Some Great Tax Tips

This is a great article written by By Tara-Nicholle Nelson Broker in San Francisco, CA

Ask a roomful of homeowners what's so great about owning versus renting, and you'll hear them holler in unison: "the tax deductions!" And it's true – homeowners who itemize their taxes are able to deduct 100% of their mortgage interest and property taxes from their income tax returns.That means that if you're in a 28% tax bracket, Uncle Sam effectively subsidizes about a third of your borrowing costs or more, making your home more affordable or allowing you to buy a larger home than you could have otherwise. Also, big chunks of your closing costs are tax deductible, and hundreds of thousands of dollars of any profit (or capital gains) that you realize when you sell your home are exempt from income taxes.At tax time, it's critical to know what you're entitled to, so you can claim it. So, here are five essential need-to-knows about home-related income tax tips to help you get the most tax-reducing bang out of your home-owning buck – and to avoid hefty home ownership-related tax traps.

1. You Have to Itemize Your Return - to Claim Your DeductionsDuring the recent debate on Capitol Hill about whether the mortgage interest deduction should be eliminated (it won't be, not anytime soon), it came out that nearly 40% of homeowners lose out on their major tax advantages every year when they fail to itemize their income taxes. If you own a home and otherwise have a fairly simple return, it might be tempting just to take the standard deduction – and if your mortgage, property taxes and income are low enough, the standard deduction might outweigh your homeowners' deductions. But you'll never know if you're losing out on the tax advantages of itemizing unless you try; before you grab a pen and start filling in that 1040-EZ grab those forms from your mortgage company and answer the questions on tax software like TurboTax, which will automatically do the math on whether itemizing or taking the standard deduction will result in the lowest tax bill – or the highest tax refund – for you.

2. Plan Ahead and Be Strategic - When Taking a Home Office DeductionAccording to the Small Business Administration, the average home office deduction is $3,686 – multiply that by your tax bracket – 15%, 20%, 30% or whatever it is, and that's what you'll save on your taxes by writing off your home office. Know, though, that the space you designate as your home office cannot be exempted from capital gains tax when you sell your home later. The $250,000 (single)/ $500,000 (married filing jointly) income tax exemption for capital gains is only good on your personal residence, after all – not including any space in your home you've claimed as your tax-advantaged office. If you foresee selling your home for much more than you bought it in the future, near or far, discuss this with your tax preparer to see if the few hundred bucks you save is worth the capital gains complication later.

3. Tax Relief for Loan Modifications, Short Sales and Foreclosures - Is Only Around Through 2012While the long-term housing outlook is beginning to look up, 2011 is projected to be the peak year for foreclosures during this market cycle. Distressed homeowners who are on the brink of a short sale, loan modification or foreclosure should be aware that normally, any mortgage balance that is wiped out by one of these outcomes is taxed as what the IRS calls Cancellation of Debt Income, or CODI.Under the Mortgage Debt Forgiveness Relief Act of 2007, the IRS is currently not charging income taxes on CODI incurred through a loan mod, short sale or foreclosure on most primary residences through 2012. But right now, banks are taking many months, or even years, to work out mortgages in all of these ways; the average foreclosure in New York state right now occurs only after 22 months of missed mortgage payments. If you foresee any of these outcomes in your future, don't put things off. Do what you can to get to closure on your distressed home and loan, ASAP, while you won't have income taxes to add as the insult on top of your significant housing injury.

4. Project the Income Tax Consequences of a Refinance or Property Tax Appeal Homeowners everywhere are working on applying for a lower property tax bill on the basis of the last few years' decline in their home's value. Those who have equity have flocked en masse to refinance their 7% home loans into the 4% to 5% rates of the last few months. These strategies offer some of the heftiest household savings out there for the corresponding investment in time and money they take. But here's a caveat for savvy homeowners who slash these costs: remember that property taxes and mortgage interest, the very costs you're minimizing, are also the basis for the major tax benefits of being a homeowner. So plan ahead for your income tax deductions to go down along with your taxes and interest.

