Real Estate Information

Freddie Mac announced Thursday, February 25 that on or about September 1, 2010, the company will cease purchasing and securitizing "interest only" mortgages--including Freddie Mac Initial Interest fixed-rate and adjustable-rate mortgages.

Interest only mortgages, including Freddie Mac initial interest mortgages, provide for interest-only payments for a specified period of time beginning with the first monthly payment after the note date, and principal and interest payments on a fully amortizing basis for the remainder of the mortgage term.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets.  Freddie Mac supports communities across the nation by providing mortgage capital to lenders. over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

The current real estate market conditions make it a perfect time for a small investor to purchase one or more foreclosure properties for their private residence, rental or resale.  During economic downturns such as these, a variety of homes go into foreclosure—including those falling into the moderate to upscale priced market. So the idea that foreclosure homes are only available in undesirable areas is inaccurate.

A current snapshot of the number of U.S. households facing foreclosure in January 2010 increased 15% from the same month last year, and a surge in cash-strapped homeowners who’ve fallen behind on mortgages could be on the way.

According to a recent report by RealtyTrac, more than 315,000 households received a foreclosure-related notice in January.  Although high, that number is down nearly 10% from 349,000 in December—the third highest total since the company began tracking foreclosure date in 2005.

In January, one in 409 homes were sent a filing—which includes default notices, scheduled foreclosure auctions and bank repossessions. The numbers could stay above that level as unemployed homeowners who have tried to keep up with their mortgages finally start missing monthly payments.

Fannie Mae, the Federal National Mortgage Association, reported in late January that the rate of borrowers who have a conventional loan on a house and are seriously delinquent was 5.29% in November—more than doubling the rate of 2.13% in November 2008. Borrowers are considered seriously delinquent if they are past due by three months or more, or are in foreclosure.

On a local level, Pitt County, Greenville, NC and surrounding areas also continue to experience a growing number of foreclosures. On Saturday, February 27, The Pistol Tingen Real Estate Team will conduct a free, educational/Q & A seminar on how to buy foreclosures as a first-time home buyer, move-up buyer or investor. The seminar is free to the public and will take place from 9am-12pm at the Prudential Prime Properties office building located at 2625 Charles Blvd., Greenville, NC.  Attendees may expect to receive current statistics, locations and prices of specific foreclosure properties, and tips on how best to find and purchase foreclosures.  Both group and individual questions will be addressed by local experienced foreclosure specialists and lenders. Space is limited and reservations for the seminar are suggested.  Please contact The Pistol Tingen Team at (252) 321-6161 for more information.

Fannie May announced on  January 28, 2010, a new incentive as part of their ongoing effort to help stabilize neighborhoods.  Specifically, the incentive allows people purchasing a Fannie Mae-owned HomePath® property to receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances.  The offer is available to any owner-occupant who closes before May 1, 2010, on the purchase of a property listed as eligible for HomePath® financing.

HomePath® Mortgage offers special financing on Fannie Mae properties.  Benefits of this type of financing include low down payments--sometimes as little as 3 percent, flexible mortgage terms, and often loan qualification with less than perfect credit.  HomePath® Mortgage financing is available from a variety of lenders—both local and national.  Since lenders may impose their own limitations on the use of the 3.5 percent incentive, buyers should consult their lenders for guidance.

Fannie Mae’s HomePath® database includes only properties that are owned by Fannie Mae.  There is a wide selection of homes—including single-family homes, condominiums and town houses located in a variety of neighborhoods.  The number, the types and the sales prices of the homes offered for sale by Fannie Mae may vary substantially.  Many of these homes are relatively new; however, older homes are offered in some areas.  Some homes may require repairs.

To purchase a Fannie Mae property, buyers must go through a real estate professional.  Fannie Mae depends on the expertise of local real estate sales professionals and accepts offers only through a Fannie Mae-certified real estate listing agent.  Individuals may work with any real estate sales professional to submit an offer to the real estate agent who has listed the property.

For over 18 years, The Pistol Tingen Team has served as the exclusive Fannie Mae-direct real estate agents for the Pitt County, Greenville, NC and closely surrounding areas. The Tingen Team welcomes and encourages questions regarding Fannie Mae properties, as well as privately owned properties currently on the market. Call 252.321.6161 with questions or to see available properties.

Who is Eligible

• First-time home buyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for a tax credit of 10% of the home purchase price, up to a maximum of $8,000. 

• Existing home owners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for a tax credit of 10% of the home purchase price, up to a maximum of $6,500.

• All U.S. citizens who file taxes are eligible to participate in the program.
Income Limits

• Home buyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000. 

• For married couples filing a joint return, the combined income limit is $225,000.

• Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit. 

• The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates

• The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010. 

 Types of Homes that Qualify

• All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.  
 

Tax Credit is Refundable

• A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

• For example:   
> A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 tax credit).  
> A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 tax credit).

