FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware

Jeff

You wrote:

It would help those that owned a home, that are upside down, who sell their home, yet have no money now.

How???  How can it help the home owner that bought in 2005, paid $550,000 and now has a market value of $300,000???

The upside down home owner is the forgotten victim in this mess.

I agree with Lenn this time. Moreso, I greatly fear the opinions of our current government that we can throw money at every single thing and it will be ok. We are going to be a bankrupt nation before we know it. Sadly I think other countries see it and we are too proud to ever see it coming.

My sales are down to probably the lowest ever this year as we are in a second home market, vacation resort properties! As much as I would like to say they should print some money for those buyers as well since it was a very large growing market (second home buyers that is), I have to agree with Stve in that we need to stop printing the money. As soon as the Chinese stop buying the T Bills we are in serious trouble. If we keep going the way we are the USA might be known as The United States of China! 

Jeff, I have real mixed feelings about this one.  I don't have a single client who has benefitted from the $8000 tax credit because you need an income way above the caps to afford anything around here.  Still, I'm not crazy about the printing money aspect of it. 

LENN....  I didn't really clarify this, because I wanted to keep this short.  Hence that I will be writing about this in detail tomorrow.  I meant to say, it could help, not would help.  Sorry about that.

But yes, I agree, that the homeowner upside down is a forgotten victim in this mess. Excellent point...  and some of the talks are that those upside down, get some tax credit market also, so they can sell. But as mentioned, I will be talking about this in detail tomorrow. But a quickie...?  I currently have a client in Florida, who is upside on their house, who will be renting it out so they can down size.  By being a buyer, but not a 1st time homebuyer, this could help them... but we need to get them the money, all of it, upfront, even for the down payment. Now, this couple would actually have their 3.5%....  thanks for the feedback.

STEVE.... . Don't get me wrong, I am with you 110%.... if you have read any of my previous blogs about spending money to lower rates, to giving out this tax credit monies, etc, etc... it will hurt us and hurt us now and around the corner..  Inflation vs deflation - Is it criminal.   I will agree that when we were spending bilions on buying the mortgage rates down. that this was going to hurt us. I mentioned that here...  I need my quick fix, please pass me that 4.5% rate -  What I am trying to say is that if we are going to give this money out, to stimulate the enconomy big time, the real estate market, that we need to get the buyers the money now, and even for their full down payment. Otherwise, this will hurt us big time.  thanks

Jeff, I just posted Senator Isakson video.  How funny then to see this - anyway. I wish we could have it both ways.  I have sold several homes this year to 1st time home-buyers who didn't need the $8,000 for their down-payment because guess why? They were VA loan eligible - so the $8,000 is going into their pockets or into the home in the form of new carpet, paint, windows, ect - which I see as a benefit to the local economy.

I also have 1st time home buyers who if they had just a little more money in the bank they would be writing offers. That is why I really want to see the $8,000 approved for down-payment monies. I do not think that all individuals need to have "skin in the game". I think we have a huge population of 1st time home buyers that should be able to purchase a home with zero down that are not able to any longer because of the lack of loan programs.

Thank you Steve!!!!! Great comment. Just because this would help Realtors does not mean it's good for the country.

I'm admittedly a little out of my league here, but wanted to take a stab- 

I am happy to see them considering opening this up to non-first timers.  We need to get inventory levels down.  I wish they would open it up to investors too.  Seems that if you can get inventory off the market faster, it will speed up stablitiy and thus will indeed help the 2005 buyer.  Not immediately, but faster than without this?  Also, I am starting to hear in many markets that the first time buyer price range inventory is indeed moving at a normal pace, sometimes even to multiple offers.  It would be nice to see that next price range start to move too.  Where I live (downtown Chicago), we are seeing 1 and 2 BR condos move - but the single families are taking a beating.  Not something a first timer is typically going to buy. 

One possible downside is that non first timers usually have a house to sell too.  So if they start considering buying, we could be putting more inventory back on the market.  (thus the desire to open up to investors too)

I like Jeff's idea of some money to help with upfront costs, but also reserving some to keep skin in the game.

I would like to see it approved for downpayment monies, too.

I do think the tax credit will eventually help the upside down homeowners if prices will revive due to return of a seller's market. Not a quick fix though.

We are seeing a boatload of activity due to the credit here. It will translate into an avalanche of business in our market if it goes to 15k.

I agree with you on all points.  If this money could be used by more than just first-time homebuyers, then we'd have a real good thing going right now.  Being able to use the money as part of the down payment would just be icing.

Jeff: VA is one of the top loans here due to the high military presence on our island. I just got into contract a week ago and the VA Loan Guaranty Officer (from VA Office) sent a memo to all LO's to pass to everyone involved in the transaction that appraisals will take up to 5-6 weeks for processing. They are flooded! Another good one is the USDA Rural Housing Loan as we have plenty of 'considered' rural area housing land. One of them in the Ewa area where foreclosures and short sales are high.