5. Don't Forget Those Closing Costs - If you bought or refinanced your home in 2010, you may be so focused on your mortgage interest and property tax deductions that you forget all about your closing costs. Any origination fees or discount points that were paid to your mortgage lender at closing are tax deductible on your 2010 return, get this – even if the seller paid your closing costs. If you can't figure out exactly what you paid, look for your HUD-1 settlement statement, that legal sized paper full of line item credits and debits that you should have received from your escrow provider or title attorney at, or just after, closing. Can't find it? Drop your real estate agent or mortgage broker an email; they can usually get a copy to you quickly.

Contact me if you have any other questions or need further clarification. I will either do some research or put you in contact with a good CPA.

My name is David Ohara and I am very Bullish on Sacramento Real Estate

@dwo34

dwo34@aol.com

Help for Homeowners who are struggling

I came across the article. I think this may have some teeth. I will do some further investigation and report back to you.

$2 billion in aid open to struggling homeowners

By Lily Leung

Monday, February 14, 2011 at 6 a.m.

Howard Lipin / Union-Tribune staff

More financial help is on its way to those fighting to remain in their homes throughout the state, including the San Diego region.

Eligibility requirements

Applicants must:

• Own and occupy their homes as their primary residence.
• Not exceed $729,750 in current unpaid principal balances on first mortgages.
• Meet low- and moderate- income limits
• Complete and sign a hardship affidavit to document reasons for hardships.
• Have mortgage loans that are delinquent or "in imminent default."
• Have enough income to pay modified mortgage payments according to guidelines from servicers participating in the programs.

Source: keepyourhomecalifornia.com

To apply

To apply, call 888-954-KEEP (5337) or your mortgage servicer - the company to which you send you monthly mortgage payments.

Each program requires the participation of the company or agency that holds the mortgage.

For more, visit KeepYourHomeCalifornia.org.

Four new mortgage-aid programs costing $2 billion might help 100,000 households avoid foreclosure, California Housing Finance Agency officials say.

The state program, "Keep Your Home California," is available to eligible homeowners throughout the state, including in San Diego County.

The four components would:

• Offer up to $3,000 a month for unemployed homeowners, up to six months of benefits.
• Help those who have fallen behind on payments due to temporary change in housing circumstance with payments of up to $15,000 per household.
• Give relocation assistance to homeowners are have finished short sales or deed-in-lieu of foreclosure transactions.
• Provide capital to cut the outstanding principal balances of struggling borrowers who owe significantly more than their homes are worth.

Each program requires the participation of the company or agency servicing the mortgage. As of last week, GMAC, Guild Mortgage, the California Housing Finance Agency and California Department of Veterans Affairs are all taking part in all four programs.

Others, including Bank of America, JPMorgan Chase, CitiMortgage and Wells Fargo, are currently in some of the programs. Housing agency officials are expecting that list to grow in the coming weeks. (See a chart of servicers and their programs.)

"We're excited to offer this program," said Housing Finance Agency spokeswoman Evan Gerberding. "It's not only going to help individual families, it's also going to help to stabilize entire communities."

Funding comes from the U.S. Treasury Department’s Hardest Hit fund, money intended to help homeowners stave off foreclosures.

After receiving the $2 billion, officials from the California Housing Finance Agency - which has helped renters and first-time homebuyers with financing and programs for 35 years - spoke to community stakeholders throughout the state to create the four new programs.

“No one program will solve the foreclosure crisis affecting our state, but together we hope to make a difference for as many families as possible," said Assemblymember Norma Torres, Chair of Assembly Committee on Housing and Community Development, in a media statement. Torres is Democrat representing part of San Bernardino County.

The programs are intended for Californians who own and occupy their homes as primary residences. They must meet certain income and financial-hardship requirements.

News of the efforts comes about a week after the state Attorney General's Office announced a new statewide foreclosure fund fueled by a $6.5 million settlement of a case against two former Countrywide executives accused of predatory-lending practices. (Read "$6.5M Countrywide settlement could help homebuyers".)

