Both Houses Have Approved The Homebuyer Tax Credit

Both Houses have approved the Homebuyer Tax Credit. The president is expected to sign as early as today. This should open up a new market. See the rules below. Chris

Who Qualifies for the Extended Credit?

First-time home buyers who purchase homes between the date the bill is signed by President Obama and April 30, 2010.
Current home owners purchasing a home between the date the bill is signed by President Obama and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

If you or your client purchased a home between January 1, 2009 and the date the bill is signed by President Obama, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum credit allowed for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by tow additional factors:

The price of the home.
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 on the date the bill is signed by President Obama single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and the date the bill is signed by President Obama, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum 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 written binding 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 occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Real Estate & Mortgage Update: Homebuyer Tax Credit Not a Done Deal

Real Estate, mortgage, and credit restoration professionals all have the same goal — Get our client in a house. Thus, the article below effects us all.

———————————

Contrary to what many have reported, the extension of the homebuyer tax credit is not a done deal yet.

The most talked about real estate news of the past week seemed to be all about the First Time Homebuyer Tax Credit getting extended.

I’ve had numerous people contact me asking for the details and have had to tell all of them that nothing has passed yet.

Given the confusion and misinformation I thought I’d give an actual update on where the extension is.

The big news is that an unofficial voice vote passed the Senate last week, and Senate Majority Leader Harry Reid announced that he’s planning an official November 2nd vote on the extension in the Senate. Discussions with his counterparts in the House lead him to believe that the House will also pass the bill in the coming week.

This could put the bill on President Obama’s desk by the end of the week.

What could go wrong? Well, the vote was held up last week by demands for votes on several other amendments, one calling for an end to the Treasury’s TARP program by year end. An extension of unemployment benefits is also rumored to be causing issues. Popular bills like this one often have other amendments added to them that might not pass otherwise, so a lot of compromising goes on.

Some New Wrinkles

In its current form, the bill would extend the tax credit to the end of April 2010. There are several proposed differences from the current tax credit:

* To qualify, a sales contract would have to be signed by April 30th and the transaction closed by June 30.
* Income limits would be increased from $75k for single people & $150k for couples, to $125k and $225k respectively.
* Buyers who have lived in their current home for the last 5 years would be eligible for up to a $6500 tax credit (or 10% of the purchase price).
* The maximum allowed home purchase price would be capped at $800,000.
* Military personnel, deployed overseas for a minimum of 90 days in 2008 or 2009, would have until April 30, 2011 to claim the tax credit.
* To combat fraud, a HUD-1 Settlement Statement will have to be attached to the tax return to secure the credit.

Stabilizing the Housing Market

The Homebuyers Tax Credit is probably the best program passed by the government since the financial meltdown started. Other measures to stabilize the economy are increasingly under fire for racking up trillions in tax payer debt, while mostly benefiting the elite on Wall Street.

More than 1.25 million taxpayers have taken advantage of the tax credit to pursue the American dream of home ownership. This has used up approximately $8.5 billion of the $13.6 billion originally set aside for the program.

Reports show home sales have increased and inventory is down. Many buyers are finding it difficult to locate a home, being outbid and outhustled.

Concerns

Even this program has its problems and detractors though. Recently, the Treasury’s Inspector General for Tax Administration, J. Russell George, told Congress that at least 19,000 filing for the credit hadn’t bought a house when they filed. Another 74,000 appear to have owned a home in the last 3 years, making them ineligible for the program. 500 plus filers for the tax credit are under 18 years old!

The IRS is pursuing criminal cases against at least a 100 offenders and is reportedly trying to audit every return where the credit is claimed this year. They’ll also be auditing themselves as Mr. George is also on record stating that they are investigating at least 53 cases of IRS employees filing illegal or inappropriate claims for the tax credit.

Many detractors are claiming that the tax credit is subsidizing housing values and just pulling forward sales that would have happened anyways.

