Herb's Blog

Think Twice Before Walking Away from an "Under Water" Property.

2010-06-24T08:04:00.000-04:00

Many homeowners are walking away from their "under water" homes these days in what is referred to as a "strategic default". In many cases where the home is worth less than the outstanding balance on the mortgage many people are opting to let the bank foreclose on the property, even if they can afford to make the payments.

Fannie Mae, on Wednesday, said that it will get tough on borrowers who have the ability to pay their mortgage but opt to walk away. For those that default on their loan by choice, Fannie Mae will refuse to guarantee another loan for seven years. In addition, they will seek to recoup losses through deficiency judgements.

If the foreclosure is as a result of true hardship, and an inability to pay, the usual rules will still apply. Defaulting borrowers who try to work with their lender can still be eligible for a new loan in two or three years if they can prove their hardship (such as job loss, divorce, illness, etc.).

Thanks for stopping by to read my comments and please visit my website at http://www.herbandeileen.com/

Make it a great day!

Tax Credit Expired - So Now What?

2010-05-23T17:48:00.002-04:00

With the recent expiration of the federal tax credit, the local real estate market has slowed somewhat. However, interest rates are still at historically low levels. The current 30 year fixed rate mortgage stands at around 4.75% with 0 points.

When you work the numbers and see how the low interest rate impacts the amount of money you actually spend on your mortgage over 30 years there's no question in my mind that buyers should still be looking to purchase. There are deals to be had.

The combination of low interest rates, abundant inventory and motivated sellers makes for a real estate market that should be more robust than it is. As soon as consumer sentiment improves we'll see an increase in sales. I'm certain of it.

Thanks for stopping by to read my comments and please visit my website at: http://www.herbandeileen.com/

Make it a great day!

Tax Credit to be Extended

2009-11-06T08:08:00.000-05:00

The House voted yesterday 403-12 to extend the tax credit for homebuyers. In addition to the up to $8,000 credit available to first-time homebuyers, the new bill will extend to non-first-time buyers to the tune of $6,500 for those who have lived in their present home for 5 years or more. The maximum purchase price is $800,000 and the maximum annual income is $125,000 for individuals and $225,000 for joint filers.

We have been waiting for this extension for a long time and expect the housing market to benefit a great deal.

This is great news for the housing market, both nationally and locally.

Thanks for stopping by to read my comments and please visit my website at: http://www.herbandeileen.com/

Make it a great day!

Will the 1st-Time Homebuyer Tax Credit be extended?

2009-10-28T15:33:00.001-04:00

Although opinions vary, most seem to think that the tax credit will, in some form, be extended. If you're not familiar with the credit as it is currently available here's a brief summary, not intended to be a complete analysis.

The tax credit refers to the American Recovery and Reinvestment Act of 2009 and has the following requirements that have to be met for the $8,000 tax credit:

It is for first-time home buyers only. This means the buyer cannot have owned a principal residence during the three year period prior to the purchase. The purchase is defined as the time of closing, not the acceptance of the offer.
It does not have to be repaid if you stay in the new principal residence for three years
It expires on November 30, 2009
Income requirements for the full credit are: up to $75,000 for single taxpayers and $150,000 for married couples.

Many believe that this credit is largely responsible for the recent pick-up in the housing market. This alone is an excellent argument for an extension of the credit.

If our economy is to continue to pull out of its recent troubles, we need to stimulate the housing market, not by sending people a check for a few hundred dollars, but by inducing consumers to consume. When housing rebounds, so do the industries that depend on housing for their own existence. Carpenters, plumbers, architects, manufacturers of materials, etc. will all find work once again. Activity breeds activity and the housing market has been, and continues to be, the catalyst to get the wheels turning. Once those wheels are turning, and the confidence of consumers is restored, our economy will come back to life - and prosperity.

Several versions of an extended and/or expanded tax credit have been discussed recently by our legislators and hopefully they'll get to work to give the people of our great nation the confidence they need to invest in our economy.

According to Investor's Business Daily, October 29, 2009: "Senate Banking Committee Chairman Chris Dodd said top Dems agreed to extend the 1st-time homebuyer credit. Bloomberg reported Senators are near a deal to extend the program to home sales signed - not closed - by April 30. The credit would be cut 10% to $7,290, but those who've owned their current home for at least 5 years would also be eligible."

Now I'm no fan of Mr. Dodd but I applaud his hard work and efforts to extend the tax credit and expand coverage to non-1st-time home buyers as well. I'll keep an eye out for updates and will share them with you right here.

Thanks for taking the time stop by and read my comments.

Don't forget to visit us at http://www.herbandeileen.com/

Make it a great day!

Unemployment Improves

2009-08-10T10:15:00.000-04:00

This past Friday, the Labor Department announced a better-than-expected unemployment rate that dipped for the first time in more than a year - but 9.4% still isn't good.

Manufacturing lost fewer jobs in July but the service sector fell at a faster pace in July as unemployment and business activity took some wind out of the sails of recent momentum.

I think real estate, locally and nationally, is the largest single driving force in our economy. When houses sell, craftsmen and laborers get more work. Stores sell more appliances and furniture and other household items. Banks lend money, stimulating the financial markets. Insurance companies insure the homes and personal property in those homes. Not to mention all of the manufacturing jobs that are necessary to produce all of these items.

How about if we tell our legislators to stop spending our money on things we don't need or want and start investing in our economy. We can start with the housing industry.

Thanks for taking the time to stopby and read my comments.

Don't forget to visit us at: http://www.herbandeileen.com/

Make it a great day!

There Are Good Signs Out There

2009-07-20T17:57:00.000-04:00

Mortgage Rates have fallen for the third consecutive week. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage averaged 5.14 percent with an average 0.7 point for last week. Last year at this time, it averaged 6.26 percent. Historically, mortgage interest rates have rarely, if ever, been better.

Some experts are hinting that no-doc loans may be returning to the mortgage market in the future. That's good news for buyers whose documentation doesn't show their complete financial picture. These loans, recently dubbed "liar loans", were dubious in many applications but, as many other mortgage programs, had their place in the overall market.

It sounds like the news is starting to get a little better for the market. Then along come Barney Frank and his compadres (aka Comrades) and want to create yet another agency, claiming that it's necessary for the proper oversight of our industry. This proposed legislation will create a Consumer Financial Protection Agency because the current laws regulating real estate and mortgages is, in their opinion, too lax. I think it was their dictates that got us into this mess in the first place. Now they're going to come along and save us from.......them? Stay tuned....

In the meantime, don't forget to visit our website at http://www.herbandeileen.com/

Thanks for taking the time to stop by and read my comments.

Herb

First Post to My Blog

2009-07-09T15:23:00.000-04:00

Unlike many parts of the country, Bucks County is not considered to be a "declining market" and values, although somewhat lower than in the recent past, have held up pretty well. Our proximity to Philadelphia, Princeton and New York adds some value that works to our benefit. We have major transportation routes (I95, Rte. 1, etc.), convenient railway routes and several nearby airports that make getting to any east coast location quite easy.

The purpose of my blog is to give a little local information that I hope will be useful to the reader and give a bit of the flavor of our historical county. I'll try to update this blog in a timely way and invite you to come back often.

Of course, I will throw in the obligatory self-serving marketing blurb.

Here are a couple of links to really nice listings we have at:

275 Anderson Road in Yardley
http://www.bucks-county-homes.org/275-Anderson-Road-a105830.html

34 S. Homestead Drive in Yardley
http://www.bucks-county-homes.org/34-S-Homestead-Drive-a106983.html

Thanks for stopping by and taking the time to read this post.