Lily Leung: (619)293-1719; lily.leung@uniontrib.com; Twitter @LilyShumLeung

My name is David Ohara and I am bullish on Sacramento!

dwo34@aol.com

@dwo34

Some Great Homes Coming on the Market Soon

Hello Friends:

First I apologize for being remiss and not posting more. I will do my best to maintain a page that is updated on a regular basis. I hope everyone had a great Thanksgiving and are preparing for a festive Christmas!

I wanted to give you all a "heads up" on some homes I that I will be putting on the market shortly. These four homes are located in great locations of Sacramento. I will be listing homes in the Elk Grove, Roseville, North Natomas and Bridgeway Island (West Sacramento) areas. The homes will be priced:

North Natomas: $179,900 for a 3 bedroom, 2 bath home with 1500 sf! This home is in show room condition and is located on a quiet street. This home has an open floor plan. Recent comps show that the home should be valued at $192,000.

Roseville: $340,000 for a 5 bedroom, 3 bath home. Located close to shopping, schools, parks and transportation. If you act now, you can pick the color of paint and carpeting. Great floor plan with a bedroom and bath downstairs. Big open kitchen. Recent appraisal done at $370,000!

West Sacramento: $269,000. This large 4 bedroom home is located in the Bridgeway Island area. New development! Open and spacious. This is an exceptional buy! Some homes in this area have sold for more than $300,000.

Elk Grove: $224,900. 4 bedrooms and 3 baths with a pool! This home is loaded with upgrades! Chance to get a great buy before it hits the market! Open floor plan with lots of natural light.

Call me for more information. Once again, these homes will be hitting the market soon. I hope you are all enjoying your day!

I am very Bullish on Sacramento.

David Ohara

Prudential Dunnigan

dwo34@aol.com

@dwo34

916-600-9495

What is HAFA?

Hello Friends:

I have been getting some emails and calls from friends and clients regarding a program called HAFA. They all asked the same thing "David, what is HAFA, and can this program help us?" I wanted to get the specific details directly from the Housing and Urban Development. Here is what they have to say about HAFA.

In early 2009, the National Association of REALTORS® (NAR) urged the U.S. Treasury Department, the Federal Housing Finance Agency, Fannie Mae and Freddie Mac to improve the short sales process.

NAR’s concerns were first addressed on May 14, 2009, when the Obama Administration announced the outline of a program to provide incentives and uniform procedures for short sales and deeds-in-lieu of foreclosure (DIL) under the Making Home Affordable Program.

The Obama Administration released guidelines and uniform forms for its Home Affordable Foreclosure Alternatives Program (HAFA) on November 30, 2009 and released an updated version on March 26, 2010. April 5, 2010 was the effective date for the program.

Modified HAFA rules for loans owned or guaranteed by Fannie Mae or Freddie Mac were still being developed as of April 28, 2010 (check www.realtor.org/shortsales for updates). HAFA does not apply to FHA or VA loans.

About HAFA

HAFA is a program primarily designed for homeowners who are unable to stay in their home even with a loan modification under the Home Affordable Modification Program (HAMP). Under HAFA, homeowners may be able to avoid a foreclosure by selling the home as a “short sale” (where the value of the home is less than the remaining amount of the mortgage) or by transferring title to the lender through a process called a “deed-in-lieu of foreclosure.”

HAFA: Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.

Uses borrower financial and hardship information already collected under HAMP.

Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds and acceptable closing costs).

Requires borrowers to be fully released from future liability for the first mortgage debt and, if the subordinate lien holders receive an incentive under HAFA, those debts as well (no cash contribution, promissory note, or deficiency judgment is allowed).

Uses a standard process, uniform documents, and deadlines.

Provides financial incentives: $3,000 for borrower relocation assistance; $1,500 for mortgage servicers to cover administrative and processing costs; and up to a $2,000 match for mortgage investors for allowing a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders (up to 6 percent of the remaining balance of each junior lien).

Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.

The program sunsets on December 31, 2012.