• All qualified home buyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions

• The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

Homes Available in the Pitt County and Greenville, NC Area

For more information regarding The Federal Housing Tax Credit or homes available in the Pitt County or Greenville, NC area, please call The Pistol Tingen Team at (252) 321-6161.

Information provided by The National Association of Home Builders.

It's more than mere speculation--there is yet another wave of foreclosures looming. According to both the U.S. Treasury Department and Fitch Ratings, the housing market faces the prospect of a new round of foreclosures. 

Last week, Fitch Ratings released a report indicating that as hundreds of thousands of risky home loans known as option adjustable-rate mortgages scheduled to reset to significantly higher payments, more borrowers may be forced to fall behind. Fitch Ratings Credit Market Research provides market participants with data and analysis on default and recovery rates and broad credit trends in the fixed income markets. The Fitch Report covers only those mortgages that were securitized, meaning packaged into securities and resold.

Approximately 70 percent of the $189 billion in outstanding option ARMs will reset by 2011--according to the Fitch report, which would be another setback to the wavering housing market still attempting to recover from the mortgage meltdown that precipitated the financial crisis.

The unraveling of the option ARMs could be felt for years--even though they make up only 1.3 percent of the outstanding mortgages and were used by a far smaller segment of the population than subprime mortgages. Fortunately the fallout from the resets should not be as devastating as the initial market setback.

Additionally, Fitch estimates that $134 billion in option ARMs will reset in the next two years. It expects monthly payments to jump 63 percent on average, or $1,053 a month, for loans adjusting this year and next--prompting a rise in defaults and foreclosures.

Clearly, foreclosures and distressed properties will continue to plague the housing market over the next few years.

If you are interested in more information regarding foreclosures--specifically those within the Greenville, NC and Pitt County area, please contact The Pistol Tingen Team at (252) 321-6161.

Time is quickly running out for first-time home buyers to receive a tax credit of up to $8,000.  There is tremendous urgency for first-time home buyers to choose a home, put it under contract and actually close or finalize the sale immediately.

Even though the tax credit doesn't expire until November 30, today's home purchases take approximately 45 to 60 days to close as the underwriting and appraisal process is taking longer because lenders are being more cautious.  For the serious first-time buyer that means their offer really needs to be made this month or at the very latest early in October.

Real estate groups are urging Congress to extend the credit beyond its current deadline and expand the tax credit to up to $15,000. 

Legislation exists in both the Senate and the House that would expand the tax credit.  A proposal by Sen. Johnny Isakson, R-Ga., would raise the credit amount to a maximum of $15,000 for any buyer of any home over the next year.  It would remove the caps that currently apply (those limits are now $75,000 for an individual and $150,000 on couples).

"I think we've got a realistic chance of doing this," Isakson says.  "Our problem is not with the first-time home buyer, it's with the move-up buyer."

Lawrence Yun, chief economist at the National Association of Realtors, says extending or raising the tax credit would spur the housing recovery, which in turn would help bolster the economy.

Under the existing legislation, as the deadline looms, Realtors say they are seeing a market upswing in interest by first-time home buyers. 

For more information regarding the $8,000 first-time buyer tax credit or assistance purchasing a home within the Greenville, NC or Pitt County area, please call The Pistol Tingen Team at (252) 321-6161.

The National Association of Realtors announced uplifting reports for existing-home sales.  August 21, 2009, NAR released statistics revealing that for the first time in five years, existing-home sales have increased for four months in a row.

The last time sales rose for four consecutive months was June 2004, and the last time sales were higher than a year earlier was November 2005.  The National Association of Realtors includes the following in their category of existing-homes:  single-family, townhomes, condominiums and co-ops.  In total, sales rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008.

Chief economist for the NAR, Lawrence Yun, stated that he is encouraged.  "The housing market has decisively turned for the better.  A combination of first-time home buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to the higher sales," he said.  Furthermore, Yun explained, "Because price-to-income ratios have fallen below historical trends, there are more all-cash offers.  In some recovering markets like San Diego, Las Vegas, Phoenix and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint."

The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008.  Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.

If you would like specific information on the existing-home sales statistics in the Greenville, NC and Pitt County area, please contact The Pistol Tingen Real Estate Team at (252) 321-6161.

Yes, you can still take advantage of the First-Time Home Buyer Tax Credit—but time is quickly running out.  Many first-time homeowners have already benefitted from this helpful program.

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Here are some of the essential facts regarding the 2009 tax credit program that can help turn prospective first-time home buyers into first-time home owners.

Who qualifies?

First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser of his/her spouse may not have owned a residence during the three years prior to the purchase.

Which properties are eligible?

The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos and townhomes.

How much will the credit be?

The maximum allowable credit for home buyers is $8,000.  Each home buyer’s tax credit is determined by two factors:

1) The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

2) The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the buyer(s) income exceeds these limits, can he/she still get a credit?

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

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the tax credit need to be repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

If you would like more information about the $8,000 First-Time Home Buyer Tax Credit or any real estate matters, please contact The Pistol Tingen Real Estate Team at (252) 321-6161.