Maine Real Estate Blog

President Obama has signed the bill to extend the existing first time homebuyer tax credit and expand it to existing homeowners that have lived in their primary residence for 5 consecutive years out of the last 8 years.  I found some frequently asked questions on the changes to the homebuyers tax credit and found them to be very helpful.  These questions and answers come from the National Association of Realtors Government Affairs Division.  To review the eligibility requirements and get more info on the 2 tax credits please visit Realtor.org.

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer:    No.  Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6,500 credit.

Question: I am an existing homeowner.  On October 25, 2009, I signed a contract to purchase a new home.  I have lived in my current home for more than 5 consecutive years and am within the new income limits.   I will go to settlement on Nov. 20th.  Since President Obama has signed the bill will I qualify for the new $6,500 tax credit now or is it only good for sales closing between Dec. 1 2009 thru June 30 2010?

Answer:    Yes.  The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed).  There is no reference to the date of contract for the new credit.  The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first-time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009.  I will be covered, however, by the new income limits.  Since the new rules have been signed into law prior to my settlement date (closing date), will I be eligible for a credit?

Answer:   Yes.  The new income limitations go into effect as soon as the President signed the bill.

Question: I am an eligible existing homeowner.  I have a fair amount of equity in my home.  I have found a home with a non-negotiable price of $825,000.  Will I be able to use any of the $6,500 tax credit?

Answer:    No.  The $800,00 cap is an absolute ceiling and any purchase price over that amount makes that home buyer ineligible for any portion of the tax credit.

Question: I am an eligible first-time homebuyer.  I entered into a contract to purchase on November 1, 2009.  Do I have to go to closing before December 1?  How does the extension date affect me?

Answer:   You do not have to close before December 1st.  Since the extension has been signed, it is like the Nov 30 date deadline never existed.

Spectacular Shoreland Farms home, where you can smell the salty air of nearby Maquoit Bay. This property features a granite and cherry kitchen, hardwood floors, and a sunken living room with massive stone fireplace. Location on a dead end road offers a beautiful setting with lots of privacy.

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For More Information & A Virtual Tour!

According to the Maine Real Estate Information System, Maine’s Realtors sold 1,133 homes last month- that’s a 13.76% increase from one year ago. Home prices eased by 9.57% to a median sales price of $170,000. This price is, however, an increase over May 2009’s median sales price of $160,000.

Nationally, home sales rose .2% and sales prices were down by 15%. In New England sales dipped by 4.7% and prices were down 5.9%.

Be Wary Of Reverse Mortgages

U.S. Bank regulator, John Dugan recently spok at the American Bankers Assocaition Confrence and offered up a warning that reverse mortgages could be the next subprime mortgage product to experience rapid growth while taking advantage of a vulnerable segment of the populartion.

Dugan said that regulators are in the process of crafting guidelines to ensure that robust consumer protections are in place for reverse mortgages.  ” While reverse mortgages can provide real benefits, they also have some of the same characteristics as the riskiest types of subprime mortgages- and that should set off alarm bells”.

A reverse mortgage is a complicated loan targeted at homeowners who are a least 62 years old, and allow older Americans to live off the quity in their homes as they age.

In this type of mortage, the homeowner receives money from the lend, which does not have to be repaid as long as the borrower lives in the home.

Fannie Mae currently has about 90% of reverse home mortages as of 2008. Many large banks like Bank of America and Wells Fargo also provide them.

A great majority of reverse mortgages are insured by the FDA and pose limited risk, but a different class of reverse mortgages offer less consumer protections. Dugan fears that as the elderly American population grows, there could be a significant pickup in demand for these mortgages which bear many similarities to the type of subprime products that helped fuel the housing boom and bust.

Dugan urges consumers to be wary of these products and hopes regulators will be vigilant as well.

AUGUSTA (AP) — Maine business regulators have ordered 15 companies that promised but failed to help homeowners facing foreclosures to stop doing business in the state.