TIMELINE

Determination of Eligibility and Notification

Servicers must consider HAMP-eligible borrowers for HAFA within 30 calendar days after the borrower does at least one of the following: Does not qualify for a HAMP trial period plan Does not successfully complete a HAMP trial period plan Is delinquent on a HAMP modification (misses at least 2 consecutive payments) Requests a short sale or DIL

If the servicer determines a borrower is eligible based on its written policy and has not already discussed a short sale or DIL with the borrower, it must notify the borrower in writing of these options and give the borrower 14 calendar days to respond, orally or in writing. If the borrower does not respond, that ends the servicer’s duty to give a HAFA offer. If the borrower asks for consideration but a short sale or DIL is not available, the servicer must inform the borrower with an explanation and provide a toll-free number.

Short Sale Agreement

If the borrower is interested in a short sale, the servicer fills out the Short Sale Agreement (SSA) and sends it to the borrower. The borrower has 14 calendar days from the date of the SSA to sign and return it to the servicer. The real estate broker also must sign the SSA. The SSA must give the borrower an initial period of 120 calendar days to sell the house (servicers may extend up to a total of 12 months, if agreed to by the borrower).

Sale Contract

Within 3 business days of receiving an executed sale contract, the borrower (or real estate agent) must submit a completed Request for Approval of Short Sale (RASS) to the servicer, including a copy of the sale contract and all addenda buyer documentation of funds or pre-approval/commitment letter from a lender all information on the status of subordinate liens and/or negotiations with subordinate lien holders.

Servicer Approval

Within 10 business days after the servicer receives the RASS and all required attachments, the servicer must approve or deny the request and advise the borrower (with a statement of the reasons in the case of disapproval).

Closing and Lien Release

The servicer may require the closing to take place within a reasonable period after it approves the RASS, but not sooner than 45 calendar days from the date of the sales contract unless the borrower agrees.

The servicer must follow local or state laws to time the release of its first mortgage lien. If local or state law does not govern, the servicer must release its first mortgage lien within 30 business days. Investors must waive rights to seek deficiency judgments and may not require

a promissory note for any deficiency. These rules also apply to junior lien holders receiving incentives.

NAR FAQs

HAFA is a complex program with nearly 50 pages of guidelines and forms. To help you better understand the process, NAR has prepared some frequently asked questions that address the basics. For more information on HAFA and more detailed NAR FAQs, please visit www.realtor.org/shortsales

Who is eligible for HAFA?

The borrower must meet the basic eligibility criteria for HAMP: Principal residence (including certain vacant properties for borrowers who recently moved at least 100 miles for employment and meet program requirements) First lien originated before 2009 Mortgage delinquent or default is reasonably foreseeable Unpaid principal balance no more than $729,750 (higher limits for two- to four-unit dwellings) Borrower’s total monthly payment exceeds 31% of gross income

How is the program being implemented?

Supplemental Directive 09-09 (revised March 26, 2010) gives servicers guidance for carrying out the program. Check www.realtor.org/shortsales for future updates.

A short sale agreement (SSA) will be sent by the servicer to the borrower after determining the borrower is interested in, and eligible for, a short sale and the property qualifies. It informs the borrower how the program works and the conditions that apply.

After the borrower contracts to sell the property, the borrower submits a “Request for Approval of Short Sale” (RASS) to the servicer within 3 business days for approval. If the borrower already has an executed sales contract and asks the servicer to approve it before an SSA is executed, the Alternative RASS is used instead. The servicer must still consider the borrower for a loan modification.

What are the steps for evaluating a loan to see if it is a candidate for HAFA?

1. Borrower solicitation and response

2. Assess expected recovery through foreclosure and disposition compared to a HAFA short sale or deed in lieu of foreclosure (DIL)

3. Use of borrower financial information from HAMP

4. Property valuation

5. Review of title

6. Borrower notice if short sale or DIL not available (to borrowers that have expressed interest in HAFA).

What are the HAFA rules regarding real estate commissions? The servicer specifies the amount of commission in the Short Sale Agreement (SSA) as a “reasonable and customary” closing cost. The borrower and the prospective real estate broker may negotiate with the servicer on the terms of the SSA, including the commission. There is a different rule if the borrower submits an executed sales contract to the servicer for approval before a SSA is executed. In that case, the sales contract is submitted to the servicer with an Alternative Request for Approval of Short Sale. The amount of the commission in that case is the amount negotiated in the listing agreement, not to exceed 6 percent. Neither buyers not sellers may earn a commission in connection with the short sale, even if they are licensed real estate brokers or agents. They may not have any side deals to receive a commission indirectly.