I have not seen hardly any benefit from this program to date in my neck of the woods. Perhaps if it were 15k it would make more of an impact. In terms of the long term fiscal wellness of our economy, well that's a subject much bigger than my brain can comprehend. I'd just like to have a few more qualified buyers and a few more reasonable sellers so my cash flow improves. I appreciate the insights and am going to reblog this post.

I think there is a lot of misinformation floating around the RE world regarding the $8,000 Tax Credit. I know that there are currently no options for "monetization" or advances on the tax credit in Illinois. Furthermore, to the best of my understanding, these $ may not be used for downpayment, but for additionas to the downpayment, closing costs and interest rate buy downs. I think we need to be VERY careful as realtors as to the information we are passing on ! 

PS.... I will be responding to all comments slowly over the next 2 days... just too much on my plate right now. But some very good opinions and thoughts, many of which I agree with.  thanks

For those upside down homeowners who are facing forclosure the banks are taking the hit.  There should be something done to offset that but we (the United States) already owe too much money to other countries that it is a matter of tim ebefore we need to start paying them back. 

I am not looking forward to the years that lay ahead abd the unstability of our nation as a whole!

It still gets me why they limited the 8k to first time homebuyers anyways.  If they wanted it to actually get used, putting that restriction on it was kind of silly.  I think there's a lot more investors purchasing homes in this market than there are first time buyers.  I think their intent was to limit its use, and its more of a marketing (consumer confidence) play anyways.

re: printing money, that is the american way.  The USD is going the way of the Zimbabwe dollar very likely in our lifetimes.  Sad but true.

I would like to see it for everyone...especially investors. I think $15000 is too high. The $8000 has people motiivated enough... Even $5000 for investors would be huge.

I think this would be great and would help stimulate the market; we need all the help we can get.

The $8,000 has stimulated a lot of interest for me but no sales. I think if it was increasd to $15,000 and some of it was allowed to be used as a down payment then I would see it translate into sales.

Kathy

I would love to see it be open to second homes and stay at $8000.  But frankly the folks in Washington don't seem to care what the voters think.

Jeff,

I think $8,000 is enough if they would let it be used at closing.

That would work in my area for many people.

Jeff...

I wonder if the #15,000 would be better spent KEEPING families in their homes.

I agree with Sara that if this is opened to everyone, it would lead to a catch-22 of property owners trying to sell their current place if they can find a better deal and pocket the $15,000. You can't forget the main point of the incentive: to stimulate. The economy is stimulated by people spending money.

I don't have a problem with the current restrictions which limit the opportunity to first-time homebuyers because I see it is as a way of adding to the pie of property tax payers rather than just shuffling current ones around.

Jeff, nice job here.

A few quick comments.

It is clear by the people commenting that there is quite a bit of mixed feeling on the subject.  That is amazing in and of itself!  Why?? Because we have one guy wanting 5k for  investors, another one wanting 8000 for everyone, another that does want it to go to 15k, another one who wants the 8000 to stay where it is at but be okay for 2nd homes too,(though that does mean getting rid of the 1st time home buyer requirement), and not to mention that with current income levels, I highly doubt anyone would meet the requirments buying a 2nd home in a lake area..etc...

JUST TODAY< i got my FIRST CALL from a customer that actually had her "BANK" offer to give her an interest free, payment free LOAN for the 8000!  I am talking with THEM today to see how they are doing it! 

Obviously, VA,FHA, USDA we are good with all of this!  Plus, I dont think..(as we discussed in our confernce call the other day Jeff)...that consumers, and Realtors alike...as well as ALOT OF BANKERS< BANKS< CREDIT UNIONS etc...realize, that we may see the end someday soon of conventional loan financing.    When your commentors talk about the direction that the US is headed...and socialism, and government control..etc..etc..think about if you voted in the last election, who you voted for, and if you are active involving current legislation in your state or not...Whether it be through the NAR, NAMB, etc...we must all be active!  BLogs such as this create great dialog, ideas, and show us what the general consensus out there is..

In this case, nobody is really agreeing on anything but that it may be a good idea!  :)  LOL

Thanks!  Darin

I think that just the extension of tax credit to all home buyers would help a lot. That would be a good boost for home sales.

Interesting but we don't see a big impact of first time buyer tax credit yet, despite the fact that Cleveland is experiencing a very good buyers' activity and sales.People buy not because of this credit. I don't think that if it's icreased up to $15K something will change.

I also don't like an idea of using tax credit money as a down payment and believe that printing more money will hurt American economy. It recalls socialism with its idea of "free" (aka government owned and given to people by government) housing. What's next? Free medicine? Free education? Equal income to everyone? No one's rich, everyone's poor. We lived in this in Soviet Union. That was not fun at all, believe me.

