Ellis Posted July 30, 2008 Share Posted July 30, 2008 I can't believe this hasn't been posted yet... I'm not sure of the small details but essentially, these are a few of the things the bill addesses: 1. If you are upside down in your mortgage in an ARM... meaning u owe more than it is worth... you can now refinance through FHA and get a loan with a fixed rate rather than an ARM. But of course, you still have to pass a credit check that lowers the standards of a passing grade. 2. $4,000 tax credit for single, 1st time home buyers... and $8,000 for couples. Essentially, if you purchased a house between April 9th 2008 through XX 2009, you get a tax credit. So for me, since I bought a house AFTER april 9th, when I claim my taxes for 2008, of my federal taxes paid... I can get up to $4,000 of it back on my return. Booyah. This part of the bill goes further though... if you haven't bought a house yet, you can use that $4K towards the house in closing OR wait and get it in your tax return for 2008 or 2009, depending on when you purchased your home. There is a bunch of other stuff in the bill too. http://www.politico.com/news/stories/0708/12166.html When a detailed explanation of the Bill gets published or blogged, I'll post it asap. The bill is estimated to help about 400,000 home owners in America. Link to comment Share on other sites More sharing options...
JohnLockesGhost Posted July 30, 2008 Share Posted July 30, 2008 Maybe the government can re-inflate the bubble even bigger this time. Link to comment Share on other sites More sharing options...
Ellis Posted July 30, 2008 Author Share Posted July 30, 2008 Here's a blog from a few days ago that doesn't totally address everything but gives ya glimpse into some of it... http://thedemocraticdaily.com/2008/07/24/random-musings-on-hr-3221/ The House just passed a Bill entitled “Housing and Economic Recovery Act of 2008”. It is said as of this writing that the Barney Frank version just given the okay in the House is the piece of legislation that will be passed imminently by the Senate, and that Pres. Bush has now agreed to sign off on. What is being labeled as an “Act” is really a 694 page collection of provisions that far more resembles a grand smorgasbord of Bills than a clean, coherent piece of public policy. It addresses such basically unrelated issues, for example, as rescuing the entire world economy from the collapse that has been forecast that letting Fanniemae and Freddiemac go under would cause, and ways to help buyers of manufactured homes get better financing and keep from getting ripped off by ethically challenged “trailer house” sales lot. Naturally there are a number of important provisions that have been headline items leading up to enactment. Money is now being made available for localities to buy up and manage distressed homes that are destroying communities, and HUD has been given a new $300 billion authorization to try to help “under water” homeowners refinance their mortgages with FHA loans. And then we come to some stuff that will basically be of interest only to real estate/finance professionals and would be homebuyers, but that will likely make complete sense to no one. For example, the minimum down payment for buying a home with FHA financing has now been increased from 3% to 3.5%. Also what the industry has euphemistically labeled as “Down Payment Assistance”, or “Nehemiah” programs have been abolished, and, to some extent, the federal government has been assigned to give away free down payments. Nehemiah Foundation found a loophole to facilitate the forbidden act of a home seller giving a down payment to the buyers, but this loophole now closes on October 1st. However, starting with many folks who bought homes as far back as April 9 of this year and stretching until July 1 of next year, there will be a tax credit of up to 10% of the price of the home purchased, capped at $7,500 and scaling down for higher income filers. A Nehemiah type buyer, then, who used or uses this discredited financing tactic in the window period of 4-9 to 10-1 gets both a free down payment, and a $7,500 tax credit. Folks should take a serious look at getting a piece of this action while it is available. And then there are two unrelated provisions, one that openly permits FHA borrowers to borrow even their down payment, as long as it comes from a family member, and another that allows the choice for their $7,500 tax credit to be processed on their 2008 tax return even if the home purchase is made during the period from Jan. 1, 2009 through June 30, 2009. This is not exactly like the federal government giving away free $7,500 dollar home purchase down payment grants to most comers, but it is also not very far removed from that either. Buy, file 2008 taxes, or an Amended return and get your down payment returned at tax refund speed. (Borrow it from H&R Block?) Link to comment Share on other sites More sharing options...
Kilmer17 Posted July 30, 2008 Share Posted July 30, 2008 Yeah! Congrats, you f@#ked up, but big brother govt wont let you fail. Gimme gimme gimme gimme gimme. Link to comment Share on other sites More sharing options...
Ellis Posted July 30, 2008 Author Share Posted July 30, 2008 Yeah!Congrats, you f@#ked up, but big brother govt wont let you fail. Gimme gimme gimme gimme gimme. For the record, the Dems constructed this... Bush was against it as were many republicans... but signed it purely b/c something had to be done. The Dem's would've dragged ass for months if they continued to debate it. meaning... by the time they decided on what to do, no one would have a house to rescue. LOL! Link to comment Share on other sites More sharing options...
