THE TOP 5 FREQUENTLY ASKED QUESTIONS ABOUT THE NEW HUD SETTLEMENT STATEMENTWith the new Settlement Statements and Good Faith Estimates in full force now, there are still many questions about how to properly disclose buyer costs. Often it takes time to resolve these issues, which can delay closings. Below, please see the Top 5 Frequently Asked Questions that have been asked of our escrow associates since we began to use the new forms. Thankfully, HUD has answered these questions and their exact answers are shown below.Q: Do loan originators have to provide a price for Owner‘s title insurance on the GFE?
A: Loan originators must provide an estimate of the charge for an Owner‘s title insurance policy in Block 5, (Owner‘s title insurance) on the GFE on all purchase transactions. For non-purchase transactions, the loan originator may enter -NA- or Not Applicable in this Block.Q: What if at closing the seller is paying for a settlement service that was listed on the GFE, such as the Owner‘s title insurance policy? How is this shown on the HUD-1?
A: If the seller is paying for a service that was on the GFE, such as Owner‘s title insurance, the charge remains in the borrower‘s column on the HUD-1. A credit from the seller to the borrower to offset the charge should be listed on the first page of the HUD-1 in Lines 204-209 and Lines 506-509 respectively.Q: If an attorney prepares loan documents for a lender, where does that charge go on the HUD-1?
A: Loan document preparation done on behalf of the loan originator is a processing and administrative service in the origination of a loan and is included in the charge on Line 801 of the HUD-1, and may not be separately itemized. See 24 CFR § 3500.8(b)(1).Q: If a borrower was quoted a basic owner‘s title insurance policy, but requests an enhanced owner‘s title insurance policy or an endorsement to the owner‘s title insurance policy, should the loan originator issue a revised GFE?
A: If the borrower requests an enhanced owner‘s title insurance policy or an endorsement to an owner‘s title insurance policy after the loan originator issues the GFE, the loan originator may choose to treat such a request by the borrower as a changed circumstance. The loan originator may then choose to provide a revised GFE to the borrower to disclose the increased charges. If the increased charges do not exceed tolerances, the loan originator may opt not to issue a revised GFE.Q: What fees are to be recorded in the 800 series of the HUD-1, beginning on Line 804?
A: When the loan originator selects the settlement service provider, fees for third party settlement services that are required by the loan originator are recorded in the 800 series beginning on Line 804. These third party services and fees most often include appraisals, credit reports, flood searches, tax service, and governmental loan program charges, such as VA, FHA, Rural Housing Service, or state bond loan programs. Processing or administrative services are part of “Our origination charge” and may not be separately itemized. The HUD-1 Instructions for the 800 series explain which fees go on which lines.Proper disclosure of the GFE up front has become a critical component of getting buyers to closing on time. Last minute issues with disclosure can lead to upset and confused buyers. As long as the loan officers accurately disclose on their Good Faith Estimates, closing delays should not occur. As a tip to realtors, it is a good idea to contact the buyer’s lender the week before closing to make sure all of the proper disclosures have been made to the buyer. Not only does this help take care of the new GFE requirements, it also helps make sure that the Truth-In-Lending law does not create any issues for closing.

AFTER TROUGH, ONLY WAY IS UPCOLLEGE STATION (Real Estate Center) – Both the United States and Texas labor markets passed the trough of this Great Recession in September 2009. Texas’ job loss rate decreased from 4 percent in August 2009 to 1.5 percent in March 2010. Over the same period, the U.S. job loss rate decreased from 5 percent to 1.7 percent.

The state’s seasonally adjusted unemployment rate rose from 7 percent in March 2009 to 8.2 percent in March 2010, while the U.S. rate rose from 8.6 percent to 9.7 percent during that period.

Two Texas industries — education and health services, and leisure and hospitality — and the government sector had more jobs in March 2010 than in March 2009. Nine other industries reported net job losses over the same period.