I want to thank everyone for each and every comment. I am happy and ecstatic that most of us agree that printing money is not the answer. This was one of my arguments in 2008, when they came out with the $7,500 tax credit. My firm belief back then was that it wasn't going to help as many people as one would think. Now, many of the answers in this thread are validating my opinion/theory from over a year ago.

Overall... we need to step back and hit this from another angle.  As I mentioned in my blog, I will be writing about this tomorrow, a call to action, that we all can participate in. As Darin Osenberg mentioned above, I love the feedback and discussion that has evolved from this blog. And we NEEDthe gov't and the public to see this, to hear about it, and to read about it. Which is part of my call to action which will be on display tomorrow. 

As mentioned, I will be commenting to each and everyone of you later tonight and tomorrow.  Again, just too much on my plate at this time. Just wanted to check in... thanks for the feedback.

the $8000 doesnt need to be increased but all the "powers that be" need to let buyers use the money at closing -- not after -- let them use it as the 3.5% down.  Just give us a method and we will get it done.  

I think it would have been fine in the 8,000 was extended to all buyers, honestly.  I am in a market that has seen a lot of activity from the 8k for first timers. We are having less homes for them to buy, multiple offers, etc.  however the move-up buyer is struggling and would be doing much better and more of them if they got the credit as well.   I know I'd be thinking stronger about moving myself this year instead of next year, were I getting a tax credit.   

It would be awfully nice if it were usable at closing.   Many buyers that have their 3.5% don't also have the 3-6% for closing costs and many sellers don't have the equity leeway to provide that to them, even if the appraisals were cooperating with that.   And I have had many good responsible buyers that have some money but not the full 3.5% who would definitely be buying.

I think a 15k credit for all home buyers would be nice and i do believe that it would have a positive impact on the housing market.  My concern is how is the gov't going to pay for this? Below, is a link to an article that was in the Wall Street Journal this week about the recommendations that were sent to the White House and Congress. 

To obtain a copy of the Business Roundtable press release and its Housing Working Group's detailed recommendations, click here. To read an article that appeared in today's online edition of The Wall Street Journal containing an interview with Richard Smith about the Business Roundtable's recommendations and why they are crucial to jumpstarting the housing market, click here.

$8,000 is plenty of incentive. If we extended that to all buyers it would make a big difference, especially if you can use it at the table. Many sellers refuse to lower their price because they won't have the money to close on a new house if they do.

One more input will not hurt. i agree 100% with the proposed increase to $15k. The 8,000 has been nice, but I have worked in the accounting and Tax prep field for a while and I have seen a lot of abuse of the credit. I would propose it be used like the old DPA progams worked with it all happening at closing with the Title or escrow agent handling the entire transaction.  The title company could possible work with local banks like H & R Block or Jackson Hewitt works with banks for Express tax refunds.  The system could be profitable for the bank IE H&R /Jackson Hewit makes millions of the fees. The banks would just have to wait the 2-8 weeks depending on if it is a initial tax return or amended return.  

Hi Jeff,

I read this news as well.  I can think of several buyers I am working with right now who would most likely get off the fence and buy if it opened up to everyone, not just first-time homebuyers.

There's a lot of aspects to this, many of which have been discussed by the posters above.

But here's what I'm wondering:

How do our buyers know there won't be a better deal coming down the market?

The people who took advantage of the $7500 tax credit last year are disgruntled because they have to pay it back.  The people who, so far, took advantage of the $8,000 tax credit this year will end up disgruntled if they miss out on an additional $7,000.

So I just cannot help but wonder if this new proposal will push more people off the fence or keep more people on it?

I like the details, but you could be jumping the gun a little. Im always hesitant to post anything that is not official because then I have to go back. I applaud you for staying ahead of the curve but because how you word things before you get bombarded with calls for clarification.

OK! I give up....what's different about this incentive to buy that's better than what we/they used before?  I thought part of the problem that caused our current predicament was home buyers who didn't have a stake in the property?

Is this "stimulus incentive" really any different than a 0-down loan?  What's to keep the same problems from showing up again 2 years from now when the new home-owner can't keep up with his upside-down mortgage?  Please don't tell me stricter lending practices are the answer.....that only prevents about 50% of the problem-children from getting in.

Don't get me wrong, I want to sell that house to an excited buyer.  This just feels like we're kicking the can down the road to be dealt with later.

I think if they are giving a credit it should be give to ALL buyers at all incomes. Alot of property in Silver Lake and Los Feliz is way to expensive for a buyer, even a first timer, to qualify for the credit. The income limits are simply too low for this market.  In any case, if you can't use it towards the down payment, it's a little silly. Yes, some banks are allowing for bridge loans, etc. but simply changing the rules would make the process a lot simpler. I'm all for extending the program timewise as well. The cut off date will be here before we know it.

WOW!  My sister in law just missed a house because they would not come down in price but a tax credit that big would have made it possible.  I will be keeping my eys open to see if it materializes.

