When?The current home buyer tax credit is still active through 11/30/2009.  Start date for the new credit starts 12/1/2009 and under contract by 4/1/2010 to close by 6/1/2010.  

Who?a) First time buyers¦same tax credit ($8k) but extended.  The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years.b) Move up buyers¦new credit ($6,500).  Those who buy a home after owning one for the last five yearsc) NOT for investing or second homes.  

What?For primary residences only.Move up buyers would need to have been in their existing home 5 of the last 8 years.  

How much?a) $8,000 First timersb) $6,500 Move up buyers  

Why? Free house for a year$8,000 is equivalent to the payment on a $140,000 mortgage, at today™s rate, for one full year! Or, It™s a half a year free on a $280,000 mortgage! (This will vary depending on the client’s scenario for their taxes and what rebate would be due – if any taxes are owed. The credit would off-set that and my reduce the total credit due to the buyer).  The median price in Atlanta last quarter was $170,000(ish)  

New LimitsThe tax credits will be limited to homebuyers who make $125,000 or less as an individual or $225,000 or less as a couple. The cost of the home being purchased may not exceed $800,000

November 5, 2009”After two weeks of delay, the Senate cleared the way to pass a seven month extension and expansion of the tax credit for homebuyers. By an 85 to 2 roll call vote, the Senate voted to cut off debate on a package of measures that includes the homebuyer credit, making it virtually certain that the legislation will reach President Obama for his signature this week.  The homebuyer tax credit, due to expire at the end of November  would be extended through April 30 of next year.

First-time buyers who are in the process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.  For the first time, the legislation that was recently cleared makes move-up buyers as well as first-time buyers eligible for a credit. The $8,000 maximum first-timer credit will continue and will now be available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law.

A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years.  For homebuyers across the country, the expanded tax credit would allow more people to qualify for the credit. While two-thirds of American families own their own home, and most earn less than the income limits that have been established within the extension, more buyers may be eligible.

Move-up buyers don™t have to sell their current home to qualify for the new credit, but the money cannot be used to buy a vacation home. It™s only for a primary residence,  In expanding the tax credit,  will help first-time home buyers, as well as homeowners looking to move up to a new home, but we would exclude from the credit speculators who may have recently purchased a home intending to flip it for a fast profit.

The tax credit has fired-up the housing market, driving existing home sales to the highest level in over two years. The National Association Realtors reported sales jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September and are 9.2% higher than the 5.10 million-unit pace in September 2008.  The legislation included provisions added to address complaints of fraud as well.

The Internal Revenue Service is given greater authority to oversee the process to root out fraud, and provisions are added in response to past abuses of false sales or underage buyers. An investigation by the Treasury Department™s Inspector General for Tax Administration found that more than 580 children, some as young as four years old, had received $627,000 in first-time homebuyer credits. The IRS has identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations of the first-time homebuyer tax credit.

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Reinstatement Plan: The reinstatement amount is the total amount that is past due including late fees and attorney costs. This amount will get your mortgage caught up immediately. As a result of your financial hardships, you may be facing a sizable quantity of past-due fees including back payments, late fees and legal expenses. If you are able to promise a lump sum to bring your payments up-to-date by a specific deadline, you may be eligible for a reinstatement.

Consider what funds are at your disposal. Many clients have retirement funds, credit cards or insurance policies that can provide the much-needed funds to stay secure in their home. Other clients will seek private loans from family, friends or co-workers.

A reinstatement will offer you the quickest method for resolving your mortgage foreclosure. With your foreclosure resolved you can enjoy the security of your home.

Repayment Plan:

The most common way of resolving a loan default is to work out a plan (Repayment Plan) that will let you repay part of the delinquency each month, along with your regular monthly installment.

Most of our clients are eligible for a repayment plan if their financial circumstances have stabilized. Many clients have gone through a short-term financial hardship that has caused them to become delinquent, but they are now financially stable and need help resolving their loan defaults. If this is your case we will negotiate with your lender to distribute your past-due amount over a set period of time, usually 18-24 months. Your lender will usually ask for 25-50% of the arrearage down and the remainder will be paid out over a period of months. You will need to provide financial information to prove that you are now capable of taking on this responsibility. Remember, this monthly amount is in addition to your usual mortgage payment.

This type of solution to your mortgage foreclosure is generally accepted very well by lenders. We will complete a detailed financial portfolio of your income vs. your expenses to show the lender what payment plan will work with your current income and what you can afford to pay as a down payment. This will bring your account up-to-date immediately and keep you secure in your home.

