted a drop, but nothing like that.

“We thought it would drop 2 percent,” said Jennifer Lee of BMO Capital Markets. “When you see 16 percent, the first thing you say is, what the heck happened here?”

Since the majority of pending sales become final in six weeks to two months, the index is considered a reliable indicator of where the market is headed. The index is calculated by comparing the number of pending sales with the level of 2001, when the index was formulated.

Lets take a quick look at the 16% drop, remember when that tax credit was suppose to end? Yeah, here as well. Buyers made a lot of offers leading up to November, mainly in October and September ensuring that the property was closed by November 30 per the original housing credit. The next few months will be interesting, housing slows dramatically over the winter months.

WTF is going on here, NY Times says walk away from your mortgage:

Such voluntary defaults are a new phenomenon. Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?

Some valid arguments from both sides, but it comes down to who put pen to paper.I remember calling last week that ‘strategic defaults’ would rule 2010.

Conflicting data from Washington Post:

Orders at American factories increased in November by more than analysts had expected, the latest evidence that the manufacturing recovery is accelerating. The industrial sector has been ramping up production since July as demand for all sorts of goods has revived and companies have had to crank up assembly lines to replace depleted inventories.

But pending home sales plummeted in November, suggesting the housing sector could weaken as the impact of government policies to support the industry fades. Although housing data are notoriously volatile, the new figures raise the possibility that the sector — where the economic downturn of the past two years started — could have further to fall.

Buckle up for 2010 and will leave it at that.

Been saying this for awhile now, but CNN says it’s your last chance to refi at rates under 5%:

A big reason for the jump is that a government program that has kept rates very low is winding to a close. The Federal Reserve has been purchasing mortgage-backed securities since early 2009, scooping up as much as $1.25 trillion worth. That has dampened rate increases by providing a ready market for the securities.

Personally would rather have a fixed low rate than anything else, but some free money (aka tax credit) is always nice.

There, all the bad in one place.

CNN just released their best places to live in 2009 list and Chanhassen comes in at 2 on the list.

Last year Minnesota placed 7 in the top 100 but this year only managed to squeeze in 3 and none of the regulars. Actually none of the cities that made the list returned.

Cities to make the list:

Chanhassen

Lino Lakes

Owatonna

Agree or Disagree? Would you add any to the list or replace the ones that are one there representing Minnesota. Take a moment and leave your comments below.

photo cred

So it looks like this $8000 Tax Credit will be available for down payment after all. The idea first came up a couple of weeks back about being able to use the tax credit towards a down payment but then it looked like the details came out to soon and it was pulled of the table.

HUD released a new statement today and the Federal Housing Administration (FHA) laid out the details. Now home buyers can get instant gratification out of the tax credit incentive if so desired. The big kicker to the $8000 tax credit being used as a down payment is you still have to come up with the required FHA minimum 3.5% down for the payment. The home buyer tax credit can also be used for closing costs.

You can view HUD Mortgagee letters along with form 9-15, which covers all the information for the housing tax credit. All the guidelines for FHA-insured mortgages are included in form 9-15, which would be details on federal, state and non profit agencies dealing with the tax credit.

FHA has a list of approved lenders that can use the bridge loan type product.

Although I don’t see a big overall impact to the Minneapolis/St. Paul real estate market, it does give first-time home buyers another option when it comes to purchasing a home. As a reminder that this $8000 home tax credit is outta here by December 1st, 2009 which for some seems like it is coming up fast (about 5 months until to December, weird to think about).

If you are thinking about doing something, don’t wait until the last minute If you have any questions just let me hear it.

BREAKING NEWS announced today that the $8000 first time home buyer tax credit can be used for a down payment.

It appears that the $8000 tax credit will be accessible through Federal Housing Information (FHA) approved lenders as a bridge loan (meaning interest is involved). This will make for funds to be available at the closing table, instead of a tax credit the following year.

HUD Secretary Shaun Donovan

We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment

More to follow as it becomes available

Take this with a grain a salt, because home prices are still down year over year. This is on a national level and as always, real estate is still local. I can’t wait for all the Realtor rhetoric that will begin, they will start shouting “Now Is Really Really The Time to BUY!!!”

If you looking for a home make sure you have the right resources that track real time real estate data, that help you make the best choices when buying a home.

There are still some unbelievable dealio’s out there with steep discounts thanks to bank owned homes and with the return of another real estate auction this weekend, good finds are out there.

So the Homeowner Affordability and Stability Plan will help borrowers that have good repayment history but are otherwise not able to refinance because they are now currently “underwater” on their mortgage. Only Fannie Mae and Freddi Mac mortgages will qualify for the program.

The plan is broken into a few different areas. Home Affordable Refinance aims at helping homeowners who cannot refinance out of their current mortgage because they don’t have the necessary equity which is 80%. The Home Affordable Modification seeks to set industry standards in loan modifications.