Four Texas metro areas — College Station-Bryan, Waco, McAllen-Edinburg-Mission and Killeen-Temple-Fort Hood — experienced positive employment growth rates from March 2009 to March 2010. The employment growth rate for Brownsville-Harlingen stood at zero while 21 metro areas experienced net job losses.

The state’s actual unemployment rate in March 2010 was 8.2 percent. Amarillo had the lowest unemployment rate followed by Midland, College Station-Bryan and Lubbock.

The Center’s complete review of the Texas economy for March 2010 is available online.

Click here to watch the entire clip:

 CNN ON AUSTIN

Katie Adams, Investopedia

In a dour housing market, wouldn’t it be nice to know that your remodeling project would pay off when you went to sell the property? Remodeling Magazine evaluated the top remodeling projects, how the cost-to-value has changed since the housing market implosion, and which projects are still worth the investment. Using the magazine’s “Cost Vs. Value Report for 2008-2009,” let’s look at some of the best projects you can undertake and recoup the majority of your cost.

Upscale Projects

Siding Replacement (fiber-cement or foam-backed vinyl).

With the economic slump, home buyers aren’t being dazzled by bells and whistles as much as they are improvements that will ensure lower repair and utility bills. Although replacing current siding with fiber-cement has lost value from 2007, it still nets an astonishing 87% ROI. If you prefer a foam-backed vinyl product replacement instead, you can still look to recoup 80% of your cost.

Window Replacement (vinyl or wood)

Windows are not only an aesthetic feature. For most homeowners, they represent one of the easiest ways to lower home heating and cooling bills. By replacing your current windows with more efficient vinyl or wood ones, you can save on your utility bills, attract future home buyers and net a nearly 80% (vinyl) or 77% (wood) return on your investment.
Bathroom Remodel

Depending on the size and amenities of your desired bathroom, you could expect to pay over $50,000 to tear out walls, repair joists and wall studs, change structural elements and make major layout changes, such as switching a toilet and shower. However big the price tag, you can still expect to recoup nearly 71% of the cost (which would be $36,400 if you have a $50K bill) when you go to sell. This project increased its value since 2007, while its sister project - adding a complete bathroom - fell in value.
Major Kitchen Remodel

Kitchens are typically the most frequently used room in a home, so it makes sense that investing money here is going to pay off when it comes time to sell. While a major kitchen renovation is usually the most time-consuming and expensive home improvement job (averaging more than $110,000), it’s also one of the most profitable. Regardless of the size of your financial layout, you can expect to get a nearly 71% ROI.
Deck Addition (composite product)

With families cutting their entertainment budgets, they’re spending more time at home, so it makes sense that adding a deck (composite, not wood) is a good investment. You can plan on recouping 63% of your total job cost to boost your home’s value by nearly $24,000 if you paid the average job cost of $37,000.

While all of the mid-range projects dropped in value versus cost since 2007, there are still numerous projects that will net you a significant ROI. Here are a few of the best bets for your money:

Deck Addition (wood)

If your bank balance can’t swing the higher price tag that comes with composite decking, you may still be able to afford a wood addition on to your home. While a wood deck would cost you, on average, in the neighborhood of $10,000, the resale value it will add to your home is more than $8,600 - an 81.8% return on your investment.
Siding Replacement (vinyl)

Fiber-cement or foam-banked vinyl are often more preferable siding upgrades, but getting vinyl siding replacements instead is still a good choice. You can recoup nearly 81% of your cost which, if the job cost you more than $10,000, means you could add more than $8,200 to your home’s value.
Minor Kitchen Remodel

With belt-tightening in style, people are turning to minor kitchen improvement projects instead of major overhauls. It turns out that that choice is not only frugal, but financially wise. While major kitchen remodeling jobs can still, on average, return a nice 70% ROI for homeowners, minor kitchen remodeling jobs net an even higher 79.5% return.
Attic Bedroom

Anytime you can add bedrooms, you’re going to add to the overall value - and listed purchase price - to your home. If your attic’s dimensions allow you to convert it to a bedroom, you may want to consider investing the money to do so. You’ll add some sleeping space and net a nice 74% return when a new buyer puts your home under contract.
Basement Remodel

If you’re fortunate enough to live in an area with a water table high enough to permit basements, you should think about squeezing all the value you can out of it. By remodeling and finishing a previously-unfinished basement you can expect to get nearly 73% of your investment returned with a higher list price, come time to sell.