Loan Modification:

A large number of clients will find themselves using a Loan Modification Plan to stop foreclosure. If you can currently make your regular payment, but you can™t catch up with the past-due amount, we will negotiate with your lender to fold any past-due amounts, including interest and escrow, into the unpaid principal balance. This new amount will be re-amortized over a new period of time.

If you are unable to make payments at this rate, we will negotiate with your lender to extend your loan for a longer period of time, modifying the loan amount to a more affordable level.

A loan modification will change your existing mortgage note and give you a fresh start in managing your home. Your account will be brought up-to-date immediately.   If you would like to have MMREM help you with a Loan Modification please click here.

Loan Refinance:

In some instances, AFS may be able to arrange new financing, but this will depend on your income, credit report, the value of your home, the amount of your equity and your current financial position. Although it might be difficult to secure new financing with a default on your existing mortgage, it is not impossible.

Do you think you can™t get refinanced because of your bad credit? Most people don™t realize that even if their credit is bad they can still get refinanced. We look at other factors such as equity, the reason your credit is bad, how your current financial situation has changed and your last 12 months of credit history. These criteria can outweigh any credit score. The overall credit score sometimes does not give a true picture of your financial stability and it needs to be amended. We can also tell you ways to improve your credit by disputing inaccurate items in your report. We can give you a loan when other mortgage companies have turned you down.

When is the time to refinance? You need to look seriously at refinancing when you need to lower your payment, when you need some cash, when you are in foreclosure and have no other options or if you have an adjustable rate mortgage and it is nearing maturity. These scenarios are perfect examples of when to refinance.

Loan Forbearance:

Some of our clients are eligible for forbearance, which gives you time to gather your assets. In forbearance, you are allowed to delay or reduce payments for a short period, with the understanding that another option will be used at the close of that time to bring your account to a current status. Your lender, if in agreement, will then temporarily cease legal actions.

Lenders may agree to combine your forbearance with reinstatement or a repayment plan if you know you can provide the needed funds to bring your account current by a specific date. This plan works for people who have just experienced a sudden living expenses increase or income loss. We will negotiate with your lender to explain this hardship and get you the time you need to readjust your spending and recover financially.

Partial Claim:

If you have an FHA Loan, we will be able to start discussions with your lender for a Partial Claim. This strategy is only available on FHA loans. Working together with The Department of Housing and Urban Development (HUD), your lender will agree to help you with a one-time payment from the FHA Insurance Fund. You may qualify if your loan is:

1. At least 4 months but no more than 12 months delinquent
2. You are able to begin making full mortgage payments
3. You have resolved the hardship that caused you to fall behind
4. You may or may not be in foreclosure
5. The mortgagor has the long-term financial stability to support the mortgage debt or make the payment
6. The homeowner does not have the ability to repay the past due amount through a special forbearance or modification
7. The property is your primary residence
8. If you have filed for bankruptcy you may still qualify for a partial claim, but the bankruptcy court must give approval

You will be required to sign a promissory note with HUD and they will place a lien on your property. This HUD loan is interest-free and will bring your account up-to-date immediately, but it is due when you pay off the loan or when you sell or leave the property.

Here are the terms for the Partial Claim:

1. The note will be interest free.
2. You will not be required to make monthly or periodic payments
3. The note will be due when the mortgage is paid off or when the homeowner sells the property
4. There will be no repayment penalty
5. The homeowner can apply for a refund in the mortgage insurance premium when the note is paid in full
6. The note is payable to HUD
7. You can make partial payments but they must be by cashier™s check or certified funds

Short Sale:

For some clients, selling their home is actually the relief that they need. After reviewing your financial portfolio, it may become obvious that you can no longer afford your home. Many owners have realized this and tried unsuccessfully to sell their home through traditional real estate methods.

As a result of market fluctuations and changes beyond your control, sometimes your home may not sell at the anticipated full price of your loan. A short sale allows you to sell your home to a third party at a price that is less than the total amount that you owe.

What is a Short Sale?
A short sale is when a lender accepts a discount on a mortgage to avoid a foreclosure auction or bankruptcy. Instead of buying from a seller, you are purchasing the property directly from the lender for a discount. For example: A homeowner who is facing foreclosure has an existing first mortgage of $300,000. You write an offer to the lender for $220,000, which is accepted as full payment for the loan. This is a short sale. Why are they willing to take such a discount? First of all, banks do not like excess inventory and bad loans on their books; therefore, if they see an opportunity in which they can sell the property without a huge loss, they will do it. Secondly, lenders know they could lose a lot more money if the property goes to auction. There are so many fees involved if the property goes to auction that they are better off taking the discount beforehand.
Your lender will use the proceeds from the sale to pay off the mortgage and the remaining balance will be negotiated or perhaps even forgiven. This avenue is open for homeowners who are willing to part with their property but keep their credit rating with the least amount of negative reports.