BRAVEONAWARPATH Posted July 30, 2008 Share Posted July 30, 2008 Yeah!Congrats, you f@#ked up, but big brother govt wont let you fail. Gimme gimme gimme gimme gimme. You may be right but since I'm about to buy my first house..I'm not going to complain. Link to comment Share on other sites More sharing options...
GoSkins561 Posted July 30, 2008 Share Posted July 30, 2008 You may be right since I'm about to buy my first house..I'm not going to complain. Hey, maybe we can be neighbors. Link to comment Share on other sites More sharing options...
techboy Posted July 30, 2008 Share Posted July 30, 2008 Actually, what I'm surprised about is that noone from the Ron Paul camp has posted the little item that has been inflaming the blogs the last few days. Here's a blog from the Washington Post... The housing bill includes a sweeping provision requiring credit and debit card firms to report the transactions of certain businesses to the IRS, sparking privacy concerns and stirring the ire of the small business community. Cue discussion... :laugh: Link to comment Share on other sites More sharing options...
SoCalSkins Posted July 30, 2008 Share Posted July 30, 2008 The tax credit is an interest free loan. You pay it back on your taxes over 15 years. The upside down debt forgiveness is voluntary on the banks. If they agree to the write down, and if you sell your house within 1 year of the refinance, the government gets 90% of the profit. That number lowers by 10% a year until it hits 50% and stays there. There is also 1.5% mortgage insurance required every year. Link to comment Share on other sites More sharing options...
BRAVEONAWARPATH Posted July 30, 2008 Share Posted July 30, 2008 Hey, maybe we can be neighbors. We might be. Link to comment Share on other sites More sharing options...
Ellis Posted July 30, 2008 Author Share Posted July 30, 2008 Based on my current trend of tax paying... I'm lookin at about $3,200 added IN to my normal tax return. HD Flat screen tv time.... LOL! Link to comment Share on other sites More sharing options...
techboy Posted July 30, 2008 Share Posted July 30, 2008 Yeah!Congrats, you f@#ked up, but big brother govt wont let you fail. Gimme gimme gimme gimme gimme. Privatize profits, socialize losses! Hooray! Link to comment Share on other sites More sharing options...
Ellis Posted July 30, 2008 Author Share Posted July 30, 2008 The tax credit is an interest free loan. You pay it back on your taxes over 15 years. If that's true, than F that. I'll just keep going as I was going. Link to comment Share on other sites More sharing options...
Fergasun Posted July 30, 2008 Share Posted July 30, 2008 I've spent considerable time reviewing this bill. - The most galling measure is $5T "blank check" authorization given to the Treasury to backstop FNM and FMC, but only if the Treasury needs to... way to watch the purse strings Congress! Of course the CBO only estimates that losses could be $25B... - Perhaps the second most galling is raising the debt limit by $800B to over $10T... thats right when Bush leaves we'll have $10T in debt! - Indeed, the IRS is going to be collecting credit/debit card receipts from small businesses. This is going to be done because they suspect many small businesses are under-reporting income. Maybe this will end up killing credit cards as more businesses move to cash? - There's also some tax incentives for Chrysler hidden in this bill. Well no, they don't mention Chrysler explicitly, but they call them "an un-named partnership made on August 3, 2007 and after that will make 650,000 cars in 2009". I wish I was kidding but I'm not. - Additionally there is money in this bill for a Canadian railcar manufacturer. Why? I don't know. - Also, those who use this program will have to share their profits with the government. Hah! All in the name of "keeping housing affordable"... all this will do is force more people who shouldn't be in homes to keep homes... inflating housing prices... argh our government! Right when the market starts to work... Link to comment Share on other sites More sharing options...
skinfan133 Posted July 30, 2008 Share Posted July 30, 2008 way to cap 8 years of ****ed up government you dick! Link to comment Share on other sites More sharing options...
ttr77 Posted July 30, 2008 Share Posted July 30, 2008 So I guess those that bought a house before April and actually did their due-diligence to make sure they could afford it will get bailed out in the next rescue bill? SWEET! Link to comment Share on other sites More sharing options...
Ellis Posted July 30, 2008 Author Share Posted July 30, 2008 way to cap 8 years of ****ed up government you dick! Place blame where it belongs dude.:laugh: -Dems constructed this bill. -People in foreclosure status were not forced at gun-point to "sign on the dotted line" at closing/settlement. Link to comment Share on other sites More sharing options...
ChocolateCitySkin Posted July 30, 2008 Share Posted July 30, 2008 On the flip-side of the coin... When I bought a house four years ago my lender absolutely refused to give me a fixed rate. I kept asking and asking and they kept telling me all I can get you is an ARM. Then finally the day I was going to settlement they agreed to give me a fixed rate. Of course, you'd have to be a complete dope to not see the writing on the wall on these ARM loans and that they had over inflated prices... but I guess a lot of people didn't and now they're getting government bailouts. Link to comment Share on other sites More sharing options...