Conclusion

If you have savings or access to reasonably-priced credit, it’s worth it to consider home improvement projects that will produce the best return for your time and money. Make sure you work with a reputable, licensed contractor (to avoid costly errors or budget overruns), and before you undertake any project it’s a good idea to check and see if it could significantly increase your property tax bill.

While it may still make sense in the long-run to undertake the project and add overall value to your home, you may need to make a few budgetary changes so that you don’t get caught off-guard when the tax bill comes. 

Washington, November 05, 2009

The National Association of Realtors® today commended the U.S. Senate and House of Representatives for passing a bill that includes an extension and expansion of the current home buyer tax credit as an important step in ensuring a real estate and economic recovery.

“Realtors® appreciate the swift action by Congress to extend the home buyer tax credit and expand it to some current homeowners,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Real Estate in Dallas-Fort Worth. “As the leading advocate of housing and real estate issues, we urge President Obama to sign this legislation into law quickly to keep the momentum going in the fragile recovery of the nation’s housing market.”

McMillan praised the efforts of several senators to put the recovery above politics. They are Sen. Johnny Isakson, (R-Ga.); Senate Majority Leader Harry Reid (D-Nev.); Finance Committee Chairman Max Baucus (D-Mont.); Sen. Chris Dodd (D-Conn.), chairman of the Banking, Housing and Urban Affairs Committee; and Sen. Joe Lieberman (I-Conn.), chairman of the Homeland Security and Governmental Affairs Committee.

NAR economists estimate that the current tax credit has contributed approximately $22 billion to the general economy, and approximately 2 million people will take advantage of the tax credit this year.

“The substantial rise in home sales we’ve seen over the past few months proves that the tax credit is working and is being used by buyers who were waiting for the right opportunity to get into the market,” McMillan said. “This important incentive is helping to stabilize the housing market, stimulate the economy and create new jobs in communities all across our great nation. Extending and expanding the home buyer tax credit will enable even more families to take advantage of current low interest rates and affordable prices to invest in their future through homeownership.”

The bill would extend the present $8,000 tax credit for first-time home buyers through April 30, 2010. Current homeowners are eligible for a $6,500 tax credit through April 30, provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years. If potential home buyers have a binding contract on or before that date, they will have until July 1 to close the transaction.

Income limits for eligible home buyers are expanded to $125,000 for single buyers and $225,000 for couples. The purchase price of the home cannot exceed $800,000. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.

Detailed information about provisions in the tax credit legislation is available on Realtor.org.

The extension and expansion of the homebuyer tax credit is the pending business in the Senate. After a long week of negotiation on the credit, an agreement on the scope of both expansion and extension has been reached. The extension is part of a larger bill that has not yet gone to a vote, however. A Senate vote on the underlying bill will occur in the Senate during the week of November 1. The package will then go back to the House. The House is expected to accept the Senate amendments, vote on the package and send it to the President for signature. The underlying bill is an extension of unemployment benefits. Other provisions in the bill include expansion of the net operating loss carryback rules, new requirements for some tax return preparers and noncontroversial provisions that “pay for” these changes.

The agreement on the extension and expansion of the credit is as follows:

• Credit available for purchases before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.
• Credit remains at $8000 for first-time purchasers. No change to definition of first-time purchaser.
• New $6500 tax credit for repeat buyers who purchase between December 1, 2009 and May 1, 2010. Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years.
• Income limits are expanded to $125,000 on a single return and $225,000 on a joint return. Current law $20,000 phase-out retained.
• New anti-fraud limitations are imposed.

The White House has indicated that President Obama will sign the legislation.