What else should I know? The deal must be “arms length.” Borrowers can’t list the property or sell it to a relative or anyone else with whom they have a close personal or business relationship. The amount of debt forgiven might be treated as income for tax purposes. Under a law expiring at the end of 2012, however, forgiven debt will not be taxed if the amount does not exceed the debt that was used for acquisition, construction, or rehabilitation of a principal residence. Check with a tax advisor or the IRS. The servicer will report to the credit reporting agencies that the mortgage was settled for less than full payment, which may hurt credit scores. Buyers may not reconvey the property for 90 days (no “flipping”).

If there any additional questions please let me know. I am here to help and provide as much information as possible.

It is May 26, 2010, and I am BULLISH on Sacramento!

David Ohara

@dwo34

dwo34@aol.com

Happy New Year! Time to Set Your Goals...

Happy New Year Everyone!

With the start of the new year, I thought I would blog on "Setting Goals." As I look back at my real estate career, I equate my success with proper goal setting. In the years that I did not do as well as I expected, I can attribute it to poor or a lack of goal setting.  In the next couple of days, I will begin to map out my goals for 2010.  I am looking forward to a very productive year! To help you get started with those goals, here are some helpful pointers. Good luck and have a great year!

Set Specific Goals

Set specific measurable goals. If you achieve all conditions of a measurable goal, then you can be confident and comfortable in its achievement. If you consistently fail to meet a measurable goal, then you can adjust it or analyse the reason for failure and take appropriate action to improve skills.

Set Realistic Goals

Goals may be set unrealistically high for the following reasons:

• Other people: Other people (parents, media, society) can set unrealistic goals for you, based on what they want. Often this will be done in ignorance of your goals, desires and ambitions.
• Insufficient information: If you do not have a clear, realistic understanding of what you are trying to achieve and of the skills and knowledge to be mastered, it is difficult to set effective and realistic goals.
• Always expecting your best performance: Many people base their goals on their best performance, however long ago that was. This ignores the inevitable backsliding that can occur for good reasons, and ignores the factors that led to that best performance. It is better to set goals that raise your average performance and make it more consistent.
• Lack of respect for self: If you do not respect your right to rest, relaxation and pleasure in life then you risk burnout.

Setting Goals Too Low

Alternatively goals can be set too low because of:

• Fear of failure: If you are frightened of failure you will not take the risks needed for optimum performance. As you apply goal setting and see the achievement of goals, your self- confidence should increase, helping you to take bigger risks. Know that failure is a positive thing: it shows you areas where you can improve your skills and performance.
• Taking it too easy: It is easy to take the reasons for not setting goals unrealistically high as an excuse to set them too low. If you're not prepared to stretch yourself and work hard, then you are extremely unlikely to achieve anything of any real worth.

Setting Goals at the Right Level

Setting goals at the correct level is a skill that is acquired by practice.

You should set goals so that they are slightly out of your immediate grasp, but not so far that there is no hope of achieving them: no-one will put serious effort into achieving a goal that they believe is unrealistic. However, remember that the belief that a goal is unrealistic may be incorrect. Such a belief can be changed by effective use of imagery.

Personal factors such as tiredness, other commitments and the need for rest, etc. should be taken into account when goals are set.

Now review the goals you have set, and then measure them against the points above. Adjust them to meet the recommendations and then review them. You should now be able to see the importance of setting goals effectively.

Thinking a goal through

When you are thinking about how to achieve goals, asking the following questions can help you to focus on the sub-goals that lead to their achievement:

• What skills do I need to achieve this?
• What information and knowledge do I need?
• What help, assistance, or collaboration do I need?
• What resources do I need?
• What can block progress?
• Am I making any assumptions?
• Is there a better way of doing things?

It's January 4, 2010, and I am very Bullish on Sacramento!

