HERA regulations going into effect July 30th

The Housing and Economic Recovery Act (HERA) regulations are going into effect at the end of the month. Congress has designed these regulations to prevent deceptive lending practices with home mortgages. The key things to know are:

- The final truth in lending must be provided to the borrow 3 days prior to closing
- If the APR increases by more than .125 from the APR originally quoted, there is a 3 day waiting period
- The original truth in lending disclosures must be made at least 7 days before closing
- Borrowers must be presented with the appraisal on the property they are purchasing 3 days prior to closing (may be waived)

Congress has recognized that the lending side of the real estate industry has had the largest hand in putting us where we are today. This legislation is great in theory; unfortunately I foresee it slowing down transactions much more than the HVCC. As always, please contact me with questions—I’m happy to help.

Home Valuation Code of Conduct (HVCC)

Many of my clients have asked questions regarding the Home Valuation Code of Conduct (HVCC). The HVCC was designed to stop inaccurate appraisals. Fannie Mae and Freddie Mac, the creators of the HVCC, were concerned that industry professionals had some control over the appraisal values due to their relationships with the appraisals. The HVCC is designed to eliminate the contact between such professionals and home appraisers. Below is some information from the National Association of Reatlors explaining the HVCC. As always, please contact me with any questions.

"The Home Valuation Code of Conduct (HVCC) establishes standards for solicitation, selection, compensation, conflicts of interest and appraiser independence. It is effective May 1, 2009, for any mortgage that will be sold to Fannie Mae or Freddie Mac; Federal Housing Administration (FHA) and Federal Home Loan Bank (FHLB) mortgages are not covered in the agreement. Breaking News: NAR Meets with NY Attorney General's Office and FHFA to Discuss HVCC.

How HVCC Affects the Appraisal Process
REALTORS® and mortgage brokers are prohibited from selecting appraisers. Lenders may use “in house” staff appraisers to conduct appraisals. However, the loan production staff is prohibited from:
- selecting, retaining, recommending, or influencing the selection of an appraiser; and,
- conducting any substantive conversation with an appraiser or appraisal management company regarding the appraisal assignment.

For the consumer, the appraisal process has remained largely intact. However, consumers may find the process takes longer than and may be more costly than it has been in the past."

Interest rates are LOW due to Fed announcement

The Federal Reserve announced that it is planning to purchase $750 billion in mortgage-backed securities and up to $300 million in Treasuries. Because interest rates are so closely tied with mortgage-backed securities, we have seen interest rates dip unbelievably low. Freddie Mac has announced these are the lowest interest rates we've experienced in 38 years. 

Please don't hesitate to contact me with any questions you may have. I help people realize their dreams of home ownership here, in Portland, OR. I also work with a lot of investors in analyzing properties to determine what their cash flow will be as well as projected ROIs.

USDA 102% Financing for Sherwood, Newberg, Canby, and more

The USDA Guaranteed Rural Home loan program allows financing up to 102% of the appraised value on the purchase of a home. This means that the purchase price, closing costs, and the one time cost of mortgage insurance can be financed into the loan.

The United States government is doing everything it can to try to make properties affordable for buyers. My last blog post talked about the new $8000 tax credit for first time home buyers, whether or not cosigners were allowed, and answered a few other questions pertaining to the tax credit and why it's a great thing for Portland, OR home buyers.

Buyers taking advantage of the The USDA Guaranteed Rural Home loan program are still eligible for the first time home buyer tax credit. That is, if you were to buy a home today in one of the qualifying areas, you would pay nothing out of your pocket plus you would receive $8000 back next year. Essentially, you would be paid to purchase a home. Buyers with credit scores above 585 are eligible for these loans.


Qualifying homes:

• Guaranteed loans can be made on new construction or existing homes.
• Plumbing, heating, water, waste disposal, and electricity must be certified as adequate and the dwelling must be free from termites and dry rot.
• Homes must be considered modest, however no restrictions exist on the size or design of of the home
  
• Farms are ineligble
  
• Homes with in-ground pools are ineligble

Qualifying areas:

• Parts of Wilsonville, Sherwood, and Hillsboro
  
• Newberg, Canby, Gaston
• Many other rural communities, contact me with eligibility questions
  

I absolutely love helping people realize their dreams of home ownership. Whether you are an existing client or someone "just looking around," I am here to be a resource for you. Please don't hesitate to contact me with any questions, I would be happy to answer them!

Revised Tax Credit- Now $8000

As many people know, a new law was passed regarding tax credits for first time home buyers on February 19th. This new law allows first time home buyer, or those who have not had a mortgage in at least three years, the ability to receive an $8000 tax credit.

The following are a few common questions:

Q: When did this tax credit become effective and when will it terminate?
A: The tax credit is retroactive back to January 1, 2009 and terminates December 1, 2009. This means that if you bought/buy a home between January 1st and December 1st you will receive the tax credit.


Q: Do I need to pay this back?
A: No, absolutely not. This isn't a loan, this is a tax credit.


Q: What are the income limitations?
A: The FULL credit is available for individuals with a gross adjusted income of $75,000 or $150,000 for joint filers. Shoot me an email for the adjusted credit for higher earners.

Q: If I end up owing the IRS nothing, will I get a refund?
A: Yes, you will receive a check for the full $8000.

Q: Are cosigners allowed?
A: Yes, the $8000 can be allocated in anyway the purchasers see fit.

Q: What are the differences between this tax credit and the previous $7500 tax credit?
A: Please visit: http://www.realtor.org/wps/wcm/connect/b32db1004d05f6338052c5fd73e5610f/government_affairs_tax_credit_chart_021308.pdf?MOD=AJPERES&CACHEID=b32db1004d05f6338052c5fd73e5610f


If you are a first time home buyer in Portland, Oregon, buy before the end of the year! This is a golden opportunity. Interest rates are low, home prices are low, and you get $8K cash back!

FHA to introduce "Risk-Based Assesment"

Starting July 14th, HUD will be implementing changes to FHA loans that will drastically impact anyone obtaining FHA financing.

Until now, all FHA borrowers were treated virtually the same, assuming they met the minimum qualification standards. There was no specific advantage for someone with a credit credit score over someone with credit issues. That doesn't make a lot of sense, does it?

That will change with the new Risk-Based Assessment. FHA will evaluate borrowers based on their credit score, loan-to-value requested, and other factors.

As always, please don't hesitate to contact me with questions or for more information.

Rates DROPPED .5% on most loan program yesterday

According to AFX News Limited "The Federal Reserve on Tuesday slashed a key interest rate by three-fourths of a percentage point, moving aggressively to contain a credit crisis threatening to push the country into a severe recession.

The latest action brought the federal funds rate -- the interest that banks charge each other -- down to 2.25 percent, the lowest point since late 2004. It marked the second back-to-back cuts of three-fourths of a percentage point."

So what does this mean to me?

The Federal Reserve recognizes that the national housing market market is suffering. By lowering rates, the FED hopes to increase demand by enticing more buyers to buy. Although Portland isn't struggling like many other cities, this rate drop will have a positive effect on our market. As of yesterday, March 17th, interest rates have dropped .5% for most loan programs. Please contact me with any questions or for further information via my website at http://www.NathanWyllie.com or by phone at 503-502-5072