Larry Posted July 30, 2008 Share Posted July 30, 2008 The tax credit is an interest free loan. You pay it back on your taxes over 15 years. Huh? You mean there's going to be a blank on the 1040 that says "If you've ever received a home buyer tax credit, then add 6.7% of the amount of that credit to your taxes owed"? The upside down debt forgiveness is voluntary on the banks. If they agree to the write down, and if you sell your house within 1 year of the refinance, the government gets 90% of the profit. That number lowers by 10% a year until it hits 50% and stays there. There is also 1.5% mortgage insurance required every year. Again, I have trouble believing this, and have trouble figuring out how it would work. John Doe sells his house. Six months later, he files his taxes, declared a Capital Gain of, say, $100K on the house, and the IRS says "hey, because you wrote down the loan your home ten years ago, you owe us $50K in taxes"? Or is writing down your loan going to be recorded on the dead, as a lien, and they're just going to confiscate your profit at closing? "Here you go, Mr. Homeowner. We sold your house for $100K more than you owe, so here's your check for $30K"? (And do all your closing costs have to come out of your $30K?) Link to comment Share on other sites More sharing options...
Larry Posted July 30, 2008 Share Posted July 30, 2008 Agree with most of your post, but I just had to point out that you made a tiny mistake: - Indeed, the IRS is going to be collecting credit/debit card receipts from small businesses. This is going to be done because they suspect many small businesses are under-reporting income. Maybe this will end up killing credit cards as professional tax cheats move to cash? Link to comment Share on other sites More sharing options...
Sarge Posted July 30, 2008 Share Posted July 30, 2008 Yeah!!!!!!!! More spending from a president who has grown the government by 60% And Repubs wonder why they are being voted out in droves Link to comment Share on other sites More sharing options...
Larry Posted July 30, 2008 Share Posted July 30, 2008 Of course, you'd have to be a complete dope to not see the writing on the wall on these ARM loans and that they had over inflated prices... but I guess a lot of people didn't and now they're getting government bailouts. Well, I know that I, (along with several others), here in Tailgate, had been telling people they looked like rotten ideas, to me, for years. And numerous posters (all of whom assured me that I was an idiot who didn't understand reality) kept assuring me that if interest rates went up, everything would still be peachy, cause they'd just refinance. Link to comment Share on other sites More sharing options...
SoCalSkins Posted July 30, 2008 Share Posted July 30, 2008 Huh? You mean there's going to be a blank on the 1040 that says "If you've ever received a home buyer tax credit, then add 6.7% of the amount of that credit to your taxes owed"? Yes. That is how it would work. If you don't select it, their automated review would probably catch it and they would adjust your return accordingly. Again, I have trouble believing this, and have trouble figuring out how it would work. John Doe sells his house. Six months later, he files his taxes, declared a Capital Gain of, say, $100K on the house, and the IRS says "hey, because you wrote down the loan your home ten years ago, you owe us $50K in taxes"? Or is writing down your loan going to be recorded on the dead, as a lien, and they're just going to confiscate your profit at closing? "Here you go, Mr. Homeowner. We sold your house for $100K more than you owe, so here's your check for $30K"? (And do all your closing costs have to come out of your $30K?) To pay off the house, there would be specific lender instructions to satisfy the loan. If you have a $500k house, are 200K upside down, the program would let you refinance to 90% of the current market value, around $270k in this example. The original bank would eat $230k and would have to pay 3% to the FHA. If you resold the house for $300k before 12 months, the FHA would get 90% of the $30k profit. You would still walk away with 10% in your pocket, but would be $230k better off than where you originally started. The FHA portion of the profit reduces by 10% a year until it reaches 50%. If prices recover to original levels, then the deal would be bad if you wait to sell it. So if you sold for 770k in 10 years, the FHA would get 50% of the 500k profit. However, your mortgage cost would be far lower in the 10 years you have been paying on the new mortgage. It is a decent deal for homeowners, but banks aren't going to volunteer to take huge write downs. Link to comment Share on other sites More sharing options...
ChocolateCitySkin Posted July 30, 2008 Share Posted July 30, 2008 ^^thats what i didn't get... okay so technically you're four percent arm loan could at most go up by 2% a year after four years each year. Up to 10-11% which go forbid would be scary! You would have to refinance. But, if you're paying that much on an arm when you refinance its going to be 8-9% anyways... you're boned any way you look at it if you want to be a long term legitimate homeowner. If you just want to flip it then well... you're taking a risk. I think this bill should only apply to people that own one home. Link to comment Share on other sites More sharing options...
SkinsOrlando Posted July 30, 2008 Share Posted July 30, 2008 I'm puking in my own mouth Link to comment Share on other sites More sharing options...
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