David Ohara

@dwo34

dwo34@aol.com

Part Two - Julie Collins

Good Morning Friends!

As promised, here is the second installment of introducing my friend Julie Collins.  Julie is an up and coming star.  She is a dynamic performer.  Please read my prior posting to learn all about her.  Today's entry is my interview I did with Julie. 

@dwo34:  Hi Julie! Please tell us about how you got involved with the "Hive Mind Movie"

@jc76:  I joined Twitter for other reasons than my music and acting but people knew I was Julie Collins from Myspace so music was talked about, Ladd & I started talking and he liked my "Turn This World Around" and said it would be a good song to open the film. So I agreed and the rest is history.

@dwo34:  Tell us about your roll in the movie

@jc76: Ladd then asked if I'd read for the part of Hive Mind I recorded the script and got it to him asap thankfully he liked what I did and I landed the role of The Hive mind .

@dwo34:  Did you have to do anything special to prepare yourself for the movie?

@jc76: I read the script a few times and familiarized myself with the character, I knew it was almost Borg like but sexy and sassy with a sense  of humour, I hope this comes across in my dialogue with Doug Trench, Last Man On Earth!

@dwo34: Tell me about your prior experiences in the entertainment field and how does the Hive Mind Movie compare

@jc76; since I was 3 I've Been performing on stage theatre & TV always auditioning for bands and playing for charity as a Madonna impersonator, films - I was  in Hitchhikers, Guide to the Galaxy and Wimbledon and also play lead role in Heather Brothers Production in a film called Bullets Buzz and Mr Fish, i have been an extra in so many things! I love it! (Laughs) I also secured a record deal in USA for 5 years in 2000 but my mother contracted cancer and I wanted to be with her. My deal expired in 2005.  I have released my work in iTunes & amazon now & hoping for another good deal.

@dwo34: What was most fun about being a part of this movie?

@jc76: I love the idea that all humans are devoured by me as hive! They will have no choice but to hear me sing Lol,

@dwo34: Your music is so cool, what and who are your inspirations?

@jc76: thanks. I have always sang since I was a small child I love Smokey Robinson & the Beatles Pink Floyd & older Madonna stuff! Karen Carpenter & Barbara Streisand were great singers to emulate.

The songs on my EP is a diary if you like of what I have done, I like to be varied, I'm no one trick pony (smiles and laughs)

@dwo34: What's on the horizon for Julie Collins?

@jc76: I'm recording all the time & looking to tour next year, hoping I land another deal again as I'm ready now more than ever to give it my best shot! I will act more as well if I get the chance, I believe I may work with Ladd again and  this time you'll see my face as well as hear my voice.

 I am aiming for the top! 

@dwo34: How can your fans stay in tune with you?

@jc76: my fans have been very loyal, I have Myspace friends that are like family now, some even have a poster of me on their Walls. You can find me

 Amazon for my work > http://bit.ly/25gdBI  http://hereico.me/JulieCollins xxxx        www.myspace.com/juliecollins                                            

  YouTube @  madjoolie 13

  EP Julie Collins (7 track) & The Hive Mind Movie are for sale now in Amazon. I'm sure people will love the film & dance and sing to my EP.

@dwo34:  Thank you so much Julie! You are an awesome performer! Keep rocking!

@jc76:      You are so welcome David.  I'm a firm believer of going for your dreams , I have been bullied taunted and upset by some people as they think I should get a proper job. Well this is my chosen field, entertainment and I love performing for you all!  Never be afraid to dream. Plus I'm a good role model as I'm a good size 12, I love my food, and I have many many stories. I'm going to write a book eventually! 

@dwo34: We can't wait. World, meet Julie Collins!

It's December 15, 2009 and I am Bullish on Sacramento and Julie Collins!

David Ohara

@dwo34

dwo34@aol.com

Housing Affordability Reaches 70.1%!!!

Housing Affordability Record-High Level  for Third Consecutive Quarter

November 19, 2009 - Nationwide housing affordability, bolstered by affordable interest rates and low house prices, hovered for the third consecutive quarter near its highest level since the series was first compiled 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) released today.