Who Qualifies

You qualify if:

• Your loan was originated before January 1, 2009
• You will need to sign IRS Form 4506 T, provide fully document income, two years of pay stubs, recent tax returns, financial hardship affadavit
• Must be a primary residence. Sorry investors and boarded up houses
• First lien principal loan amount up to $729,750
• New loan cannot be more than 31% of borrowers monthly gross income
• Loans can be modified thru December 31, 2012
• Only once can the loan be modified

The overall target for homeowners being help is in the ball park of 7 to 9 million.

And for the rest

For loan servicer’s, a “pay for performance” is also thrown into the mix. Look at it as an incentive for servicers to make a better attempt to modify the loan of a troubled borrower. Loan servicers will get $1000 upfront for a loan that fits the criteria, as well as another $1000 if the loan is in good standing three years down the road. Loans apparently can start being modified immediately.

There also doesn’t seem to be a wink at trying to influence that mythical 4% interest rate. Looks like the government will let the free market figure that one out or until another intervention occurs again. This is for homeowners that need help, not want lower rates.

The announcement still lacks certain transparency for who, what and how this is going to get accomplished. Oh well, another wait is in order I guess.

Here are some links:

Homeowner Affordability and Stability Plan HUD Site

US Treasury Press Release

Check Your Lender’s Website

Financial Stability Gov

The Goal: Save 9 million homes from foreclosure and prevent falling home prices.

I have rounded up some links to some articles giving different perspectives on “Obama’s $75 billion Homeowner Affordability and Stability Plan”

• White House Blog
• MSNBC and Here
• CNN
• Calculated Risk (The Best Insights)

Some Key Points:

1. Refinance for Homeowners with Fannie Mae or Freddie Mac held mortgages
2. Modify Mortgages/Reduce Monthly Payments
3. Influence Lower Mortgage Rates

Definitely a lot of buzz surrounding the plan. Thoughts?  Please share below in the comments.

Hopefully this will help a little bit, home buyers are still going to have to qualify to buy home and have down payment of at least 3.5%. A lot thing that it is only delaying the inevitable of home prices still falling. Locally, we already seen an uptick in pending sales compared to years past and this was before the $8000 home buyer tax credit was even announced. It will be interesting to gauge the effectiveness of this credit.

A breakdown of First Time Home Buyer $8000 Tax Credit

Of course there is provisions of the $8000 home buyer tax credit, most people will find out that they will qualify. Here is what is known (that could change once somebody goes through the fin print):

• Available to homes purchased between January 1st 2009 and December 1st 2009
• Maximum tax credit is increased to $8000 or 10% of homes value
• All owner occupied principal residences. This includes single family homes, Condos, Townhouses, Co-ops
• Income limits to single filed return of gross income no more than $75,000 or $150,000 joint return
• Do not need to refund the $8000 first time home buyer tax credit
• The tax credit is available to first time home buyers only and must not have owned a home within the past three years
• There is no recapture meaning that if you own the home for three years or more, then you don’t have to repay the tax credit due on sale. If you do sell the home without living in the home for three years, then there is a recapture of the tax credit paid on sale of the resident. Applied to homes purchased in 2009 only.
• Termination of the opportunity to use the $8000 tax credit is December 1st 2009
• Effective date is January 1st 2009

Applying for the credit should be fairly easy, just file your income taxes. If you have already purchased a home this year, then you file amended tax returns to receive the $8000 tax credit. For this just ask “the box” (if you used a computer program) or contact your tax professional to find out the next steps.

So there you have it, if you would like more information on the $8000 home buyer tax credit and are a first time home buyer in Minneapolis, St. Paul or surrounding Twin Cities metro area, then please contact me here. As always, make sure you consult your tax advisor on how this can help you. I am not a tax professional.

For all practical purposes, it looks like the $15,000 home buyer tax credit is no more. Looks like it was all just a bunch of hype. There still is some noise going on about including a $8,000 tax credit to all home buyers/first time home buyers (more info to follow when found or finalized on this one).

Straight from CNN

The homeowner tax credit has been kept but significantly reduced. The Senate version proposed a $15,000 credit, double that of the House bill.

Well, let the fundamentals of the market provide the opportunities.

Since this seems to be all the rage, good or bad. I have put together some links that talk about the $15,000 home buyer tax credit that is working it’s way through congress. Whether you are looking for a home in Minneapolis, St. Paul, Minnesota… this may apply to you.

USA Today

Associated Press

New York Times

Housing Wire

Bloomberg

CNBC – Survey says most Americans support the $15,000 home buyer tax credit

CNN

Now this hasn’t passed yet and will update when it does. If you have any other good reads, post them in the comments below.