The companies, all based out of state, enticed consumers with radio, television and Internet ads promising to help them avoid foreclosure, but then took a collective $36,000 in advance fees and did not save a single home from foreclosure, Will Lund, superintendent of the Consumer Credit Protection Bureau, said Tuesday.

While many debt management companies comply with the law, the 15 companies “made false promises and then took money from desperate folks who could least afford to lose those funds,” Lund said.

Here is a list of the businesses:

Federal Loan Modification Law center; Irvine CA

United Hope Alliance Corp.; Jacksonville, FL

National Foreclosure Counseling Services; Jacksonville, FL

Hope Now Modifications; Cherry Hill, NJ

Pathway Financial Management; Stanton, CA

Law Offices of Joel L. Schwartz; Northfield, NJ

BillsMadeSimple.com, Inc; San Diego, CA

Lewis Foreclosure Mediation Services, LLC; Phoenix, AZ

Apply 2 Save, Inc.; Coeur d’Alene, ID

HelpModifyNow.com; Newport Beach, CA

Ocean View Investment Services Co.; Ft. Lauderdale, FL

FHA All Day; Boca Raton, FL

Mason Capital Group, LLC; Encino, CA

The Hall Firm; New York City, NY

Fresh Start Mortgage Assistance Solutions; Beverly Hills, CA and Clearwater, FL

Bureau of Consumer Credit Protection: www.Credit.Maine.gov.

Check out some these exciting 4th of July  events!

Bath Heritage Days- Spend the weekend enjoy historic Bath, maine. http://bathheritagedays.com

20th Annual Bethel Art Fair:  At the town green from 9:00-4:00

Antique Tractor Pull & Display:  9:30Am in Boothbay

Reading of the Declaration of Independance: Free reading at 2:00pm at Colonail Pemaquid Historic Site

Fireworks Sail with Portland Schooner Co.  8:15-10:15pm at the Maine State Pier- 207-766-2500

Eastern Prom Firepworks Portland, 9:15

Meet A Bald Eagle 11:00AM at the Maine Wildlife Park

With the credit crunch still in full swing, finding a good deal on a mortgage isn’t as easy as it once was. Many banks have tightened their lending standards and eliminated programs and many banks are no longer working with mortgage brokers.

Taking the online avenue can be tricky as well as many sites have been cited for running bait-and-switch advertisements on rates and not fully disclosing fees.

If you are currently looks for a home loan, follow these recommendations by Sarah Max of Money Magazine.

1. Take to the world wide web.

Visit sites like bankrate.com, mortgagemarvel.com and zillow.com to shop anonymously and get accurate rates.  Take this route if you know what kind of loan you[re looking for; the web should act as your starting point go get a handle on current rates and fess so that when it comes time to sit down with a bank or mortgage broker you’ll know if you’re getting a good deal.

Avoid any website that asks you for your social security number and address upfront. They might pull your credit report, which could hurt your score when you go to actually apply for the loan. 

Also make sure that all fees are clearly disclosed before you take the next step.

How to get the best deal:When you put your information into the online mortgage tool, do not estimate your income, credit score or other key facts, you won’t get an accurate rate without accurate information.

2. Go Directly to a bank

Go to the bank if you are looking for a conforming loan ( less then $417,000). Many banks have stopped underwriting jumbo loans. If you’re refinancing, call your current lend first as they may give you a bette rate to keep you as a customer.

Look out for novice loan officers, in this market, your agent must know what they are doing to keep the deal together.

To Get the Best Deal visit your local bank who’s familiar with the local market and the players in your area .

3. Call a Broker.

A good broker will help you along the way then you would navigating the lending world from your home computer.

If you’re in the market for a jumbo mortgage or financing for an investment property or you don’t fit the conforming mold, a broker will help you find a program that meets your needs.

Watch out for fees, most brokers make money on the difference between the rate you could get and the rate you actually pay and they aren’t required to disclose their cut. Look for a fee-only broker in your area at upfrontmortgagebrokers.org

How To Get The Best Deal Obtain rate and fee info from banks and web sites before talking to the broker. There are lots of brokers who want your business and are willing to help you find the best rate around.

