Posts Tagged 2008 salt lake city home prices

HVCC could be phased-out by year-end

Although H.R. 3044 which would put an 18-month moretorium on HVCC seems to have gotten stalled, but some members of the House Financial Services Committee were able to tack a repeal of HVCC onto H.R. 3126, the Consumer Financial Protection Act (CFPA) as an amendment. H.R. 3126 passed committee 39 t0 29 with most Committee Republicans voting against it.

H.R. 3126 has been fought furiously by banks and credit card companies because is severely limits how they can put the screws to you and I when getting or servicing loan or credit card.

If passed by the House of Representatives it will go on to the Senate. President Obama has requested that CFPA be on his desk for signing into law before the new year.

As a brief review, HVCC is the Housing Valuation Code of Conduct, which was the brainchild of New York State Attorney Andrew Cuomo. He was wrongfully assuming that A) appraisers are all pansies, and B) because they are pansies they could be easily bullied by mortgage loan officers and real estate agents into artificially inflating the value of a home.

Well, for the most part appraisers are a pretty honest bunch and housing bubble was much more than just inflated appraisals due to some unscrupulous loan officers, real estate agents and appraisers. All HVCC did was add an additional layer of cost and time to the process: Appraisal Management Companies, or AMC’s.

AMC’s are the go-between for loan officers, Realtors and the appraiser. A buffer if you will. The AMC’s run interference and isolate the appraiser from talking to the loan officer or Realtor, the idea being that if a loan officer or Realtor can’t talk to the appraiser they can’t pressure them into “hitting a target value” to make the deal work.

Well, the market decides the value, all the appraiser does is compare the subject property to comparable properties that sold within a given period and a given distance from the subject property. In short: it is what it is.

There are a number of problems with AMC’s though:

  1. AMC’s increased the price the consumer pays for an appraisal because it added a middleman into the process.
  2. Appraisals have to be paid by the borrower before the appraisal is done, it can no longer be rolled-up into the loan like before.
  3. AMC’s take up to 60% of the amount collected from the borrower as “administrative costs” and appraisers are making only 40% of what they did just last April.
  4. Because of this the good appraisers have exited the business, leaving green appraisers who will work for pennies on the dollar, and thus;
  5. We are getting shoddy appraisals using comparatives that are not comparable properties. And, because we can’t talk with the appraiser we can’t go to bat for our borrower by questioning why the appraiser used a short-sale or a bank foreclosure as a comparable as compared to a genuine sales transaction, which represents the true market value of a home.

All HVCC has done is add another layer of bureaucracy, increased costs to the borrower, and hindered refinances that can help a borrower by reducing their interest rate and putting more cash in their pocket each month, thus reducing the chance of defaulting on their mortgage.

You’d think this would be a good thing, huh?

So let’s hope H.R. 3126 passes the House and the Senate and we can start moving forward with real economic recovery and your home will start increasing in value again as real, honest and competent appraisers get back to work doing what they love to do.

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2009 First-Time Home Buyer Tax Credit Fact Sheet

Who is Eligible

  • The $8,000 tax credit is available for first-time home buyers only.
  • The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
  • All U.S. citizens who file taxes are eligible to participate in the program.

Payback Provisions

  • The tax credit is a true credit. It does not have to be repaid.
  • The only repayment requirement is if the home owner sold the home within three years after the purchase.
    Income Limits
  • Home buyers who file as single or head-of-household taxpayers can claim the full $8,000 credit if their modified adjusted gross income (MAGI) is less than $75,000.
  • For married couples filing a joint return, the income limit doubles to $150,000.
  • Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit.
  • Married couples who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.
  • The credit is not available for single taxpayers whose MAGI is greater than $95,000 and married couples with a MAGI that exceeds $170,000.

Effective Dates for the Tax Credit

  • First-time home buyers would receive an $8,000 tax credit for the purchase of any home on or after January 1, 2009 and before December 1, 2009. To qualify, you must actually close on the sale of the home during this period.
    Tax Credit is Refundable
  • A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference.
  • For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $3,000 payment from the government.
  • If you are due to receive a $1,000 tax refund from the government, your refund would grow to $9,000 ($1,000 plus $8,000 from the home buyer tax credit).
  • Buyers can take the tax credit on their 2008 or 2009 income tax return.

Types of Homes that Qualify for the Tax Credit

  • All homes, whether single-family, townhomes or condominium apartments will qualify, provided that the home will be used as a principal residence and the buyer has not owned a principal residence in the prior three years. This also includes newly-constructed homes.

For more details on the tax credit, go to www.federalhousingtaxcredit.com

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Salt Lake City Mortgage Market Update for December 16, 2008

The big news in Utah today is that the decline in housing prices has finally hit us, though not as bad as the nation on the whole.  According to the Federal Housing Finance Agency Utah as a whole saw a decline of 1.64% in home values from this same time last year.  The national average is 4%.

Salt Lake City dropped 1.8% while home values in Logan actually increaed 4.6%, making it #8 nationally.  St. George saw the worst decline in Utah at 8.5% less than last year.

Overall the drop seems to be in the larger homes, those prices above $300,000.  Homes below $300,000 seem to be holding their value since those are the ones most Utahns can qualify for under the revived “Full Doc” only lending policies.

On top of that, buyers aren’t buying it.  Even though prices are getting better and the increased time on market has sellers dropping their prices to stir interest in their home, many buyers seem frozen with fear do to all the bad news about the economy.  They’re afraid to make any big moves financially right now.

And if you have the means, right now is the time to do it.  Mortgage rates are the lowest they’ve been since 2004, and home prices are getting back into the range of being “affordable” for the average Utahn.  If you qualify for a loan right now you can pretty much write your own ticket when it comes to buying a house.

And remember, the $7,500 tax credit for first time home buyers (anyone who hasn’t owned a home in 3 years or more) is good through April 9.

For Salt Lake City, UT today’s average mortgage rates are as follows:

30-year fixed: 5.00%

15-year fixed: 4.75%

Conforming Jumbo 30-year fixed: 5.125%

FHA 30-year fixed: 5.00%

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