I find it hard to believe that the current $8,000 tax credit expires on November 31st, 2009.  Before December 1st 2009 is correct.  However, I agree with some of the other point you and others have made.  Whether or not the $8,000 tax credit should be increased to $15,000 is not a point I want to make; I believe that it would benefit everyone if it would be extended to all home buyers and not just first time home buyers.  

We would have to look at the numbers to determine if the tax credit has made on impact on the market.  Would these buyers not have purchased without the credit?  

Someone brought up a point of the "poor" homeowners who are underwater and that they should be helped. That is indeed a big problem but how many of these homeowners have used their home as a piggy bank, living beyond their means?  Those who are underwater and able to hold on to their homes are the "lucky" ones.  Those who have been reckless in their lending and spending practices or just walk away from their homes because they are underwater are getting help such as loan modifications or "free" housing (not paying their mortgage payments).

We are in this situation because of a number of different aspects from risky lending to getting rich quickly (flipping homes) all betting on an increase in Real Estate values.  There is no easy solution to this complex problem.  The days of simple mortgage options and slow and steady home value increases has long gone.

@ Carla:  You may think what you say is only "your two cents worth." 

You are probably unaware that a new tax credit law has been passed... but it's not for real estate.  It is for making comments on posts.  There is now a fifteen cent tax credit available to anyone who makes a comment on a post.

So... if you take your original two cents, and add the new "comment tax credit" of fifteen cents... your comment is now worth a total of Seventeen Cents !  What A Country !

I just do not see how the government can afford to give everyone a $15,000 tax credit to buy a home. Our deficits are getting completely out of control that will lead to rapidly escalating interest rates that means that even with a credit, people won't be able to afford their mortgage payments.

Short term, it may be good.  But long term, it will just contribute to the current problem--people owning homes that cannot afford them.  Individuals in this country need to accept responsibility for their own actions, or lack thereof.

Hey Jeff - I agree with Lenn that the upside-down homeowner is completely left out.  It is not just them, however.  As the Government muddles through the recession/depression remedies, what about the 1st time homeowners who didn't qualify in 2009 for the tax credit?  Are they "out of luck" if the new paramaters are adopted?  It's just like the government's efforts to help homeowners from being foreclosed upon.  What about all the foreclosures that happened since 2006 that actually precipitated the entire housing mess?  These people have destroyed credit and may never get squared away to buy again.  It is a very frustrating situation.  My solution is to lower interest rates and clean the slate for those that endured foreclosures and bankruptcies since 2005.  That would stimulate massive realestate sales.

Thanks for the post...another good one.

I agree with Maureen wholeheartedly.  We need to step back and look at how all these "tax credits" will affect each and every one of us, since our country is already mired in debt!  As a homeowner and a tax-payer, I am very concerned about where our government is going to get the money to start paying back all the debt we have accumulated.  Folks, it's going to come from our pockets in the form of higher taxes on EVERYTHING, higher interest rates, new taxes, and the cost of products is going to sky-rocket.  The $15,000 tax credit is actually a tax loss to the government.  Those $15,000 refund checks have to come from somewhere.....  I truly cannot understand why someone buying a house should be rewarded with a tax incentive? 

As a Realtor, a $15,000 tax credit would probably generate more business.  As a tax-payer, I don't want the government handing out any more of my tax dollars.  To be fair, every single homeowner should get a one-time $15,000 tax credit.  What do you think?

Jeff,  Do you have any thoughts about Lowering the Percentage of the Tax Credit to 3.5%.   With a maximum Dollar limit?    If they kept the 8,000 limit this would mean someone buying a 228,571 home could receive the needed down payment.   Or as another option what about FHA approving 100% Financing?  Here in Ohio, down payments are not the biggest problem that I am encountering.  The bigger problem that I see are the investor guidelines that eliminate buyers from purchasing.  I personally have a problem with the National Lenders (that are accepting other government funds) that are imposing restrictions above those required by FHA. 

I also have an issue with Buyers that are only motivated by FREE MONEY.  That free money is not really free.  It becomes a debt of every tax paying individual in this country.  I would personally like it if the Real Estate market improved tomorrow, because the more loans that I write the more money I could make, however on the other side I have to worry about the method or costs of that occurring. 

One last point for consideration, We know that the 15,000 limit was in the original proposal and that it was removed when the Tax Credit was passed.   I think we know that a number of bills are submitted, however few go that far.  I question if a number of our Legislatures are using their support of this proposal solely for the purpose of being reelected, knowing the legislation will likely not go anywhere, however their support for it will gain votes. 

Will close in asking everyone

"Are you in support for this because it will truly help the economy or it will assist our industry?" 

JFK said it best, "Ask not what your country can do for you, Ask what you can do for your Country."