Cumberland Charmer!

This Cumberland home is in a great neighborhood, only minutes to schools and the center of town. The home offers a wonderful flowing floor plan, wood floors and a great master suite; This home is ideal for comfortable living. The lot slopes gently and is nicely wooded & private.

Visit Our Website www.BrettDavisRealtors.com

For More Information & A Virtual Tour!

In case you missed it, Brett Davis, owner of Brett Davis Realtors was interviewed on Thursday by News Channel 8 WMTW. Click here to watch!

Wondering what to do this memorial day weekend in Maine? 

 Here are a few fun ideas!

Down East Spring Birding Festival May 22nd- May 25th

Come birding “Way Down East” over Memorial Day Weekend to Maine’s Cobscook Bay Area – “one of the important bird areas in the US”. Our great variety of habitats are home to many bird species. Bird in Moosehorn National Wildlife Refuge, Roosevelt Campobello International Park, Shackford Head and Quoddy Head State Parks, and other wildlife areas. See two dozen warblers in their breeding plumage, boreal species, and Atlantic Puffins up close and (almost) touchable. Participants find over 150 different birds each year. How many will you find? Hikes, boat trips, presentations for advanced, intermediate, and beginning birders. Your general registration fee covers most events; some events are extra charge.  www.downeastbirdfest.org For More Information

60th Anniversary Barbershop Show

FALMOUTH VALUE!

Super value on over 5 acres in Falmouth! Home is neat as a pin with hardwoood floors, new carpet, new kitchen floor, new interior doors, new garage doors and more! Beautiful lot on a dead end road with mature gardens, grapevines & fruit trees. $235,000 MLS:932236

Visit Our Website For More Information

www.BrettDavisRealtors.com

Nationally, the number of homes under contract rose for the second consecutive month and are up year over year, up 3.2% from February and 1.6% from last year.

Industry experts had expected no rise in pending home sales, so this data comes as a pleasant surprise to many. Some believe the uptick in pending homes is a direct result of the First Time Home Buyer Tax Credit that lapses in December.

Another factor may be the significat decrease nationwide in home prices, encouraging those waiting on the side lines to jump in to the market.

By Tami Luhby, CNNMoney.com senior writer  

See the article here: http://money.cnn.com/2009/04/28/news/economy/foreclosures/index.htm?postversion=2009042816

The Obama administration said Tuesday it is expanding its foreclosure prevention program to cover second mortgages and to direct more troubled borrowers to the Hope for Homeowners program.

Announced with great fanfare in mid-February, the president’s $75 billion program has gotten off to a slow start. Loan servicers only recently started taking applications and many delinquent borrowers have complained about being left in the cold because their home values have dropped or they’ve lost their jobs.

The administration is seeking to address some of the concerns by tweaking the original modification plan, which calls for adjusting eligible borrowers’ loans so monthly payments are no more than 31% of pre-tax income.

Servicers covering 75% of the nation’s mortgages are now participating in the program, which also allows some homeowners with little or no equity to refinance their mortgages, a senior administration official said Tuesday. Together, the plans are expected to help up to 9 million avoid foreclosure.

During the housing frenzy, many borrowers obtained second mortgages to allow them to put little or nothing down when buying a home. Up to half of at-risk borrowers have second liens, according to the administration.

These loans have complicated the modification process. For one thing, they add to troubled homeowners’ debt levels. Also, mortgage investors have balked at reducing payments on first mortgages when the second loan was left intact.

Under the administration’s new program, the interest rate on second mortgages will be reduced to 1% on loans where payments cover interest and principal and to 2% for interest-only loans. The government will subsidize the rate reduction, with the money going to the mortgage investor.

Servicers will be paid $500 for each modification and an additional $250 annually for three years if the borrower stays current. Borrowers can receive up to $250 per year for five years to pay down their first mortgage.

