Today’s News Synopsis:
Approximately $326 million in credit went to over 47,000 taxpayers who didn’t qualify as first-time homebuyers, according to the Treasury Inspector General. When a borrower in default seeks a loan modification, the bank often pursues foreclosure. Ginnie Mae is ending the flat fee for servicing reverse mortgages.
In The News:
Los Angeles Times – “Post-recession, expect a shift in building trends” (4-17-11)
“The numbers report for the home-building industry couldn’t have been more grim in February: New-home construction in the U.S. fell to a pace that would translate to about 250,000 homes for all of 2011, which would be the fewest built since the Commerce Department began keeping track in 1963.”
Yahoo – “IRS paid $513M in undeserved homebuyer tax credits” (4-15-11)
“about $326 million — went to more than 47,000 taxpayers who didn’t qualify as first-time homebuyers because there was evidence they had already owned homes, said the report by J. Russell George, the Treasury inspector general for tax administration.”
Los Angeles Times – “Banks are foreclosing while homeowners pursue loan modifications” (4-14-11)
“Dual tracking refers to a common bank tactic. When a borrower in default seeks a loan modification, the institution often continues to pursue foreclosure at the same time.”
NAHB – “Builder Confidence Slips Back a Notch in April” (4-18-11)
“Builder confidence in the market for newly built, single-family homes slipped back one notch to 16 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for April, released today. The index has now held at 16 for five of the last six months.”
Yahoo – “Super rich see federal taxes drop dramatically” (4-18-11)
“The top income tax rate is 35 percent, so how can people who make so much pay so little in taxes? The nation’s tax laws are packed with breaks for people at every income level. There are breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent.”
The Atlantic – “Should Big Banks Be Regulated as Utilities?” (4-14-11)
“should big banks be regulated as utilities? At a conference this week, Kansas City Federal Reserve Bank President Thomas Hoenig asserted that big banks already are public utilities, since they’re implicitly government-backed. As a result, he suggests regulating them like utilities. Is he right?”
FICO – “Research looks at how mortgage delinquencies affect scores” (4-18-11)
“The magnitude of FICO® Score impact is highly dependent on the starting score. There’s no significant difference in score impact between short sale/deed-in-lieu/settlement and foreclosure. While a score may begin to improve sooner, it could take up to 7-10 years to fully recover, assuming all other obligations are paid as agreed.”
Housing Wire – “S&P negative outlook on US debt linked to Fannie and Freddie” (4-18-11)
“One of the pressures on the credit is analysts’ estimate that it could cost the U.S. government up to ‘3.5% of GDP to appropriately capitalize and relaunch Fannie Mae and Freddie Mac’ in addition to the 1% of GDP already invested. S&P analysts said the government may have to inject as much as $280 billion into the government-sponsored enterprises, which includes $148 billion already spent, to cover losses at the housing finance companies that were put into conservatorship in September 2008.”
Housing Wire – “Ginnie Mae to erase flat fee for servicing reverse mortgages” (4-18-11)
“Ginnie Mae will require issuers of reverse mortgage-backed securities to pay servicers based on a basis point strip of the interest beginning this summer. The requirement, which takes effect July 1, essentially ends paying a flat fee for the servicing of these loans.”
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California Real Estate Investing News is a post from: The Norris Group