At first, I liked the idea of extending it to all home buyers. But then, I thought of a man I know, who bought a house, re-financed it way over anything it was ever worth, took that money and bought land in another country.  Now, he's living on that land, and the debt has been forgiven.  Do I really want him to be able to come back and get a tax credit to do it again?  Uh...no.  The money could have been better used to keep folks in their home while they're between jobs.

For what my experience in my market is worth, the $8k tax credit has not instilled urgency to buy in any of the first time buyers I've seen in the last few months.  Every one of them has said, "Yea, we know about it.  We sure are going to buy before November."  I hear those comments all the time, they indicate to me lack of cash.  None of the first time buyers I've been trying to work with has stepped up to write.

My alternative to more tax credits to help the housing market?  How about this.  Start passing some of this money out to cities and counties to help knock down homes.  My area, St. Louis/St. Louis County, MO, has many areas of town with homes that were put up in the ten years after the Second War, poorly built, poorly maintained, barely able to get through one more ownership cycle.  If these homes have gotten near lot value, help these cities buy them from the banks, and knock them down.  Do this and maybe this 4 or 5 year glut of unsold homes will decline and home values might start to stabilize.  Also, neighborhoods would be better without the derelict homes that no longer are liveable.  

Jeff ... Thanks for this post and more discussion about whether we should have the $8k tax break extended beyond Nov. 30, 09, and whether that should be allowed to be used for closings costs, whether that should be allowed for use on the FHA 3.5% down (which is not not allowed), and whether the credit should be increased to $15K.

I also am not in favor of the US govt printing more money. On the other hand, we are talking about tax credits (not give away money), which would used to encourage home purchase and investment.

Let's support this concept of income tax credits as incentives for buyers, so that we can boost business, real estate, and encourage private industry to make money and add employees.

IMO if banks just allowed current owners to refinance at the current market value of the problem this would go away. The negative equity would go away.

But, hey it's Friday and I'm dreaming.

I think  no matter how much but if they give the Tax credit for every body it will incourage investors to invest in housing market.. may be i am wrong .... 

I would like to see the tax credit used as down payment. Out market is slow and anything would help

buyers get started.

Getting that next price range moving would be awesome, and would help everyone in the long run. 

Hi Jeff, I don't buy it. It is yet another step in social re-engineering plan. The way to change hearts and minds and put people on the dole. Business will increase, we will all benefit and we will all be then a part of the longer nightmare ahead. It sure is tempting isn't it and just as it is intended to be. Spread it around and make everyone seem happy. There is a price that most won't like ahead and it will be most likely be onerous. I would guess that reminding people that we need to be careful what we wish for, we might get it.

Jeff: This is very interesting.. thank you for keepind us posted on these things.

I think the next and last step should be to allow the first time home buyer, in some way, to use the $8000.00 as their down payment. Whatever the IRS and HUD have to agree and arrange make it happen. Getting the first time buyers ABLE to buy is enough. That is all the Gov't should do, no more. The cycle will work it's way through, give it time.

RICK aka Pocono Mountain..... I am sure most of us would love to see the gov't print money and give it to different sections of the country, to help spark all types of sales.  But as you & Steve mentioned, in which I have blogged about many times, we need to stop printing the money like it's a waterfall.  In my opinion, it will hurt us now and later... and later, and more later into the future.  thanks

PATRICIA.....  if anyone remembers my comments and statements on those blogs that talked about the $7,500 tax credit, I was against it for several reasons. And I ticked some people off....  but people didn't understand that you still needed your own money upfront and that this was going to cost the tax payers money. Now, my stance is... hell, give more money?  But why not have the borrower pay it back over time. I could live with this part.  Let's give money to proven/qualified investors then....  I will be writing more about this in my call to action.

JO.... . you make most of my point that I will be talking about in a few days. There are many people that don't have the full down payment, that could use assistance. If we want to see this housing market BOOM and possibly help correct our economic situation, we need to find a way to help these people with the down payment. My argument?  If we are giving them a tax credit, find a way to let them use it for their down payment. It sounds simple, but makes you wonder what they do on Capital Hill.

JOHN......  that would be my same argument. I have heard some realtors say... my business is flourishing because of this.  Which first off, I would think differently. If you truly dissect this with the client, this can't be the main reason why they are jumping off the fence... in my opinion.  But does that realtor realize that this could hurt us a lot more than by putting dollars in their pocket now?  thanks

SARA.... .  don't ever sell yourself short, because your comment is half spot on in what I will be talking about in my "call to action" shortly.  What is a great way to get rid of inventory and foreclosures?  Attract buyers into these homes.  How can we do this?  I have several ideas that I will be sharing sometime soon, in that call to action.  thanks for your input and feedback.