One potential problem that the media hasn’t focused on yet, is that the tax credit may be encouraging banks to sit on foreclosed homes. Many real estate experts have pointed out that the number of foreclosures has been outpacing the number of units entering the market for some time now. Instead of putting these homes on the market to be sold, banks could be sitting on them to drive down inventory and push up prices – using bailout funds to support this endeavor. Not a lot that can be done at the “street level” about this, but surely something for our representatives to look into

Don’t Procrastinate

Hopefully, the extension of the tax credit won’t turn more buyers into procrastinators who wait until the last minute to buy. Buyers should keep in mind that finding a home isn’t like shopping for Christmas items or even a car – where their are multiple copies of the desired item.

Homes are much more unique, rarely are even two homes remotely alike. Start your search now, as it could take awhile to find what you want. When you do find it, jump on it or someone else usually will.

Reprint from Loan Survivor: www.seekingalpha.com

Cheers, Blair – Upgrade My Credit

Credit Repair Tip: Dispute the Middle Score

Credit Tip:

Let’s suppose you have a loan application pending with little time to fix the disputed items. Let me share an example of how to raise your score using this tip in a short time. A friend of mine was applying for a loan when his loan broker told him his middle score was 622. He had a 580 with TransUnion, a 622 with Equifax, and a 634 with Experian, thus his middle score was 622. Just to let you know, 620 and up is considered light to medium risk and you can get at least an FHA loan with this score.

So what was the game plan here?

Here is the free credit repair tip, since the Equifax score was the middle score, which is the most important score for measuring your creditworthiness, he started an investigation with them. In a matter of days his Equifax score temporarily increased while the items were getting investigated.

Also, since he had a Visa card with two 30 day late payments on it in the past 24 months, he called the Visa company, explained that he was in a dire situation and that his payment had been delayed a couple of times because of their pay by phone equipment, and they started an investigation internally and temporarily deleted his derogatory items. The result of these investigation was a quick boost to his credit score. His Equifax score jumped up to 650, a 28-point increase in just a couple of days. This tip worked for him.

Now keep in mind, not all credit bureaus may boost your scores when you start an investigation, their policies change regularly. But it still makes sense to at least try the above free credit repair tip to see if your score changes in your favor.

Good luck,

Blair – Upgrade My Credit

How Credit Restoration Can Help You

Credit restoration services can assist you with increasing your credit score, and help obtain and maintain a healthy credit profile. Credit restoration services can help you in rebuilding your financial stability. These services will help you to improve your credit scores by analyzing the various erroneous items in your credit reports and providing optimum solutions. Your credit reports are very crucial for your financial well-being and goals, and by understanding this, credit repair companies offer their personalized services to give you the best possible solutions.

These companies have an experienced staff that can handle your bad credit problems and provide optimum restoration plans. The credit restoration services that they offer will help you to start from the initial phase of analyzing your credit problems and then providing step by step solutions to get the job done.

Credit restoration at times can be a tedious and time-consuming process, but it doesn’t mean that credit restoration is a waste of time or money. If it is properly handled, it can be effective. However, you should be careful about what programs or services you obtain. Most people think that in the only way to restore their creditworthiness they have to pay off everything, pay their bills on time, live within their means and wait for their bad accounts to hit the point where they drop off of their credit report. Of course, the above just mentioned is the foundation of good debt management and budgeting, but what about the negative credit now? Some people just give up because the process seems impossible. They are not familiar with the credit repair techniques that professional and reputable credit restoration companies are aware of and use, and they need credit counseling to help them realize the positive outcomes that can be achieved through such services.

Basically, it is your right to dispute information that you believe is inaccurate, unverifiable, misleading or obsolete in your credit reports to get things on the right track. Credit repair companies are very familiar with your rights, and have developed through experience and education effective techniques of using the laws to your advantage and success.

