Doing the Charleston!

Over the next few months 1.4 million U.S. Census workers will be surveying the population of the country to gather demographic information about
everyone living here. As the 2010 census process begins, the Better Business Bureau (BBB)Serving Central SC & Charleston advises citizens to cooperate carefully in order to avoid becoming a victim of census-related scams.

Citizens are required by law to respond to the U.S. Census Bureau's requests for information.Census data will be used in allocation of more than $300 billion in federal funds as well as indetermining the number of Congressional representatives that each state is allowed.
"Most people are understandably cautious about giving out personal information to unsolicited phone callers or visitors, but the Census is an exception to the rule", said Jim Camp, President/CEO of the BBB of Central SC & Charleston. "Scammers know that the public is more willing to share personal data when participating in the Census, so they take advantage of this opportunity by posing as government workers to get access to personal financial information."

The BBB has been in contact with local census officials, who have urged South Carolina residents to call the Columbia Census office at (803) 239-5010 or the Charleston Census office (843) 323-4004 if they have concerns.

The BBB offers the following advice to help distinguish between bona fide Census workers and con artists:
1.  U.S. Census workers will have identification, a handheld device and a confidentiality notice. Caution: never invite strangers into your home.
2. U.S. Census workers will not ask for your Social Security number or any informationabout bank or credit card accounts.
3. U.S. Census workers will not ask you for money or say that you owe money.
4. U.S. Census workers will not harass or intimidate you.
5. U.S. Census workers will not contact you by email, only by phone, by mail or in person.
                                                                                                         For more information regarding the 2010 Census, visit the U.S. Census Bureau online atwww.census.gov.

TO THOSE OF YOU WHO PLAN TO USE AN FHA LOAN TO TAKE ADVANTGE OF THE $8000 OR $6500 HOME BUYERS TAX CREDIT, THIS IS VERY IMPORTANT NEWS!

The Federal Housing Authority (FHA) outlined mortgage loan policy changes in late January that will affect home buyers in the very near future. The new polices are meant to reduce the government group's portfolio risk and strengthen it financially overall. FHA is experiencing record-high delinquency rates on single-family mortgages. This has sent the number of claims FHA has been forced to pay out skyrocketing, and left its capital reserve fund depleted – falling below what’s required by law for the first time since the agency was formed.

What these policy changes mean are higher costs for home buyers using FHA loans, beginning in spring/early summer of this year. The new policies are more detailed in FHA’s official announcement, but the basics of the changes are:

¨    The upfront mortgage insurance premiums, collected at closing, are increasing from 1.75% to 2.25%.

¨    If a home buyer’s FICO score (credit report score) is below 580, a minimum of 10% down payment will be required, instead of the 3.5% minimum down payment homebuyers have come to expect on an FHA loan.

¨    The amount of money that sellers can kick in for homebuyers/borrowers – typically in the form of closing costs – will drop from 6 percent to 3 percent of the home’s value.

If the increase in upfront mortgage insurance premiums is a major cause of concern for you, it is worthwhile to note that FHA has asked Congress to allow it to raise the maximum annual premiums that borrowers can be charged. If allowed, it will shift some of the premium increase from up-front (paid at closing), to the monthly payments made by the borrower over the life of the loan.  FHA says this will allow it to increase needed capital reserves with less impact to the consumer. However, either way, it can possibly make or break whether a home buyer qualifies for a loan.

Homebuyers should expect underwriting to be tougher in 2010 as well.  FHA’s mission is to provide affordable financing to families that need it, but it must also manage the risk that comes with insuring lesser-quality loans. This spring, FHA approved lenders will have to assume liability for all the loans they originate and underwrite. If a lender produces an unacceptable number of bad loans, FHA can withdraw their approval as a lender nationwide, even if only one of its regional branches is at fault. As a result, even though FHA is allowing 580 FICO scores, many banks are already making 620 the minimum FICO score they will accept.

The FHA's new guidelines don't go into effect until spring (the exact date has not been announced), until then the old guidelines will apply.  If you plan to buy a home with an FHA home loan, and these new guidelines will effect your ability to do so, your #1 priority should be finding the home you want to buy, and closing on it before spring/early summer of 2010.

If I can assist you in any way toward that goal, or need more information, please don’t hesitate to contact me.

Information contained in above commentary was compiled from information on the HUD website.

Many of you may know this - the First-Time Home Buyer Tax Credit program was extended to allow Buyers who contract on a house by April 30, 2010, and close by June 30, 2010, to still receive the $8000 tax credit. What you may NOT know is that the program was also expanded to offer a tax credit to home buyers that are NOT first time home buyers. That means a lot more people can get a piece of this pie!

You could qualify for a tax credit of up to $6,500, if you previously owned a home and bought another after Nov. 6, 2009, or if you currently own a home and want to buy another before April 30, 2010. Also, the house purchased does NOT have to cost more than the house you sell. (This will be good news to those of you who are downsizing.)

The basic rules are for the $6500 tax credit are:

1. You must have lived in your home as a primary residence for at least 5 of the last 8 years

2. The home sales price can’t exceed $800,000.

3. You can't purchase the home from a parent, spouse, or child; or an entity in which they're a majority owner (IE: If the home’s title is in the name of a family business, you can’t buy it from the business.)