 

The HOI showed that 70.1 percent of all new and existing homes sold in the third quarter of 2009 were affordable to families earning the national median income of $64,000, down slightly from a near-record 72.3 percent during the previous quarter and up from 56.1 percent during the third quarter of 2008.

 

"At a time when housing is at its most affordable, we applaud the recent actions taken by Congress and President Obama to stimulate housing by extending the federal tax credit beyond its Nov. 30 deadline and expanding it to a wider group of eligible home buyers," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "With interest rates now lower than last quarter, the tax credit will encourage even more home buyers to enter the market and help stabilize housing and the economy by creating new jobs, stimulating home sales, reducing foreclosures, cutting excess inventories and stabilizing home prices."

 

Indianapolis was the most affordable major housing market in the country during the third quarter, a position the metro area now has held for 17 consecutive quarters. Almost 95 percent of all homes sold were affordable to households earning the area's median family income of $68,100.

 

Also near the top of the list of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa., and three Michigan metropolitan areas, Detroit-Livonia-Dearborn; Warren-Troy-Farmington Hills; and Grand Rapids-Wyoming. 

 

Five smaller housing markets posted even higher affordability scores than Indianapolis, with Kokomo, Ind. outscoring all others. There, 96.7 percent of homes sold during the third quarter of 2009 were affordable to median-income earners. Other smaller housing markets near the top of the index included Springfield, Ohio; Bay City, Mich.; Mansfield, Ohio; and Elkhart-Goshen, Ind.

 

New York-White Plains-Wayne, N.Y.-N.J., was the nation's least affordable major housing market during the third quarter of 2009, the New York metro area's sixth consecutive appearance at the bottom of the list. Slightly more than 19 percent of all homes sold during the third quarter were affordable to those earning the New York area's median income of $64,800.

 

The other major metro areas near the bottom of the affordability scale included San Francisco; Honolulu; Santa Ana-Anaheim-Irvine, Calif.; and Nassau-Suffolk, N.Y.

 

San Luis Obispo-Paso Robles, Calif. was the least affordable of the smaller metro housing markets in the country during the third quarter. Others near the bottom of the chart included Ocean City, N.J.; Santa Cruz-Watsonville, Calif.; Santa Barbara-Santa Maria-Goleta, Calif.; and Brownsville-Harlingen, Texas.

 

It's December 2, 2009 and I am Bullish on Sacramento!

David Ohara

@dwo34

dwo34@aol.com

Buyer Update! Mission Accomplished

Happy Thanksgiving Everyone!

I wanted to give you all an update on a previous Buyer that I was working with and had blogged about.  The Buyer was referred to as "Ryno."  Ryno is a teacher at Inderkum High School in Natomas and is looking for a home in the North Natomas area.  As you might remember, Ryno and I have been searching for a home for a few months now.  We have made offers on several different homes, only to be outbid by another Buyer.

Last week, we looked at a nice 3 bedroom, 2 bath home in a great neighborhood.  After consideration, we decided to submit an offer on it.  The home is in immaculate shape, with new stainless steel appliances, palm trees, hardwood floors, fresh paint, tile roof, close to shopping, parks, and most importantly, his work.  We wrote up a nice and clean offer for the home, and I submitted it to the Seller's agent.  After we discussed the offer, the agent told me that he was going to recommend that the Seller accept our offer as written.  I enjoy working with quality agents that you can communicate with. Needless to say, Ryno had his offer accepted as written! He should be able to get the keys to his new home a few days after Christmas! Congratulations Ryno! I know you will be happy at your new home.

It's November 25, 2009 and I am extremely Bullish on Sacramento!

David Ohara

@dwo34

dwo34@aol.com

Flipping - The 90 Day Wait Period

Good Evening Everyone!

I have been getting a lot of inquiries about the 90 day "flipping rule" from several people.  Essentially, some lenders will not underwrite a loan on a property that has been purchased by an investor with the intention of "flipping" the property for a quick profit.  These lenders require that these investors hold title for at least 90 days before they will consider the property for a loan.  The 90 day rule does not apply in situations where the lending institutions that acquired the property back through the foreclosure process.  Below is the actual language directly from the United States Department of Housing and Urban Development.