Investors can also receive a payment in exchange for extinguishing the second lien. They would receive 3 cents on the dollar for loans more than 180 days delinquent and between 4 cents and 12 cents for less delinquent loans, depending on the borrowers’ debt levels.

Servicers who join the new program must modify second loans when a borrower’s first mortgage is adjusted. It will likely take a month to implement, but it should not slow down the modifications of primary mortgages, the administration said.

“By bringing both the first lien and second lien program together, we can reduce monthly payments for borrowers and make it much more likely that they can stay in their homes,” a senior administration official said.

Also Tuesday, the administration said it is now requiring servicers to offer troubled borrowers access to Hope for Homeowners as a modification option if they qualify.

Expanding Hope for Homeowners would address one of the major holes in the original Obama foreclosure prevention plan. It helps homeowners whose homes are now worth far less than their mortgages.

Servicers had balked at participating in the Hope program because it required they reduce the mortgage principal balance to 90% of a home’s current value.

Hope for Homeowners, which began in October, is being revamped in Congress. Servicers would have to reduce the principal to 93% of the home’s value. The change would also reduce the program’s high fees, which turned off many troubled borrowers.

As an incentive to participate, servicers will be paid $2,500 for each refinancing, while lenders who originate the new loans will receive up to $1,000 a year for three years, as long as the loan remains current.

Separately, however, another pillar of the president’s plan appears to be headed for defeat this week. The Senate is not expected to pass legislation allowing bankruptcy judges to modify mortgages. The administration had sought this change to pressure servicers to modify loans before borrowers declare bankruptcy

BEAUTIFULLY RENOVATED PORTLAND HOME

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4 bedrooms and 2 full baths~ $269,900

Visit Our Website For More Information: www.BrettDavisRealtors.com

If you were eagerly awaiting the release of March’s home sale stats you were probably disappointed to see another decline in sales of existing homes.  Look closley though and you’ll find a few glimmers of hope. Inventory is declining, first time home buyers are shopping and home prices ticked upward!

Yes, nationwide home sales fell by 3% in March. However, of the buyers out there, some 53% were first time home buyers. That’s great news if you your home value is around the $200,000 mark  because that is the price range that is selling.  With lower interest rates and the first time home buyer tax incentive, first time home buyers are out in full force scooping up the deals. Now is a great time to sell if you have an entry level home.

Inventory declined a bit in March  by 1.6% which is also good news for home sellers. The fewer the homes on the market, the less competition you have.

And the last bit of good news hidden amidst all of the gloom and doom? Prices actually ticked up 4.2% in March. The national medium sales price is now $175,200, up from $168,200.

Great Location! Enjoy gardening on this quiet and peaceful property.  Miles of hiking trails from your doorstep. Full dormered cape with 3 bedrooms plus office and 2.5 baths. Featuring hardwood floors, woodstove, deck & more. All majors systems have recently been replaced. $269,900

Like a lot of home owners, you’re probably considering refinancing your home at a lower rate to save a little money however getting a low rate may actually be more difficult then you would think.

Because of the number of foreclosures, short sales and changing regulations, lenders are cutting back on the number of products they offer. They have also upped their credit requirements. To get the very best rates you will need a credit score of at least 740 and 20% equity.

If you don’t have 20% equity you can still refinance. President Obama’s housing package allows homeowners who owe as much a 105% to receive government-backed loans. To qualify for that program your original mortgage must be held by Freddie Mac or Fannie Mae. You must also prove that you can make the payments and you’ll have additional fees that tack .25% to 3% onto your rate.

Get Rid Of Your Home-Equity Loans!

Having home-equity loans and lines have become the enemy of would-be financers. Before you can close on a new loan your home-equity lender must agree to be paid after the primary loan is paid which can take at least a month.

One way around this process is to do a consolidation refi through your home-equity lender. Or submit the paperwork to your Home Equity lender before you start shopping for a primary mortgage so that you don’t have to wait around when the right rate comes along.