DAWN.....  I agree, that we need to see this money approved for down payments also...  I could see how 15k would get more people out there.  But here is one main problem that you aren't looking at. If these people need that money upfront and they are a first time homebuyer, they need the 3.5%, at least that, as their own money.  If they aren't a first time homebuyer, unless the lender is giving them some sort of loan upfront, they won't be able to get this through the state agencies, because those programs are only for the first time homebuyers.  So just curious, how would 15 k push more people out there to buy, when the 8k has only done a little.  PS.. we need to define a little... because some people are saying a lot.  A lot to me would be a half a million people, which it's only about a 1/4 percent of that.. I would think.  thanks

JIM & MARIA......  I think most of us would agree on those statements. Some still say that you should have skin in the game and I will argue that all day Looooonnnnggggg....  We can always look at how the VA and USDA loans are performing.  It comes down to how relaxed lending guidelines are and were once...  but people and the gov't want to hear what they want to hear. At least this is my opinion.  thanks

Jeff~ thanks for this post and for the discussion it has engendered...I am wondering your (all) opinion. Possibly...would this help the housing market recover? really???

Great information and discussion Jeff. I think the 8k credit has made a real impact on activity in my area. I can not see why the additional funding would not help.

I would like to see the changes because there are certain segments of my market that are not moving and this might help. However, I do not feel we should be allowing it to be used as anything but a tax credit. If that means some people cannot buy today, but instead have to save for a while longer then so be it. I only feel that way because I do not think the no or low down payment problems of the past should be revisited.

The problems with banks not responding in a timely manner to short sales, offers on foreclosed homes, and the lackluster efforts of banks to work with distressed homeowners should also be addressed. And laws should be put in place to protect distressed homeowners from the scam artists that have popped up to prey on homeowners needing help.

I would love to see the $15,000 credit for all buyer's. I would be able to buy an investment property and then sock the $15,000 back into my retirement account that lost 45% last year. It would really help me in the long run as I will be eligible for Social Security in just three years. Thank God it only costs me $25.00 for a round of golf with a cart!

SALLY..... .  I will agree and so many others that both VA and USDA loans are very good programs. Too many people just assumed that no skin in the game, that you are a greater risk. Yes, this has some validity, but with those that had credit scores under 600. Not saying all under 600 would be the same, just that the risk is higher. I am going to try and make more people aware of this, in my call to action tomorrow.  thanks

RONNIE...... in my opinion, 8k or 15 k should not make a big difference for first time homebuyers. They still need 3.5% of their own money. Now, if they open this up to 2nd time buyers, sure, this could help. But if they are underwater, how will this help them?  They would need to find a source to get the money upfront... and they still would need 3.5% of their own money.  This seems to be the main problem.

BRAD.... . you are mostly correct in that comment.  There are some sources to give the money upfront, but it's not clear and very few. And there are some strict guidelines from the states on these programs to get the money upfront. But yes, I believe it starts with being able to use this money as your down payment also. This is the main problem as I see it.  thanks

BRIDGET.... . I agree, that there should be a program for those upside down. But here is the problem that I have with those people. If they bought the house 2 years ago, with a payment that they know about....  who cares if they are upside down. Buying homes is an investment and you live in it and you grow with your family within your home. Meaning... I think so many bought hoping that they would increase their value and sell and buy higher.  Then you have those that are upside down that can't afford the payment now, yet they need to sell.  These are the people that we need to help.  But another problem with this... how do you truly determine this?  Who would be faking this, just to get out from under a loss?  Some major concerns that I have.   But yes, overall, I am very afraid of our future.  thanks

NATHAN... . well, I wouldn't go as far as to say that there are more investors buying homes than those buying as a primary borrower. But I will agree that it could open up the flood gates and possibly help our economy, if we allowed investors to get some of this help.  This is something that I will be writing about in my call to action tomorrow.   thanks

CHUCK.... . I like your line of thinking, which is part of my outline for my call to action, that I want to share with the government and the media.  Hopefully you will see this from me in a day or so.  thanks

PAT..... are you saying that the 15k over the 8 k would help stimulate the economy?  Or just opening it up to others,other than to 1st time homebuyers?   I truly don't think 15 k would stimulate the economy.  Here is one reason... who will be paying for this?  We will, the tax payers.  But I will talk about this in my call to action tomorrow.  In regards to needing some help, I would agree with that.  But we need to be careful on how we help and how much money that we print for this help.  I believe a lot of this would back fire on us then.  thanks

KATHY.... . there will always be interest, because people just hope. I don't think it should be increased to 15 k, but that the 8k now, should be allowed to be applied towards the 3.5% part of the down payment. As mentioned to so many others, I will be writing about this in my call to action tomorrow.  thanks

I'm not seeing any difference. $7500 with no takers so let's make it $8000.  Still no takers so let's make it $15,000 and throw the rules out the window!  I just don't have any faith anymore in the master plan.

How many times must we read the $8,000.00 tax credit can you be used on the front end of a home purchase?

I have received e-mails from REALTORs who have read or heard some government official declaring the $8,000.00 can be used. As of this date it CANNOT! Wishful thinking does not make it so.