4. You can't acquire the home by gift or inheritance

The following rules apply for both first time homebuyers and other home buyers:

¨    You cannot have an adjusted gross income over $250,000 if you file a joint tax return, or over $125,000 if you are a single filer.

¨    You must be 18 years or older. (For a married couple, only one spouse must meet this age requirement.)

IMPORTANT NOTE:  Homebuyers who claim the credit on their 2009 tax return will not be able to file electronically, but instead will need to file a paper return. For homes purchased in 2009 there is an option to take the credit on an original or amended 2008 tax return.

Remember this is a true tax credit - it reduces a taxpayer's tax bill, or increases his or her refund, dollar for dollar, AND, it will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

If you would like to buy a house, this is absolutely one of the best times I’ve seen in my lifetime, and I’ve been doing this for 30 years.!  

You can benefit from tax credits, low interest rates, and Buyer’s market prices on homes. If there is any legitimate way you can find a way to buy a home - as the well known slogan says – just do it;  and hurry, as of Sat., 1/30/2010, you only have 90 days and counting down to get a house under contract.

Let me know if I can help you do it.

Most of you now know about the severe devastation caused by the earthquakes in Haiti. The Haitian people are suffering terribly, and they need help immediately. The National Association of REALTORS® (NAR) is helping answer the calls for help in two key ways.

First, NAR is contributing $550,000 to charities that will help bring much-needed supplies and care to the people of Haiti. Included in that sum is $100,000 donated by our REALTOR Benefits® Program partner, Lowe’s®, which we have matched at $100,000. From that we will donate $50,000 to The Harvest of Haiti, founded by REALTOR® Patrick Moore, a 2007 Good Neighbor Award winner. Patrick has done great work for several years in Haiti supporting orphans, delivering clean water and providing medical care for more than 3,500 people a year.

We are also contributing $500,000 to the Clinton Bush Haiti Fund, which is supporting earthquake recovery efforts with immediate relief and long-term support to earthquake survivors.

Second, NAR is accepting donations from REALTORS® through the REALTORS® Relief Foundation. We have earned a reputation for our compassionate work on behalf of others – both here in the United States and around the world – and continue in these efforts on many levels.

Let us take the following words to heart. “An individual has not started living until he can rise above the narrow confines of his individualistic concerns to the broader concerns of all humanity.” - Dr. Martin Luther King, Jr.

Please demonstrate your compassion by donating today through the organization of your choice, and bring hope to people who so desperately need it.

Mortgage rates dropped this morning (Thurs. 1/15/10) on weaker-than-expected Retail Sales data from December. Lower rates means more bang for your home-buying buck.

Excluding motor vehicles and parts, December's "ex-auto" sales receipts were down roughly $500 million from November. Analysts had expected receipts to grow.

The correlation between Retail Sales and home affordability isn't obvious, but it's definitely logical. Retail Sales is directly related to consumer spending and consumer spending accounts for the majority of the U.S. economy. When consumer spending slows, the economy often does, too. It leads investors to seek out "safe" investments.

It's the reason why stock markets often drop on weak economic data -- stocks are among the riskiest investment classes available. Conversely, the best place to find safety is in the market of government-backed bonds.  This world includes products like U.S. Treasuries and many of the mortgage-backed bonds that help set mortgage rates.  Weak economic data puts mortgage bonds in demand.

Mortgage interest rate shoppers will be happy;  more demand for mortgage bonds causes mortgage rates to fall.  Mortgage rates are lower today because Wall Street is shedding some risk.

December's Retail Sales report closes out a year of generally-weak data.  2009 marks just the second time that Retail Sales fell year-over-year since the government started tracking it 40 years ago.  The other year was 2008.

Home buyers around the country, this is good news - so go buy that house you want!

This week marks the beginning of mini-Vacation Season on Wall Street; be prepared for big swings in mortgage interest rates.

Mortgage pricing worsened Monday, driving mortgage rates to their highest levels since October.

The day's action was drastic, too. 

Some banks issued as many as 3 rate sheets Monday -- each worse than the preceding and one reason why rates got so bad, so quickly, is because this week marks the beginning of mini-Vacation Season on Wall Street. 

Between now and January 4, 2010, be prepared for big swings in pricing from day-to-day.  Shopping for a mortgage could be a challenge.

The relationship between vacation days and mortgage rate volatility is rooted in how mortgage rates are "made".

1. Conforming mortgage rates are based on the price of mortgage-backed bonds, a security that is sold on Wall Street
2. Mortgage-backed bonds can't sell without a bond buyer and a bond seller agreeing to a specific sale price

So, during vacation week, when the total number of market participants are less, there are fewer opportunities for buyers and sellers to meet at a specific price.  As a result, bond prices rise and fall with a higher velocity than on a "normal" day.  Rallies and momentum plays are exaggerated, too.

Now, mortgage market action like this can work in your favor, or it could work out of your favor. Unfortunately, on Monday, rates moved out of favor.

This rest of this week is stacked with market-moving economic data. The data could be better-than-expected, or worse-than-expected.  Either way, markets will react a little more feverishly than normal.

Above info is courtesy of Melissa Breeland with Residential Mrotgage of SC