Shop Around

Even if you have great credit you won’t get a great rate without doing some serious shopping. That’s because every bank uses different standards for underwriting loans. You will likely get the very best rates from small local banks and credit unions.

Pay A Point Upfront

A point equals 1% of your mortgage amount and will typically buy you an eighth to a quarter of a percent point drop in your rate. Some lenders will even knock off half a percentage point for those who pay a point. If you are planning to stay in your home for at least 5 years  paying a point may be worth it.

We can recommend some great lenders- give us a call or email us!

bretteam@brettdavisrealtors.com; 207-846-0085

www.BrettDavisRealtors.com

According to guidelines published jointly by the U.S. Department of Energy and the Environmental Protection Agency, the new tax credit program applies to a range of energy saving products and, in some cases, to installation costs of those products. Credits of 30% (up to $1,500 maximum) are available not only for new windows in existing homes, but also for doors, insulation, metal and asphalt roofs, as well as certain types of space heating and water heating systems. Purchases made before the end of 2010 qualify.

In addition, a 30% credit with no maximum is available through 2016 for geothermal heat pumps, solar panels, solar water heaters, small wind energy systems and fuel cells. These credits apply to new as well as existing homes. Complete information is available at www.energystar.gov

Stu McConnell, the millwork manager at Hammond Lumber Company cautions that not all Energy Star products qualify for these credits. He advises that anyone who wants to take advantage of the new program seek additional information from an informed sales person prior to making a purchase.

Stop by a local Hammond Lumber company to find out which products qualify for the credit! www.Hammondlumber.com

Visit our website to view new homes on the market in Maine!

www.BrettDavisRealtors.com

IMMACULATE RAYMOND HOME WITH DEEDED RIGHTS TO CRESCENT LAKE!

Incredible opportunity to own a year round crescent lake home with a 20′ deeded right of way to the water. Have your own dock just steps away! Great double lot with views. Immaculate condition, move in ready. Enjoy warm summer nights on beautiful brand new 10×24 screened in porch. This is a great buy at just $200,000. This won’t last long!

Visit our website for more information: www.BrettDavisRealtors.com

The housing rescue packages created by the Obama administration is offering up $75 billion to help troubled homeowners to get new or refinanced loans, and that’s drawing a lot of attention. Unfortunately the plan  has caught the eyes of scam artists who are looking to prey on those who are most vulnerable at this time. 

Mortgage rescue scams have hit an all time high even though the number of mortgages being issued have declined. The FBI is currently investigating some 2,000 cases of fraud. That’s up 400% from just five years ago.

The FTC has also been hard at work reviewing the online & print advertising of companies offering loan modification or foreclosure services.  They have uncovered over 70 companies running suspicious ads.  The FTC currently has 5 civil cases filed including one against a company who spent over 9 millions dollars on advertising in one year alone. 

According to FTC Chairmann Jon Leibowitz, “These companies are kicking people when they’re down, charging enormous upfront fees and sabotaging homeowners who could be getting help for free. These companies are giving people false hope. They are shameless, as well as opportunistic.”

If you are a troubled homeowner CNN money’s contributer Lee Christie suggests that you ask these five questions before hiring anyone.

How much does the service cost? “You should never pay a nickel for foreclosure-prevention counseling,” said Austin King, a spokesman for the community organizer Acorn. “The companies that charge for this service are profit driven, not mission driven, and they can charge up to a couple of thousand dollars for doing an hour’s work.”

Organizations like Acorn, which has offered foreclosure counseling for 20 years, provide expert, HUD-certified caseworkers at no charge to homeowners. They’re paid with funds from the government, private foundations and lenders

How long has the organization performed foreclosure-prevention counseling? Longer, of course, is better. Counselors should be fully up to speed on how to handle the particular problems of their clients. Each case may be unique, but experienced counselors can apply what they’ve learned to other particular cases.

Not every organization has been handling foreclosure problems as long as Acorn, but if they just got into the field a few months ago, they may not yet be fully up to speed.