Negotiating a short sale with the lender is a difficult process, generally because it is very hard to find the bank officer who has the authority to accept a discount. Much like getting your phone bill corrected, you can expect the process to involve a lot of waiting on hold and being bounced around an intricate maze of automated voicemail systems. Once you get in touch with the right person, then the hard work and the negotiating can begin.

The mortgage company may require a written contract between you and the buyer, an HUD-1 or settlement statement of the sale, a buyer assurance letter stating that the potential buyer is approved for the new loan, proof that the house has been on the market for 90 days with a real estate agent and financial information from you showing that you cannot afford the house.

Many short sales fall through, but we have successfully negotiated a short sale for many homeowners. We are familiar with the process and we know what the mortgage company needs for approval.

Deed-in-Lieu of Foreclosure:

The deed-in-lieu of foreclosure offers several advantages to both the borrower and the lender. The principle advantage to the borrower is that it immediately releases him from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he would in a formal foreclosure.

If you have been unable to make your monthly mortgage payments and have also been unsuccessful trying to sell your home at the market value, this form of foreclosure may be what is necessary to get you back on track. This procedure allows you to transfer your property voluntarily to your lender or mortgage company, and your debt or deficiency is often forgiven. This will not save your home, but it will help increase your chances of getting another mortgage loan in the future and it will help you avoid the lengthy legal process of foreclosure. Although it is a negative strike on your credit rating, it is less harmful than a mortgage foreclosure.

Typically your mortgage company will require that your home has been listed with a real estate agent for at least 30 days and there are no other liens on the property for them to approve you. Some companies may also require that the property be vacant, demand an interior appraisal of the property and require a minimum of 60 days prior to a foreclosure sale. Let us help you with filing the necessary paperwork and negotiating with your mortgage company.    

REMEMBER YOU MUST BE CLOSED BY NOVEMBER 30 TO QUALIFY

Can the market function without $8,000 credit for first-time home buyers?

When Congress passed an $8,000 tax credit for first-time home buyers last winter, it was intended as a dose of shock therapy during a crisis. Now the question is becoming whether the housing market can function without it.

As many as 40 percent of all home buyers this year will qualify for the credit. It is on track to cost the government $15 billion, more than twice the amount that was projected when Congress passed the stimulus bill in February.

In the view of the real estate industry and some economists, all that money is well spent. They contend the credit is doing what it was meant to do, encouraging a recovery in the housing market that is gathering steam. Analysts say the credit is directly responsible for several hundred thousand home sales.

Skeptics argue that most of the money is going to people who would have bought a home anyway. And they contend that unless it is allowed to expire on schedule in late November, the tax credit is likely to become one more expensive government program that refuses to die.

The real estate industry, including the powerful 1.1 million-member National Association of Realtors, wants Congress to extend the credit at least through next summer. The group hopes to expand the program to $15,000 and to allow all buyers, not just those who have been out of the market for at least three years, to qualify. The price tag on that plan: $50 billion to $100 billion.

˜A no-brainer™

Joseph and Chassity Myers are among the two million buyers eligible for the credit this year. The newlyweds heard they could get money from the government for something they were tempted to do anyway.

œIt was a no-brainer, said Mr. Myers, a commercial underwriter. œOwning something is the American family dream.

The couple bought a two-bedroom condominium here in the spring for $171,000 and amended their 2008 taxes immediately, receiving their windfall by direct deposit a few weeks later

Seizing the opportunity of the first-time buyer market before the $8,000 tax credit Expires!

You only have 83 days!!!!  

If you are a First Time Home Buyer,

 and have been thinking of taking advantage of that

Eight-Thousand Dollar Tax Credit in 2009,

and you haven™t been pre-approved yet or

started looking for homes with an agent,

I™m afraid you may almost be too late.

www.TroyDykmann.com

612 889 2455

Visit my Website www.TroyDykmann.com

IncredibleAgents.com

What is the average home price in your market?
13-County Metropolitan Area 2008 $208,000 2009 $171,000 – 17.8% year over year

Are there any new developments or trends in your area?
The Twin Cities housing market is entering the dog days of summer, and with that comes a bit more stagnant air revolving around new inventory. The 1,637 new listings for the week ending August 1 are 12.2 percent below last year’s numbers. Over the past few weeks, pending sales have been flat, but in yearover- year comparisons they are still 20.9 percent above 2008 numbers. Days on Market Until Sale: Dropped by 6.6 percent over last year, from 146 to 137. Inventory is being swept up. Percent of Original List Price: 94 percent. On a steady increase the past few months as is usually the case during the summer months.