-Blair and the Upgrade My Credit team

Banks Sueing Realtors Over Foreclosed Properties

Realtors Beware:

When it comes to lawsuits, real estate agents and brokers tangle mostly among themselves. But disgruntled buyers or sellers who believe they’ve been so wronged that they are willing to spend the time and money to take their realty professionals to court bring a fair number of cases. Commercial banks selling foreclosed properties seem to be doing this more often, with the increasing volume of foreclosures they have.

The vast majority of transactions go off without a hitch, at least the kind that are serious enough to wind up before a judge or jury. Moreover, the cases that are adjudicated tend to come down in favor of the defendant.

But just the fact that a deal can sometimes go so very wrong should serve as a warning to be aware of what could happen. After all, if the latest edition of “Legal Scan” tells us anything, it’s that a handful of agents and brokers either don’t know the law or don’t care to follow it.

Another “ripple”

-Blair

You Have Rights Under FCRA (The Fair Credit Reporting Act )

In 1970 Congress enacted a federal law to defend consumers from inaccuracies on their credit reports. This law is known as the Fair Credit Reporting Act or the FCRA and it was passed to protect consumers and promote the fairness, accuracy and privacy of personal information compiled by credit reporting agencies on credit reports.

The main credit reporting agencies are TransUnion, Equaifax and Experian. They are in the commerce of collecting and compiling information used for credit evaluation and other purposes.

A consumer  has the right to argue and dispute any information found on a credit report on the basis of accuracy, completeness and truthfulness. After a dispute is received the credit bureaus have 30 to 45 days to attest to the accuracy and the ownership of the disputed credit. If they are incapable to provide that substantiation within the time frame then the negative listing must be deleted from the report.

The FCRA has also set other responsibilities to the credit reporting agencies. Each year the credit bureaus must provide a free credit report to any consumer who desires one. Prior to 2003 the consumer had to pay for this report but a 2003 amendment changed this and now they must give one report each year at no fee to the consumer. If credit is denied on the foundation of information provided in the report the bureau with the negative reporting must also give a report upon request.

Oftentimes when a negative mark is disputed it is removed from the account. Under the FCRA the disputed information cannot be reinstated without the credit bureau contacting the consumer in writing.

The FCRA also defined a limit as to how long negative information can stay on a report. Usually if must be removed within 7 years from the time of delinquency with the exception being a bankruptcy that can last for 10 years and a tax lien that can remain on the report for 7 years after it is paid off.

There are estimates that as many as 40% of all disputes are not verified in the time frame. That means that up to 40% of all disputed information must be deleted before it is even checked out. A consumer can use that piece of information for their own advantage however, consumers must also be aware that fair, truthful and accurate information should stay on the report even if it is deemed negative.

A FCRA gave consumers the right to dispute inaccuracies and errors and to do the work to repair their credit. Credit repair takes time and patience but it can be accomplished by doing it yourself or by hiring a professional company that specializes in credit repair.

-Blair

No Word Yet On Extending Home Buyer Tax Credit

Interesting News:  White House Mum on Expanding Home Buyer Tax Credit
Even though industry groups are clamoring for elected officials to expand the $8,000 first-time home buyer tax credit, the White House said Tuesday it has yet to make up its mind on the issue.

-National Mortgage News

5 Things You Should Consider in Hiring a Credit Repair Company

The following is adapted from several articles:

If you’re considering credit repair services, it’s a good idea to know up front what should be expected. Most of the time people are unaware of what should be the minimum expectations from a credit repair company, and this is why they cannot judge which will be the best choice of credit repair services they can get. Lots of trustworthy companies will be able to provide a wealth of good services, but basically you need to look out for the following 5 points:

1.How fees are charged – dishonest agencies will demand their fees prior to delivering any services. This is because they will rarely deliver what they promise and they won’t get paid when you become aware that you’re being scammed. Normally, a reputable agency will charge the fees in a pre-determined pattern that charges for initial services and subsequent payment at various levels of intervention.

The charges will always reflect what services are rendered. Ensure that you research the market closely both at the regional and national level to give you an idea of.