Does the counselor have a direct pipeline your servicer’s mortgage-modification department? Many foreclosure counselors have established working relationships with the mortgage-mitigation specialists at the lenders. These are the people authorized to offer workouts to defaulting mortgage borrowers.

If counselors are already talking to a servicer several times a week, they know what the servicer requires and what workouts are likely to be offered. Counselors also may have established personal relationships that they can leverage to negotiate on your behalf.

Of course, almost any firm trying to win your business will say they have a direct contact. So get specific. Ask if they have a written agreement with your servicer; many have put pledges to work with foreclosure counselors down on paper. You can also ask if they work with a specific person at the servicer, someone who would have the authority to make decisions on your account.

Do they have an “in” with a decision maker who can override the mortgage mitigation department?Some foreclosure counselors have a servicer’s VP for mortgage mitigation on speed dial. If they can’t get a desired outcome from the people they usually deal with, they can call the higher-ups and sometimes get them to override decisions.

Does the counselor stay with you every step of the way? Often once a client is assigned a caseworker, that person sticks with the borrower throughout the foreclosure prevention process.

That’s important. One of the problems that defaulting borrowers have in dealing directly with lenders is they tend to get bounced around from one mortgage mitigation specialist to the next. Filtering everything through a single counselor can save time, which is often in short supply for at-risk borrowers.

Keep in mind that even with the right counselor on your side, there are no guarantees for success.

“Not everyone should stay in the house,” said Marietta Rodriguez, director of National Home Ownership Programs for the community organizer NeighborWorks America.

Counselors, according to her, must ask themselves whether it is in the best financial interest of the borrower to hang on to a home. In some cases, people have to choose “the least amount of collateral damage,” she said. That can mean borrowers stop trying to keep homes they simply can’t afford under any viable plan and leaving homeownership behind

Picture Perfect Cape Cod

This beautifully updated 4 bedroom Cape Cod sets on 2 acres and is conveniently located just minutes to Route 1 and I-295 for an easy commute! The home boats lovely hardwood floors, a completely remodeled bath, a new shingled roof, new carpets, new front door, new walkway & fence!  Attractively priced at $235,000

Visit Our Website For More Information: www.BrettDavisRealtors.com

Thinking of buying a foreclosure? Here are 6 questions Realtor Magazine recommends you ask before making a deal.

Is now a good time to buy a foreclosure?

The conditions in your local market vary, so speak with a real estate agent to determine what the conditions are like in your market, and ask where they see the market heading.

What’s the first step buyers need to take?

First a buyer should be pre-approved by a mortgage broker. A buyer should also be prepared to spend more money financing the property if they are purchasing it as an investment or second home as lenders typically charge higher interest rates and require larger down payments.

How can you tell a bad foreclosure from a good one?

Not all foreclosures are a good deal. Buyers should be wary of unpaid liens, including mortgage debt, taxes, construction loans, home equity lines of credit and possibly a second or third mortgage. Any or all of these obligations could become the new buyer’s responsibility when purchasing a foreclosure. To avoid this, a buyer should stick to bank-owned REO properties only.

If I’m a qualifying borrower, can I appeal to banks for better loan terms?

Some banks are very motivated to cut a deal. If you have a good credit score, some will offer a below-market-rate loan on their bank-owned homes. Unlike paying down with points, this doesn’t cost anything.

What are the costs of buying a foreclosure?

The best opportunities are for buyers with cash. If you are considering renting out the property or reselling for a quick profit, make sure to consider carrying costs including sales commissions, marketing costs, vacancies, taxes, insurance and maintenance. Once you’ve calculated these costs add 10-15% for surprises.

How does choice of neighborhood affect foreclosure investments?

Buyers looking for a good investment should avoid neighborhoods overrun with foreclosures, especially new subdivisions in overbuilt exurban areas. They may be the areas with the steepest discounts but this is because they have the most risk for further depreciation. The best deal will be in a solid neighborhood, with good schools and transportation. If you want to make an offer on a more risky property factor the risk of falling prices into your offer.

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