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March Dates to Remember

Inside Scoop
By Debra Shaw, Governmental Affairs

NAR’s four-point housing stimulus plan
NAR has created a four-point consumer driven plan for consideration by Congress and the new administration.

The $7500 first-time taxpayer credit should be made available to all buyers and the repayment requirements should be eliminated. Loan limits should not be reduced; making the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent would help mortgage affordability.

The Troubled Asset Relief Program should be repaired and more money should go to mortgage relief. Create a federal mortgage interest buy-down program to lower rates to 4.5 percent or lower and stabilize home prices. The proposal calls for a short-term government buy-down of mortgage rates to at least 4.5 percent or lower for a 30-year fixed rate mortgage (down from current rates of approximately 6.04 percent). This homebuyer incentive would apply to the purchase of all new and/or existing homes sold up to $1 million. There are many ways the government could decide to structure and fund this program, which could be addressed as part of the stimulus packages currently being discussed in Washington .

Banks should be prevented from dabbling in real estate brokerage and management since it would further complicate the process for homebuyers.

First-time homebuyer tax credit
The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit to first-time homebuyers that must be repaid over a 15 year time period. The credit is available on homes purchased on or after April 9, 2008 and before July 1, 2009 and is available to single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000.

The act also includes a foreclosure relief provision that allows FHA to guarantee up to $300 billion in new mortgages if lenders voluntarily agree to reduce the outstanding principal and adjust the terms to make them more affordable for borrowers. 

How North Carolina is trying to decrease foreclosures
North Carolina is one of a handful of states that is aggressively working to keep people in their homes by creating programs and new legislation.

For instance, North Carolina is a member of the State Foreclosure Prevention Working Group, which is made up of attorney generals and banking regulators from across the county. The group was created in 2007 to work in concert with mortgage groups to find ways to prevent unnecessary foreclosures.

North Carolina has also passed legislation to help curb abusive lending practices. The state requires lenders to underwrite mortgages at the fully indexed interest rate to ensure affordability after adjustment for ARM loans. Also, the “ability to repay” analysis is now required to include related costs such as property taxes and insurance. 

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