Why do you enjoy being a real estate agent?
It is my mission is to consistently provide the highest quality, most innovative and exceptional real estate service available anywhere in the 13 County Metro, and surrounding areas. Client™s needs always come first. We strive to always provide value far in excess of our client™s expectations. The constant goal is mutual respect, and long term relationships that are beneficial to all parties. Our operation will be a great place to work and do business. We will be positive, helpful, and enthusiastic at all times “ always focusing on solutions, not challenges. Taking care of business first and foremost, but have fun and enjoy ourselves in the process. We run a clean, organized, and efficient operation, and always adhere to the highest standards of integrity and ethical business practices. Never resting on accomplishments and constantly striving to create, develop, and implement new ideas, strategies, and services that will benefit our clients. I continue to seek continuing education in all aspects of our business to increase the level of service we offer our clients.

What is the most challenging issue you face as a Real Estate Professional?
The problem with this technical approach to finding the bottom of the housing market is that it ignores both demand and supply-side realities. Keeping up with the market and daily trends and understanding the big picture allows us to stay a step ahead of the market.

What is your best characteristic?
ATTITUDE œThe longer I live, the more I realize the impact of attitude on life. Attitude, to me, is more important than facts. It is more important than the past, the education, the money, than circumstances, than failure, than successes, than what other people think or say or do. It is more important than appearance, giftedness or skill. It will make or break a company… a church… a home. The remarkable thing is we have a choice everyday regarding the attitude we will embrace for that day. We cannot change our past… we cannot change the fact that people will act in a certain way. We cannot change the inevitable. The only thing we can do is play on the one string we have, and that is our attitude. I am convinced that life is 10% what happens to me and 90% of how I react to it. And so it is with you… we are in charge of our Attitudes.

Who or what inspires you the most?
My Family, Friends, Mentors, Coaches, great Colleagues and Clients inspire me every day. It also inspires me to be able to use my talents to help others and lend a helping hand. When you need to Buy or Sell a home it is my mission become an essential part of the entire process everyday – like a good friend – connecting people with the information they need to achieve their goals and to live great lives.

What is the best advice you ever received?
Be Honest And Kind To Others And Be True To Yourself. If They Matter, They Don™t Mind. If They Mind, They Don™t Matter.

If you could live anywhere in the world, where would it be?
I am living the dream right here in Minnesota however I truly enjoy to travel all over the world and It is always nice to come Home.

Homebuyer Protection Alert!

Recent Federal legislation can impact your closing date. When completing your Purchase Agreement, even if you are prepared to move forward and close quickly, a more conservative timeframe of at least 30-45 days from the time of the contract acceptance would be a more realistic expectation at this time.

Listed below is information on two pieces of legislation that stand to impact your closing date, and a few bullet points that explain the reasoning behind and effects of each measure.

HVCC: Home Valuation Code of Conduct
HVCC was designed to ensure that appraisals are conducted objectively and without pressure from parties with an interest in the transaction. Under HVCC:

• The appraisal and selection of the appraiser will be ordered by someone not directly involved in the origination of the mortgage. This could be either someone else within the mortgage company or a third-party appraisal management company.
• A copy of the appraisal must be provided to the homebuyer/borrower no less than three days before closing.
• The minimum time expectations for receipt of the appraisal should be a few weeks and not days. (While receipt of the appraisal may be received in shorter timeframes, conservative expectations are warranted.)
• Communication between the appraiser and the originating mortgage professional is prohibited. It is imperative that the agents involved in the transaction be prepared at the time of inspection to offer supporting value information if warranted.

HERA: Housing and Economic Recovery Act
HERA was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information (Truth in Lending Statement pertaining to Annual Percentage Rate or APR) regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance. Under HERA:

• No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees may be collected only after four business days.
• Should the APR change by more than .125% on a fixed rate loan or .250% on an adjustable rate loan, the lender must disclose the new APR and the borrower must have a minimum of three business days to review the information before the transaction may proceed.
• Items that can trigger re-disclosure requirements include a change(s) in the loan amount, closing date, loan program, any fees that impact the APR or interest rate from the rate indicated on the original loan application.
• In cases where documents are sent by mail to the borrower related to re-disclosure of APR and/or providing a copy of the appraisal, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.