 

HUD No. 03-055

BUSH ADMINISTRATION PROVIDES HOMEBUYERS NEW PROTECTION FROM PREDATORY LENDING PRACTICE

New "Anti-Flipping" Rule Holds Lenders, Sellers and Appraisers Accountable

WASHINGTON - Housing and Urban Development Secretary Mel Martinez today announced a new initiative in the Bush Administration's efforts to crack down on predatory lending. HUD published a final rule today in the Federal Register addressing property "flipping" on mortgages insured by the Federal Housing Administration (FHA).

Property "flipping" occurs when a recently acquired property is resold for a considerable profit with an artificially inflated value.

"The Bush Administration is committed to maintaining a strong housing market in which consumers can feel confident that they are protected from unscrupulous practices," Martinez said. "This final rule represents a major step in our efforts to eliminate predatory lending practices."

Predatory lending results when home purchasers become unwitting victims of lenders, sellers and appraisers, often working together. The unsuspecting homebuyers either purchase homes with sales prices far in excess of the fair market value, or are substantially overcharged with costs associated with obtaining a mortgage.

The final rule, "FR-4615 Prohibition of Property Flipping in HUD's Single Family Mortgage Insurance Programs," (view as TEXT or view as PDF file) makes recently flipped properties ineligible for FHA mortgage insurance. It also allows FHA to better manage its insurance risk by requiring additional support for a property's value when a significant increase between sales occurs. Features include:

Sale by Owner of Record: Only the owner of record may sell a home to an individual who will obtain FHA mortgage insurance for the loan; it may not involve any sale or assignment of the sales contract, a procedure often observed when the homebuyer is determined to have been a victim of predatory practices.

Time Restrictions on Re-sales:

Re-sales occurring 90 days or less following acquisition will not be eligible for a mortgage to be insured by FHA. FHA's analysis disclosed that among the most egregious examples of predatory lending was on "flips" that occurred within a very brief time span, often within days. Thus, the "quick flips" will be eliminated.

Re-sales occurring between 91 and 180 days will be eligible provided that the lender obtains an additional appraisal from an independent appraiser based on a re-sale percentage threshold established by FHA; this threshold would be relatively high so as to not adversely affect legitimate rehabilitation efforts but still deter unscrupulous sellers, lenders, and appraisers from attempting to flip properties and defraud homebuyers. Lenders may also prove that the increased value is the result of rehabilitation of the property.

Re-sales occurring between 90 days and one year will be subject to a requirement that the lender obtain additional documentation to support the value to address circumstances or locations where HUD identifies property flipping as a problem. This authority would supersede the higher expected threshold established for the above-mentioned 90 to 180 day period and will be invoked when FHA determines that substantial abuse may be occurring in a particular locality.

Other recent actions by the Bush Administration to protect homeowners from predatory lending and promote homeownership include:

A proposed rule making lenders accountable for appraisals on mortgage insured by FHA.

A recent plan announced by HUD to expand protection of homeowners by proposing performance standards for appraisers of FHA-single family homes under its Appraiser Watch Initiative. Under Appraiser Watch, some 25,000 appraisers will be held accountable for faulty appraisals, which too often lead to default and foreclosure. FHA will monitor appraisers' default and claim rates and will levy sanctions - including removal from its list of approved appraisers - against those whose rates are excessive. 

A proposal to reform the regulatory requirements of the Real Estate Settlement Procedures Act (RESPA) that would make the process of buying and refinancing a home significantly simpler, potentially less expensive and would protect consumers from unscrupulous lending practices. 

The "Homebuyer Bill of Rights," which requires greater disclosure of costs associated with buying a home, allows consumers more choices in choosing providers of closing services, limits excessive settlement fees and encourages innovation and competition in the marketplace.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet.

If you have any questions about this or a property, please let me know and I can do the research for you.

It's November 17, 2009 and I am very Bullish on Sacramento

David Ohara

@dwo34

dwo34@aol.com