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The Expanded First-Time Home Buyer Tax Credit: 10 Common Questions (and Answers)
Tweet Share on Facebook June 8, 2009 Comment (12)In late May, Uncle Sam rolled out a policy change that provided home buyers with expedited access to a recently-enacted tax credit worth up to $8,000. The change allows home buyers to put this tax incentive toward closing costs or part of their down payment, instead of waiting until after tax season to get their hands on the funds. But while helpful, the program to "monetize" the tax credit can be puzzling to consumers. In an effort to help consumers better understand how the program works--and how they can take advantage of it--the National Association of Home Builders has released the following "FAQ on Monetization:"
[See The $8,000 First-Time Home Buyer Tax Credit Program Expands: 5 Things to Know]
1. What exactly does “monetizing” the tax credit mean?
The term “monetization” is defined as the act of converting something into money. In the context of the first time-home buyer tax credit, monetization means to treat the payment of the credit as if it was cash and allow its use as a payment for certain closing and downpayment expenses.
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Mortgage-Rate Jump Undercuts Refinancing Demand
Tweet Share on Facebook June 4, 2009 CommentAs expected, the recent spike in mortgage rates is taking a bite out of refinancing demand. Average rates for 30-year fixed mortgages jumped to 5.25 percent for the week ending May 29, from 4.81 percent in the previous week, according to the Mortgage Bankers Association.
[See Mortgage Rates Jump: 6 Things You Need to Know]
As a result (from the MBA):
The Refinance Index decreased 24.1 percent to 2953.6 from 3890.4 the previous week and the seasonally adjusted Purchase Index increased 4.3 percent to 267.7 from 256.6 one week earlier. …The refinance share of mortgage activity decreased to 62.4 percent of total applications from 69.3 percent the previous week.
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Tim Geithner Can't Sell Home, Has to Rent it Out
Tweet Share on Facebook June 4, 2009 Comment (3)Unable to sell it, Treasury Secretary Tim Geithner--like other homeowners ensnared in the real estate bust--is now renting out his suburban New York City home for $7,500 a month, The Associated Press reports:
After reducing the price on his house in a tony New York City suburb to less than he paid for it, Geithner still couldn't sell and recently rented it out instead, according to real estate agents familiar with the deal.
Geithner put his five-bedroom Tudor near leafy Larchmont on the market for $1.635 million in February, after heading to Washington for his job as the nation's top economic official.
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FEMA May Use Foreclosed Homes As Hurricane Shelters
Tweet Share on Facebook June 4, 2009 Comment (1)With hurricane season upon us, federal officials say they might turn foreclosed homes in Florida into temporary housing for those displaced by "catastrophic" storms, The Associated Press reports:
The Federal Emergency Management Agency told The Associated Press that it might consider using foreclosed homes if hotels, shelters and other housing options are full and only for a catastrophic situation, such as Hurricane Katrina. The idea was discussed at a hurricane drill this week in Florida.
Jeff Bryant, FEMA's federal coordinating officer for Florida, said the agency will work with other federal agencies such as Housing and Urban Development and state emergency planners to see if it could be a solution.
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Mortgage Rates Jump: 6 Things You Need to Know
Tweet Share on Facebook June 1, 2009 Comment (27)A swift rise in mortgage rates is threatening to undermine the already-rickety real estate market and toss sand into the gears of Uncle Sam's plans to rescue the economy. Beginning last fall, the Federal Reserve rolled out a series of initiatives--such as the purchase of Fannie Mae and Freddie Mac mortgage-backed securities and long-term treasury bonds--that worked to drive mortgage rates down to all-time lows. Federal officials hoped that by pushing the cost of purchasing a home artificially lower, they could lure more buyers into the market to gobble up the massive supply of unsold homes. Meanwhile, lower mortgage rates could also enable scores of homeowners to lower their monthly payments by refinancing. That, in turn, would free up cash to be pumped back into the economy. For some time, the mortgage market acted accordingly, with rates of less than 5 percent triggering a flood of refinancing applications. But last week, rates surged, a development that could create all sorts of headaches for federal officials, consumers, and the economy as a whole.
Here are five things you need to know about the surge in mortgage rates:
