Southern Oaks Mortgage's New Webpage (New and Improved!)

Check out our new and improved site:  http://www.somloans.com/
would love to hear your feedback.

Thanks,
Jeff Eisenberg
President
jeff@somloans.com
http://www.loanmanjeff.com/

Assembly Bill No. 183 - California Tax Credit $10,000 for First-Time Buyers

This information is taken right from the California State Franchise Tax Board or this link:  http://www.ftb.ca.gov/individuals/New_Home_Credit.shtmlGeneral

Information: These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. The purchase date is defined as the date escrow closes. Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010.


These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.

The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer. For example, if a taxpayer is allocated $10,000 for the New Home Credit, the $100 million cap for the New Home Credit will only be reduced by $7,000. If a taxpayer is allocated $10,000 for the First-Time Buyer Credit, the $100 million cap for the First-Time Buyer Credit will only be reduced by $5,700. The 70 and 57 percent reductions do not impact the amount that can be claimed by the taxpayer.

We will allocate the tax credits on a first-come, first-served basis.

Only one tax credit is allowed per taxpayer. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.

Taxpayers will not be eligible for either tax credit if any of the following apply:

The taxpayer was allowed a 2009 New Home Credit.

The taxpayer is under 18 years old. (A taxpayer who is married as of the date of purchase will be considered to be 18 if the spouse/registered domestic partner (RDP) of the taxpayer is 18 or older on the date of purchase.)

The taxpayer or the taxpayer’s spouse/RDP is related to the seller.

The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.

New Home Credit: A qualified principal residence, for purposes of the New Home Credit, must:

Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home. A home constructed by the taxpayer is not eligible since the home has not been "purchased."

Have never been occupied. Sellers must certify that the home has never been occupied in order for a taxpayer to receive an allocation of the credit.

Be eligible for the California property tax homeowner’s exemption.

Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

Tax credit allocation:

A Certificate of Allocation will not be issued if:

The seller does not certify the home has never been occupied.

We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.

We receive the application or reservation request after the total tax credits available have been allocated.

FTB's determination may not be protested or appealed.

First-Time Buyer Credit: A qualified principal residence, for purposes of the First-Time Buyer Credit, must:

Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home. A home constructed by the taxpayer is not eligible since the home has not been "purchased."

Be eligible for the California property tax homeowner’s exemption.

Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

A first-time buyer is any individual (and the individual’s spouse/RDP, if married on the date of purchase) who did not have an ownership interest in a principal residence, either in or out of California, during the preceding 3 year period ending on the date of the purchase of the qualified principal residence. If the buyer is married on the date of purchase and either the buyer or the buyer's spouse/RDP had an ownership interest in a principal residence during the preceding 3 year period, the buyer does not qualify for the First-Time Buyer Credit even if the spouse/RDP is not going to be on title.

Tax credit allocation:

A Certificate of Allocation will not be issued if:

We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.

We receive the application after the total tax credits available have been allocated.

FTB's determination may not be protested or appealed.

Applications: We will accept applications by fax only beginning May 1, 2010. Do not use the 2009 application. We will post more information by May 1, 2010.

Reservations: Taxpayers who qualify for the New Home Credit may, but are not required to, reserve a tax credit prior to the close of escrow. Reservations will become important as we near the $100 million cap for homes that may not close escrow before the cap is reached, as a reservation will "hold the taxpayer's place in line" until 2 weeks after escrow closes. To reserve a tax credit, the taxpayer and seller need to complete, sign, and fax to us a reservation request to certify that they have entered into an enforceable contract on or after May 1, 2010, and on or before December 31, 2010. A copy of the signed contract must be included with the reservation request. Taxpayers who reserve a tax credit still need to fax an application and a copy of the settlement statement within 2 weeks after the close of escrow. Taxpayers may not reserve a tax credit if the contract was entered into before May 1, 2010. We will post the reservation form and details about the process by May 1, 2010.

If you are only applying for the First-Time Buyer Credit, you will not be able to reserve the tax credit before escrow closes.

Claiming the tax credit:

The taxpayer must receive a Certificate of Allocation from us to claim the tax credit on their California personal income tax return. The Certificate of Allocation will state the maximum amount the taxpayer can claim listed by tax year.

The taxpayer should refer to the 2010 New Home / First-Time Buyer Credit Publication for instructions on claiming the tax credit (the publication will be available by December, 2010).

Special rules apply to married/RDP taxpayers filing separately, in which case each spouse/RDP is entitled to one-half of the tax credit, even if their ownership percentages are not equal. For 2 or more taxpayers who are not married/RDP, the tax credit amount will have already been allocated to each taxpayer occupying the residence on their respective tax credit allocation letter.

If the available tax credit exceeds the current year net tax, the unused tax credit may not be carried over to the following tax year.

The tax credit may not reduce regular tax below TMT.

The tax credit is not refundable.

Any disallowance of the tax credit may not be protested or appealed.
 
For more information, please email me at jeff@somloans.com
http://www.somloans.com/
http://www.loanmanjeff.com/

The New Good Faith Estimate for 2010!

Okay, our wonderful Government just instituted a new Good Faith Estimate that all brokers and banks have to begin using as of 1/1/2010.  This estimate is supposed to help take any confusion out of the consumers mind and help them better compare one lender with another.  Hmmmm!  Not so sure that it will work.  Basically it lumps all the fees into one and holds the broker or lender to tolerance levels.  If the fees are more than 10% of what was quoted, the broker/lender will have to eat it.  They are making us quote fees that we have no control over, like escrow, title, etc., but we are still liably.  Okay, so this is what our government wants.  We also were told not to issue a good faith estimate unless we have all six of the following items:  borrower name, social security, loan amount, property address, income and value of the property.  So don't expect to get a written good faith estimate if you are just looking for a pre-approval without a property.  We can tell you or give you something in writing that will give you a rough estimate of the closing costs, but we can't give you an actual good faith until all 6 of those items have been given.

2010 looks to be an interesting year for the mortgage industry.  Loans may take a bit longer at closing because escrow companies are required to rectify any tolerances over that 10% mark and that could delay closing.  For more information on this topic, please contact me at 661.964.2600 or email me at jeff@somloan.com.

Jeff Eisenberg
Southern Oaks Mortgage, Inc.
http://www.somloans.com/
http://www.loanmanjeff.com/
www.twitter.com/loanmanjeff

Buying a Home? New Appraisal Rules Could Impact You

In the last several years, significant changes have impacted financing for residential real estate. The issue I would like to bring to your attention today could impact the value that will be used to underwrite your loan.The Home Valuation Code of Conduct (HVCC), effective May 1, 2009, governs the way in which appraisals must be ordered for all residential real estate transactions, where the loans are sold to Fannie Mae and Freddie Mac.The purpose of this new regulation is to ensure that the value of the home - on which a mortgage is being issued - is arrived at both independently and objectively.While I have traditionally been able to order appraisals directly from local appraisers whom I know are familiar with the neighborhood or region, this legislation will prohibit this practice and will instead randomly assign an appraiser, potentially to someone not in the immediate area. The new legislation also eliminates my ability to discuss the property with the appraiser.As a result, the task of providing information that will help the appraiser arrive at an accurate value now falls upon the seller and the real estate agents involved.While your real estate agent may already be providing this assistance, I thought it would be appropriate to stress how important this becomes in light of HVCC.If any issues occur in arriving at a fair value for your home, I will work with you to resolve them. While I don't expect any problems, being prepared is always a best practice.
Sincerely,
Jeff Eisenberg
Southern Oaks Mortgage, Inc.
661.964.2600
jeff@southernoaksmortgage.com
www.somloans.com
www.loanmanjeff.com

Why are loans taking longer than 30 days?

Good question! The answer to this question is the result of lower mortgage interest rates.
A few months ago, many lenders were laying off their underwriters, processors and customer service positions due to the slow refinance market. Then the Fed decided to purchase $600 billion worth of mortgage backed securities, which put confidence into the mortgage bond market. Rates dropped considerably and everyone was racing to their broker or bank to refinance. They just weren’t prepared for this influx of new loan applications, so what happened was a slow down in underwriting files. The lenders now had to re-hire new employees and train them in order to get back up to speed. This in turn is why it was taking so long to process loans. As we speak, they are still ramping up for this mini-refinance boom we are experiencing. Good news is that I have a lender who can close a loan from start to finish in 12 business days. Call Jeff Eisenberg - President, Southern Oaks Mortgage, Inc. in Valencia at 661.964.2600

Remember to visit my website at: http://www.somloans.com/ or http://www.southernoaksmortgage.com/ and stop by my website http://www.loanmanjeff.com/ to get a copy of my new book.

Market Turmoil!

What a week it has been. The stock market took one of the largest hits in years, the mortgage bond market has deteriorated and the overall economy is looking pitiful. Friday the 10th of October, the Fannie Mae 30 yr. bond took a dramatic 109 basis point drop, which sent mortgage interest rates higher. Now that the bond has fallen far below the 200 day moving average, we are in store for some short term increases in interest rates. Ouch!

visit my site at: www.somloans.com

The Changes Just Keep Coming!

Well, guess what? Another road block. FHA just came out with a new guideline regarding the rent of your current residence. The Buy & Bail policy. If you currently own your home and want to rent it out to buy another one, in the past, you'd be able to use 90% of the rent to offset the payment so you could qualify for more. The new rule basically says, you cannot do this unless you have 75% equity in your current home, proven by an appraisal within the last 6 months or you are relocating jobs or residences out of the area. So if you are in a situation where you don't have any of these conditions met, you will have to qualify for the new home provided you can qualify with both debts against you.

visit my site at www.somloans.com

The Time Has Finally Come!

Southern Oaks Mortgage, Inc. is officially approved to originate FHA loans.

visit my site at www.somloans.com

Mortgage Market - moving in positive direction!

Mortgage Bonds are trading slightly higher and have made a break above the important ceiling of resistance at the 200-day Moving Average. A convincing break above this important barrier would signal a major trend shift towards lower rates. It is highly probable that the results of tomorrow's Jobs Report will be the deciding factor whether Mortgage Bonds can make the break above the 200-day MA or if they will be pushed back towards worse pricing. Our Jobs report strategy below lays out our thoughts.
Some good news on Productivity is helping Bond prices this morning, as productivity for the second quarter was revised higher to 4.3% from a previous reading of 2.2% and well above expectations of 3.5%. Higher productivity is good news for the economy and inflation as it shows employers are able to squeeze more output from hours being worked. And if employers can produce more goods from their existing workforce, without a need to hire or increase pay, it keeps wage-based inflation down. Within the Productivity Report, Unit labor costs -- a key inflation gauge - fell 0.5%, revised down from a gain of 1.3%, representing the biggest decrease since the third quarter of 2007. Lower Unit Labor Costs means less of a threat for wage-based inflation and this is good news for Bonds.
Initial Jobless Claims came in at 444,000, significantly higher than expectations of 420,000. And the ADP Report showed a loss of 33,000 private sector jobs, pretty much in line with expectations. After factoring in the usual 20,000 new government jobs added to the economy, the ADP Report suggests tomorrow's official Jobs Report will come in somewhere near -13,000. Expectations for tomorrow's Non-farm payrolls is -75,000.

--this comes directly from Barry Habib, The Mortgage Market Guide CEO.

Thursday, Sept. 4th - 1st Show

Sept. 4th at 10:30 am will be the 1st of 52 internet radio shows of the "Jeff Eisenberg's Mortgage Show". I will forward the URL once the show has been posted. Tomorrows topic will be the difference between a short pay and a foreclosure. Stay tuned...

Also, I'd love to hear any comments on the speech made by Republican Candidate for Vice President, Palin at the Republican Convention.

Housing in L.A. is IMPROVING!

Good news, I'm starting to see multiple offers on properties. This means more people are making offers on the same homes which helps drive up the price. I recently had a client who made an offer on a home in which 16 other offers were presented. Luckily my client got the home. I am also seeing that homes are selling much faster than before as well. All good signs!

Pay your house off in 1/3 to 1/2 the time!

Through an innovative software program, you could be debt free and own your own home outright. For more information, call me at 661.964.2600.

More on President Bush's New Bill

In the coming weeks, I will be reviewing this bill and how it will affect the general public. Please stay tuned....

President Bush's New Bill

Great News! The FHA, Fannie and Freddie limits will be permanently raised to approx. $625,000 in high cost areas, like Los Angeles and Orange County, January 1, 2009. More details to follow.