I am so far to the right that I make Rush look a little pink, but this is a far better solution than dumping of Billions into the banks and other financial industries.  Has one dime of TARP been spent on toxic assets?  This solution is cheaper than anything else they have tried and it is directed at common people.  Most of them taxpayers.  Now would it be better for the government to stop spending all this money and cut taxes like crazy, you bet it would.  This is the closet thing to a tax cut we are going to get.  Are all you that are against this also willing to do away with the mortgage interest deduction?

Jeff. Where did you hear about this? Is it speculation or a true possibility?

Great, just another rip off of the hard working taxpayers out there to bail out the fat cats that can't sell their underwater homes.  What a bunch of jerks! It wasn't bad enough that congress is just giving $8000 to people that did not earn it, that seems like a good use of PUBLIC resources! So, the people that already own a home, worked hard and struggled for years and payed their taxes get hosed again.  Sounds like business as usual.  Gene, you are right on.  We should get rid of all those money robbing mortgage interest deductions, subsidies, and tax policies that distort the market.  Don't see it happening anytime soon unfortunately, look at this mess they are proposing!  Of course you realors should be happy, the rest of the country will be putting money in your pockets, have fun with it while you can, it can't last forever.   

I would be surprised if the tax credit gets extended at all.  And even more surprised if it gets raised to $15K and be available to all.  When it came out originally, it should have been available to all !  I think now with the economy showing signs of life that I do not know if the Govt can do more stimulus.  The stock market is already up dramatically off the lows and Bernanke is talking about "recession is over" .  It may be risky to have additional stimulus.  The better approach would have been to have more serious stimulus towards the housing market in the beginning.  ~ Chris

Jeff, the State of Washington passed in its last budget a provision to come up with a bridge loan type of product for this tax credit - I was so excited! I even went and purchase a domain name and started a specail blog for information.  taxcreditadvantageloanprogram.com to assist those wanting more information. Well, on June 10th because of all the rigamaroll with HUD the State of Washington Housing Commission has now pulled plans to continue. I am so tired of all the political mumbojumbo! So much for trying to work this program.  I am just fed up!

Tax credits have been a motivational force in the past.  Use in the right way can be productive. 

I'm still waiting for sound productive responses to the financial crisis.  Tax credits would get some buyers of the fence by it not the solution.

Bailouts are Cancer and Bankruptcy is the cure.  To big to fail is a destructive myth.  I'm hopeful we will have some sound rational responses based in what's in the best interest of the country as a whole.

Jeff, Thanks for the information and the interesting conversation about this!  I will definitely be reading whatever you write to keep updated and informed.

I think some combination of the ideas of Missy & Scott would be the most sensible, but hey!  it is government, isn't it?  ...so I don't expect a really sensible solution to just about anything, especially from this administration.  We are soooo in trouble for a while to come.

And to Gene:  I'm right there with you! You said it so well!

NY is looking to add $7000 to the deal. It is still in the talking stage. I do see buyers out looking because of it.

TAMMY.....  I would like to see a few things, but in all honesty, all it does in regards to opening this up to second homes is puts more money in realtors pockets.  Sure, it gives someone a chance to acquire a 2ndproperty....  but I know many that try to buy an investment property as a second home.  In my opinion, there is not need to give a tax credit to 2nd homes.  Possibly to those buying investment properties though, which I will talk about this later.  thanks

BRENDA.....  I would agree, that $8,000 is enough. And they do allow it at closing, that's if you can get it from a source. I do agree that the gov't should allow for it to be used for your down payment. But that final call is a combination of FHA or Fannie Mae & the gov't approving this.  thanks

RICHARD.... .  I would this would help some, keeping families in a property. But you know how many people that I have talked to that just won't to leave their current home just because they are underwater?  Many... I think we would need to screen these people a lot harder. But again, wouldn't this take more time & money?

RYAN.... you make some great points.  AndI agree, people would just buy a new home, rent their current one, just so they could get $15,000. If they could spend 3.5% for the down payment, get the seller to pay 6% of the closing costs, that buyer could then pocket $15,000 2 months after closing. So, on a $250,000, the buyer could possibly get into the house initially with $8,750 and then pocket $6,250. Depending on where andhow they spend it, how would it stimulate us?  Many would argue against this thought.  thanks

DARIN.... .   agree or disagree, what irks me are those that think low rates and these major tax credits are just okay, that it will stimulate the economy... but that so many forget that we will pay for a lot of this down the road, sooner than later.  I hope to have my call to action blog out by tomorrow, explaining some more of this and what we can do.

Overall, yes, there were many different variations and different answers.  Maybe there is no right or wrong answers, but I think some of these commenter's answers aren't properly thought out. Meaning, are we just like the gov't?  brain washing ourselves, telling everyone that it will work.  Isn't that called HOPE?  I am tired of hope. We need to actually make a change by using common sense, not by hope or by crossing our fingers.  And thanks for the polite compliments...

