If you are thinking about or are applying for a home mortgage here is some very important news. Beginning June 1, 2010 lenders’ are more than likely going to order a full credit report immediately before closing.

Be careful not to start shopping early for furniture and for appliances for your new home. Do not use more credit than is normal during your loan process. Do not accept new lines of credit nor apply for new lines of credit.  Your loan could be put on pending while researching any changes, and in fact could be denied at the last minute if your debt-to-income ratio should change.

These changes are part of an effort by mortgage giant Fannie Mae to cut down on poor underwriting by lenders and frauds by borrower.

Fannie’s loan qualification initiative will require lenders not only to pull two credit reports for each mortgage transaction but also to verify borrower occupancy plans for the property, Social Security numbers and taxpayer ID numbers, among other changes.

  How to deal with these changes? Abstain. During your 45 or 60 day loan period from application to closing, don’t do anything to change your credit status. Resist spending during this period and your second credit report should look like your first report.

From the beginning of three downturns in the housing market, the term short sale started to appear.  At first, Realtors tried to steer clear of these listing as they rarely turned to sales.  Now the term has taken on more respect with real estate professionals, as the banks and Realtors are understanding the process of a short sale and the advantages of a short sale to both the bank and the seller.   

In that regard, Fannie Mae will be shorting waiting periods for a new loan for individuals who have given the deed back to the bank (deed in lieu of foreclosure) because of financial problems or have done a short sale.  You may not have to wait the typical four or five years to qualify for financing to purchase another house. 

It is now likely the wait could be as little as two years.  A bulletin to lender’s from Fannie Mae said it was relaxing the rules for those individuals who participated in a deed in lieu of foreclosure or a short sale.  The new guidelines are to take effect July 1, 2010. 

Also, it was reported earlier that credit scores would suffer a deduction of 250 points for a foreclosure and a 150 point deduction for a short sale.  This is yet another reason to consider a short sale.

Visit the LA Times for more information.

The closely watch median sales of homes prices of in Southern California has jumped 14% in March from March one year ago.  The median price-the price at which one half the houses sell from more and one half the houses sell for less- rose 3.6% from February.

Encouraging signs, you bet.  As a Realtor, I can definitely feel the momentum of the housing market swinging upward. It is becoming clear that now is the time to make your decisions to buy real estate.  Prices and selection are still good in Palms Springs with the higher end starting to sell (homes over one million dollars).

  For complete details of county by county statistics see article in LA Times.

“The linchpin of the legislation is the tax credit of up to $10,000 for the first time home buyers and those purchasing newlly built homes.  It would take effect May 1, 2010. ” LA Times, March 23, 2010

“Lawmakers are setting aside $200 million to pay for it.  Buyers can receive 5% of a home purchase up to $10,000, as long as they reside there for two years.LA Times, March 23, 2010. TAX BREAKS+Up to $10,000 credit for first-time home buyers or those purchasing a newly built home.  LA Times, March 23, 2010.

As the first decade of this century has ended, I have compiled data for single family home sales in Palm Springs.  The results are interesting.  The following chart shows the rise and fall of Palm Springs single family home prices.  A lot of conclusions can be drawn from this information.  For instance, the median sales price of a home is 2009 is approximately the same as the median price in 2002/2003.  The median price of a home in 2009 was approximately 22.5% greater than the median price of a single family Palm Springs home in 2000.

For more detailed information I have posted the Average, Median, and Number of single family homes sold in Palm Springs by the month for the entire decade.   For instance, if you purchased your home in January of 2005, the median for that month would have been $565,000.  In December of 2009, the median price was $319,915.

 This information is a valuable tool whether you are a buyer or seller.  If you are thinking about buying or selling in Palm Springs please give me a call 760.831.5996.  I know the market currently and historically and would like to put my knowledge to work for you.

At the nation’s largest mortgage servicers, short sales soared 165% to 74,513 in the first nine months of 2009.  Realtors are beginning to see more accepted short sales and less aversion from lenders who are beginning to understand it is better to sell an occupied house than an empty house which is susceptible to neglect and vandalism.  Also, lenders are realizing it is generally less expensive to do a short sale over a full blown foreclosure.  This is good news for real estate professionals who in the past have experienced difficulty in closing short sales.  Maybe the time has come where the lenders are realizing the advantages of negotiating short sales.  Now, let’s hope the process of a short sale can be streamlined and transactions can be concluded in a timely manner which benefits everyone involved in a short sale as opposed to a foreclosure.

Click here to read the entire article featured on the front page of the LA Times February 18, 2010.

Palm Springs Real Estate fact obtained from the Desert Area MLS: The highest median price recorded for a single family residence in Palm Springs was in June, 2006 at $611,500.  At the end of the decade, December, 2009 the median price was $319,915.

The median price is the price for which half of the homes sold for more and half sold for less.

Starting today, February 1, 2100, the FHA flip rule has been deleted for the next year.  The long time rule prevented investors from immediately applying for an FHA loan. This change has been made with the intention of moving investor houses quicker.  For the complete article visit latimes.com

The Basics: Extended Home Buyer Tax Credit 2009/2010

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 tofirst-time home buyers until April 30, 2010.

• Expands the credit to grant up to $6,500 credit to current homeowners purchasing a new or existing home between November 7,2009 and April 30, 2010.

Here is some basic information about how the Extended Home Buyer TaxCredit can help prospective home buyers become part of the Americandream. If you have specific questions or need additional information, pleasecontact a tax professional or the Internal Revenue Service at 800-829-1040.

Who Qualifies for the Extended Credit?• First-time home buyers who purchase homes between November7, 2009 and April 30, 2010.• Current home owners purchasing a home between November 7,2009 and April 30, 2010, who have used the home being sold orvacated as a principal residence for five consecutive years withinthe last eight.To qualify as a “first-time home buyer” the purchaser or his/her spousemay not have owned a residence during the three years prior to the purchase.

 Which Properties Are Eligible?The Extended Home Buyer Tax Credit may be applied to primaryresidences, including: single-family homes, condos, town homes, and co-ops.

How Much Is Available?The maximum allowable credit for first-time home buyers is $8,000.The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?Each home buyer’s tax credit is determined by two additional factors:1 - The price of the home.2 - The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective onNovember 7, 2009, single buyers with incomes up to $125,000 andmarried couples with incomes up to $225,000—may receive themaximum tax credit.These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits.

If the Buyer(s)’ Income Exceeds These Limits, Can He/SheStill Get a Credit?Yes, some buyers may still be eligible for the credit. The credit decreases for buyerswho earn between $125,000 and $145,000 for single buyers and between $225,000and $245,000 for home buyers filing jointly. The amount of the tax credit decreases ashis/her income approaches the maximum limit. Home buyers earning more than themaximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30,2010?Under the Extended Home Buyer Tax Credit, as long as a writtenbinding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?No. The buyer does not need to repay the tax credit, if he/she occupiesthe home for three years or more. However, if the property is soldduring this three-year period, the full amount credit will be recouped onthe sale.

Great architectural home (Albert Frey) in best neighborhood of Palm Springs priced to sell at $1,250,000.  Someone is going to get a deal.

Contact Gary at 760.831.5996