2.Correcting mistakes in your credit report – credit repair services include correspondence with the 3 major credit bureaus, will correspond repeatedly with the three credit bureaus. until your credit report has no remaining errors.

3.Provide you with the knowledge to be financially self-reliant – you will not hire the credit repair agency for life. Therefore, you should learn a few basic things along the way. It should be included in good credit repair services to educate you in financial self management.The company will help you along until such time as you can, on your own, regularly obtain and analyze your credit report, how to get errors removed, and most importantly teach you good financial management so you can keep your credit score high.

4.Individual customization – a lot of agencies will utilize credit repair software in providing your services. However, this by itself is not enough. Each case is special and very rarely can be typeset to a pre-determined computerized service. The best credit repair services will individualize their approach for your specific needs, in spite of the usefulness of modern state-of-the-art software.

5.Never use illegal means – aboveboard credit repair services will never consider using means that aren’t legal. If there’s the least possibility that a credit repair agency is doing otherwise, get rid of it immediately!

Even though you may feel that improvement in your credit score is urgent, or need to get your credit history modified quickly to leave out items such as repossessions, bankruptcies, collections, and so on – you must understand that this cannot always happen, since each case is unique and reputable credit repair agencies are dealing with 3rd party entities out of their control. Agencies that “promise” they can do this are more often than not using illegal means, and if you knowingly accept these services, you bear some culpability if they are breaking the law. Do not let yourself get in this position.

A good company will likely provide additional services as well as those we’ve enumerated, but definitely should include these 5 points, A good way to chose an agency is through word-of-mouth recommendation from someone close you know.

If you can not do so check for references before signing on the dotted line. Never be afraid to ask questions and insist on references, until you are comfortable with the choice you are about to make!

As we have mentioned before, we at Upgrade My Credit want the best for consumers and our clients. That’s why we post stuff like this, so you will be informed, educated, and equipped to take action. Fee free to contact us with any credit questions,or…..make a comment on this blog. -Blair

As if Mortgage Origination Wasn’t Already Competitive Enough!

The following article, while not directly related to credit restoration is, nonetheless, important to our industry since a large part of our referrals come from mortgage brokers and bankers.  Even though the credit crisis is old news, it’s ripples continue to spread uncertainty and change in the marketplace. One such change is a “return” to credit unions playing a bigger and bigger role in mortgage origination, and, as seen below, adding yet another layer of competition and challenge to mortgage brokers and bankers. Time will only tell if the following is just an isolated event, and, if not, it warrants closer ties to be developed between credit unions and credit restoration companies.

We at Upgrade My Credit are always trying to stay tuned to the market so that we can bring you the best possible service.

-Blair

Mortgages: Credit Union Slashing Origination Fees
–From the Credit Union Journal

LENEXA, Kansas-TruHome Solutions is slashing 20 basis points off its mortgage origination fees for all loans funded in September and October. The CUSO said the move was prompted by its budget goals being “significantly exceeded” thanks to efficiencies and spiking lending volume. “Holding true to the cooperative model credit unions were founded on, TruHome will share its success with our clients through a reduction in origination fees,” the CUSO’s COO said. A credit union would save about $300 on a $150,000 mortgage origination with TruHome if it takes advantage of this promotion. The savings also gives CUs the chance to step up their own marketing efforts and launch short-term promotions of their own, giving them a competitive edge in a market that is competitive once again.

Read more at www.nationalmortgagenewsonline.com

Credit Tip: Stay focused

Deciding to finally launch an all out effort to repair and build your credit is a major decision. It takes a certain monetary and time commitment, and once you have begun the credit restoration process, stay focused, be patient, and don’t do anything that does not positively effect your credit, like applying for credit, or increasing your debt to limit ratio. Try not to apply for credit cards, or buy a car or anything requiring credit, UNLESS you are sure it will help your overall credit restoration goals.

2010 can be your year!

Sincerely,

Blair

This tip was brought to you by Upgrade My Credit.