Click here to read the entire article from US News:  FTHB TAX CREDIT

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BUSINESS WEEK ARTICLE

The following is the email that I received from Senator Kay Bailey Hutchison regarding extending the first time home buyer tax credit.  I thought you would like to see her views.

 Dear Friend:

Thank you for contacting me regarding the housing market. I welcome your thoughts and comments.

Homeownership is an essential part of the American Dream. In recent months, Congress has taken extraordinary actions to respond to the economic downturn in an effort to spur economic growth, especially in the housing market. I believe that Congress must continue to strive to improve access to affordable housing, support community development, and increase homeownership, while not imposing an undue tax burden on Americans.

In July 2008, Congress passed H.R. 3221, the Housing and Economic Recovery Act of 2008, which included a homebuyer tax credit. This allowed first-time homebuyers to claim a tax credit of 10% of the home’s value - - up to $7,500 - - for homes purchased between April 9, 2008 and June 30, 2009. Homebuyers would then repay a portion back each year over 15 years, making the credit an interest-free loan.

In February 2009, the homebuyer tax credit was revised and extended through H.R. 1, the American Recovery and Reinvestment Act of 2009. This legislation increased the available tax credit to $8,000, and extended the deadline to purchase a home to November 30, 2009. Furthermore, it stipulated that for homes bought after January 1, 2009, no repayment of the credit is required.

As the termination date of the homebuyer tax credit approaches, a number of proposals have been introduced this Congress to alter it. One such proposal, introduced by Senator Ben Cardin (D-MD) on September 16, 2009, is S. 1678, a bill that would extend the $8,000 first-time homebuyer tax credit until June 1, 2010. Another proposal is S. 1230, the Home Buyer Tax Credit Act of 2009. Introduced by Senator Johnny Isakson (R-GA) on September 10, 2009, S. 1230 would increase the homebuyer tax credit to as much as $15,000, extend the deadline to qualify for an additional year, and make it available to all homebuyers.

Both S. 1678 and S. 1230 have been referred to the Senate Committee on Finance, on which I do not serve. As Congress considers legislation to strengthen our economy and provide responsible relief to Texas homeowners come, you may be certain I will keep your views in mind.

I appreciate hearing from you, and I hope that you will not hesitate to contact me on any issue that is important to you.

Sincerely,
Kay Bailey Hutchison
United States Senator

284 Russell Senate Office Building
Washington, DC 20510
202-224-5922 (tel)
202-224-0776 (fax)
http://hutchison.senate.gov

By Jaclyn Colletti and Joel Weber, researchers 

From the moment she finds out she’s expecting, a new parent’s mind begins to construct a fantasy of the perfect place to build a nest: a community that’s safe, nurturing, stimulating, and economically sound. A neighborhood where parents reflect your values — education, health and fitness , concern for the environment — and raise their children the same way. The kind of place

where a child can slip on her rubber boots, grab her colorful umbrella, and play on the quiet,

tree-lined street outside her home without worry.

The editors of Children’s Health wanted to find where in America such places existed and

how we can make the communities we live in today more like that ideal, so we embarked on

a comprehensive statistical analysis to rank 100 noteworthy American cities scattered

across the country. We considered more than 30 factors that parents deem vitally important,

 including crime and safety, education, economics, housing, cultural attractions, and health.

 (See the criteria used.) When we crunched the numbers, these were the cities that best

complemented family life.

1. Burlington, VT
Living on Lake Champlain rewards you with more than scenic views and colorful fall foliage.

The schools’ per-pupil spending and graduation rates rank near the top of the country, as

does the percentage of the population with advanced degrees and the median family income.

 And, as is often the case, wealth leads to health — there’s less obesity here than anywhere else in the country, possibly because the city also has the fewest

fast-food restaurants per capita.  2. Madison, WI 3. Fargo, ND 4. Lincoln, NE 5. Fremont, CA 6. Lexington, KY 7. Honolulu, HI 8. Cheyenne, WY 9. Omaha, NE 10. Yonkers, NY 11. Austin, TX Click here to see the full list