The number of homes for sale in the Twin Cities metro area continues to decline relative to a year ago. As of Monday morning this week, there were 26,674 homes for sale in the region, down 20.9 percent from a year ago. In other words, we’ve lost 1 in 5 homes in our inventory in the last year.  Sales are a different story. For the week ending June 20, there were 1,156 signed purchase agreements, up 32.1 percent from the same week in 2008. That’s the 12th week of the last 13 to feature a year-over-year increase in sales activity exceeding 20 percent.  

We must bear in mind, however, that sales are only up in certain categories and price ranges. Year to date, traditional home sales (excluding foreclosures and short sales) are still down 17.8 percent from last year. New construction sales are down 21.7 percent from last year. And sales of homes priced above $350,000 are down 26.8 percent from a year ago. The lion’s share of market activity is taking place in the lower price ranges this year.

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Property Tax Fact Sheet 1Each spring your county sends you a property tax bill. Three factors that affect your tax bill are:

• the amount your local governments (town, city, county, etc.) spend to provide services to your community,

•  the estimated market value of your property, and  

•  the classification of your property (how it is used).

The assessor determines the last two factors. You may appeal the value or classification of your property. This fact sheet discusses estimated market value and classification as shown on your Notice of Valuation and Classification. On the back, it tells you what you can do if you and the assessor disagree.Estimated market value
Estimated market value is the amount the assessor estimates a buyer would pay for your property if it were offered for sale. Each year the assessor reviews the market valuation of your property to determine if changes in the real estate market or improvements to your property require a change in the estimated market value.Classification and class rates
All property is classified by the assessor according to its use. Each class of property (home, apartment, cabin, farm, business) is taxed at a different percentage of its value. This percentage, or class rate, is determined by the state legislature. Like market value, the class rate of your property plays a significant role in how much property tax you pay.Valuation and classification notice
Each spring, the assessor will mail you a Notice of Valuation and Classification informing you of the value and classification of your property. If you believe the classification or the estimated market value of your property is incorrect, you have several appeal options. The first step is to do some research.

• Verify information about your property, such as its dimensions, age and condition of its structures.

• Review records to determine the market value of similar property in your neighborhood.

• Review sales data to find out what similar property in your area is selling for.

• Check real estate ads in your newspaper to get an idea of the asking price of local properties.

•  Ask the assessor to explain the criteria used for classifying your property. You may also review the classification of other property used in the same manner as yours.

Appealing your assessment
You have the right to appeal your market value estimate and/or property classification if you feel your property is:

• Classified improperly.

• Valued at an amount higher than you could sell your property for.

• Valued at a level different from similar property in your area.

First, talk to the assessor to discuss changing your assessment. If you and the assessor are unable to agree on your valuation or classification, more formal methods of appeal are available.Formal Appeal Methods
You can appeal to your local and county Boards of Appeal and Equalization or you can take your appeal directly to the Minnesota Tax Court. Or you can choose both options, in which case begin with the Local Board of Appeal and Equalization.Local Board of Appeal and Equalization
If you choose to appeal to your boards of appeal and equalization, first meet with your Local (city or town) Board of Appeal and Equalization. These are usually the same people as your city or town council. The board meets on a specified day in April or May. The exact date is listed on your Notice of Valuation and Classification. We strongly recommend that you call or write your city or town clerk to schedule your appearance.You may make your appeal in person, by letter, or have someone else appear for you. The assessor will be present to answer questions. You must present your case to the city or town board before going to the County Board of Appeal and Equalization.

• The small claims division only hears appeals involving one of the following situations:

• The assessor™s estimated market value of your property is less than $300,000.

• Your entire parcel is classified as a residential homestead (1a or 1b) and the parcel contains no more than one dwelling unit.

• Your entire property is classified as an agricultural homestead (1b or 2a).

•  Appeals involving the denial of a current year application for homestead classification of your property.

The proceedings of the small claims division are less formal and many people represent themselves. Decisions made by the small claims division are final and cannot be appealed further.

• The regular division will hear all appeals“including those within the jurisdiction of the small claims division. Decisions made here can be appealed to a higher court.Most people who appeal to the regular division hire an attorney because the hearing is conducted according to the Minnesota rules of civil procedure.

You may obtain complete information on Tax Court appeals by writing or calling the court administrator in your county or by contacting:

Minnesota Tax Court
Minnesota Judicial Center
Suite 245
25 Reverend Dr. Martin Luther King, Jr. Boulevard
St. Paul, MN 55115
(651) 296-2806
http://www.taxcourt.state.mn.us