SVETLANA.....  I think it would help some more, but not a lot. Define a lot...  Seriously, in my opinion, is 2 a lot?  Or is 2,000 a lot?  The gov't throws numbers out there and the biggest number is that it will help a lot of people.  To me, that is misinformation.  Not saying that you are saying this... just the gov't.  Why won't it help as much?  You need your own money for the down payment first, before you can use the other money. Those upside down?  Won't have that much money in many cases also.  Just my opinion.  thanks

JENNIFER.... .  I agree with most or your statement and I think so many people commenting, miss this point and don't truly understand... that you can't get this money, now or later, not until you have at least 3.5% of your own money.  I will be writing about this in my call to action blog tomorrow.  Thanks for your input.

Hold the money!  $8,000 for first time homebuyers is great.  It HAS motivated people to buy.  Let's just keep that going beyond November.  $15,000 for FTHB or $5,000 for investors will be an unnecessary burdon on our country that Steve Kappre is correct in saying is heading toward BK.  We cannot bail out everyone that has failed or give them money to see if they can succeed.

What would be nice is to see common sense and logic back in the industry.  This back pedaling and trying to re-invent the system is creating havoc and paranoia.  

I just want to get the deals done without a blood test to make sure the borrower is who they say they are and they are the person earning the money the pay stub is made out to.

Good stuff on this, Jeff. I guess the real question is what is the desired effect of the tax credit? The current credit rewards those who are in the right place at the right time; this proposal would go beyond that, but it would likely push homeownership to a level that may not be sustainable. Let's see what happens!

Thanks,
Dan

Jeff, had to followup.

I met with a new customer today.  10% down, her CREDIT UNION Is offering her a no interest, no payment loan,for the 8000 tax credit.  ONLY IF SHE DOES THE LOAN THERE THOUGH!  My rate at the same closing costs is .375% better than her credit union!  Talk about holding hostage!  I told her the 8k is going to do THAT MUCH for her payment anyway...get the credit, take the money, put it in the "rainy day" fund for repairs and improvements on the house!!!  She agreed! 15k however, would have gotten rid of her PMI, and def lowerd her payment...That is a HUGE difference maker then!!  Most of the time though..I am with you..this is one of them as well!

Just my TAAHC!  :)

Darin

Jeff: Thanks. I don't think the $15,000 credit will stick. In fact, I wouldn't be surprised if they don't come up with something after the $8000 credit expires. Eventually our government needs to stop propping things up and let the market go on its own. It appears the real estate market is slowly recovering and you have to wonder if it would have started without all the artificial incentives. It may have taken longer but I'll bet we'd still get to the same place. Plus, we wouldn't have a lifetime of debt to pay back. We shall see what happens! Thanks again!

Just wondering what your thoughts are on if they will extend the tax credit. We are first time home buyers and want to take advantage of the $8,000. However, we don't know if we will be quite ready before Dec. 1st. That bill that you said was introduced on June 10th...do you know if they are even discussing? And when would we know anything on it?

Thanks!

How does this help people like me who purchased in April of 2008? I have to pay back the 7500 tax credit they gave me at that time. Since i purchased my house everything has gone up except my home value. I tried to refinance under your (i did not vote for him) great and fearless leaders proposed stimulus package and was told i don't qualify. I have had a newborn since then and a wife out of work and i am barely holding a roof over our heads. As usual, the middle class in this country suffers. The rich get richer and the poor get help. The middle class is becoming an endangered species. Most all of these politicians who are put in office are crooks and lie to the public everyday. Misappropriating and mismanaging funds and making their wallets fatter on my back is really starting to piss me off. We the American people just sit back and take their crap like the jerks we are. Especially the middle class!

I read here (http://www.savingtoinvest.com/2009/09/2010-first-time-homebuyer-credit.html) the credit is being extended to April 2010 (no increase) and will be phased out by year end. This is not the news I was looking for as wanted the 15K increase!

GAIL....  comment # 79....  first off, it does not say the credit is being extended. The very first sentence up top reads :Senate Likely to Extend and Gradually Reduce Homebuyer Credit in 2010

Sure, it might go through, but you are assuming. And this is how misinformation gets around.  thanks  PS... why would you want the 15k increase?  Can you please explain why $8,000 is just not enough?  Did you read this blog post?  thanks

First time homebuyers tax credit - Who is frauding who?? - Possible extension?

Congress is kicking around several ideas and different ways to roll out an extension.

As you can imagine. there are some big hurdles with all of the fraud. Many people took the credit early in anticipation of buying this year. <= Because they didn't have enough money for a down payment in their savings account! <=These people should never have bought a house.

Irresponsible borrowers have cost this industry greatly. Saving for a down payment and living well within your means with a rainy day fund just doesn't happen anymore.