The Don Edam Group | Real Estate Professionals Serving Minneapolis, Edina, St. Paul and Surrounding Suburbs

In conversations regarding the recent downturn in both the housing market and economy as a whole, its inevitable that I get the question on how this all started.  I usually think I do a pretty good job of explaining CDOs and the freezing of the credit market, but this guy blows me out of the water!  If you’ve ever wondered what the heck everyone is talking about over the past 6 months with regards to the economy, or just want a refresher course on how we got to where we are today….I invite you to check out this excellent video put together by Jonathan Jarvis for a thesis project he was working on at the Art Center College of Design in Pasedena, CA.

[vimeo]http://vimeo.com/3261363[/vimeo]

Image from www.larealestateblog.net

President Obama signed the American Recovery and Reinvestment Act of 2009 into law last week.  Of note to potential home buyers and current home owners was Section 1006, which granted an “Extension of and Increase in First-Time Homebuyer Credit” as well as a Waiver of the requirement to Repay.  Here are the details:

• The previous tax credit was given to those that purchased their first home up until July 1st, 2009.  The new extension of the tax credit replaces that date with December 1st, 2009
• The previous tax credit was $7,500.00.  The new tax credit is $8,000.00
• The previous tax credit was essentially a $7,500 loan from the government to be repaid over time.  The new tax credit is does not require that you repay (with some exceptions…generally if you sell your home within a 3 year period from purchase).
• The effective date of this tax credit is December 31st, 2008.

To get more information on the original bill that the American Recovery and Reinvestment Act of 2009 revised, we’ve linked to a previous post of ours that explains the details of the old $7,500 tax credit

If you have any questions on the $8,000 tax credit and how it impacts you as a home buyer, don’t hesitate to ask.

Related Posts:

Your $7500 Tax Rebate | H.R. 3221, the “Housing and Economic Recovery Act of 2008″ | Why You Should Care Series – Post 2

UPDATE (2/24/09): Revisions have been made to this bill with the American Recovery and Reinvestment Act of 2009.  After reading about this bill, read about the changes made here.

In this second post of our H.R. 3221, the “Housing and Economic Recovery Act of 2008″ Series, we talk about a provision included that allows most first time home-buyers to receive at $7500.00 tax rebate.  Make sure you read all the way through as there are some caveats and a TWIST.  Here are the details you need to know:

• The $7500 Tax Credit is available to firs-time home buyers that purchase a principal residence sometime after April 9th of 2008 and sometime before July 1st of 2009.
• The Credit is a “refundable” credit.  So, if you have a tax liability of $2000 next (more…)

There might be a bit of overacting in this video , but nonetheless,  if you’re interested in the latest Housing Stimulus Bill and where the National Association of Realtors stands, here’s your update…

NAR President-Elect Charles McMillan sits down with NAR Chief Lobbyist Jerry Giovaniello to discuss the importance of the Housing Stimulus legislation currently pending on Capitol Hill.

It may sound hard to believe, but one part of the mortgage market is hot: reverse mortgages. That’s giving older homeowners more options to tap the equity in their homes but also opening the door to more confusion and mistakes.

Only a year ago, homeowners interested in reverse mortgages had little to choose from beyond the plain-vanilla government-backed products that have long dominated the market. Such mortgages essentially allow homeowners at least 62 years old to sell a large chunk of their home equity back to a bank or another lender in exchange for a lump sum, monthly payments or a line of credit.

Now, nearly a dozen large banks and mortgage lenders have launched reverse-mortgage products with lower fees and larger payouts. One lender has reduced the minimum age requirement to 60; others are making loans on second homes and vacation rentals. “Jumbo” reverse mortgages, for houses valued at as much as $10 million, are becoming more common.

With a reverse mortgage, instead of the borrower making payments to the lender, the lender makes a payment or payments to the borrower. The borrower keeps control of the house and doesn’t have to repay the money as long as he or she lives there. When the homeowner dies or moves out, the loan is typically paid off by selling the house, and any money left over goes to the homeowner or the homeowner’s estate.

