CLOSING FOR TAX CREDIT CLOSING EXTENDED

WASHINGTON — Homebuyers would get an extra three months to complete their purchases and qualify for a generous tax credit under a bill overwhelmingly passed by the House on Tuesday. Under current law, homebuyers who signed purchase agreements by April 30 have until Wednesday to close on the sale to qualify for tax credits of up to $8,000. The bill would give buyers until Sept. 30 to complete their purchases. The extended deadline only applies to people who signed purchase agreements by April 30. The National Association of Realtors estimates that about 180,000 homebuyers who already signed purchase agreements are likely to miss the Wednesday deadline.
The popular tax credit has helped to stabilize the nation's slumping housing market. More than 2.6 million taxpayers claimed the tax credit through April — claiming $18.7 billion — according to the Internal Revenue Service. The Realtors group says the tax credit has generated 1 million new home sales that wouldn't have happened otherwise.
The tax credit for first-time homebuyers was part of President Barack Obama's economic recovery package enacted last year. In November, Congress extended the credit and expanded it to longtime owners who bought new homes. First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.

FORECLOSURES IN ABQ

Question was asked about where we find the foreclosures. There are two answers. First, there are foreclosures all over and in all price brackets. People who have lost jobs are having great difficulty including those who have been at upper management or executive levels. We see foreclosures in High Desert and NE Heights in the upper price levels reflecting this situation. We see foreclosures by people who have been in their own businesses and with the recession their business volume has forced them to close their businesses and foreclose. The foreclosures related to the decrease in income due to the recession occur all over ABQ. These homeowners try to sell their homes but they have lost equity and cannot sell except as a short sale. With no income they cannot renegotiate with the bank and the only way they can sell as a short sale is to stop making payments. Then after they stop payments and if they can't sell, the home is foreclosed. Many times they can't sell as a short sale because the banks take months to review an offer and the Buyer gets tired of waiting. So it's not that we don't find buyers for their homes, it's that the banks make it almost impossible to complete the transaction. Do I sound bitter???

The second answer is that there are more foreclosures in areas where people bought on loans that they probably should not have gotten involved in. For example, in the SW developments and some parts of Rio Rancho and Ventana Ranch, first time homebuyers bought loans with no money down or at 103% of the value. When the value dropped 20-25% in the last two years, these people are upside down. Also, investors who bought several homes are selling or foreclosing because they can't lease the homes and realize they will never sell to make a profit so they "dump" them.

Hope that answers the question. We, by the way, have had really good success getting short sales to close and if it goes to foreclosure, we have investors who will buy redemption rights. We're trying to stay current in our skills so we can serve our clients.

FINALLY LOVE RANCH

My chiropractor, a petite gentle & quiet man, treated Helen Mirren when she was here filming Love Ranch. He had articles and pictures of her all around his office and was so impressed with her a another gentle soul. Now finally the film is to be released but sadly not yet in New Mexico.

Mortgage Interest Rates at All Time Low

It's time to buy a home in Albuquerque or Rio Rancho! There are plenty of good deals and the interest rates are in the mid-fours. Give me a call.

MORTGAGE RATES TO STAY LOW

The volume of homes sales seems to have come to a crashing halt with the end of the Federal tax incentive, but the interest rates are the lowest in 30 years. Rates are just above 4% for most buyers. I don't get it. It's the best time ever to buy. Sellers are desparate, rates are low and there are lots of choices out there. Where are all the Buyers??????? Call me and I'll talk you into doing it NOW.

FORECLOSURES UP IN NEW MEXICO

As home sales went up last month so did foreclosures. Personally, I think the banks are getting more efficient in taking action. They had so many short sales to deal with first that they staffed up for that and foreclosure action took forever. The short sales seem to be moving more quickly and perhaps those extra staff can now turn their attention to foreclosing. It will be awhile until these bank distressed properties get off the market. It's been a major factor in the depressed prices in New Mexico. A fairly priced house doesn't have a chance in some subdivisions.

GREAT TIME TO BUY!!!

So whereas the announcement below may seem to be negative, for buyers it is great news. With demand low and interest years at a twenty year low, it is a terrific time to buy. As the article below indicates, homeowners who can want to just refinance but for those who need to sell, and are therefore more motivated, they are more willing to negotiate to get the deal done.


The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 28, 2010. "With another week of historically low mortgage rates, the trend from the prior three weeks continued, as refinance applications increased while purchase applications dropped. Purchase applications are now almost 40 percent below their level four weeks ago, while the refinance share, at 74 percent, is at its highest level since December," said Michael Fratantoni, MBA's Vice President of Research and Economics. "In addition, the ARM share dropped last week to its lowest level since March of this year, as borrowers took the opportunity to lock in at historically low fixed mortgage rates."The Mortgage Bankers Association application survey covers over 50% of all US residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a look into consumer demand for mortgage loans. In a low mortgage rate environment, a trend of increasing refinance applications implies consumers are seeking out a lower monthly payment which can increase disposable income and consumer spending (or give consumers a chance to pay down other debts like credit cards). A falling trend of purchase applications indicates a decline in home buying interest, a negative for the housing industry and the economy as a whole.