New Lending Policies Announced by FHA

	If you've been listening to the housing news, you've probably heard about some lending changes that were announced by the Federal Housing Administration (FHA). While many of the news reports were confusing, the truth is pretty clear...and isn't as bad as some people may have heard. Overall the measures announced by the FHA are intended to help the organization better manage its risks and strengthen its capital reserves, while still providing home loans to the nation. The good news, as FHA Commissioner David Stevens stated recently, is that "by continuing to provide affordable, responsible mortgage products, FHA will support the housing market's recovery" and "remain the largest source of home purchase financing for underserved communities." What's Changing? If you or someone you know is considering an FHA loan, some of these changes may affect you. Here's a clear, concise rundown of the major changes and what they mean: 1. Increased mortgage insurance. The mortgage insurance premium (referred to as private mortgage insurance by many people) will be increased from 1.75% to 2.25%. This change will add some cost to purchasing a home, but will not overburden consumers since the mortgage insurance is paid over the life of the loan, rather than upfront at closing. This change will become effective on April 5, 2010. 2. New down payment and credit score requirements. According to the new policy, homebuyers who have a credit score of at least 580 may still be able to purchase a home with 3.5% down, but those with credit scores of less than 580 will be required to put down at least 10%. This change is designed to help the FHA balance its risk, while still providing affordable down payments for consumers with a history of good credit and responsibility. 3. Reduced seller concession. Basically, this change means that the person selling the home will now only be able to offer the homebuyer 3% to help defray closing costs, as opposed to 6% under the previous policy. In addition to these changes, the new policies contain a series of new measures aimed at increasing lender enforcement. The bottom line is that the changes will impact some homebuyers more than others. But in the end, the FHA is still committed to providing affordable home loans. If you're concerned about your credit score or are worried about what these changes may mean to your specific situation, please call or email to schedule an appointment. There are many different programs available for homebuyers, so finding the right plan for you just requires a short discussion about your goals and financial picture.

Brandon Knapp's Market Update 3/1/2010

http://www.mmgweekly.com/w/index.html?SID=89e3b2c88ef35d68afff6abeb34bec4c

Brandon Knapp's Market Update 2/24/10

http://www.mmgweekly.com/w/index.html?SID=89e3b2c88ef35d68afff6abeb34bec4c

El Dorado Joins Proposition 90 Counties

PROPOSITION 90 - Inter County Base Year Transfer

On December 10th, 2009, the El Dorado County Board of Supervisors approved the introduction and 1st reading of the Proposed Prop 90 ordinance. On December 15th, 2009 the Board adopted the ordinance after its second reading. The ordinance has an effective date of February 15th 2010, which is 60 days after the adoption.

As the ordinance is currently written and based on Revenue and Taxation Code Section 69.5 (Prop 90), in order to qualify for a base year transfer:

• The replacement residence must be acquired after the effective date of the ordinance allowing base year value transfers from other counties.
• As of the date of transfer of the original property, the claimant or the claimant's spouse is at least 55 years of age or severely and permanently disabled. There is no age requirement for persons who are severely and permanently disabled.
• The claimant and/or the claimant's spouse has not previously been granted the property tax relief provided by section 69.5. The sole exception to this requirement is if relief was first granted for age, relief can be granted a second time if the claimant or claimant's spouse subsequently becomes severely and permanently disabled, and has to move because of the disability.
• The original property was eligible for the homeowner's exemption or the disabled veterans' exemption either at the time it was sold or within two years of the purchase or new construction of the replacement dwelling.
• As a result of its transfer, the original property must (1) be subject to reappraisal at its current full cash value in accordance with sections 110.1 or 5803; or (2) receive a base year value determined in accordance with section 69 (intracounty disaster relief), section 69.3 (intercounty disaster relief), or section 69.5 because the original property qualified as a replacement property under one of those sections.
• The replacement dwelling is purchased or newly constructed within two years of (before or after) the sale of the original property.
• The replacement dwelling must be eligible for the homeowner's exemption at the time the claim is filed.
• The replacement dwelling must be of equal or lesser value as compared to the original property. This means that the full cash value of the replacement dwelling on the date of purchase or completion of new construction must not exceed:

1. 100 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed prior to the date of sale of the original property,
2. 105 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the first year following the date of the sale of the original property, or
3. 110 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the second year following the date of the sale of the original property.
   
   The "full cash value of the original property" includes any inflationary factoring that occurs between the sale of the original property and the purchase of the replacement dwelling. The "full cash value of the replacement dwelling" does not include any inflationary factoring.

• If the original property was substantially damaged or destroyed by misfortune or calamity and sold in its damaged state, the full cash value is determined immediately prior to the misfortune or calamity.
• The claimant must file a claim for property tax relief under this section within three years of the date the replacement dwelling was purchased or the new construction of the replacement dwelling was completed. 

The above requirements were taken directly from guidance issued by the State Board of Equalization in 2006. The complete document, which contains additional detailed information and is written in a Q&A format, is available by clicking on this link:http://www.boe.ca.gov/proptaxes/pdf/lta06010.pdf
In addition, the ordinance requires an application fee of $500 to the Assessor.
The Assessor is currently developing tools to help real estate professionals, homeowners and others determine if a base year value can be transferred. This will be made available as soon as completed.
If you have any questions, please call Tim Holcomb, Assessor at 530.621.5755 or Assistant Assessor Karl Weiland at 530.621.5757.
Thank you

Claiming Your Home Buyer Tax Credit for 2008 or 2009

Procedures have not remained constant when claiming a home buyer tax credit.  Here is a link to procedures as of February 26, 2010.

http://www.irs.gov/newsroom/article/0,,id=187935,00.html

Brandon Knapp's Market Update 2/15/10

Brandon Knapp of RPM Mortgage's weekly market update.
http://www.mmgweekly.com/w/index.html?SID=89e3b2c88ef35d68afff6abeb34bec4c

Fewer homeowners see home values falling

2/11/2010

Julie Haviv

NEW YORK

Fri Feb 5, 2010 10:38am EST

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NEW YORK (Reuters) - Fewer U.S. homeowners expect the value of their homes to decline in the year ahead, but they also believe gains are unlikely, according to a Thomson Reuters/University of Michigan survey published on Friday.

U.S.  |  HOUSING MARKET

The proportion of homeowners that expected declines in the value of their homes in the year ahead fell to 15 percent in January, the lowest level since early 2007.

That is down from 16 percent in the fourth quarter, and sentiment has improved over the past year. In the first quarter of 2009, 26 percent expected their home value to decline.

The mean anticipated annual gain over the next five years held steady at 2.7 percent in January. Given consumers' long-term inflation expectations, a zero, inflation-adjusted gain was expected.

Last month, 46 percent said their homes decreased in value during the past year, while 14 percent said they increased.

The lowest mortgage rates in decades and high affordability helped the hard-hit U.S. housing market find some footing in 2009 after a three-year slump.

Home buyers, however, appear to have the upper hand.

"The main issue now holding the housing market at low levels is not the buy side but the sell side. Most home buyers must also sell their current home, and nearly all homeowners view home selling conditions quite unfavorably," the survey said.

In the January 2010 survey, three-in-four homeowners viewed current home buying conditions favorably because of very attractive prices and low mortgage rates.

But, when asked about home selling conditions, nine of ten homeowners viewed current market conditions for the sale of their home unfavorably, largely over price declines.

"The impact of price declines is likely to remain a long-term drag on the housing market for both economic and psychological reasons," the survey said.

Homes that were valued in the top third of the distribution showed some greater strength than lower valued homes, the survey showed.

(Editing by Padraic Cassidy)