Makes Sense for Home Buyers
to ACT Now!
The Housing and Economic Recovery
Act of 2008…
…and how it impacts YOUR clients and
YOUR bottom line!
Joe LO
XYZ Mortgage Company
Why this new law?
• To help a sluggish housing market recover
• To strengthen an also sluggish US economy
• To provide additional benefits to current homeowners,
and encourage home purchases
• To help prevent more foreclosures, which weaken home
prices nationwide
• To prevent “bad actors” from participating in the
professional business of home loan lending
Let’s Break it Down
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FHA “Modernization” – several changes
New Tax Credits and Incentives
Conforming “Jumbo” loan changes
Hope for Homeowners in trouble
New Quality Standards for Mortgage Lenders
Seller Paid
Down Payment Assistance
• Going, going… not gone yet, but slated to be
eliminated October 1, 2008
• Why? These loans have triple the chance of
default and foreclosure over traditional FHA
loans
• Bills already in progress to resuscitate, but all
guarantees are off
• OPPORTUNITY: If prospective homebuyers
want seller paid DPA – they must get it now!
More Cash Needed Ahead
• For FHA financing, minimum cash investment is
increasing from 3% to 3.5%
• Mortgage Insurance costs will likely be
increasing too
• HUD in process of clarifying details and when
this will take effect
• OPPORTUNITY…Prospective home buyers
must act now to get best benefits before
changes take place!
Good News…
Did Someone Say Tax Credits?
• Calling All First Time Home Buyers
– Or Any Non-Homeowner in the Past Three Years
– Good for Buyers From April 9, 2008 Through July 1,
2009
• Tax Credit Up to $7,500
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10% of Sales Price up to a Maximum of $7,500
Must be Primary Residence
Income Limits $75K for Singles or $150K for Couples
Phases Out at $95K and $170K Respectively
The Fine Print
• The Tax Credit is generous… but is actually an interest-free
loan, must be paid back over 15 years at $500 per year
• If home sold early, repayment of loan is limited to amount of
appreciation
• If homeowner dies… the good news is that the loan is forgiven.
The bad news is… they are dead.
• OPPORTUNITY: Better benefits than ever before for First
Time Home Buyers to get “off the fence”, and into their
first home… but limited time program, it’s time to act!
As an FYI…Tax Benefits for
Current Homeowners
• For whom? Those who own a home but currently file
the EZ form, or do not itemize their tax deductions
• Most homeowners itemize deductions – but this will
help some individuals
• May be able to deduct real estate property taxes, up to
a maximum of $500 for a single person, $1000 for
married
• OPPORTUNITY: Mention this fact to past clients
you’ve helped get into a home. If they are in the
group of non-itemizing homeowners, they will
thank you for the valuable information.
Who You Calling “JUMBO”?
• In recent times, Fannie and Freddie have temporarily
allowed more favorable interest rates on loan amounts
normally considered to be “Jumbo”
• This benefit was set to expire, but has been extended
• However, the maximum limits have decreased
– First Capped at $417,000 – No Change
– Maximum Caps Pulled back to $625,500 – Few Markets Hit Here
– Capped for Others at 115% of Local Area Median
• OPPORTUNITY: Extended benefits for homebuyers in
certain Jumbo markets to finance more affordably!
Hope for Homeowners
• Who will this impact? Homeowners who are “upside-down” in their
homes, ie: they owe more than the property is currently worth… and
are headed for trouble
• Very detailed eligibility guidelines
• Must agree to split all future equity built up in the home with the
government, 50/50
• Foreclosed homes drag down property values for everyone… so this
is good news for all homeowners
• OPPORTUNITY: If you know homeowners in serious trouble,
make them aware of the program… you will likely win a raving
fan client for life, and help to keep America’s neighborhoods
stronger.
The Heat is On… Originators
• Federal Licensing Requirements are Coming, and Will Improve the
State of the Mortgage Industry Overall
• No Crooks Allowed
• Smarter Mortgage Professionals Ahead
• Have to Be in Good Shape – Financially That Is
• Working With a True Professional is Always Key
• OPPORTUNITY: Partner with a true professional, who not only
has experience, knowledge and ethics and will always make
YOU look good to your referrals – but also has the tools that
will help make a partnership truly successful.
Let’s get the word out together, that
home buyers must ACT NOW!
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Home prices are low – and most experts believe a bottom in real estate is
here
Remember – you can’t see a “bottom”, until it is already in the rear view
mirror
Home loan rates still exceptionally low
Benefits of this legislation will not last forever… why let clients miss
this opportunity?
Get prospects pre-approved – buyers and sellers
Work that database
Nurture leads to deals
Work with a real professional
Let’s get the word out together, that
home buyers must ACT NOW!
Like you, I am a true professional, and I am devoted to
making homeownership a reality that makes sense.
I have the tools needed to operate successfully in
today’s challenging climate, and to partner
successfully with you.
Let’s discuss how to advance our partnership, and
work together to make our clients’ dreams of
homeownership come true.