A better life in retirement

The product is evolving from meeting basic needs to fulfilling the desires of a new generation of retirees, from funding a vacation getaway or recreational vehicle to renting a Paris pied-à-terre. The new options, though, mean more potential for confusion among consumers and a bigger chance that they could miss out on getting the best loans for their situations. MSN’s Full Story

Listings of foreclosures on newforeclosureonline.com reveal all-time highs for country foreclosures. According to the site, numbers show that filings have nearly doubled since last year, but have leveled off in the last two months.More homeowners were reported to have lost their homes in October of this year as compared to a year ago. Nevada, California, Florida and Ohio recorded the highest foreclosure rates, experts said from New Foreclosure. New Foreclosure Online is a specialized foreclosure listing company that also provides solutions to anyone that is threatened to lose their home.

As of the end of October, 224,451 foreclosure filings were reported, up 94% from 115,568 in the same month a year ago, according to Irvine-based RealtyTrac Inc. The national average is said to be set at one foreclosure for every 555 households in October, also according to RealtyTrac, Inc. In all, 45 states saw an increase in foreclosure filings since last year.

Among the top of the list of states with increased foreclosures were Nevada, California and Florida. Nevada reported one foreclosure filing for every 154 households, earning the state the highest rate in the nation for the 10th month in a row. The state had 6,618 filings in October, nearly triple from October 2006. California’s rate beat out Nevada with one filing for every 258 households. The state reported the most foreclosure filings of any single state with 50,401, down 2 percent from September but more than triple the number from October of last year.

Florida had one foreclosure filing for every 273 households and had reported 30,190 foreclosure filings in October, down more than 9% from September, but up nearly 165% from October 2006’s total. Rounding out the states with the top 10 foreclosure filing rates in October were Georgia, Michigan, Colorado, Arizona, Indiana and Illinois. New Foreclosure Online has responded in many ways to help homeowners find better solutions.

Two and a half years ago, Zopa launched its social finance concept in the UK. Yesterday, they finally went live in the US. While the basic principle is the same—consumers lend to other people instead of banks, and both parties win—Zopa US deviates from the path taken by its British sibling.

While Zopa UK uses a number of methods to keep lenders’ money safe—extensive profiles include a potential borrower’s credit rating; risk is diversified by spreading money across a number of borrowers; Zopa works with a collection—Zopa US takes security a step further by federally insuring all funds through credit unions.

Instead of lending directly to borrowers, lenders buy a Zopa CD (certificate of deposit). To buy a Zopa CD or borrow a Zopa Loan, members need to be a member of one of Zopa’s partner credit unions. If they’re not already a member, they can sign up online. After buying a Zopa CD, the member must pick at least one borrower to help. And this is where it gets interesting: by choosing the rate at which he or she ‘helps’ a borrower, the lender controls how much lower a borrower’s monthly payments will be. APY for a CD is currently at 5.10%, with APR for the borrower ranging from 8.75% to 16.99%, depending on credit history. Feeling philanthropic? Set a lower rate for the borrower. More of a Scrooge? Keep a larger portion of the spread to yourself.

This system not only sets it apart from Zopa UK, but also from the company’s main US competitor: Prosper. Both Zopa UK and Propser let their internal market of borrowers and lenders determine the going rates, and neither offers the security of a guaranteed loan. The safer route provided by Zopa US could help it tap into the very social market of loans between family and friends: the same audience that CircleLending focused on (now Virgin Money US).

According to Online Banking Report, a research firm, roughly $100 million in new person-to-person loans will be issued this year, mostly by Prosper, with new P2P loans expected to jump to as much as $1 billion in 2010 and $9 billion in 2017 (source: Wall Street Journal). Which makes it a very interesting market to watch, or to join if you’re in financial services.

(Spotted at Springwise.com)